Tribunal Rejects Financial Creditor's Second Insolvency Application Against Guarantor Due to Duplicate Claims.

The NCLT dismissed the Financial Creditor's application to initiate a second CIRP against the Corporate Guarantor, as it was based on the same claims and defaults already under CIRP against the Principal Borrower. The Tribunal, following the NCLAT's precedent in the Piramal Enterprises case, found the duplication of claims impermissible under the IBC.

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Issues Involved:
1. Whether the Financial Creditor can initiate another Corporate Insolvency Resolution Process (CIRP) against the Corporate Guarantor for the same set of claims and defaults after initiating CIRP against the Principal Borrower.
2. Whether the Financial Creditor, holding a major stake in the Principal Debtor Company, can invoke provisions of the Insolvency & Bankruptcy Code, 2016 against the Corporate Guarantor.

Detailed Analysis:

Issue 1: Initiation of CIRP against Corporate Guarantor for the same claims and defaults
The Financial Creditor, State Bank of India, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate CIRP against the Corporate Guarantor, Athena Energy Ventures Private Limited. The Financial Creditor had previously filed a similar application against the Principal Borrower, Athena Chhattisgarh Power Limited, which was admitted by the National Company Law Tribunal (NCLT), Hyderabad bench, and CIRP was in progress.

The Respondent argued that the present application is a duplication of the earlier claim and is not permissible under the IBC. They cited the case of "Vishnu Kumar Agarwal Vs. Piramal Enterprises Limited," where the National Company Law Appellate Tribunal (NCLAT) held that a Financial Creditor cannot file another application for the same set of claims once CIRP is initiated against either the Principal Borrower or the Corporate Guarantor.

The Applicant contended that the Corporate Guarantor and Principal Borrower are Joint Venture Companies, and thus, the judgment in the Vishnu Kumar Agarwal case does not apply. However, the Tribunal noted that both entities are independent companies with separate Memorandum of Association/Articles of Association and cannot be considered a Joint Venture Company.

The Tribunal concluded that based on the NCLAT ruling, the Financial Creditor cannot pursue two separate Section 7 applications for the same claim. Therefore, the application against the Corporate Guarantor cannot be admitted.

Issue 2: Financial Creditor's major stake in Principal Debtor Company
The Respondent also argued that the Financial Creditor, being a major shareholder in the Principal Debtor Company, lacks the locus standi to file the present application. The Applicant countered that the application is against the Corporate Guarantor, not the Principal Borrower, and the Financial Creditor has satisfied all the necessary conditions for admission under Section 7 of the IBC.

The Tribunal observed that the Financial Creditor had demonstrated the existence of debt exceeding Rupees One Lakh and the default by the Principal Borrower. The Corporate Guarantor had also executed Corporate Guarantee Documents, making it jointly and severally liable for the Principal Borrower's obligations.

Despite these arguments, the Tribunal emphasized that the primary issue is the duplication of claims, which is not permissible under the IBC as per the NCLAT ruling.

Conclusion:
The Tribunal, guided by the NCLAT's judgment in the Piramal Enterprises case, rejected the application filed by the Financial Creditor against the Corporate Guarantor, as it was based on the same set of facts, claims, and defaults for which CIRP was already in progress against the Principal Borrower. The application CP(IB)No.466/07/HDB/2019 was accordingly dismissed.

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