9911796707
TMI Blog2022 (9) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... as approved the Resolution Plan by 'JSW Steel Coated Products Limited'/the 'Successful Resolution Applicant' ('SRA') which was approved with 79.3% voting share of the Committed of Creditors ('CoC'). 2. Facts in brief are that the Appellant is an 'Operational Creditor' of 'M/s. Asian Color Coated Ispat Ltd.'/the 'Corporate Debtor' and entered into four contracts dated 24.12.2009 and 25.05.2010. The 'Corporate Debtor' defaulted in payments and the outstanding amount totalled to Rs.21,89,16,893.57/-. It is stated that a settlement was entered into between the parties and the 'Corporate Debtor' was issued 12 postdated cheques amounting to Rs.6Crores/- as part payment, however the cheques were dishonored and the Appellant initiated proceedings under Section 138 of the Negotiable Instrument Act, 1881. Subsequently, on 12.12.2017 a Demand Notice was issued under Section 8 of IBC for initiation of CIRP against the 'Corporate Debtor'. Once again, a settlement was arrived at and the 'Corporate Debtor' assured to repay the dues of Rs.18,65,75,394/- by 30.09.2019. It is pleaded that as a security, the then Promotor of the 'Corporate Debtor', Mr. Pradeep Agarwal executed a registered Mortgage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al justice. The Adjudicating Authority failed to appreciate that the RP and the SRA, in view of the undertaking given in the email dated 04.02.2019 to resolve the Appellant's Mortgage Deed over the personal property were estopped from taking the steps for unilateral Assignment of Mortgage from the Appellant under the guise of the Resolution Plan. The RP is aware about the terms of the settlement arrived at between the Appellant and Mr. Pradeep Agarwal and the prayer in I.A. 569/2020 with regard to the proposed transfer of the land, which is in the name of Mr. Pradeep Agarwal. It is contended that the Appellant herein was not a party to the said I.A. i.e., whether the personal property was included in the terms of settlement. The settlement was approved by the Adjudicating Authority vide Order dated 02.02.2021. The Resolution Plan cannot deal or extinguish the Mortgage claim of the Appellant over the personal property without express consent from the Appellant. It is submitted that the Appellant would be entitled to recover only the remaining outside amount of Rs.7,96,75,394/- and the right of the Creditor to proceed against the Personal Guarantor for balance dues has been upheld by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the 'Operational Debt' would be deemed to be permanently extinguished subsequent to the approval of the Plan. Learned Counsel drew our attention to Schedule-I of the Resolution Plan which provides as under: "Purchaser: shall mean the SPV or a nominee of the Resolution Applicant, in whose favour (i) the Remaining Debt; and (ii) the Operational Debt owed to Jyoti Strips, CMI FPE Limited and Ajay Metal Alloys Pvt. Ltd. & Metal Trading Company, along with securities, mortgages and rights, and guarantees, shall be assigned, in accordance with the terms of this Resolution Plan". (Emphasis Supplied) 8. The Liquidation value of the 'Corporate Debtor' was computed at Rs.619.15Crores/- whereas the SRA paid Rs.1,550Crores/- and the amount payable to the 'Operational Creditors' in the occasion of Liquidation was 'NIL' and the SRA had paid 2.21% of the admitted claims of all 'Operational Creditors' including that of the Appellant and hence, the treatment of the Appellant's claim under the Resolution Plan is in compliance with the IBC. Further, the SRA has also paid the Appellant in priority over the Financial Creditors', in compliance the Regulation 38(1)(a) of the CIRP Regulations. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may exercise its right available pursuant to applicable law. The Mortgager is the sole and absolute owner and beneficiary of the said land and is entitled to the same and to all incidental rights thereof. The Learned Counsel relied on paras 25, 26 & 26.1 of the Judgement of the Hon'ble Supreme Court in 'State Bank of India (Supra), wherein it is observed as follows: "25. Section 31 of the Act was also strongly relied upon by the respondents. This section only states that once a resolution plan, as approved by the Committee of Creditors, takes effect, it shall be binding on the corporate debtor as well as the guarantor. This is for the reason that otherwise, under Section 133 of the Contract Act, 1872, any change made to the debt owed by the corporate debtor, without the surety's consent, would relieve the guarantor from payment. Section 31(1), in fact, makes it clear that the guarantor cannot escape payment as the resolution plan, which has been approved, may well include provisions as to payments to be made by such guarantor. This is perhaps the reason that Annexure VI(e) to Form 6 contained in the Rules and Regulation 36(2) referred to above, require information as to persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount. Any recourse under Section 133 of the Contract Act, 1872 to discharge the liability of the surety on account of variance in terms of the contract, without her or his consent, stands negated by this Court, in V. Ramakrishnan [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 : (2019) 2 SCC (Civ) 458] wherein it was observed that the language of Section 31 makes it clear that the approved plan is binding on the guarantor, to avoid any attempt to escape liability under the provisions of the Contract Act, 1872. It was observed that: (SCC p. 411, para 25) "25. ... Section 31(1), in fact, makes it clear that the guarantor cannot escape payment as the resolution plan, which has been approved, may well include provisions as to payments to be made by such guarantor." And further that: (V. Ramakrishnan case [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 : (2019) 2 SCC (Civ) 458] , SCC p. 412, para 26) "26.1 Section 14 refers only to debts due by corporate debtors, who are limited liability companies, and it is clear that in the vast majority of cases, personal guarantees are given by Directors who are in management of the companies. The object of the Code is not to allow such guaranto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal debtor was discharged under the Insolvency law or the Company law), was considered. It was held that in view of the unequivocal guarantee, such liability of the guarantor continues and the creditor can realise the same from the guarantor in view of the language of Section 128 of the Contract Act, 1872 as there is no discharge under Section 134 of that Act. This Court observed as follows: (SCC pp. 362-63, para 7)......" 13. The salient points which need to be considered in this Appeal, which are peculiar to the facts of this case are that the Mortgage Deed was entered into on 27.03.2018, between Mr. Pradeep Agarwal, the Promoter of 'Corporate Debtor' and the Appellant/'Operational Creditor' prior to the initiation of CIRP (CIRP was initiated on 16.10.2018); in the claim Form-B the Appellant/'Operational Creditor' mentioned in Column 8, the specific details of the Mortgage Deed; the letter dated 04.10.2019 by the Appellant seeking to enforce the Mortgage Deed; the Reply by the RP stating that the Plan was approved by a majority of the CoC on 28.06.2019 and the Application CA 1393 is pending approval before the 'Adjudicating Authority'; the stand of the RP that the land is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
