In the absence of insolvency proceedings against the Corporate Debtor, the Adjudicating Authority is DRT and not NCLT? | If Corporate Debtor has already been resolved or even liquidated, the essence of proceedings against a Personal Guarantor remains a recovery proceeding – Aditya Birla Finance Ltd. Vs. Sarita Mishra – NCLT Kolkata Bench
The Hon’ble NCLT Kolkata Bench held that:
(i) If the Corporate Debtor has already been resolved or even liquidated and there is no scope for further value maximization of the Corporate person, the proceedings against the personal guarantor are relegated to a modus of recovery only and not that of resolution of insolvency.
(ii) The essence of proceedings against a personal guarantor remains a recovery proceeding, which is clear from the words “Repayment Plan” as against a “Resolution Plan”, which is so generic a word meant for resolving a corporate person.
(iii) It is recognized by the legislature that for Part-III, the Adjudicating authority shall be Debt Recovery Tribunal unless the context otherwise requires. This context has then been clearly laid bare in Section 60(4) above, that in such a context i.e. where the CIRP/liquidation is proceeding before a NCLT, the NCLT shall have powers of the DRT.