2017 (8) TMI 1412 - Tri - Companies Law

Corporate insolvency process - Whether the invocation of corporate guarantee by ICICI Bank which does not conform to the stipulations of the ESL Corporate Guarantee and STA be treated as valid invocation and ICICI Bank be allowed to participate in the COC? - claim for the loan facilities availed by ESL, can the claim lodged by the ICICI Bank be rejected by IRP/RP on the ground that it is already participating in the resolution proceedings, including the COC meetings, initiated in the case of the Principal Borrower i.e. ESL - Held that - The aforesaid issues are entirely in the domain of the Insolvency Professional and in the midstream, when the process of resolution plan is in progress, it will not be proper to opine either way by this Tribunal. Of course, at the time when the resolution plan comes up for final approval of the Tribunal all such arguments would be available to the parties. In the meanwhile, the Insolvency Professional must exercise her wisdom and discretion particularly when her work is facilitated by moratorium envisaged by Section 14 of the Code which has been in operation. Application not maintainable.

Summary

Issues:
1. Clarification on the invocation of corporate guarantee by ICICI Bank.
2. Rejection of claim lodged by ICICI Bank for loan facilities availed by ESL.
3. Determination of voting rights value for ICICI Bank in COC.

Analysis:
1. The Insolvency Professional sought clarification on the validity of ICICI Bank's invocation of a corporate guarantee not conforming to stipulations. The Tribunal refrained from providing an opinion at this stage, stating that such issues fall within the domain of the Insolvency Professional. The Tribunal emphasized the importance of the Insolvency Professional's discretion during the resolution plan process, especially under the protection of Section 14 of the Code.

2. Another issue raised was whether ICICI Bank's claim for loan facilities availed by ESL could be rejected by the IRP/RP due to its participation in the resolution proceedings. The Tribunal held that it was premature to make a decision on this matter, as all arguments would be considered when the resolution plan is presented for final approval. The Tribunal highlighted the significance of the Insolvency Professional's role and discretion during the ongoing resolution process.

3. The final issue pertained to the determination of the value for which ICICI Bank should be granted voting rights if permitted to participate in the COC. The Tribunal dismissed the application, stating that it was not maintainable at that stage. The Tribunal emphasized that all relevant arguments, including those related to voting rights, would be considered when the resolution plan is brought for final approval, and urged the Insolvency Professional to exercise wisdom and discretion in the interim.