Tribunal upholds creditor's claim on corporate guarantee, allows simultaneous insolvency proceedings.

The Tribunal upheld the financial creditor's claim against the rejection by the Resolution Professional of the Corporate Debtor, directing verification and admission of the claim related to a corporate guarantee. It affirmed the creditor's ability to initiate insolvency proceedings against both the Corporate Debtor and Corporate Guarantor simultaneously, citing relevant provisions of the Insolvency and Bankruptcy Code. The decision favored the State Bank of India, emphasizing the creditor's rights and the legal validity of the claim submission in the insolvency resolution process.

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Issues Involved:
- Rejection of claim by Resolution Professional
- Simultaneous claim submission by financial creditor against Corporate Debtor and Corporate Guarantor
- Interpretation of relevant sections of Insolvency and Bankruptcy Code, 2016
- Legal validity of claim rejection based on admission by IRP of M/s. Sintex
- Empowerment of Financial Creditor to initiate CIRP against Corporate Guarantor

Issue 1: Rejection of claim by Resolution Professional

The Tribunal addressed the application filed by the State Bank of India under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 against the rejection of their claim by the Resolution Professional of the Corporate Debtor. The claim pertained to a corporate guarantee provided by the Corporate Debtor in favor of the applicant, State Bank of India.

Issue 2: Simultaneous claim submission by financial creditor against Corporate Debtor and Corporate Guarantor

The Tribunal deliberated on the question of whether a financial creditor can submit a simultaneous claim in the Corporate Insolvency Resolution Process (CIRP) against both the Corporate Debtor and the Corporate Guarantor. The case involved claims against M/s. Sintex, where the Corporate Debtor had executed a corporate guarantee.

Issue 3: Interpretation of relevant sections of Insolvency and Bankruptcy Code, 2016

The Tribunal analyzed various sections of the Insolvency and Bankruptcy Code, 2016, including Section 3(6), Section 5(7), Section 5(8)(i), and Section 60(2). These sections were crucial in determining the admissibility of the claim submitted by the financial creditor and establishing the legal status of the applicant as a financial creditor.

Issue 4: Legal validity of claim rejection based on admission by IRP of M/s. Sintex

The Tribunal examined the legal validity of the rejection of the claim by the Resolution Professional of the Corporate Debtor based on the admission of a similar claim by the Insolvency Resolution Professional (IRP) of M/s. Sintex. The rejection was challenged on the grounds that the claim was within the definition of a financial debt and the applicant was a financial creditor.

Issue 5: Empowerment of Financial Creditor to initiate CIRP against Corporate Guarantor

The Tribunal considered the empowerment of a Financial Creditor to initiate the Corporate Insolvency Resolution Process against both the Corporate Debtor and the Corporate Guarantor simultaneously. It highlighted the provisions of Section 60(2) of the Insolvency and Bankruptcy Code, 2016, which allow for such actions by the creditor.

The Tribunal, after thorough analysis and interpretation of the relevant legal provisions, upheld the applicant's claim and directed the Resolution Professional of the Corporate Debtor to verify and admit the claim submitted by the applicant concerning the corporate guarantee executed by the Corporate Debtor. The decision allowed the application and disposed of the matter in favor of the State Bank of India.

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