2019 (9) TMI 1448 - Tri - Insolvency and Bankruptcy

Issuance of directions to the Interim Resolution Professional to accept and admit the claim of the applicant - direction to IRP to revise the list of creditors of the corporate debtor - HELD THAT - Admittedly, the total claim of M/s. Edelweiss Assets Reconstruction Company Limited is only based upon the corporate guarantee dated 03.05.2018 for the purpose to secure loan sanctioned to the principal borrower vide loan agreement dated 07.10.2013 and nothing more. However, M/s. Edelweiss Assets Reconstruction Company Limited has lodged the very same claim, for admission in different insolvency processes respectively. Not only there is duplication of selfsame claim, but also the applicant financial creditor, if such duplicate claims are allowed, will enjoy proportionate voting rights in both the CoCs - No doubt the liability of guarantor is co-extensive with that of the principal debtor, however the applicant couldn't place any precedent in support of their contention that when a claim has been admitted in one CIRP, similar selfsame claim can also be admitted and pursued in other Insolvency Processes simultaneously. The finding of the Hon'ble NCLAT that for the same set of debt, claim cannot be filed by same 'Financial Creditor' in two separates 'Corporate Insolvency Resolution Processes' has not yet been varied, modified or set-aside nor has been stayed. Judicial discipline therefore demands that the precedent laid down by Hon'ble Appellate Court needs to be followed. The claim of the applicant being a repetition of the claim which already stands admitted in other insolvency process, cannot again be admitted in the present CIRP - Application dismissed.

Summary

Issues:
- Claim of financial creditor for admission in insolvency process
- Validity of claim based on assignment agreement and corporate guarantee
- Rejection of claim by Interim Resolution Professional (IRP)
- Challenge to IRP's rejection based on Supreme Court status quo order
- Precedent on filing duplicate claims in insolvency processes
- Judicial interpretation of same set of debt claim in multiple processes

Analysis:
The judgment involves a claim by a financial creditor, M/s. Edelweiss Asset Reconstruction Company Limited, seeking admission in the insolvency process of a corporate debtor, M/s. Gwalior Bypass Projects Limited. The creditor claimed dues from the debtor based on an assignment agreement and corporate guarantee related to a loan agreement with another entity, Adel Landmarks Limited. The creditor's claim was rejected by the IRP, citing a previous judgment and the initiation of a separate insolvency process against the principal borrower.

The creditor argued that the rejection based on the previous judgment was invalid as it was challenged in the Supreme Court, which had only issued a status quo order. Additionally, the creditor contended that the insolvency process against the principal borrower did not bar its claim against the guarantor. However, the IRP maintained that the creditor had already filed a claim in the principal borrower's insolvency process for the same debt.

The tribunal noted that the creditor had filed duplicate claims in different insolvency processes, leading to potential disproportionate voting rights in the Committees of Creditors (CoCs). It emphasized that allowing duplicate claims for the same debt was impermissible, citing a precedent set by the Hon'ble NCLAT. The tribunal highlighted that judicial discipline required adherence to established precedents.

Ultimately, the tribunal dismissed the creditor's application, ruling that the claim, being a repetition of an already admitted claim in another insolvency process, could not be entertained in the present CIRP. The decision was based on the binding nature of the NCLAT precedent and the principle of stare decisis. The judgment underscores the importance of consistency in interpreting and applying insolvency laws to maintain the integrity of the process.