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TMI Blog2020 (2) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... or and the same can be invoked without exhausting the remedies against the Principal Debtor. The application deserves to be admitted - application admitted - moratorium declared. - C.P. NO. IB-564/(ND)/2019 - - - Dated:- 21-10-2019 - R. Varadharajan, Judicial Member And K.K. Vohra, Technical Member Alishan Naqvee and Ms. Swet Shikha, Advs. for the Respondent. ORDER 1. The instant application has been filed by M/S. India Factoring And Finance Solutions Pvt. Ltd. [for brevity 'the Applicant' or Financial Creditor (FC)] under the provisions of Section 7 of Insolvency and Bankruptcy Code, 2016 ( IBC ) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice dated 21.01.2019 to the CD thereby calling upon the CD to make payments. (g) There after a reply notice dated 04.02.2019 was sent by the CD raising frivolous grounds thereby constituting vexatious litigation with the sole intention to harass the FC. (h) The total amount claimed to be in default by the CD is ₹ 2,63,65,768.13 as on 31.12.2018. 3. The following documents (copies) are attached to the application in order to prove the existence of financial debt: (a) Duly accepted 'Facility letter' dated 9.05.2017 executed by the Respondent in favour of the Petitioner. (b) Duly executed factoring agreement dated 12.05.2017 between the petitioner and Respondent. (c) Corporate Guarantee dated 17.05.2017 executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, and as such it would be grossly premature to hold the CD responsible towards a fall back corporate guarantee. Due to this the disputes pending between the subsidiary of the CD, FC and its approved Debtor/Flipkart, it is likely that GRPL (subsidiary of the CD) is determined to have no liability towards the FC or the Approved Debtor of the FC. (f) The CD referring to the judgment titled Export Import Bank of India v. CHL Limited states that the liability of a guarantor arises only when the Principal borrower defaults in repayment of the demand made by the lender, which situation has not arisen in the present case. (g) The CD has also annexed an E-mail dated 1.05.2019 from the FC to GRPL along with the ledger showing the pending invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability under the present proceedings. (e) Section 128 of the Indian Contract Act 1882 states that the liability of the guarantor is co-extensive with the liability of the principal debtor and can be invoked without exhausting the remedies against the principal debtor. (f) The factoring agreement executed between the parties had a provision for 'right to recourse' which was executed by the GRPL after duly analysing the terms of the agreement and the eventualities arising thereof, wherein in case of any default arising in terms of repayment the client i.e. GRPL was to compensate/repay the amount due in order to minimize the risk of loss of the FC. (g) The clause 12 of the factoring agreement dated 12.05.2017 stipulates that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability of the guarantor is co-extensive with the liability of the principal debtor and the same can be invoked without exhausting the remedies against the Principal Debtor. 7. The Applicant has specified the name of the Resolution Professional (IRP) and has annexed Form 2, the consent of the proposed IRP to the application accordingly. 8. From the Application filed it is seen that the Applicant has named an IRP in Part III of its Application whose details are as follow: Mr K.V. Sivaraman, Address: AAA Insolvency Professionals LLP, E-10A, Kailash Colony, New Delhi- 110048. It is also seen from the Application that the above named IRP has given a written consent in Form 2 wherein he has agreed to accept appointment as an IR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the CD. c. However during the pendency of the moratorium period in terms of Section 14(2) and 14(3) as extracted hereunder: (2) The supply of essential goods or services to the CD as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. d. The duration of the period of moratorium shall be as provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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