HYDERABAD: The National Company Law Tribunal’s bench in Amaravati, Andhra Pradesh, received the first personal insolvency petition in the country on Monday, the day the amended Insolvency and Bankruptcy Code (IBC) bringing personal guarantor under its purview came into effect.
Omkaram Venkata Ramana, who had stood personal guarantor to five firms that defaulted on Rs 38.66 crore of bank loans, filed the petition to initiate personal insolvency resolution process, which his counsel said would entitle him to an interim moratorium on all his liabilities.
India on Friday notified the amended IBC guidelines that enable creditors as well as personal guarantors to approach the tribunal seeking to initiate insolvency proceedings against personal guarantors. The lenders were hitherto moving the debt recovery tribunals against personal guarantors.
Ramana had offered personal guarantees to Nithin Grains & Mills, Nithin Proteins, Nithin Nutritions, Ramanasree Consumer Products and Ramana Sri Logistics, all promoted by him. Bank of India, the sole banker to the five companies, had earlier attempted auctioning the personal assets of the promoter offered as guarantee, but could not succeed.
When contacted, Ramana told ET that the guarantee that he had provided was the only financial liability he had as an individual and promoter of the five companies. “I voluntarily approached the tribunal after being convinced that the IBC 2016 introduced by the government is the most modern law for revival of failed business model and provides a resolution and dignified exit for promoters like me.”
Ramana said the accounts of the companies turned into non-performing assets in June 2016.
Source- Economic Times.