Carnet Elias Fernandes vs State Bank Of India on 4 September, 2023

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Madhya Pradesh High Court

Carnet Elias Fernandes vs State Bank Of India on 4 September, 2023

Bench: Sanjay Dwivedi

                                    1
            IN THE HIGH COURT OF MADHYA PRADESH
                         AT JABALPUR
                               WP No. 22479 of 2023
       (CARNET ELIAS FERNANDES AND OTHERS Vs STATE BANK OF INDIA AND OTHERS)

Dated : 04-09-2023
      Shri Akshat Agrawal - Advocate for the petitioners.

      Heard on the question of admission as well as on interim relief.
      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 Section 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 Section 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 Section 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.

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.

By way of interim measure, till next date of hearing, the operation of impugned orders dated 16.01.2023 (Annexure-P/9) and 20.06.2023 (Annexure- P/11) shall remain stayed and the petitioners shall not be debarred from participating in the resolution proceeding of corporate debtors.

List this petition in the week commencing 16.10.2023.

(SANJAY DWIVEDI) JUDGE Devashish DEVASHISH MISHRA 2023.09.05 11:01:57 +05'30'

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Madhya Pradesh High Court