Hon’ble NCLT Ahmedabad recently in the matter of Personal Guarantors of Alok Industries Limited rejected the petition filed by Canara Bank under Section 95 of IBC for initiation personal insolvency process considering foundation documents i.e. Guarantee Deeds are defective and inadmissible as evidence due to insufficient stamp duty paid on Guarantee Deed.
Due to difference of opinion between Hon’ble Judicial member and Hon’ble Technical Member of NCLT Ahmedabad Court II bench, the matter related to Personal Guarantors of Alok Industries Limited has been referred to Hon’ble Third member of NCLT Ahmedabad so that matter is decided with the opinion of majority.
Hon’ble Third member of NCLT Ahmedabad has decided various issues for matter related to petition filed by Canara Bank under Section 95 of IBC for initiation personal insolvency process against Personal Guarantors of Alok Industries Limited.
Out of which one issue and question is related to whether Guarantee Deeds are admissible as evidence given the DRT order dated 25.10.2019 impounding them for insufficient stamp duty which remains uncured despite opportunity to cure given?
Hon’ble Third member of NCLT Ahmedabad has relied upon judgement of Hon’ble Supreme Court of India in the matter of Bidyut Sarkar vs. Kanchilal Pal in which it was held that an insufficient stamped document, marked with objection and referred to collector remains inadmissible until the duty and penalty paid and certified.
In present case, DRT vide order dated 25.10.2019 impounded the guarantee and the applicant i.e. Canara Bank has not provided evidence of curing the defect by paying the requisite stamp duty and penalty or obtaining certification. This impounding order was issued in the context of the DRT proceedings where the Guarantee were submitted as evidence and the defect was identified under the provision of the Stamp act.
Therefore, Hon’ble Third member of NCLT Ahmedabad held that Guarantee Deeds are inadmissible in evidence due to the uncured stamp duty defect and accordingly petitions filed by Canara Bank are rejected.