NCLAT dismisses personal guarantors' appeals against Bank of Baroda, upholds lower court's direction for document inspection [Read Order]
The NCLAT concluded that the impugned order did not warrant interference under its appellate jurisdiction, as the mechanism for inspection was already provided for by the NCLT.
NCLAT - Bank of Baroda - taxscan
NCLAT - Bank of Baroda - taxscan
In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) dismissed appeals filed by personal guarantors, upholding the National Company Law Tribunal's (NCLT) order that had directed the Bank of Baroda to permit document inspection.
The appeals were filed by Rajesh Jain and Shailesh Jain against an order passed by the NCLT, Mumbai Bench. The underlying proceedings were initiated by the Bank of Baroda under Section 95 of the IBC against the personal guarantors. The guarantors had filed applications (IAs) before the NCLT seeking directions for the bank to produce certain lending documents to verify the amount of debt claimed as repaid.
The NCLT had dismissed these applications. However, in its impugned order, the Tribunal provided a crucial direction, stating that if the respondents (the guarantors) applied for inspection, the concerned bank would be required to provide the same within a period of two weeks.
The appellants' senior counsel, Mr. Abhijeet Sinha, argued that the documents were essential for verifying the amount repaid and that the NCLT ought to have granted their request for production of these documents.
The NCLAT bench, comprising Justice Ashok Bhushan (Chairperson) and Indevar Pandey (Member, Technical), analyzed the NCLT's order and observed that the direction for inspection within two weeks was sufficient to protect the appellants' interests. The Tribunal held that this specific direction adequately addressed the guarantors' need for access to the documents. The NCLAT concluded that the impugned order did not warrant interference under its appellate jurisdiction, as the mechanism for inspection was already provided for by the NCLT.
Consequently, the NCLAT found no merit in the appeals and dismissed them. However, it clarified that the appellants were at liberty to make a fresh request for inspection within two weeks, and the Bank of Baroda was obligated to comply with the NCLT's original direction.
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