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TMI Blog2018 (4) TMI 1806X X X X Extracts X X X X X X X X Extracts X X X X ..... prima facie case and also proved that there is a debt due payable by the principal borrower and there is a decree made against the respondent/guarantor. This Tribunal has no jurisdiction to enforce the foreign decree ; however there is no bar in it taking cognizance of the foreign decree - petition disposed off. - C. P. No. 670/IB/2017. - - - Dated:- 27-4-2018 - K. Anantha Padmanabha Swamy Judicial Member And S. Vijayaraghavan Technical Member For the Petitioner : Anirudh Krishnan For the Respondent : S. R. Rajagopal ORDER K. Anantha Padmanabha Swamy (Judicial Member). - 1. Under consideration is a company petition filed by M/s. Stanbic Bank Ghana Ltd. (in short petitioner/financial creditor) against M/s. Rajkumar Impex P. Ltd. (in short respondent) under section 7 of the Insolvency and Bankruptcy Code, 2016 (in short IB Code 2016) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short, IB Rules, 2016). 2. The petitioner/financial creditor herein is a bank incorporated at Ghana having its registered office at 215, South Liberation Link Airport City, Accra, Ghana and the respondent herein is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time, all such security to be in form and substance satisfactory to the bank : 8.1.1 Legal mortgage over customer's fixed assets valued at USD 53,00,000 and located at plot number 69, Block 'D', Sector 3N Layout at Techiman in the Techimanian Municipality of the Brong Ahafo Region of the Republic of Ghana measuring 7.79 acres. 8.1.2 Fixed and floating charge over customers movable asset including all raw and processed cashew nut stocks to be stamped for USD 2,05,30,000. 8.1.3 Unlimited parent corporate guarantee from Rajkumar Impex P. Ltd., registration number 18-29136 (the 'guarantor'), incorporated in India. 8.1.4 General assignment of customer's sale proceeds and receivables. (d) When there was a default by the principal borrower, proceedings were initiated in Ghana (Suit No. BFS 13 of 2016 on November 20, 2015) against the principal borrower (page 8 of the additional affidavit and documents) and against the respondent before the English courts (Case No. CL-2017-000235 on April 20, 2017) (page 107 of the petition). (e) While the proceedings before the Ghana court is still pending and no money has been recovered till date pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e insolvency resolution process against the respondent under the Insolvency and Bankruptcy Code, 2016. (g) Learned counsel for the respondent filed a counter and vehemently argued that the petition under the IB Code, 2016 is not maintain able on the grounds that the petitioner/financial creditor not being an Indian company within the meaning of the Companies Act, 2013 cannot invoke the provisions of the IB Code and prefer a petition styling them selves to be a financial creditor. He further submitted that the application was signed by the agent in Ghana on October 31, 2017 and that a constituted attorney cannot institute application on behalf of their principal invoking the provisions of section 7 of the IB Code, 2016. The rules framed thereunder entitle only a person authorised or authorised representative to verify the pleading and that the pleadings verified by an agent is not maintainable. He also submitted that the principal borrower is an independent entity and not a subsidiary of the respondent-company. Having failed to recover the amount from the principal borrower, the petitioner/financial creditor cannot enforce the claim against the guarantor and the guaranteed liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Court, London has not considered the said aspects and therefore the judgment is not on the merits. The claim based on the same is bad in law and the application under the IB Code, 2016 is not maintainable. Learned counsel for the respondent relied on the following case laws and on the Foreign Exchange Management Regulations, 2000, in support of his submissions : (1) [1954] 24 Comp Cas 249 (Mad) ; 67 LW 1100 (Karnatak Vege table Oils and Refineries Ltd. v. Madras Industrial Investment Corporation Ltd.)-it was held that where an application for winding up of a company was preferred under sections 162 and 166 of the Companies Act by a creditor who had ample security for his debt and there was no averment that the security was insufficient or that he ever demanded additional security though the mortgage deed contained a specific provision enabling him to demand such additional security and the application was not supported by any other creditor desiring that the company should be wound up and the company objected to the winding up on the ground that its financial embarrassment was only temporary due to cause beyond its control and that the winding up would not be in best interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emedy available against the principal borrower before proceeding against the guarantor. It is up to the guarantor to see whether the principal borrower pays and not that of the creditor. The guarantor's right against the principal borrower is protected by virtue of the right of subrogation. Clause 3.3 of the guarantee deed provides that the petitioner/financial creditor need not be obliged to take any action against the borrower before enforcing the rights against the guarantor as referred to in paragraph 11 of the judgment of the hon'ble High Court of Justice, Queen's Bench Division, Commercial Court, London. Letter dated March 11, 2015 is a conclusive evidence of the debt as it is in accordance with clause 13 of the guarantee deed. The respondent is not only liable as guarantor but also as a principal obligator. With regard to the submission made by the respondent that the conditions of guarantee are not met, he submitted that it is not open to go beyond the decree once there is a foreign court decree. The order of the hon'ble High Court of Jus tice, Queen's Bench Division, Commercial Court, London is conclusive and it was made on merits even though it is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 3 SCR 724 (Amrit Lal Goverdhan Lalan v. State Bank of Travancore) it was held that the guarantor's right against the principal borrower is protected by virtue of its right of subrogation ; (4) [2007] SCC online Bom 319 ; [2008] 142 Comp caas 647 (Bom) (China Shipping Development Co. Ltd. v. Lanyard Foods Ltd.), [2001] 5 SCC 265 (International Wollen Mills v. Standard Wool (U. K.) Ltd.), [2017] 2 SCC 253 (Alcon Electronics P. Ltd. v. Celem S. A. of France), AIR 1927 All 510 (Ishri Prasad v. Sri Ram), [1928] SCC online Rangoon 7 (Abdul Rahman v. Mohamad Ali Rowthar), AIR 1958 Ker 203 (Govindan Asari Kesavan Asari v. Sankaran Asari Balakrishnan Asari) to say that the foreign summary judgment based on the merits is enforceable in India. (5) [2017] 205 C-C 57 (SC) ; [2017] SCC online SC 1025 (Innoventive Industries Ltd. v. ICICI Bank) it was held that dispute irrelevant for the purpose of determining an application under section 7 of the IB Code, 2016. (6) Civil Appeal No. 15135 of 2017-Macquarie Bank Ltd. v. Shilpi Cable Technologies Ltd. [2018] 1 C-C-OL 644 (SC) it was held that there is no restriction on a duly authorized power of attorney holder signing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (l) The hon'ble judge has also observed that there is no other compelling reason for a trial and passed the decree in favour of the petitioner/ financial creditor herein. It is also on record that the respondent has never appeared before the said Commercial Court, London despite of the notice served and it is also on record that the respondent has not proved that either they have filed an application to set aside the order or filed an appeal against the said order before the appropriate court. Without filing an appeal or application to set aside the order of the hon'ble High Court of Justice, Queen's Bench Division, Commercial Court, London and now con tending that the said order is not made on merits is not supported by any law and therefore the respondent is estopped from making such plea before this Adjudicating Authority. It is a well-settled law that the courts need not go beyond a decree made in favour of a party and in this case the decree made by the hon'ble High Court of Justice, Queen's Bench Division, Commercial Court, London. Since the respondent failed to defend its case before hon'ble High Court of Justice, Queen's Bench Division, Commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment. The List of the reciprocating territories as per the provisions of section 44A of the Code of Civil Procedure, 1908, is as under : United Kingdom, Aden, Fiji, Republic of Singapore, Federation of Malaya, Trinidad and Tobago, New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa, Hong Kong, Papua and New Guinea, Bangladesh and United Arab Emi rates. (n) The objections raised by counsel for the respondent are not valid ground for rejection of the instant petition. Therefore the petition stands admitted. (o) The Tribunal thus orders for the commencement of the corporate insolvency resolution process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed. (p) We appoint Ms. Deepa V. Ramani (registration No. IBBI/IPA-002/ IP-00118/2017-2018/10287), having office at No. 40, TNHB Complex, No. 180 Luz Church Road, Chennai-60 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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