Shri Manoj Narendrakumar Patel vs State Bank Of India & Anr

In the matter of: Manoj Narendrakumar Patel ...Appellant Vs. State Bank of India & Anr. ...Respondents

For Appellant: Mr. Masoom Shah, Mr. Dhruvin Dossani, Me. Neha Shah, Advocates

For Respondent: Mr. Harshit Khare, Mr. Prafful Saini, Mr. A. Agarwal, Mr. Brijesh Gupta, Advocates for R-1/SBI

ORDER

(Hybrid Mode)

This Appeal is preferred by a personal guarantor challenging initiation of a PIRP

under Section 95 of IBC.

2. The quintessence of the issue is whether notice dated 20.04.2018 under

Section 13(2) of the SARFAESI Act by the respondent will satisfy the requirement

of a demand notice within the meaning of Rule 7(1) of the IBBI Rules for initiating

PIRP proceedings against personal guarantors.

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3. Heard both sides. The learned counsel for the appellant submitted that in

the matter of Amanjyot Singh Vs Navneet Kumar Jain & Ors. [Company

Appeal (AT) (Insolvency) No.961 of 2022], this Tribunal has held that a notice

under Section 13(2) of the SARFAESI Act will not satisfy their requirements of

Rule 7(1) and hence admitting the PIRP against him is unsustainable.

4. Per contra, the learned Counsel for the respondent submitted that in the

matter of Mavjibhai Nagarbhai Patel Vs State Bank of India & Anr.

[Company Appeal (AT) (Insolvency) No.1702 of 2024], this Tribunal has held that

a Notice under Section 13(2) of the SARFAESI Act is adequate enough to satisfy

the requirements of Rule 7(1) of the IBBI Rules for initiating PIRP proceedings

against personal guarantors. Subsequently in Asha Basantilal Surana Vs

State Bank of India & Ors. [Company Appeal (AT) (Ins) No.84 of 2025], this

Tribunal itself has clarified the case of Amanjyot Singh that the said Judgement

cannot be read to mean that the personal guarantee can never be invoked by a

Notice under Section 13(2) of the SARFAESI Act.

5. This Court carefully considered rival submissions. Amanjyot Singh case

is one where the appellant challenged an Order rejecting a petition which he had

filed under Section 94 of IBC for initiating PIRP proceedings wherein he relied on

Notice issued by the bank under Section 13(2) of the SARFAESI Act, sometime

in 2013, and the RP in its Report filed under Section 99 of IBC has indicated

that it was about 9 years since the Notice under Section 13(2) was issued and

that the bank had not shown any intent to proceed against the appellant. It is in

Company Appeal (AT) (Ins) No.1654 of 2024 3

these circumstances, this Tribunal did not want to act on the appellant's plea

founded on the Notice issued under Section 13(2) of the SARFAESI Act. However,

in Mavjibhai Nagarbhai case, this Tribunal had occasion to settle the law. That

was a case where a PIRP proceeding was initiated against the Corporate Debtor

based on the Notice issued under Section 13(2) of the SARFAESI Act. This was

held to be a valid demand for the purpose of initiating a PIRP proceeding. This

Tribunal, therefore, finds merit in the submissions of the respondent's Counsel.

In conclusion, we do not find any merit in the Appeal and the same is dismissed.

[Justice N. Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical) rs/sk

Company Appeal (AT) (Ins) No.1654 of 2024