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TMI Blog2018 (12) TMI 1730X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor . While considering the Resolution Plan , the creditors focus on resolution of the borrower Corporate Debtor , in line with the spirit of the I B Code . The present appeal has been preferred by the promoters, who are responsible for having contributed to the insolvency of the Corporate Debtor . The I B Code prohibits the promoters from gaining, directly or indirectly, control of the Corporate Debtor , or benefiting from the Corporate Insolvency Resolution Process or its outcome. The I B Code seeks to protect creditors of the Corporate Debtor by preventing promoters from rewarding themselves at the expense of creditors and undermining the insolvency processes. For the aforesaid reasons, it will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Kunal Godhwani, Mr. Tarun Mehta and Ms. Stuti Vatsa, For Respondents: Mr. Sumant Batra, Ms. Honey Satpal, Ms. Srishti Kapur, Mr. Sanjay Bhatt and Mr. Abhishek Anand, Advocates for R-2 and Ms. Kiran Sharma, Mr. Bishwajit Dubey, Mr. Kirat Nagra, Ms. Surabhi Khattar and Mr. Prafful Goyal, Advocates for Monitoring Agency. Mr. Ankur Kashyap and Mr. Manan Mehta, Ms. Arushi Singh, Mr. Mustafa Mumtaj, Mr. P.V. Dinesh, Mr. Rajendra Beniwal and Mr. T.P. Sindhu, JUDGMENT Sudhansu Jyoti Mukhopadhaya, J. The Appellants- Lalit Mishra Ors. are the promoters of Sharon Bio Medicine Ltd. - ( Corporate Debtor ). In the appeal they have challenged the order dated 28th February, 2018 passed by the Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced to nil and thereby the Resolution Plan have been submitted against the provisions of Sections 133 and 140 of the Indian Contract Act . 6. The submissions made on behalf of the Appellants have been disputed by the learned counsel appearing on behalf of the Resolution Professional and the 3rd Respondent. 7. Section 4 of the Resolution Plan deals with raising of funds under the proposed plan . Under Clause 1 therein, the reduction of share capital has been proposed and it is proposed that the Company undertakes a selective capital reduction of (i) the entire shareholding held by the Promoter Group and Secured Lenders; and (ii) up to 90% of the Equity Shares held by the public shareholders. It is mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds the Company or the Resolution Applicant . 9. It was not the intention of the legislature to benefit the Personal Guarantors by excluding exercise of legal remedies available in law by the creditors, to recover legitimate dues by enforcing the personal guarantees, which are independent contracts. It is a settled position of law that the liabilities of guarantors is co-extensive with the borrower. This Appellate Tribunal held that the resolution under the I B Code is not a recovery suit. The object of the I B Code is, inter alia, maximization of the value of the assets of the Corporate Debtor , then to balance all the creditors and make availability of credit and for promotion of entrepreneurship of the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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