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TMI Blog2024 (7) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 application against the corporate debtor (corporate guarantor) this appeal has been filed. 2. Brief facts of the case necessary to be noticed for deciding this appeal are:- 2.1. M/s. Vayam Technologies Ltd. (principal borrower) obtained working capital facilities from the financial creditor. The said facilities were renewed in the year 13.09.2012 and 22.11.2013. The corporate debtor- M/s. Abhisar Impex Pvt. Ltd. executed a corporate guarantee dated 14.03.2012 to guarantee the repayment of the said facility and also created a charge by way of equitable mortgage on pari-passu basis on commercial property situated at D-319, Sector-63, Noida. As principal borrower failed to honour its obligation and neglected to make the payment. Financial creditor issued Loan Recall Notice dated 20.06.2015 to the principal borrower as well as to the corporate guarantor recalling the entire outstanding amount in terms of the Facility Agreement. Financial creditor filed an OA No.466 of 2015 before the Debt Recovery Tribunal, New Delhi for recovering its outstanding dues. The parties including principal borrower and the corporate debtor entered into settlement and filed a joint application before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2022. Order dated 25.03.2022 was challenged by Suspended Director in Company Appeal (AT) (Insolvency) No.418 of 2022 which was permitted to be withdrawn with liberty to file application under Rule 49(2) of the NCLT Rules, 2016. Application under Rule 49(2) was also rejected. Against order dated 15.01.2024, Suspended Director of the corporate debtor i.e. appellant herein has filed Company Appeal (AT) (Insolvency) No.195 of 2024 which appeal was also heard and dismissed by order of this Tribunal dated 21.05.2024. Thus, against the principal borrower CIRP has proceeded. 3. We have heard Shri Gaurav Mitra, Learned Senior Counsel for the Appellant, Shri Dhruv Malik, Learned Counsel for the Respondent No.1 and Ms. Prachi Johri, Learned Counsel for the Respondent No.2. 4. Shri Gaurav Mitra, Learned Senior Counsel for the Appellant submits that the Corporate Debtor is a healthy company and it has only one asset i.e. D-319, Sector-63, Noida. The CIRP against the corporate debtor shall not be fruitful since no resolution of corporate debtor may take place. It is submitted that the recovery certificate issued by the DRT dated 24.07.2019 in pursuance of the order dated 15.07.2019 is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate had been issued, no payments have been made by the principal borrower. The corporate guarantee was invoked on 29.10.2021 and thereafter application under Section 7 was filed by the financial creditor on 18.01.2022. Part IV of Section 7 application has been extracted by Adjudicating Authority in paragraph 7 of the order, which is as follows:- "7. The details qua the amount defaulted to be paid and the date of default are mentioned in Part-IV of the Application which reads thus: Part IV PARTICULARS OF FINANCIAL DEBT 1 TOTAL AMOUNT OF DEBT GRANTED DATE(S) OF DISBURSEMEN T The Corporate Debtor stood as guarantor to the debt of Rs. 25,00,00,000/- (Rupees Twenty-Five crores) sanctioned to Vayam Technologies Limited ("principal borrower") vide offer letter dated 01.08.2011 and the Working Capital Credit Facility was renewed from time to time on 13.09.2012 and 22.11.2013. The principal borrower failed to make repayment of the outstanding amounts and therefore it was incumbent upon the Corporate Debtor to honour its agreed obligations in accordance with the Corporate Guarantee. However, the Corporate Debtor failed to make good the default(s) committed even despite service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thus: "DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI Appeal No. 415/2019 In M.A. No. 135/2017 Arising out of O.A No. 466/2015 (DRT-II, Delhi) Vayam Technologies Ltd & Anr Vs DBS Bank & Ors 08.12.2022 Hon'ble Mr. Justice Brijesh Sethi Present Mr. Anand Aggarwal. Ld. counsel for appellants Ms. Sharmistha Ghosh, Ld. counsel for respondent no.1 bank Ms. Prerna Sabharwal, Ld counsel for respondent no.5 This matter has been taken up by me through Video Conferencing. Learned counsel for appellants states that D83 Bank has approached the NCLT and an IRP has been appointed and the moratorium, has started. Learned counsel for the respondent no 1, however, states that the appellants have approached the NCLAT against the said order of NCLT and the said order stands stayed. Learned counsel for the appellants further states that a review application against the Impugned order has been filed by the appellants before the learned DRT. Heard Let the review application be decided by the learned DRT and appellants are given liberty to approach this Tribunal in case the review application is decided against them Learned counsel for the appellants, however, st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed Under Section 25 and 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 from the above named Certificate Debtors. Given under my hand and seal of this Tribunal on this the 24th day of, 2019." 10. Corporate guarantee was invoked by the financial creditor and thereafter Section 7 application was filed. Adjudicating Authority after considering the submissions of the parties came to the conclusion that the debt and default has been proved and admitted Section 7 application. Adjudicating Authority also in its judgment has relied on the judgment of the Hon'ble Supreme Court in "Dena Bank vs. C. Shivakumar Reddy and And.- Civil Appeal No. 1650 of 2020". In paragraph 27 of the judgment, Adjudicating Authority has made following observations:- "27. The Ld. Counsel for the CD also raised the plea that the loan was sanctioned by the consortium and the Applicant alone could not have moved the present application. It is stare decisis that, when the loan is sanctioned by the Consortium, and one of the member of the consortium qua the loans the default in repayment of which is committed invoke the procedure under Section 7 of IBC, 2016, these are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Corporate Debtor to the Financial Debtor, under the judgment and/or decree and/or in terms of the Certificate of Recovery, or any part thereof remained unpaid." 11. The submission of counsel for the appellant is that the corporate debtor has only one asset which may not be sufficient to clear the debt of financial creditor nor sufficient for the resolution of insolvency does not commend us. Initiation of CIRP process is consequent to debt and default on the part of the corporate debtor who was corporate guarantor. The debt and default by the corporate debtor is writ large on the record. The corporate debtor having unable to pay its debt, insolvency resolution process against such corporate debtor cannot be interdicted on the submission that asset of the corporate debtor is not sufficient to resolve the insolvency of the corporate debtor. These are the issues which have to be addressed in the CIRP of the corporate debtor and cannot be ground to set aside an order of admission under Section 7. We have already noticed that the insolvency process has also commenced against the principal borrower. The order of commencement against principal borrower as well as rejection of appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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