The New Delhi Bench of the National Company Law Tribunal ( NCLT ) held that the specific role assigned to RP involves providing consultation to the personal guarantor ( PG ), while repayment plan is responsibility of debtor.
The application was filed by the Personal Guarantor espousing that the RP namely Mr. Raj Kamal Saraogi met him on 24.04.2024 and during the course of the meeting he endeavoured to apprise him with the nature of his business and the interest he carried qua the same. During the course of the meeting, the PG was unable to gain confidence in the RP and the impression what he gathered is that the RP could not aptly comprehend and understand the vastness and intricacies of the complicated affairs of the Respondent as businessman, a philanthropist and as a public servant.
It was also the plea raised on behalf of the Personal Guarantor in the affidavit that in terms of the provisions of Section 100(2) of IBC, the Resolution Professional might at the time of admission of the matter under Section 100 of IBC request to seek permission from this Tribunal to conduct negotiations between the Debtor and the Creditors, but he did not take any such initiative to seek permission of the Tribunal for conducting the negotiation. In sum and substance the plea raised on behalf of the Applicant is that the Resolution Professional seems to have no desire to streamline the process.
The Insolvency and Bankruptcy Board of India ( Insolvency Resolution Process for Personal Guarantor to Corporate Debtor ) Regulations 2019. Even these regulations do not indicate anywhere that the RP appointed by this Tribunal in terms of the provisions of Section 97 of IBC, 2016 is entitled to take the assistance of a lawyer while discharging his function as RP at the stage, when the PG was yet to prepare his re-payment plan.
A Two-Member Bench comprising Subrata Kumar Dash, Technical Member and Ashok Kumar Bharadwaj, Judicial Member observed that “While discharging function in terms of the provisions of Section 105 of IBC, 2016 read with Regulation 17, role of the RP is only to extend the service as consultant to the Personal Guarantor. When in terms of the provisions of Section 105 read wtih Regulation 17 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantor to Corporate Debtor) Regulations, 2019, the role assigned to RP himself is that of consultant and re-payment plans has to be prepared only by the debtor, it is difficult for us to appreciate that the RP whose presence itself is recognized and acknowledged as that of consultant can have the services of another lawyer, while discharging the function as consultant only.”
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