2019 (5) TMI 1877 - Tri - Companies Law

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - The question that arises for consideration is whether the same claim could be made the basis for filing an application under Section 7 of the Code for triggering the CIR Process. The question is no longer res integra. In, DR. VISHNU KUMAR AGARWAL VERSUS M/S. PIRAMAL ENTERPRISES LTD. 2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI where it was held that though there is a provision to file joint application under Section 7 by the Financial Creditors , no application can be filed by the Financial Creditor against two or more Corporate Debtors on the ground of joint liability ( Principal Borrower and one Corporate Guarantor , or Principal Borrower or two Corporate Guarantors or one Corporate Guarantor and other Corporate Guarantor ), till it is shown that the Corporate Debtors combinedly are joint venture company. The question further is as to whether the claim lodged by the petitioner-International Finance Corporation which was based on the same set of facts and documents in the holding Company namely Punj Lloyd Limited-Guarantor and that has already been admitted by Mr. Gaurav Gupta, IRP of that Company as is evident from the aforesaid list. This cannot again be raised for admission in the present proceeding - thus, on account of duplicacy of the claims the petition cannot be entertained. Petition dismissed.

Summary

Issues Involved:
1. Validity of triggering the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Whether the same claim can be the basis for filing multiple applications under Section 7 against different corporate debtors.
3. The impact of an already initiated CIRP against the guarantor on the current proceedings against the principal borrower.

Detailed Analysis:

1. Validity of Triggering the CIRP:
The Financial Creditor, International Finance Corporation, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Punj Llyod Upstream Limited. The Corporate Debtor is a registered company under the Companies Act, 1956, with authorized share capital of ?100,00,00,000/- and paid-up share capital of ?62,69,40,000/-. The loan agreement dated June 6, 2008, was entered into for a loan amount of USD 25,000,000, guaranteed by Punj Lloyd Limited, the holding company of the Corporate Debtor. The first tranche of USD 12,500,000 was disbursed on 19 November 2008 and 02 April 2009, while the second tranche was canceled on 19 March 2015 upon the Corporate Debtor's request.

2. Multiple Applications for the Same Claim:
The Financial Creditor had already initiated CIRP against the guarantor, Punj Lloyd Limited, under Section 7 of the Code, which was disposed of on 09.05.2019, with the observation that another CIRP cannot be initiated against a corporate debtor undergoing an existing CIRP as per Section 11 of the Code. The Financial Creditor was granted liberty to file its claim before the Insolvency Professional, Mr. Gaurav Gupta. The records, including Form-1, showed that the amount claimed from the guarantor Punj Lloyd Limited included the same amount claimed from the principal borrower in the present case, relying on the same loan agreement dated June 6, 2008.

3. Impact of Existing CIRP Against the Guarantor:
The question arose whether the same claim could be the basis for filing an application under Section 7 for triggering the CIRP. The judgment referenced Dr. Vishnu Kumar Agarwal v. M/s. Piramal Enterprises Ltd., where it was held that once an application under Section 7 is admitted against one corporate debtor, a second application for the same claim and default cannot be admitted against another corporate debtor. The Financial Creditor had already lodged its claim with Mr. Gaurav Gupta, IRP, towards the facilities disbursed to both the principal borrower and the guarantor. This claim was included in the list of creditors prepared by the IRP.

Conclusion:
The petition was dismissed on the grounds of duplicacy of the claims, as the same claim had already been admitted in the CIRP against the guarantor, Punj Lloyd Limited. The tribunal concluded that such a course is not permissible in law, as laid down in the Dr. Vishnu Kumar Agarwal case. Therefore, the petition could not be entertained, and the petition failed and was dismissed.