Corporate Debtor Admitted to CIRP, Moratorium Imposed, IRP Appointed with Duties and Financial Creditor Fees Set.

The tribunal admitted the Corporate Debtors into CIRP, appointing Mr. Vikash Prakash Gupta as IRP. A moratorium under Section 14 of the IBC was imposed, halting suits or proceedings against the Corporate Debtor and ensuring essential services continue. The IRP must announce the CIRP and fulfill duties under the Code. The Financial Creditor is to pay the IRP Rs. 2,00,000 for fees and expenses until the CoC's decision. The registry was ordered to communicate and upload the decision immediately. The CIRP commenced from the order date, with both applications allowed and resolved.

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Issues Involved:
1. Declaration of loan account as NPA by Financial Creditor.
2. Compliance with Section 215 of IBC, 2016.
3. Maintainability of CIRP proceedings against corporate guarantors when the principal borrower is already admitted in CIRP.
4. Authorization of the officer filing the application on behalf of the bank.

Detailed Analysis:

Declaration of Loan Account as NPA by Financial Creditor:
The corporate guarantors argued that the bank wrongly declared the principal borrower's loan account as a Non-Performing Asset (NPA), ignoring RBI guidelines. The tribunal found no substance in this defense, noting that the principal borrower defaulted on the loan as per the terms of the loan agreement. The guarantees given by the corporate guarantors were rightly invoked by the bank. The tribunal cited the Supreme Court's ruling in Innoventive Industries Ltd. Vs. ICICI Bank & Ors., stating that once the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete. Hence, the defense regarding the non-observance of RBI guidelines was rejected outright.

Compliance with Section 215 of IBC, 2016:
The corporate guarantors contended that the Financial Creditor did not comply with Section 215 of IBC, 2016, which involves submitting financial statements to the Information Utility Service Providers. The tribunal clarified that it is not mandatory for the Financial Creditor to file a certificate of default issued by the Information Utility for initiating CIRP. The Financial Creditor can prove the debt and default through other evidence, which was overwhelmingly present in this case. Therefore, this defense was also rejected.

Maintainability of CIRP Proceedings Against Corporate Guarantors:
The corporate guarantors argued that once the principal borrower is admitted in CIRP, the application under Section 7 of IBC, 2016 is not maintainable against the guarantors for the same debt and default. They cited the NCLAT order in Dr. Vishnu Kumar Agarwal v. Piramal Enterprises Ltd. In contrast, the Financial Creditor relied on the NCLAT's later order in State Bank of India vs Athena Energy Ventures Pvt. Ltd., which stated that IBC permits simultaneous proceedings against the principal borrower and the guarantor. The tribunal favored the latter interpretation, noting that the NCLAT had considered amendments to Section 60(2)(3) of IBC, 2016 and the Supreme Court's decision in State Bank of India vs V. Ramakrishnan and Another, which allowed simultaneous CIRP proceedings. Thus, this defense was deemed not maintainable.

Authorization of the Officer Filing the Application:
The corporate guarantors claimed that the officer who filed the application on behalf of the bank was not properly authorized, and proceedings based on a power of attorney are not maintainable. The tribunal clarified that the officer presenting the application is not the Financial Creditor; the bank is. Given that the debt and default were admitted, the tribunal did not reject the applications on this technical ground, especially considering the commercial nature and the involvement of significant public funds.

Conclusion:
The tribunal concluded that the Corporate Debtors in both applications required admission into CIRP. The name of Mr. Vikash Prakash Gupta was suggested and appointed as the Interim Resolution Professional (IRP). The order included the imposition of a moratorium under Section 14 of the Code, prohibiting suits or proceedings against the Corporate Debtor and ensuring the continuation of essential services. The IRP was directed to make a public announcement of the CIRP and perform duties as specified under the Code. The Financial Creditor was directed to pay the IRP a sum of Rs. 2,00,000 as fees and expenses until the Committee of Creditors (CoC) decides on the matter. The registry was instructed to communicate the order to relevant parties and upload it on the website immediately after pronouncement. The commencement of the CIRP was effective from the date of the order, and both applications were allowed and disposed of.

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