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2021 (3) TMI 763 - AT - Insolvency and BankruptcyFiling of separate claims by Financial Creditors for Corporate Guarantor and Principal Borrower - HELD THAT - There is no substance in the submissions of Counsel for Respondent that case would be different if same IRP/RP is there in the two CIRPs. It would be just a matter of co-ordination between the two IRPs/RPs. Till payment is received in one CIRP, claim can be maintained in both CIRPs for same amount and representation in CoC in both CIRPs to the extent of amount due will be justified. This is the reason why Section 60 (3) provides for transfer of proceeding to Adjudicating Authority where already there is a pending proceeding. There is no question of looking into Judgments when Section 60 of IBC is clear and makes the two CIRPs maintainable in such matters. If they are maintainable, claim in both (subject to adjustments on receipts) would also be maintainable. The Respondent will consider the claim of the Appellant Borrower and appropriately deal with the Appellant as Financial Creditor in the CoC - Appeal allowed.
Issues Involved:
1. Whether it is admissible for the Financial Creditor to file separate claims in the CIRP of the Corporate Guarantor and the Principal Borrower. Issue-wise Detailed Analysis: 1. Admissibility of Separate Claims by Financial Creditor: The primary issue addressed in this judgment is whether a Financial Creditor can file separate claims for the same debt in the Corporate Insolvency Resolution Process (CIRP) of both the Corporate Guarantor and the Principal Borrower. The Appellant, State Bank of India, argued that the liability of the Corporate Guarantor is co-extensive with that of the Principal Borrower, and hence, it should be allowed to file claims in both CIRPs. The Appellant cited the case of "State Bank of India Vs. Athena Energy Ventures Pvt. Ltd." to support its argument. The Appellant contended that the National Company Law Tribunal (NCLT) failed to consider the provisions of Section 60 of the Insolvency and Bankruptcy Code (IBC) and relevant judgments, and erroneously dismissed their claim against the Corporate Guarantor on the grounds that a claim had already been filed against the Principal Borrower. The Resolution Professional (RP) and the Committee of Creditors (CoC) argued that the claim against the Corporate Guarantor was not tenable as the amount recoverable from the Principal Borrower was uncertain. They also referred to the judgment in "Dr. Vishnu Kumar Agarwal Vs. M/s Piramal Enterprises Ltd." to support their stance. The Adjudicating Authority observed that allowing the Appellant to file claims in both CIRPs would complicate the determination of voting shares in the CoC and the amount recoverable from each party. The Authority held that the claim from the Corporate Guarantor was nebulous and not admissible. Analysis of Legal Provisions and Judgments: The judgment referenced Section 60 of the IBC, which outlines the jurisdiction of the NCLT in cases involving corporate debtors and their guarantors. The Tribunal noted that amendments to Section 60(2) and (3) allow for simultaneous proceedings against both the Corporate Debtor and Corporate Guarantor. The Tribunal emphasized that these provisions indicate that the IBC does not prevent filing claims in both CIRPs, as long as adjustments are made when payments are received. The Tribunal also referred to the Insolvency Law Committee (ILC) Report, which supported the idea of simultaneous CIRPs against Principal Borrowers and Corporate Guarantors. The ILC cited the case of "Edelweiss Asset Reconstruction Company Ltd. V. Sachet Infrastructure Ltd." which allowed for such simultaneous proceedings. Conclusion: The Tribunal concluded that the Adjudicating Authority erred in dismissing the Appellant's claim against the Corporate Guarantor. The Tribunal held that the IBC permits filing claims in both CIRPs, subject to adjustments when payments are received. The Tribunal set aside the Impugned Order and directed the Respondent to consider the Appellant's claim and treat the Appellant as a Financial Creditor in the CoC. The Appeal was allowed, and the Tribunal emphasized that the law permits simultaneous claims in CIRPs of both the Principal Borrower and the Corporate Guarantor, ensuring that creditors can pursue their claims without being restricted by procedural technicalities.
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