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2022 (3) TMI 1111 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - invocation of multiple remedies by filing claims of the same amount in some other Corporate Insolvency Resolution Processes (CIRP) going on against other companies of the Ninex Group - Whether the claim of Respondent No. 1 which is being considered in the CIRP of the Corporate Debtor/Abloom Infotech Pvt. Ltd. does not preclude him from filing an application for initiating CIRP against the personal guarantor? - time limitation - HELD THAT - The Appellant has raised an issue that part of the Loan Facility was used for ever-greening and therefore it cannot be termed as a loan given for time value of money - Admittedly, the default has taken place in accordance with the Event of Default as defined in the Loan Agreement in Article 8 and further Ninex Developers Pvt. Ltd. and Red Topaz Real Estate Pvt. Ltd. who are co-borrowers in the said Loan Agreement dated 27.04.2016 are already under CIRP due to their inability to repay the loan amounts. Furthermore, statutory demand notice under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Negotiable Instruments Act, 1881 dated 19.03.2019 and legal notice dated 2.06.2019 issued on behalf of the Financial Creditor to the Corporate Debtor also establish the Event of Default. This default has first taken place on 15.09.2019 and hence, the section 7 application is under limitation. The Agreement to Sell is done with the purpose of repayment of Loan Facility and can hardly be called a collusive action by the Financial Creditor alongwith Pardos Realtors Pvt. Ltd. against the Corporate Debtor - It has also asked for return of the refundable security deposit of ₹ 10,88,73,790/- together with interest at the rate of 30% per annum compound monthly as stated in Paragraph 4 of termination letter. Be that as it may, the termination of the agreement to sell has no bar on the adjudication of section 7 application. Therefore, when the liabilities of the principal borrower and surety are co-extensive under an agreement, it stands to reason that the liabilities of co-borrowers who have equal and similar liabilities under a loan agreement will also be there and CIRPs against them can run simultaneously. Moreover, till the financial creditor is able to get payment of his claim, he can file claim in all the CIRPs and also have voting rights in the respective CoCs based on the quantum of his financial debt. Thus, the liabilities of the corporate debtor and the co-borrower companies are joint and co-extensive in nature and that claims of similar amounts could be submitted by the financial creditor in all the CIRPs. In the matter of Lalit Kumar Jain Vs. Union of India Ors. 2021 (5) TMI 743 - SUPREME COURT , the Hon ble Supreme Court has held the validity of notification authorising the Central Government and the Insolvency and Bankruptcy Board of India to frame Rules and Regulations on how to allow actions against a Personal Guarantor to a Corporate Debtor before the Adjudicating Authority. Thus, it is clear that simultaneous proceedings are possible against the Corporate Debtor and the Personal Guarantor who has stood surety through a valid deed of guarantee. In the present case, Mr. RM Garg and Mr. Sandeep Garg have stood guarantee of the Loan Facility advanced by the Financial Creditor to the Corporate Debtor vide Loan Agreement dated 27.04.2016 and through the deed of guarantee dated 27.04.2016 and hence can be moved against under the IBC while CIRP proceedings are going on against the Corporate Debtor. A loan amounting to ₹ 13,35,00,000/- was disbursed by the Financial Creditor/DMI Finance Pvt. Limited to the Corporate Debtor/Abloom Infotech Pvt. Ltd. in accordance with Loan Agreement dated 27.04.2016 whose repayments were in default and a Section 7 application was moved against the Corporate Debtor by the Financial Creditor consequently. Ingredients of section 7 application are satisfied and the Adjudicating Authority has correctly admitted the section 7 application, thereby initiating CIRP against the Corporate Debtor - there are no reason to interfere with the impugned order dated 11.03.2021 and hold it as correct. The Appeal is thus disposed off.
Issues Involved:
1. Whether any amount was due and payable by the Corporate Debtor to the Financial Creditor. 2. Whether the financial creditor can invoke multiple remedies by filing claims of the same amount in other CIRPs against other companies of the Ninex Group. 3. Whether the claim of the Financial Creditor in the CIRP of the Corporate Debtor precludes him from filing an application for initiating CIRP against the personal guarantor. Detailed Analysis: Issue 1: Amount Due and Payable The Appellants argued that despite repaying ?88,37,00,000/- against a total loan of ?69,51,00,000/-, a Section 7 application was admitted erroneously. They claimed that no default occurred and requested a proper account statement, which was not provided. The Respondent argued that a total loan of ?13,35,00,000/- was disbursed as per the loan agreement dated 27.04.2016, and the Corporate Debtor admitted this in their reply. The Tribunal noted that an event of default occurred on 15.09.2017, and subsequent defaults followed. Statutory and legal notices also established the default. The Tribunal concluded that the loan disbursed qualified as a financial debt under Section 5(8) of IBC and default had occurred as per the loan agreement. Issue 2: Multiple Remedies and Claims The Appellants contended that the Financial Creditor filed claims for the same amount in CIRPs of other co-borrowers and under SARFAESI Act, 2002, making the current proceedings untenable. The Tribunal referred to judgments from the Supreme Court and NCLAT, which held that liabilities of principal debtor and surety are co-extensive, allowing simultaneous CIRPs against co-borrowers. The Tribunal noted that the Financial Creditor could file claims in multiple CIRPs until the debt is fully recovered and that such actions are permissible under Section 60 of IBC. Therefore, the Tribunal found no issue with the Financial Creditor filing claims in multiple CIRPs. Issue 3: CIRP Against Personal Guarantor The Appellants argued that the Financial Creditor initiated personal insolvency proceedings against the personal guarantor despite a stay order from the Delhi High Court. The Tribunal cited judgments affirming that simultaneous proceedings against the Corporate Debtor and Personal Guarantor are permissible under IBC. The Tribunal held that the Financial Creditor could proceed against both the Corporate Debtor and the personal guarantors, as their liabilities are independent and co-extensive. Conclusion The Tribunal concluded that the loan of ?13,35,00,000/- was disbursed and defaulted as per the loan agreement. The Financial Creditor's actions of filing claims in multiple CIRPs were justified and permissible under IBC. The Tribunal upheld the Adjudicating Authority's order admitting the Section 7 application and initiating CIRP against the Corporate Debtor. The appeal was disposed of with no order as to costs.
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