Same loan documents in a connected CIRP can render a parallel insolvency petition infructuous and dismissible.

An insolvency petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was found to arise from the same loan agreement, security documents and computation chart as a connected petition already admitted against a co-borrower. Because the connected matter had been admitted and moratorium had been granted, the Tribunal treated the present petition as lacking independent survival at that stage. The petition was therefore held infructuous and dismissed, leaving the creditor to pursue its grievance within the ongoing CIRP process.

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Issues: Whether the insolvency petition under section 7 of the Insolvency and Bankruptcy Code, 2016 became infructuous in view of the admission of a similar petition on the same loan documents against a co-borrower and the grant of moratorium therein.

Analysis: The application was founded on the same loan agreement, the same security documents, and the same computation chart as the connected petition already admitted by the Tribunal. The claim against the present corporate debtor and the claim in the connected matter were found to arise from the same set of documents and the same loan transaction. In these circumstances, and since the connected petition had already been admitted with moratorium granted, the present petition was treated as having no further independent survival at that stage.

Conclusion: The petition was held to be infructuous and was dismissed.

Final Conclusion: The insolvency proceeding did not proceed further before the Tribunal, leaving the creditor to pursue its grievance in the ongoing CIRP process.

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