NCLT is the only Adjudicating Authority in respect of Personal Guarantors to a Corporate Debtor where a CIRP or liquidation proceeding initiated against a Corporate Debtor is either pending before a NCLT or is already concluded | In absence of an “initiated” or “pending” or “concluded” CIRP against a Principal Borrower, an application u/s 95(1) against a Personal Guarantor will not be maintainable before the NCLT | The Recovery Proceedings will lie only before the DRT having territorial jurisdiction – UCO Bank Vs. Mr. Subrata Das – NCLT Kolkata Bench
In this important judgment, the Hon’ble NCLT Kolkata Bench concludes that:
a. In terms of Section 60(1) and (2) read with Section 179 of the I&B Code, NCLT is the only Adjudicating Authority in respect of Personal Guarantors to a Corporate Debtor where a CIRP or liquidation proceeding initiated against a corporate debtor is either pending before a NCLT or is already concluded.
b. In absence of an “initiated” or “pending” or “concluded” CIRP against a Principal Borrower, an application under Section 95(1) to initiate Insolvency Resolution Process against a Personal Guarantor to a Corporate Debtor will not be maintainable before the NCLT. The Recovery Proceedings will lie only before the Debt Recovery Tribunal (DRT) having territorial jurisdiction.