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2022 (5) TMI 912 - Tri - Insolvency and BankruptcyRejection of the simultaneous claim by the Resolution Professional of the Corporate Debtor - Claim filed by the Applicant with respect to the corporate guarantee given by the Corporate Debtor - whether a simultaneous claim can be submitted by the financial creditor in the CIRP initiated against the Corporate Debtor as well as against the Corporate Guarantor? - HELD THAT - Section 60(2) of the IBC 2016 empowers the Financial Creditor to initiate the CIRP against the Corporate Debtor as well as the corporate guarantor of the Corporate Debtor. If the financial creditor is entitled to initiate a CIRP against the Guarantor during the pendency of CIRP or liquidation proceeding pending against the Corporate Debtor. Thereby the claim can not be rejected merely on the ground that the claim has already been admitted in CIRP of M/s. Sitex. Moreover there is no bar in the IBC 2016 to submit the simultaneous claim in the CIRP of the Corporate Debtor as well as in the CIRP of the corporate guarantor. The Hon ble NCLAT in STATE BANK OF INDIA STRESSED ASSET MANAGEMENT BRANCH VERSUS ATHENA ENERGY VENTURES PRIVATE LIMITED 2020 (11) TMI 800 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI has upheld that when the principal borrower and surety are undergoing CIRP the creditor is entitled to file a claim in CIRP on both of them. It is directed to the RP of the Corporate Debtor to verify and admit the claim submitted by the applicant with respect to the corporate guarantee executed by the Corporate Debtor for the credit facilities as well as Bank Guarantee Given to M/s. Sintex - the present application is allowed.
Issues Involved:
- Rejection of claim by Resolution Professional - Simultaneous claim submission by financial creditor against Corporate Debtor and Corporate Guarantor - Interpretation of relevant sections of Insolvency and Bankruptcy Code, 2016 - Legal validity of claim rejection based on admission by IRP of M/s. Sintex - Empowerment of Financial Creditor to initiate CIRP against Corporate Guarantor Issue 1: Rejection of claim by Resolution Professional The Tribunal addressed the application filed by the State Bank of India under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 against the rejection of their claim by the Resolution Professional of the Corporate Debtor. The claim pertained to a corporate guarantee provided by the Corporate Debtor in favor of the applicant, State Bank of India. Issue 2: Simultaneous claim submission by financial creditor against Corporate Debtor and Corporate Guarantor The Tribunal deliberated on the question of whether a financial creditor can submit a simultaneous claim in the Corporate Insolvency Resolution Process (CIRP) against both the Corporate Debtor and the Corporate Guarantor. The case involved claims against M/s. Sintex, where the Corporate Debtor had executed a corporate guarantee. Issue 3: Interpretation of relevant sections of Insolvency and Bankruptcy Code, 2016 The Tribunal analyzed various sections of the Insolvency and Bankruptcy Code, 2016, including Section 3(6), Section 5(7), Section 5(8)(i), and Section 60(2). These sections were crucial in determining the admissibility of the claim submitted by the financial creditor and establishing the legal status of the applicant as a financial creditor. Issue 4: Legal validity of claim rejection based on admission by IRP of M/s. Sintex The Tribunal examined the legal validity of the rejection of the claim by the Resolution Professional of the Corporate Debtor based on the admission of a similar claim by the Insolvency Resolution Professional (IRP) of M/s. Sintex. The rejection was challenged on the grounds that the claim was within the definition of a financial debt and the applicant was a financial creditor. Issue 5: Empowerment of Financial Creditor to initiate CIRP against Corporate Guarantor The Tribunal considered the empowerment of a Financial Creditor to initiate the Corporate Insolvency Resolution Process against both the Corporate Debtor and the Corporate Guarantor simultaneously. It highlighted the provisions of Section 60(2) of the Insolvency and Bankruptcy Code, 2016, which allow for such actions by the creditor. The Tribunal, after thorough analysis and interpretation of the relevant legal provisions, upheld the applicant's claim and directed the Resolution Professional of the Corporate Debtor to verify and admit the claim submitted by the applicant concerning the corporate guarantee executed by the Corporate Debtor. The decision allowed the application and disposed of the matter in favor of the State Bank of India.
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