A decision in a proceeding under Section 66 of IBC does not influence or affect in any manner an independent consideration of Wilful Defaulter identification within the purview of the RBI Master Circular – Suresh Kumar Patni and Ors. Vs. Bank of Baroda and Anr. – Calcutta High Court

Hon’ble High Court held that: (i) Insofar as Section 96 is concerned, the same concerns itself with the ‘debt’. Section 14, on the other hand, speaks about the corporate ‘debtor’. Thus the Sections respectively seek to protect each of the said entities. (ii) Mere protection of the debt or the corporate debtor cannot be equivalent to giving unnecessary and unwarranted protection to persons who are guilty of wilful default under the Master Circular of the RBI. (iii) A guarantor, who stands on co-extensive footing with the debtor, cannot be absolved from a wilful defaulter proceeding at the inception, merely by citing the pendency of a proceeding under Section 96 of the IBC. (iv) A decision in a proceeding under Section 66 of the IBC does not influence or affect in any manner an independent consideration of Wilful Defaulter identification within the purview of the Master Circular.

Scroll to Top