Resolution Professional Can Submit An Additional Report Under Section 99 Of Insolvency And Bankruptcy Code, 2016: NCLAT

Personal Guarantors of a corporate debtor filed an appeal under Section 61 of the Code before NCLAT against the order dated 08.12.2021 of NCLT wherein NCLT appointed a Resolution Professional without furnishing any limited notice to the Personal Guarantors in terms of Para 44 of the judgment of NCLAT in the case of 'Ravi Ajit Kulkarni Vs. State Bank of India.

"44. In substance, once the application is "filed" (as per Section 95, 96 read with Rule 10) the Adjudicating Authority has to act on it, and following principles of natural justice, give limited notice to Personal Guarantor to appear referring to the Interim Moratorium that has commenced as per terms of Section 96. Then the next stage is of appointing Resolution Professional as per Section 97 read with Rules and Regulations. Third stage will be Resolution Professional acting in terms of Section 99 and submitting Report. At the fourth stage comes in adjudication of the application under Section 100 which ought to be decided by giving hearing to parties keeping in view Application, evidence collected and report under Section 99."

It was also the grievance of the personal guarantors that the Resolution Professional has already submitted a report under Section 99 of the IBC and because of the absence of limited notice they were unable to submit any objections before the Resolution Professional.

NCLAT observed that though it limited notice in terms of Ravi Ajit Kulkarni was not issued to Personal Guarantors but subsequently personal guarantors have appeared before Adjudicating Authority. Therefore, in the interest of justice, NCLAT permitted the Personal Guarantors to submit a representation to the Resolution Professional and subsequently, the Resolution Professional can submit an additional report in continuation of his first report and the Adjudicating Authority will consider both the report before taking any decision under Section 100 of the Code.

Case Title: Ramesh Chander Agarwala Vs State Bank of India & Anr.

Counsel for Appellant: Mr. Saurabh Jain and Mr. Devashish Bharuka, Mr. Kaushik Poddar, Advocates

Counsel for Respondent: Mr. Mohit Sethi and Mr. Om Narayan Rai, Advocates for R-1.

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