In the matter of P S Sathish Kumar, [Ia (Ibc) 754/(CHE)/2024 in Cp (Ib) 133/(CHE)/2023]

NCLT15 Sept 2025IA (IBC) 754/(CHE)/2024 in CP (IB) 133/(CHE)/2023

Case brief

AI extract

What is this about?

The NCLT Chennai Bench admitted an application initiated by a personal guarantor to start the Insolvency Resolution Process. The Court held that concurrent SARFAESI proceedings do not bar maintenance of the application and admitted the case, initiating the IRP and appointing a Resolution Professional.

What did the court decide?

Application admitted; Insolvency Resolution Process initiated against Personal Guarantor; Moratorium declared; Resolution Professional appointed.

In the matter of P S Sathish Kumar, [Ia (Ibc)… — Insolvency and Bankruptcy | NCLT (2025)

¶1

¶2

NATIONAL COMPANY LAW TRIBUNAL SPECIAL BENCH, COURT – II CHENNAI

¶3

ATTENDANCE CUM ORDER SHEET OF THE HEARING OF NATIONAL COMPANY LAW TRIBUNAL, CHENNAI BENCH, HELD ON 15.09.2025 AT 02.15 P.M. THROUGH VIDEO CONFERENCING:

¶4

----------------------------------------------------------------------------------------------------------------

¶5

CORAM: SHRI. RAVICHANDRAN RAMASAMY, HON'BLE MEMBER (TECHNICAL)

¶6

---------------------------------------------------------------------------------------------------------------APPLICATION NUMBER : IA(IBC)/754(CHE)2024 PETITION NUMBER : CP(IB)/133(CHE)2023 NAME OF THE APPLICANT : Madhu Desikan (IRP) (P S Sathish Kumar) NAME OF THE RESPONDENT(S) : -- UNDER SECTION : Sec 99 of IBC, 2016

¶7

---------------------------------------------------------------------------------------------------------------Order pronounced under Rule 151 of NCLT Rules, 2016.

¶8

ORDER

¶9

Present: Ld. A.S.Sathish Kumar for the Applicant.

¶10

Vide separate order pronounced in Open Court.

¶11

RP Report taken on record. Petition Admitted.

¶12

Sd/

¶13

RAVICHANDRAN RAMASAMY

¶14

Member (Technical)

¶15

¶16

IN THE NATIONAL COMPANY LAW TRIBUNAL, SPECIAL BENCH – II, CHENNAI CP (IB) 133/ (CHE)/ 2023

¶17

¶18

IA (IBC) 754/ (CHE)/ 2024 In CP (IB) 133/ (CHE)/ 2023

¶19

(Under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 r/w Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019)

¶20

In the matter of

¶21

P S SATHISH KUMAR,

¶22

9/6, Thillai Nagar, Near IOB, Erode, Tamil Nadu – 638 001.

¶23

… Applicant/ Personal Guarantor

¶24

Order pronounced on 15.08.2025

¶25

CORAM

¶26

SHRI. SANJIV JAIN, MEMBER (J)

¶27

SHRI. RAVICHANDRAN RAMASAMY, MEMBER (T)

¶28

Present;

¶29

For Personal Guarantor: Mr. A. S. Sathish Kumar, PCS

¶30

For Respondent No.1: Mr. M. L. Ganesh, Advocate

¶31

For Respondent No. 2: Mr. U. Vinay Metha, Ms. A. K. Pavithra and Ms. Shiksha,

¶32

Advocates

¶33

For Tamilnad Mercantile Bank Limited: Mr. A.G. Sathyanarayana, Advocate

¶34

For Resolution Professional: Mr. Madhu Desikan (Party in person)

¶35

ORDER

¶36

( Hearing through hybrid mode )

¶37

This application has been filed under Section 94(1) of the Insolvency

¶38

and Bankruptcy Code, 2016 ('Code'/ 'IBC') read with Rule 6 of the

¶39

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶40

Page 1 of 19

¶41

Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 ('Rules') by the Applicant/ Personal Guarantor " P S Sathish Kumar ", to initiate the Insolvency Resolution Process in respect of "P S Sathish Kumar ", being the Personal Guarantor for KMP Spinners Private Limited ('Corporate Debtor").

¶42

SUBMISSIONS OF THE APPLICANT

¶43

The Applicant has given the particulars of debt in Part-III of the application, including interest for Indian Overseas Bank as Rs.24,31,81,344/- (Rupees Twenty Four Crores Thirty One Lakhs Eighty One Thousand Three Hundred and Forty Four only), amount of default as Rs.24,31,81,344/- (Rupees Twenty Four Crores Thirty One Lakhs Eighty One Thousand Three Hundred and Forty Four only) and the date of default as 30.06.2019. Particulars of Debt for Aditya Birla Finance Limited as Rs.6,94,34,457/- (Rupees six crores ninety four lakhs thirty four thousand four hundred and fifty seven only), amount of default as Rs.6,94,34,457/(Rupees six crores ninety four lakhs thirty four thousand four hundred and fifty seven only) and the date of default as 28.08.2019.

¶44

As per the averments made in the application, KMP Spinners Private Limited had taken credit facilities from Indian Overseas Bank, Erode Main Branch, Erode-638 003 and Aditya Birla Finance Limited, T. Nagar, Chennai-600 017. The Applicant herein had given personal guarantee to the said loans. In this matter, the Corporate Debtor for whom the Applicant has given Personal Guarantee failed to repay the debt and in pursuance of which the present application has been filed.

¶45

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶46

Page 2 of 19

¶47

It is submitted that the financial creditors have already initiated proceedings against the principal borrower and the guarantor under the provisions of the SARFAESI Act, 2002. In this regard, reliance is placed on the sale notice dated 11.05.2023 issued by Indian Overseas Bank and the demand notice dated 04.09.2019 issued by Aditya Birla Capital Limited, both under Section 13(2) of the SARFAESI Act, demonstrating that recovery proceedings are underway.

¶48

It is submitted that the applicant has disclosed the statement of affairs as on 20.05.2023, which details his financial position, including lists of immovable and movable assets owned by himself and his immediate family. However, he states that certain documents, namely the personal guarantee contract, banker’s book entries, financial contract reflecting all amendments, and relevant ownership/title documents, are not available with him and hence could not be produced. Notwithstanding this, he has provided the particulars of the secured debts, including details of the security interests created, the dates of their creation, and their estimated value as assessed by the creditors.

¶49

It is submitted that his income during the last three assessment years has been below the exemption limit prescribed under the Income Tax Act, 1961, and therefore he has not filed income tax returns. He has furnished an affidavit to this effect along with the application. The applicant avers that he has no adequate means to meet the liabilities owed to the financial creditors, and his current financial condition warrants initiation of the insolvency resolution process.

¶50

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶51

Page 3 of 19

¶52

It is submitted that in view of his present financial status and absence of sufficient income, he is unable to discharge the outstanding liabilities owed to the creditors.

¶53

SUBMISSIONS OF THE RESPONDENT No.1

¶54

The Respondent No.1 – Indian Overseas Bank submits that the petition filed under Section 94 of the Insolvency and Bankruptcy Code, 2016 is not maintainable, as the same has been instituted by the applicant/guarantor with the sole intention of thwarting the secured creditor from confirming the sale of the secured assets and from taking physical possession thereof under the measures initiated in terms of the SARFAESI Act, 2002. The bank contends that the applicant is not genuinely seeking insolvency resolution but is only attempting to stall recovery proceedings which are already lawfully in progress.

¶55

It is further submitted that the loan account of the corporate debtor was classified as a Non-Performing Asset (NPA) on 29.06.2019 as per RBI guidelines. If the applicant had been genuinely under financial distress, he could have approached this Hon’ble Tribunal either immediately upon classification of the account as NPA, or at least upon issuance of the demand or possession notices. Instead, the present application has been filed after considerable delay, thereby reflecting mala fide intent.

¶56

It is also submitted that the bank has taken various steps under the SARFAESI Act, including the issuance of a demand notice on 23.07.2019, which was duly acknowledged by the applicant on 24.07.2019. Possession notice issued and affixed on 27.12.2019, which was also published on

¶57

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶58

Page 4 of 19

¶59

01.01.2020. The applicant was thus fully conscious of the fact that symbolic possession of the secured assets was already taken in December 2019, yet he chose not to file the instant application.

¶60

The bank states that it has issued 12 e-auction sale notices, the latest being on 27.03.2023, and out of seven secured properties, three have been successfully sold, the details of which have been provided in the counter, including reserve prices, fair market values, and bid outcomes. Although certain auctions did not succeed, the bank continues to pursue realization of its security through lawful means.

¶61

It is further submitted that apart from the liabilities of the corporate debtor, the associate concern Rakshitha Textiles had also availed credit facilities, and in addition, four loan-against-property (LAP) facilities were availed in the names of directors/guarantors, including the applicant and his immediate family members. The total outstanding in these accounts amounts to Rs.5.84 crores as on the respective dates, with further interest at contractual rates payable until realization. The details of these facilities and the corresponding liability of the guarantors have been set out in the counter.

¶62

It is also submitted that the Interim Resolution Professional (IRP) has recommended allowing the present Section 94 application by considering only the liability of the corporate debtor company, without taking into account the substantial personal liabilities of the applicant and other guarantors under the above-mentioned LAP accounts. This, according to the respondent, renders the recommendation incomplete and untenable.

¶63

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶64

Page 5 of 19

¶65

SUBMISSIONS OF THE RESPONDENT No.2

¶66

The Respondent No.2 - Aditya Birla Capital Limited, submits that the application filed by the applicant under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 is not maintainable as the same suffers from suppression of material facts and is an attempt to misuse the provisions of the Code.

¶67

The respondent contends that the applicant has failed to produce essential documents such as the personal guarantee contract, loan documents, and entries in the banker’s book, which are indispensable to prove the nature, extent, and enforceability of the liability.

¶68

It is further submitted that the applicant had stood as a personal guarantor to the loans availed by the corporate debtor, who has committed default in repayment of its loan obligations. In view of the said default, the respondent had issued a demand notice dated 04.09.2019 under Section 13(2) of the SARFAESI Act, 2002, calling upon the corporate debtor and the guarantor to make payment of the outstanding dues. However, despite such demand, neither the corporate debtor nor the applicant discharged the liability, thereby compelled the respondent to initiate recovery proceedings under SARFAESI.

¶69

It is submitted that several steps have already been taken for enforcement of security interest under the SARFAESI Act, including attachment and sale of secured assets, and that the present application has been filed by the applicant only to stall and frustrate the lawful recovery proceedings. It is further contended that the applicant has not approached this Tribunal with bona fide intention. The reliance placed on the plea that

¶70

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶71

Page 6 of 19

¶72

his income was below the taxable limit for the past three years is nothing but an afterthought to escape from his obligations as a guarantor and does not absolve him from liability under the contract of guarantee.

¶73

It is also submitted that the applicant has deliberately withheld crucial documents such as the guarantee deed, loan agreements, and ownership/title documents of the assets, which indicates mala fide conduct and lack of transparency. Therefore, the application is nothing more than an abuse of the process of law and cannot be entertained.

¶74

APPOINTMENT OF RESOLUTION PROFESSIONAL

¶75

This Tribunal vide order dated 23.02.2024 in CP(IB)/133(CHE)/2023, pursuant to the application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the insolvency resolution process against the personal guarantor appointed Mr. Madhu Desikan , with Reg. No: IBBI/IPA-001/IP-P-00579/2017-2018/11021, as the Insolvency Resolution Professional (IRP), to examine the company application and submit a report under section 99 of the Code.

¶76

REPORT OF THE RESOLUTION PROFESSIONAL

¶77

Upon receipt of the appointment, the RP examined the application in accordance with the provisions of the Code and verified its compliance with all statutory requirements under Section 94.

¶78

It is submitted by the RP that as per the records verified, the outstanding dues as on 30.06.2019 in favour of Indian Overseas Bank stood at Rs.24,31,81,344, and as on 28.08.2019 in favour of Aditya Birla Capital

¶79

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶80

Page 7 of 19

¶81

Limited stood at Rs.6,94,34,457, both of which were classified as NonPerforming Assets (NPA) in 2019. The guarantees executed by the applicant were duly invoked, and demand notices were issued by the creditors under Section 13(2) of the SARFAESI Act, 2002, followed by a sale notice dated 11.05.2023 by Indian Overseas Bank for enforcement of security.

¶82

Upon perusal of the records, the RP has confirmed that the applicant has otherwise furnished the relevant information and documents, including demand notices issued by the creditors and MCA records of the corporate debtor, and nothing has been found to suggest that the disclosures made with regard to the guarantor obligations towards Indian Overseas Bank and Aditya Birla Capital Limited were false or misleading.

¶83

It is submitted that the application meets all the requirements under Section 94 of the Code. The debt in question is not an excluded debt under Section 79(15), and the personal guarantor is not an undischarged bankrupt, nor undergoing any other resolution or bankruptcy process. No prior admitted application under Section 94 exists within the previous twelve months.

¶84

In view of the above facts and legal compliance, the RP concluded that the application meets the criteria stipulated under Section 94 of the IBC. Accordingly, he recommended that the application filed by P S Sathish Kumar be admitted and that the insolvency resolution process be initiated against him in respect of the personal guarantee extended for the corporate debtor, KMP Spinners Private Limited. The IRP has prayed that the Tribunal may take on record his report under Section 99 of the Code

¶85

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶86

Page 8 of 19

¶87

and pass such further or other orders as it may deem fit and just in the interest of justice.

¶88

Observations in the report filed under Section 99 of the code are as follows:

¶89

i. Details of debt :

¶90

Sl.	Particulars
No.
1	Outstanding Claim	Principal with Interest for Indian Overseas Bank as Rs.24,31,81,344/- (Rupees Twenty Four Crores Thirty One Lakhs Eighty One Thousand Three Hundred and Forty Four only) and the date of default as 30.06.2019 and for Aditya Birla Finance Limited as Rs.6,94,34,457/- (Rupees six crores ninety four lakhs thirty four thousand four hundred and fifty seven only) with the date of default as 28.08.2019.
2	Documents establishing PG's Liability	1. Demand Notice dated 23/07/2019, u/s 13(2) of SARFAESI Act, 2002 was sent to Guarantor by Indian Overseas Bank. 2. Demand Notice dated 4/9/2019 by Aditya Birla Capital Ltd.
		3. Sale Notice issued by Indian Overseas Bank on 11/5/2023 u/s 13(2)of SARFAESI Act,2002.

¶91

ii. Compliance under Section 94 of IBC

¶92

Sec No.	Details of the Sections	Compliance
	A debtor who commits default	Corporate Debtor – KMP Spinners
	may apply either by personally	P Ltd had committed a default and
94 (1)	or through a resolution	their loan was categorized as NPA
	professional to the	on 30-06-2019 and the loans to
	Adjudicating Authority for	Corporate Debtor was guarantee
	initiating an insolvency	by PG. Hence it is in order.
	resolutionprocess under this

¶93

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶94

Page 9 of 19

¶95

	section by submitting an application.
94(2)	Where the debtor is a partner of a firm, such debtor shall not apply under this Chapter to the Adjudicating Authority in respect of the firm unless all or a majority of the partners of the firm file the application jointly.	Not applicable
94 (3)	An application under sub- section (1) shall be submitted only in respect of debts which are not excluded debts.	Not applicable
94 (4)	A debtor shall not be entitled to make an application under sub-section (1) if he is— (a) an undischarged bankrupt; (b) undergoing a fresh start process; (c) undergoing an insolvency resolution process; or (d) undergoing a bankruptcy process.	Not applicable
94 (5)	A debtor shall not be eligible to apply under sub-section (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve monthsprecedingthe date of	On inquiry it is understood that such application has not been made by the Corporate Guarantor

¶96

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶97

Page 10 of 19

¶98

	submission of the application under this section.
94 (6)	The application referred to in	The relevant fees had been paid
	sub-section (1) shall be in such form and manner	through Bharatkosh – Receipt No. 24052300007525 dated 24-05-2023
	and accompanied with such	for Rs. 2000.
	fee as maybeprescribed.

¶99

FINDINGS OF THIS TRIBUNAL :

¶100

Heard and perused the report.

¶101

The Resolution Professional in his report has observed that the Personal Guarantor satisfies the requirement as set out in Section 94 of IBC, 2016. He has accordingly recommended for admission the of the present application.

¶102

On the other hand, the respondents, Indian Overseas Bank and Aditya Birla Capital Limited, have strongly opposed the maintainability of the present application. It has been urged that the application has been filed with a mala fide intention to stall and frustrate the ongoing SARFAESI recovery proceedings. It is pointed out that Indian Overseas Bank has already taken symbolic possession of secured assets in December 2019, issued multiple auction notices, and even sold certain properties, while other auctions are in progress.

¶103

The respondents also submit that the applicant has failed to disclose all relevant documents, including the guarantee deed, loan contracts, and ownership/ title papers, thereby suppressing material facts. Aditya Birla

¶104

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶105

Page 11 of 19

¶106

Capital Limited has further emphasized that the application is incomplete and suffers from non-disclosure of vital information, which disentitles the applicant from any relief.

¶107

The Resolution Professional, in his report under Section 99, has confirmed that the applicant indeed stood as a guarantor for the debts owed by the corporate debtor to Indian Overseas Bank (Rs.24.31 crores as on 30.06.2019) and Aditya Birla Capital Limited (Rs.6.94 crores as on 28.08.2019). The RP has further verified that the guarantees were invoked and demand notices were issued by both creditors, thereby establishing the existence of debt and default.

¶108

It is not disputed that the applicant herein executed personal guarantees in favour of the creditors for the facilities availed by the corporate debtor, KMP Spinners Private Limited, and that the said guarantees have been invoked. Demand notices under Section 13(2) of the SARFAESI Act, 2002, have been issued, symbolic possession of secured assets has been taken, and recovery proceedings are underway. The liability of the guarantors thus stands established.

¶109

The creditors contend that the present applications are filed with mala fide intent to obstruct recovery under SARFAESI. Indian Overseas Bank points out that multiple auction notices have been issued and certain assets have been sold. Aditya Birla Capital Limited also alleges suppression of material facts and documents, such as copies of the guarantee deeds and title papers, and urges that the applications be rejected.

¶110

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶111

Page 12 of 19

¶112

On the other hand, the Interim Resolution Professional, after verifying the records, has confirmed the liabilities of the applicant towards Indian Overseas Bank and Aditya Birla Capital Limited. He has concluded that the requirements of Section 94 of the Code have been satisfied. While noting that some borrowings in the personal capacity of the guarantors were not disclosed, the IRP has clarified that these were unrelated to the corporate debtor and therefore do not affect the maintainability of the present applications. The IRP has accordingly recommended admission.

¶113

At this stage, it becomes necessary to address whether the pendency of SARFAESI proceedings by itself disentitles the guarantor from seeking insolvency resolution under Section 94 of the IBC. The Hon’ble NCLAT in Getz Cables Private Limited v. SBI & Northern ARC Capital Ltd. (CA(AT)(Ins) No. 1953 of 2024) has held that mere pendency of SARFAESI proceedings cannot be equated with fraudulent intent under Section 65 of the IBC, and that the statutory right of an applicant to seek insolvency resolution cannot be denied without specific pleading and proof of malice. This ratio directly applies to the present case, where the creditors’ objections rest substantially on the ground of parallel SARFAESI action.

¶114

We are mindful of the contrary precedents relied upon by the creditors. In Syed Sirajis Salikin Khadri v. Edelweiss ARC (NCLAT, 25.04.2025) , the petition was dismissed where the filing was made immediately after the possession notice solely to frustrate recovery, evidencing lack of bona fides. This case is distinguishable on facts, because in the present case, the application has been filed before conclusion of

¶115

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶116

Page 13 of 19

¶117

SARFAESI auctions, the debt and default are undisputed, and the IRP’s report supports admission.

¶118

It is also pertinent to note that proceedings under SARFAESI and IBC are not mutually exclusive, and the pendency of recovery measures under SARFAESI cannot, by itself, bar the maintainability of an application under Section 94 of the Code. The jurisdiction conferred on this Tribunal under the IBC has to be exercised keeping in mind the object of the statute, namely, to provide a structured mechanism for resolution of debts of personal guarantors to corporate debtors.

¶119

The IRP has confirmed that the application satisfies all conditions under Section 94 of the Code. The debt is not an excluded debt under Section 79(15), and the applicant is not an undischarged bankrupt nor undergoing any other resolution or bankruptcy process. The personal guarantor has not filed any other application in the preceding twelve months, and the requisite statutory fee has been paid.

¶120

The Tribunal is satisfied that the application under Section 94 is maintainable and that the report submitted under Section 99(1) of the Code supports the initiation of the Insolvency Resolution Process. There exists a valid debt, a clear default, and the guarantor’s personal liability. As per settled law, the liability of a guarantor is coextensive with that of the principal debtor.

¶121

It is noted that this Tribunal vide an order dated 03.06.2025, this has already considered and allowed the substitution of the Interim Resolution Professional. Mr. Mahalingam Suresh Kumar (IBBI/IPA-001/IP-

¶122

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶123

Page 14 of 19

¶124

P00110/2017-2018/10217) has been appointed in place of Mr. Madhu Desikan, considering operational convenience and availability, thereby ensuring continuity of the resolution process. This strengthens the procedural compliance of the case and reflects that the matter is actively being pursued under due process of law.

¶125

As per section 128 of the Indian Contract Act, 1872, when a default is committed, the Principal Borrower and Surety are jointly and severally liable to Creditor and the Creditor has the right to recover its dues from either of them or from both of them simultaneously. Section 128 of the Indian Contract Act, 1872 is reproduced hereunder:

¶126

"The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract."

¶127

The Personal Guarantor of the Corporate Debtor, guaranteed for the Loan and credits which it availed from the Financial Creditors. The Corporate Debtor and Personal Guarantor failed to repay the Loan after the issuance of Demand Notice. The liability of the personal guarantor is co-extensive with the corporate debtor, as expressly provided under section 128 of the Indian contract act 1872, as the personal guarantor’s liability is through an independent contract.

¶128

In light of the afore-stated observations, the RP report filed under section 99 in I.A.(IBC)/754/(CHE)/2024 is taken on record . Consequently, the CP/(IB)133/(CHE)/2023 is admitted . The Insolvency Resolution Process stands initiated against P S Sathish Kumar viz. the Personal Guarantor in this application. We hereby direct as follows:

¶129

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶130

Page 15 of 19

¶131

i. Insolvency Resolution Process against the Personal Guarantor is initiated. The moratorium in relation to all the debts is declared, from today i.e., date of admission of the application, and shall cease to have effect at the end of the period of 180 days, or this Tribunal passes order on the repayment plan under Section 114 whichever is earlier as provided under Sec 101 of 1BC, 2016. During the moratorium period,

¶132

a. Any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed, and

¶133

b. The creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt; and

¶134

c. The debtor shall not transfer, alienate, encumber, or dispose of any of his assets or his legal rights or beneficial interest therein:

¶135

d. The provisions of this section shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

¶136

ii. We hereby appoint Mr. Mahalingam Suresh Kumar (email Id - [email protected]) and Reg. No.IBBI/IPA-001/IPP00110/2017-2018/10217 with valid AFA till 31.12.2025.

¶137

iii. The Resolution Professional viz. Mr. Mahalingam Suresh Kumar is directed to cause a public notice published on behalf of the Adjudicating Authority within 7 days of passing this Order on the website of the NCLT Chennai Bench, inviting claims from all

¶138

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶139

Page 16 of 19

¶140

Creditors, within 21 days of such issue The notice under Sub Section (1) of Section 102(2) shall include: -

¶141

a. details of the order admitting the application;

¶142

b. particulars of the resolution professional with whom the claims are to be registered; and

¶143

c. the last date for submission of claims.

¶144

iv. The publication of notice shall be made in two newspapers, one in English and other in Vernacular, which have wide circulation in the State where the Corporate Debtor and Personal Guarantor reside. The Resolution Professional shall furnish two spare copies of the notice to the Registry for the record.

¶145

v. The Resolution Professional, in exercise of the powers conferred under Section 104, shall prepare a list of creditors on the basis of:

¶146

a. the information disclosed in the application filed by the debtor under Sections 94 or 95 as the case may be, and

¶147

b. claims received by the Resolution Professional under Section 102 within 30 days from the date of the notice. The debtor shall prepare a repayment plan under Section 105, in consultation with the Resolution Professional, containing a proposal to the Creditors for restructuring of his debts or affairs.

¶148

vi. The repayment plan may authorise or require the Resolution Professional to:

¶149

a. carry on the debtor, business or trade on his behalf or in his name: or

¶150

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶151

Page 17 of 19

¶152

b. realise the assets of the debtor; or

¶153

c. administer or dispose of any funds of the debtor.

¶154

vii. The repayment plan shall include the following, namely;

¶155

a. justification for preparation of such repayment plan and reasons based on which the creditors may agree upon the plan;

¶156

b. provision for payment of fee to the Resolution Professional; c. such other matters as may be specified.

¶157

viii. The Resolution Professional shall submit the repayment plan along with his report on the plan to this Authority within a period of 21 days from the last date of submission of claims, as provided under Section 106.

¶158

ix. In case the Resolution Professional recommends that a meeting of the creditors is not required to be called, he shall record the reasons thereof. If the Resolution Professional is of the opinion that a meeting of the creditors should be summoned, he shall specify the details as provided under Section 106(3) of IBC, 2016. The date of meeting should not be less than 14 days or more than 28 days from the date of submission of the Report under subsection (1) of Section 106 of IBC, 2016, for which at least 14 days' notice to the creditors (as per the list. prepared) shall be issued by all modes. Such notice must contain the details as provided under the provisions of Section 107 of IBC, 2016.

¶159

x. The meeting of the creditors shall be conducted in accordance with Sections 108, 109, 110 & 111 of IBC, 2016. The Resolution

¶160

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶161

Page 18 of 19

¶162

Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under Section 112 of IBC, 2016 and submit the same to this Tribunal, copies of which shall be provided to the Debtor and the Creditors. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the Code of Conduct provided under Section 208 of IBC, 2016.

¶163

xi. The Resolution Professional shall submit his periodic reports before this Tribunal, every 30 days.

¶164

xii. The Personal Guarantor is directed to deposit Rs.2,00,000/(Rupees Twenty lakh only) to the bank account of the Resolution Professional within one week, towards his fees and expenses. This shall be subject to the rules and regulations under the provisions of the Insolvency and Bankruptcy Code, 2016.

¶165

xiii. The Registry is directed to communicate the copy of order, report and application to the concerned parties within seven working days and upload the same on the website immediately after the pronouncement of order.

¶166

The present IRP report filed under section 99 in I.A.(IBC)/754/(CHE)/2024 is taken on record and consequently, CP/(IB)133/(CHE) /2023 stands admitted .

¶167

Sd/Sd/- RAVICHANDRAN RAMASAMY SANJIV JAIN Member (Technical) Member (Judicial)

¶168

IA(IBC)/754/(CHE)2024 In CP(IB)/133/(CHE)2023 Mr. Madhu Desikan v/s P S Sathish Kumar and 2 others

¶169

Page 19 of 19

¶170

(Order pronounced under Rule 151 of NCLT Rules, 2016, by Hon’ble Member Technical Shri. Ravichandran Ramasamy for the cases heard and reserved by the Coram comprising Hon’ble Member Judicial Sanjiv Jain and Hon’ble Member Technical Shri. Ravichandran Ramasamy)

¶171

Sd/- Court Officer

In the matter of P S Sathish Kumar, [Ia (Ibc) 754/(CHE)/2024 in Cp (Ib) 133/(CHE)/2023]

Case brief

What is this about?

What did the court decide?

In the matter of P S Sathish Kumar, [Ia (Ibc) 754/(CHE)/2024 in Cp (Ib) 133/(CHE)/2023]

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases