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TMI Blog2022 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... s undischarged live liability and the amount due to the Appellant has not been paid by the 'Principal Borrower'/'Principal Debtor'. For the undischarged live liability for which the Guarantor /corporate Debtor is obliged to pay in terms of Guarantee Agreements and accordingly, Guarantor is fully responsible for the liability of the Principal Debtor. It is very much clear that the Appellant has submitted its claim within due time frame and with relevant papers and Guarantee is a continuing guarantee - All this do not suggests that the amount is not due and payable in law and there is no default. The CD/Respondent was made aware of the same well in time. The Resolution Professional had rejected the claim of the Appellant mainly on the ground of non-invocation of the corporate Guarantee. The Resolution Professional further submits that the arbitration award was put on the Adjudicating Authority record during the pendency of the application for the first time. Therefore, Resolution Professional submits that he is not responsible for the non-consideration of the documents since the same was never placed on Form 'C' stage - Based on the facts of the case, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in various Sections / Regulations pertaining to collation / adjudication of claims for the purpose of ascertainment of liability in respect of such claims under CIRP/ Liquidation would mean a debt which is due and payable, both in law or in fact and the provision of Limitation Act, 1963 will be applicable thereto. (iv) We hold that claims in respect of a time barred debt, whether such claim is principal debt or arise out of a contract of Guarantee, cannot be entertained in CIRP/ Liquidation Proceedings. 35. In view of the above discussions, the application filed by the Applicant is liable to be dismissed; hence, the same is dismissed. 3. The Appellant case is that it is a 'Non-Banking Finance Company' (NBFC) and it's registered with 'Reserve Bank of India' (RBI). It is a case of corporate Guarantee given by the Corporate Debtor (CD) for the loan facilities availed from the Appellant. The Appellant had sanctioned two loan facilities to 'Umiya Ceramic Pvt. Ltd' in terms of two separate sanction letters both dated 16.03.2013 and one loan facility was sanctioned to Gokul Ceramic Pvt. Ltd in terms of sanction letter dated 27.07.2013. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.03.2016 took place well within the period of limitation qua all the loans. 'Arbitral Awards' have also been passed on 21.08.2015 and total amount awarded is ₹ 3,62,30,729/- against 'Umiya Ceramic Pvt. Ltd' and similarly 'Arbitration Award' given against 'Gokul Ceramic Pvt. Ltd'. dated 08.01.2016 amount to ₹ 1,69,30,411/-. 6. It is also submitted by the Appellant that none of the three 'Arbitration Award' was set aside by the 'Competent Court'. All these are 'Arbitration Award' is at Annexure A-6 of the Appeal Paper Book. However, on the rejection of the claims by the Resolution Professional (RP), the Appellant filed the said I.A No.340 of 2020 in CP(IB) No. 561/7/NCLT/AHM/2018. The Appellant also submitted that all the records produced before the 'Adjudicating Authority' and the 'Appellate Authority' proves that the 'Corporate Guarantee' furnished by the CD was duly invoked. 7. The Respondent has stated that alongwith the claim in Form-C dated 07.02.2020, they have not provided the information about 'Arbitration Award' and 'Termination cum Arbitration Notices' and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . All these notices are demanding repayment of dues. The terms and conditions were also not disputed between the parties. e. It is very much clear that the 'Deed of Guarantee' provides for 'Continuing Guarantee' and shall be deemed to have given separately for payment of loan, interest thereon cost and other expenses in the agreement and shall be enforced till the entire amount guarantees is paid in full. f. The record reveals that the CIRP commenced on 21.01.2020. The 'Interim Resolution Professional' (IRP) invites claim from the Creditors of the CD on 30.01.2020. The Appellant submits its claim with the IRP in 07.02.2020 13.02.2020. The claims were rejected by the IRP on 23.03.2020 and on 05.04.2021, the Adjudicating Authority has confirmed the action of the IRP. g. In this context, for brevity and clarity, we are reproducing Section 3(6), 5(7), 5(8) 7, of the Code: 3(6) claim means- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class,whicheverisless: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less: Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first and second provisos and has not been admitted by the Adjudicating Authority before the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, such application shall be modified to comply with the requirements of the first or second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. h. From the details available on record, it is amply clear that the Appellant has invoked the 'Corporate Guarantee'. The Appellant has invoked the Guarantee well within the expiry of the term of 'Loan Agreement' concerned. The claim was also filed within 30 days from the date of invitation of the claim. Para 132, 142, 144 of the Dena Bank Vs. C.ShivaKumar Reddy and Anr. 2021 SCC online SC 453 states as follows: Para 132 - . As observed earlier in this judgment, on a conjoint reading of the provisions of the IBC quoted above, it is clear that a final judgment and/or decree of any Court or Tribunal or any Arbitral Award for payment of money, if not satisfied, would fall within the ambit of a financial debt, enabling the creditor to initiate proceedings under Section 7 of the IBC. 142. To sum up, in our considered opinion an application under Section 7 of the IBC would not be barred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or at different points of time. A claim may be even time-barred against the principal debtor, but still enforceable against the Guarantor. The parties may agree that the liability of a guarantor shall arise at a later point of time than that of the principal debtor. We have referred to these aspects only to underline the fact that the extent of liability under a guarantee as also the question as to when the liability of a guarantor will arise, would depend purely on the terms of the contract. n. It is very much clear that the Appellant has submitted its claim within due time frame and with relevant papers and Guarantee is a continuing guarantee. o. All this do not suggests that the amount is not due and payable in law and there is no default. The CD/Respondent was made aware of the same well in time. p. However, it is essential to mention that the Resolution Professional has filed its reply affidavit wherein it is stated that the Appellant had filed its incomplete information in Form 'C'. The termination of loan and invocation of the arbitration clause does not hold the Corporate Debtor liable for the claims as even if he was Corporate Guarantor as per the deed o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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