2019 (5) TMI 1934 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - filing simultaneously two claims under section 7 against principal borrower - petition is admitted against one company then another petition based on the same claim can be admitted or not? - HELD THAT - If a petition is admitted against one company then another petition based on the same claim cannot be admitted. In other words, separate petitions, against different Corporate Debtors, for the same claim cannot be admitted simultaneously. Here, since the petition against the Corporate Guarantor i.e. Dugal Projects Development Company Private Limited is admitted in CP 2527/2018 vide our order dated 08.05.2019, therefore, the present petition on the same claim cannot be admitted. Petition dismissed.

Summary

Issues:
Company petition under Section 7 of IBC for default in payment; Filing of multiple petitions against principal borrower and corporate guarantor simultaneously.

Analysis:
The judgment pertains to a Company Petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by a Financial Creditor against a Corporate Debtor for defaulting on a significant payment. The Petitioner claimed that the Corporate Debtor defaulted on a substantial amount as per a decree issued by the Debt Recovery Tribunal (DRT) and the debt was subsequently transferred to the Petitioner. The debt was also secured by a Corporate Guarantee provided by another entity. The Petitioner had also filed a separate petition against the Corporate Guarantor for the same debt and default.

In reference to a judgment by the NCLAT in a similar case, it was highlighted that while there is no prohibition on filing two applications under Section 7 against the Principal Borrower and the Corporate Guarantor simultaneously, once an application is admitted against one Corporate Debtor for the same claim, a second application for the same claim against another Corporate Debtor cannot be admitted. This implies that separate petitions against different Corporate Debtors for the same claim cannot be admitted simultaneously.

Considering the above legal position, the Tribunal noted that since the petition against the Corporate Guarantor had already been admitted in a separate case, the present petition against the Corporate Debtor for the same claim could not be admitted. The Tribunal clarified that its decision to dismiss the present petition as infructuous did not imply any opinion on the merits of the case and granted liberty to file a fresh petition if necessary.