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TMI Blog2019 (11) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the Appellant - Company Appeal (AT) (Insolvency) No. 538 of 2019 Page 4 of 7 M/s. Maharaja Theme Parks and Resorts Private Limited does not come within the meaning of Corporate Guarantor as defined under Section 5(5A) - From the conjoint reading of Sections 3(7) and (8), it is clear that a Company as defined in clause (2) of Section 2 of the Companies Act, 2013 or Company Appeal (AT) (Insolvency) No. 538 of 2019 Page 5 of 7 a limited liability partnership, as defined in clause (n) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008, or any other person incorporated therein (except any financial service provider), comes within the meaning of Corporate Debtor. It is not in dispute that M/s. Maharaja Theme P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f P. Sathiyamoorthy. [Collectively referred to as the Borrowers] 3. M/s. Maharaja Theme Parks andResorts Private Limited (Corporate Debtor) extended corporate guarantees for the loans availed by all three Borrowers. The three Borrowers failed to repay the debts payable to the Respondent Bank. Under the circumstances, the proceedings were not initiated against the Borrowers, but against the Corporate Guarantor, i.e., M/s. Maharaja Theme Parks andResorts Private Limited. 4. Learned Counsel for the Appellant submitted that the application under Section 7 was not maintainable against M/s. Maharaja Theme Parks and Resorts Private Limited. It was submitted that the petition can be filed Company Appeal (AT) (Insolvency) No. 538 of 2019 Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited does not come within the meaning of Corporate Guarantor as defined under Section 5(5A). 10. Section 5(22) defines Personal Guarantor, reads as follows: - 5(22) personal guarantor means an individual who is the surety in a contract of guarantee to a corporate debtor. 11. It is submitted that the Appellant having not given any surety in its individual capacity in a contract of guarantee to a corporate debtor (Borrowers being Partnership Firms or Proprietorship concern), the Appellant comes within the meaning of personal guarantor. 12. Section 3(7) defines Corporate Person, reads as follows: - 3(7) corporate person means a company as defined in clause (20) of section 2 of the Companies Act, 2013 (18 of 2013), a limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney and includes the amount of any liability in respect of any of the guarantees or indemnity for any of the items referred to in sub-clauses (a) to (h) of the clause. Relevant provisions of Section 5(8) reads follows: - 5(8) financial debt means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialized equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; Company Appeal (AT) (Insolvency) No. 538 of 2019 Page 6 of 7 (d) the amount of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed the money against payment of interest from the Bank and M/s. Maharaja Theme Parks and Resorts Company Appeal (AT) (Insolvency) No. 538 of 2019 Page 7 of 7 Private Limited has taken the guarantee in respect of the item referred to in clause (a) of Section 5(8). In this background, we hold that the Bank comes within the meaning of Financial Creditor of M/s. Maharaja Theme Parks Resorts Private Limited (Corporate Debtor). For the said reason, the application under Section 7 is maintainable. 19. We find no merit in this Appeal. It is accordingly dismissed. No costs. [Justice S. J. Mukhopadhaya] Chairperson (Justice A.I.S. Cheema) (Kanthi Narahari) Member (Judicial) Member (Technical) NEW DELHI 18th November, 2019. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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