2020 (4) TMI 503

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....t amount which the Corporate Debtor, M/s Sungrowth Shares and Stocks Limited, is liable to pay the Bank as the Guarantor as per the deed of guarantee dated 23-9-2011. 2. It is not in dispute that M/s Adhunik Alloys and Power Limited is already admitted in CIRP by this Adjudicating Authority vide order dated 23-7-2017. One M/s SVP Bhagwati Power Steel Limited - the resolution applicant in that proceeding has submitted the resolution plan for Adhunik Alloys & Power Limited. That plan was approved by the Adjudicating Authority (Bench-I). State Bank of India - the Financial Creditor herein was one of the members of the Committee of Creditors (in short "CoC"). In that proceeding, State Bank of India had submitted its claim of Rs. 324.23 Crore. It was considered in that plan. Now, State Bank of India has come out with this proceeding under section 7 of Insolvency and Bankruptcy Code, 2016 against the guarantor of Adhunik Alloys and Power Limited to start CIRP of the guarantor M/s Sungrowth Share & Stock Limited stating that the Guarantor committed default in paying balance outstanding of M/s Adhunik Alloys and Power Limited which it is bound to clear as per deed of guarantee. 3. Th....

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....n respect of the above mentioned credit facilities and/or requiring Lender to enforce any remedies or securities available to Lender. The Guarantee herein contained shall not be determined or in any way be prejudiced by any absorption of or by Lender or by any amalgamation thereof or therewith but shall ensure and be available for and by the absorbing or amalgamated Lender or concern. The Guarantee shall be irrevocable and enforced against the Guarantor notwithstanding any dispute between Lender and the Borrower. The Guarantor affirm, confirm and declare that any balance confirmation and/or acknowledgment of debt and/or admission or liability given or promise or part payment made by the Borrower or the authorised agent of the Borrower to Lender shall be deemed to have been made and/or given by or on behalf of the Guarantor themselves and shall be binding upon each of them." 7. Further in terms of said guarantor's liability to pay the balance outstanding is further reiterated in the following words:- "The Guarantee hereby given is independent and distinct from any security that Lender has taken or may take in any manner whatsoever whether i....

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.... recitals in the resolution plan, saves the Financial Creditor's right to file and continue with any proceeding against the Guarantor for recovery balance loan amount. 10. Ld. Senior Counsel, Abhrajit Mitra for the Corporate Debtor submitted that in view of provisions of section 135 of the Indian Contract Act, 1872, the Corporate Debtor/Guarantor stands automatically discharged because the Financial Creditor herein enter into compromise with principal debtor and gave promise not to sue for the outstanding balance by giving consent for the approval of the resolution plan submitted for the Principal Debtor. He also submitted that any agreement contrary to above provision of law becomes redundant. 11. We considered his submissions. Section 135 of the Indian Contract Act, 1872 states that, "A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or not to sue, the principal debtor, discharges the surety, unless the surety assents to such contract." 12. In fact similar controversy had felt for consideration of Hon'ble NCLAT in case of Lalit Mishra v. Sharon Bio Medicine Ltd. [Company Appeal N....

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....vency Resolution Process against the Corporate Debtor, M/s Sungrowth Share & Stocks Ltd., is hereby admitted. (ii) We declare a moratorium and public announcement in accordance with sections 13 and 15 of the IBC, 2016. (iii) Moratorium is declared for the purposes referred to in section 14 of the Insolvency & Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under section 15. The public announcement referred to in clause (b) of sub-section (1) of section 15 of Insolvency & Bankruptcy Code, 2016 shall be made immediately. (iv) Moratorium under section 14 of the Insolvency & Bankruptcy Code, 2016 prohibits the following:  The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;  Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; Any action to foreclose, recove....