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TMI Blog2021 (3) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... lant claims that the bank had granted credit facility in the nature of Term Loan to Purple Advertising Services Pvt. Ltd. (Principal Borrower). The present Respondent No. 1 was Guarantor for securing the dues of the Principal Borrower. The Principal Borrower became the NPA as well as the present Respondent No.1 (Corporate Guarantor), their liability being co-extensive, they became liable to pay outstanding dues to the Appellant bank. A sum of Rs. 29 crore approx. as on 20.11.2019, was due. 3. It is stated that vide its order dated 29.10.2019 in C.P. No. 108/KB/2019, the Ld. NCLT initiated CIRP against the Principal Borrower on an application filed by the United Bank of India. The Appellant Bank has filed its claim before the Resolution Professional and the CIRP is pending and the Resolution Plan is being evaluated. According to the Appellant it may not get any substantial sum (approx. less than 10% of the dues) in the CIRP of the Principal Borrower even if any resolution is found. 4. The Appellant claims that by order dated 20.11.2019 in C.P. No. 159/KB/2019, the Ld. NCLT initiated CIRP against Corporate Guarantor, on an application filed by the United Bank of India. On 11.02.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity in Impugned Order in para 14 (d). He submits that there are Judgments of the Hon'ble Supreme Court with regard to following subsequent larger Bench Judgment. 9. It is further submitted that under Section 21 (4) (a) of the IBC the Financial Creditor to the extent of the Financial debt owed by the Corporate Debtor, can be included in the Committee of Creditor, with voting share proportionate to the extent of financial debt. It is stated when claim is made in CIRP of Principal Borrower, the same benefit in CIRP of Guarantor cannot be taken as amount would not be known what is recovered in other CIRP. 10. We have heard parties. From the Impugned Order it is apparent that the Impugned Order failed to discuss the provisions or Judgments. It was simply observed in paras 16 to 21 as under: "16. Heard the Ld. Counsel for the Applicant and the Ld. Counsel for the Resolution Professional and have perused the application. 17. The main issue in this application is whether the Applicant can be permitted to file its claim for the entire amount with two Resolution Professionals in the CIRP of two Corporate Debtors, one being the Principal Borrower and other the Guarantor. The claim admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority did not consider the provisions or Judgments. In Judgment in the matter of "State Bank of India Vs. Athena Energy Ventures Pvt. Ltd." (2020) SCC online NCLAT 774, we had referred to Section 60 of the IBC and the amendment made to sub-Section 2 in the following manner: "13. Apart from this, the observations in the Judgment in the matter of Piramal do not appear to have noticed Sub- Sections 2 and 3 of Section 60 of IBC. It would be appropriate to reproduce Section 60 (1) to (3) which reads as under:- " 60. Adjudicating Authority for corporate persons.- (1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate person is located. (2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority dealing with insolvency resolution process or liquidation proceeding of such Corporate Debtor. Apparently and for obvious reasons, the law requires that both the proceedings should be before same Adjudicating Authority." 12. We have further observed in para 16 is as under: "16. We find substance in the arguments being made by the learned Counsel for Appellant which are in tune with the Report of ILC. The ILC in para - 7.5 rightly referred to subsequent Judgment of "Edelweiss Asset Reconstruction Company Ltd. V. Sachet Infrastructure Ltd." dated 20th September, 2019 which permitted simultaneously initiation of CIRPs against Principal Borrower and its Corporate Guarantors. In that matter Judgment in the matter of Pirmal was relied on but the larger Bench mooted the idea of group Corporate Insolvency Resolution Process in para -34 of the Judgment. The ILC thus rightly observed that provisions are there in the form of Section 60 (2) and (3) and no amendment or legal changes were required at the moment. We are also of the view that simultaneously remedy is central to a contract of guarantee and where Principal Borrower and surety are undergoing CIRP, the Creditor should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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