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Issues: (i) Whether the petitioner had made out a prima facie case for admission of an application under section 7 of the Insolvency and Bankruptcy Code, 2016 on the basis of the foreign decree and the guarantee deed; (ii) Whether the objections based on foreign creditor status, verification by authorised agent, pendency of other proceedings, and enforceability of the foreign decree barred admission.
Issue (i): Whether the petitioner had made out a prima facie case for admission of an application under section 7 of the Insolvency and Bankruptcy Code, 2016 on the basis of the foreign decree and the guarantee deed.
Analysis: The Tribunal found that the respondent had executed an on-demand guarantee and indemnity and that the foreign court had proceeded after due service, considered the merits, and recorded liability not only as guarantor but also as principal obligator and indemnifier. The Tribunal held that the decree was relevant to establish a debt due and that a creditor need not first exhaust remedies against the principal borrower before proceeding against the guarantor. It also held that the foreign decree could be taken cognizance of, even if not executed by the Tribunal itself.
Conclusion: The petitioner had made out a prima facie case and the application was maintainable on this basis.
Issue (ii): Whether the objections based on foreign creditor status, verification by authorised agent, pendency of other proceedings, and enforceability of the foreign decree barred admission.
Analysis: The Tribunal rejected the objections and held that the Insolvency and Bankruptcy Code does not bar a foreign creditor from invoking section 7. It also held that the application was competent despite being filed through an authorised representative, and that pendency of proceedings against the principal borrower did not defeat proceedings against the guarantor. The Tribunal further held that the decree from the English Commercial Court was not open to collateral challenge before it and that the respondent's objections did not furnish a valid ground for rejection.
Conclusion: The objections did not bar admission of the petition.
Final Conclusion: The petition was admitted, corporate insolvency resolution process was directed to commence, an interim resolution professional was appointed, and moratorium was ordered.
Ratio Decidendi: In a section 7 proceeding, a foreign decree on a debt against a guarantor can be relied upon to establish a prima facie case, and the creditor is not required to exhaust remedies against the principal borrower before proceeding against the guarantor.
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