DRT, Chennai Bench directs KEB Hana Bank to provide a refundable advance of 4 Lacs to the RPThe Debts Recovery Tribunal-II (DRT), Chennai Bench has directed the applicant, KEB Hana Bank (KEB Bank) to provide a refundable advance of Rs.4lakhs/- to the resolution professional on proper receipt and also admitted application filed by the applicant under section 95 of the Insolvency and...
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DRT, Chennai Bench directs KEB Hana Bank to provide a refundable advance of 4 Lacs to the RP
The Debts Recovery Tribunal-II (DRT), Chennai Bench has directed the applicant, KEB Hana Bank (KEB Bank) to provide a refundable advance of Rs.4lakhs/- to the resolution professional on proper receipt and also admitted application filed by the applicant under section 95 of the Insolvency and Bankruptcy Code (Code).
In this matter, the Resolution Professional(RP)appointed by the Tribunal, had filed its report under section 99 of the Code recommending approval of application filed u/s 95 of the Code by KEB Bank against personal guarantors to the corporate debtors.
Defendant (Mr. Nath) had filed a counter affidavit contending that this Tribunal did not have the jurisdiction to entertain the present petition as he is a resident of Palavakkam which falls within territorial jurisdiction of DRT-3 Chennai. Another objection raised was that the Resolution professional had not complied with the procedure as envisaged in section 99(2) which mandates the Resolution professional to require debtor to prove repayment of the debt claimed as unpaid by the creditor by furnishing the proof of the same.
The Appellant sternly contended that that as per section 60 of the Code, the Insolvency Resolution has to be initiated before adjudicating authority having territorial jurisdiction over the place where the registered office of the Corporate person is located.
The DRT, after hearing the contentions, made it very clear that the present proceedings are against guarantor to the corporate debtor alone. As far as the proceedings before this Tribunal is concerned, section 60 of the Code has no application.
The Tribunal also stressed that the present application is filed by the applicant showing the address of the respondent as Palavakkam, Chennai, where they have been served with the communications and the same falls within the territorial jurisdiction of this Tribunal. Hence, this Tribunal was of the view that there was no force in contention of the respondent that this Tribunal lacks territorial jurisdiction to entertain this matter.
The Tribunal also observed that where the application has been filed under section 95, the resolution professional may require the debtor to prove repayment of the debt claimed as unpaid by the creditor by furnishing-Evidence of electronic transfer of the unpaid amount from the bank account of the debtor; evidence of encashment of a cheque issued by the debtor; or a signed acknowledgment by the creditor accepting receipt of dues.
With respect to the issue regarding section 99(2), the Tribunal emphasised that section 99(2), makes it crystal clear that the resolution professional may require the debtor to furnish the details about the repayment and there is nothing to suggest that it is made mandatory to the resolution professional to call for from the debtor the details of repayment. The word used "may" cannot be construed as mandatory one. The Tribunal also held the contention of the respondent that noncompliance of section 99(2) vitiates the proceedings was unfounded.
The Resolution Professional had requested for providing a refundable advance of Rs.4lakhs/- from the applicant to meet the insolvency resolution process expenses, refundable back to the applicant from realization of payments received on a priority payment as per the water flow mechanism under section 53 of the Code.
It was for these reasons that the Tribunal directed the Applicant to provide a refundable advance of Rs.4lakhs/- and also application filed by the applicant under section 95 had been admitted.