CARNET ELIAS FERNANDES Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Heard on the question of admission as well as on interim relief.

(2.) Learned counsel for the petitioners submits that the petitioners are the personal guarantors of the firm known as M/s GEI Industrial Systems Limited and against the personal guarantors, the respondent/Bank has moved an application under Sec. 95 of the Insolvency and Bankruptcy Code, 2016 (in short the 'Code, 2016') and as such, order has been issued by the NCLT on 25/11/2021. He submits that in view of the provisions of Sec. 96 of the Code, 2016, all proceedings with regard to personal guarantors shall be deemed to have been stayed. He further submits that a creditor bank in pursuance to the said provision cannot take any legal action or initiate proceeding in respect of any debt against the petitioners. He submits that even otherwise, the respondent/Bank issued an order declaring the petitioners to be willful defaulters. The orders declaring the petitioners to be the willful defaulters are available on record as Annexure-P/9 and Annexure-P/11 respectively. He submits that the action of the respondents is illegal and contrary to the protection granted under Sec. 96 of the Code, 2016. He submits that the orders declaring the petitioners to be willful defaulters will have an adverse impact over their rights.

(3.) Considering the aforesaid, let notice be issued to the respondents on payment of process fee within a period of seven days by RAD mode, returnable within six weeks.