TaxTMI 
TaxTMI 
2020 (3) TMI 1132
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.... the considered view that since the Financial Creditor has rightly filed this petition under section 7 of the Insolvency & Bankruptcy Code against M/s. Genegrow Commercial Pvt. Ltd., the present Corporate Guarantor having executed the deed of guarantee and Supplementary Deed of guarantee, ensuring and guaranteeing the repayment of loan facilities/total outstanding as on 31st January, 2018 to the tune of Rs. 162,62,23,609.63 outstanding against Gee Pee Infotech Pvt. Ltd., the Principal Borrower, both the deed of guarantees being irrevocable and unconditional and shall be enforceable. The Financial Creditor has also placed on record the balance confirmation by the Principal Borrower admitting the default to the tune of Rs. 84,53,923.50 as on 7th April, 2014 which is also reflected in the CIBIL Report. Since the accounts of the Principal Borrower was classified as an NPA, the Financial Creditor had to file O.A. No. 493/2015 before the DRT, which was never objected to by the Principal Borrower and the liability of the Corporate Guarantor is coextensive with the Principal Debtor and even the Financial Creditor is free to sue and proceed against the Principal Debtor or the Guarantor or....
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.... claim and had no defence, initiated 'Corporate Insolvency Resolution Process' against the 'Principal Borrower' and Corporate Guarantor. In this connection, it is the stand of the Appellant that the Learned Adjudicating Authority while admitting the claim had failed to appreciate that the liability of the 'Principal Borrower' and the 'Guarantor' is co-extensive for the purpose of recovery. 5. The Learned Counsel for the Appellant point out that the 'I&B' proceedings is not a recovery proceedings and relies upon the decision 'Binani Industries Limited' Vs. 'Bank of Baroda & Anr.' (CA)(AT)(Ins.) No. 82/2018 at para 17 wherein it is observed that the IBC is not a Recovery proceeding. 6. The Learned Counsel for the Appellant cites the decision 'Dr. Vishnu Kumar Agarwal Vs. M/s. Piramal Enterprises Ltd. in Company Appeal (AT)(Ins.) No. 346 and 347 of 2018 (reported in MANU/NL/0003/2019) wherein at para 32 and 33 observed as under:- "32. There is no bar in the 'I&B' Code' for filing simultaneously two applications under Section 7 against the 'Principal Borrower' as well as the 'Corporate Guarantor(s)' or against both the 'Guarantors'. However, once for same set of claim application u....
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....e Limitation Act may be applied to condone the delay in filing such application." 8. The Learned Counsel for the Appellant refers to the decision of Hon'ble Supreme Court in the case of Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company (India) Ltd. & Anr. (in Civil Appeal No. 4952/2019 dated 18.09.2019) wherein at para No.6 it is observed and held as under:- "6. Having heard the learned counsel for both sides, what is apparent is that Article 62 is out of the way on the ground that it would only apply to suits. The present case being "an application" which is filed under Section 7, would fall only within the residuary article 137. As rightly pointed out by learned counsel appearing on behalf of the appellant, time, therefore, begins to run on 21.07.2011, as a result of which the application filed under Section 7 would clearly be time-barred. So far as Mr. Banerjee's reliance on para 7 of B.K. Educational Services Private Limited (supra), suffice it to say that the Report of the Insolvency Law Committee itself stated that the intent of the Code could not have been to give a new lease of life to debts which are already time barred." 9. Contending contra it is the submiss....
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....lant is estopped from taking this plea before this Tribunal. 13. The Learned Counsel for the 1st Respondent cites the judgement dated 22.11.2019 in Company Appeal (AT)(Ins.) No. 672/2019 reported in MANU/NL/0558/2019 in the matter of Sesh Nath Singh and Ors. Vs. Baidyabati Sheoraphuli Cooperative Bank Ltd. & Ors. wherein at para 10 it is observed as under:- "10. A notice was issued on 20.03.1997 to the respondent invoking the personal guarantee given by him and calling upon him to pay the sum of Rs. 5.40 crores together with further interest and liquidated damages from 1.1.1997 till repayment." 14. The Learned Counsel for the 1st Respondent relies on the order dated 06.09.2017 Sanjeev Shaye & Ors. V. State Bank of India & Ors. reported in MANU/UP/2243/2017 wherein it is reiterated that "the rights of the surety is coextensive with that of Principal Debtor. 15. A perusal of the application by the 1st Respondent/Bank/Financial Creditor (filed u/s 7 of 'I&B' Code read with Rule 4 of 'I&B' application to Adjudicating Authority Rules, 2016) part IV points out that the principal sum due as on 31.01.2018 was Rs. 81,92,38,508.50/-. The facility cc(AUCA) sanctioned was Rs. 320000000(R....
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....and therefore initiating CIRP as against the corporate debtor is against the proposition held in the above cited decision is found devoid of any merit." 18. It is not in dispute that the 'Corporate Debtor' (Being Corporate Guarantor of the Principal Borrower 'Gee Pee Infotech Pvt. Ltd.) had executed the Guarantee Deed on 05.10.2011 in respect of overall Limit and sanctioned in favour of the 'Financial Creditor'. Also that a supplementary Guarantee Deed was executed between 'Corporate Guarantor' & and the 'Financial Creditor'. 19. As per Section 145 of the Indian Contract Act, 1872 in every 'contract of 'Guarantee', there is an implied promise by the 'Principal Debtor' to indemnify the 'Surety'. This court pertinently points out that a 'Financial Debtor' includes Debt owed to the Creditor by both the Principal and the Guarantor. Section 3(11) of 'I&B' Code refers to a sum that it is due from any person including 'Corporate Debtor'. A mere failure of the Guarantor to pay the 'Financial Creditor' when the principal sum is demanded will come within the purview of default u/s 3(12) of the Code. A 'Financial Creditor' who has a 'Guarantee' on the Debt due can commence proceedings u/s 7....