The National Company Law Tribunal, New Delhi Bench (“NCLT”) vide its decision in the case of PNB Housing Finance Limited v. Mr. Mohit Arora, [Company Petition No. (IB) 395/2021, decided on September 29, 2021], has held that an application under section 95 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) filed for initiating insolvency resolution process (“IR process”) against the personal guarantor of a corporate debtor is maintainable before the NCLT, where the application for initiating corporate insolvency resolution process (“CIRP”) against a corporate debtor is pending.
While going through Section 60(1), we have seen that the Adjudicating Authority, in relation to the insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the NCLT having territorial jurisdiction over the place where the registered office of a corporate person is located. Hence, in the case herein, there is a situation where various IB applications for initiation of CIR process against the Corporate Debtor are pending. In our considered view, the moment the IB application in relation to Insolvency resolution of the Corporate Debtor is pending before this Adjudicating Authority, the provisions of Section 60(1) get attracted and the jurisdiction to entertain insolvency process against the personal guarantor would, therefore, lie with the NCLT.
(Para 31/Page 17)
In the light of the aforesaid facts, we would like to summarise that in the case herein, since (i) there are pending IB cases in relation to initiation of insolvency resolution of the Corporate Debtor; ii) Section 60(2) of IBC 2016 is without prejudice to Section 60(1) as held by the Hon’ble Supreme Court in the matter of Lalit Kumar Jain V. Union of India; and iii) Section 179(1) of IBC 2016 is subject to Section 60 of IBC 2016, which includes Sub-Section (1), therefore, in our considered view, the jurisdiction in relation to the insolvency resolution (and liquidation) for corporate persons including corporate debtor and personal guarantors thereof shall be the National Company Law Tribunal in terms of Section 60(1) of IBC 2016.
(Para 32/Page 18)
Hence, we conclude that in a situation where Application(s) in relation to the Corporate Debtor for initiation of CIRP is pending at National Company Law Tribunal (NCLT) then, initiation of CIRP of the Corporate Debtor is not a prerequisite for maintainability of an application under Section 95 of the IBC, 2016 filed for initiating IR Process against the Personal Guarantor of that Corporate Debtor before the NCLT.
(Para 33/Page 18)
