TaxTMI 
TaxTMI 
2022 (3) TMI 1111
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....aw Tribunal, New Delhi) in CP (IB) No. 2115(ND)/2019 filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'IBC'). 2. The Appellant is aggrieved by the fact that despite there being no default and incorrect averments of the Appellant, Section 7 application submitted by the Respondent No. 1 was admitted vide the Impugned Order 3. The Appellants have stated in the appeal that they are ex-directors of the Corporate Debtor-M/s Abloom Infotech Pvt. Ltd., which is an associate company of Ninex Group of Companies. The four companies in Ninex Group entered into a common loan agreement dated 27.4.2016 for availing a total loan of Rs. 69,51,00,000/- from the Respondent No. 1. The Appellants have further stated that the corporate debtor, who is one of the borrowers, and three other co-borrowers have repaid Rs. 88,37,00,000/- against the loan which is much more than the combined principal and interest amount and yet a Section 7 application alleging that the corporate debtor/Abloom Infotech Pvt. Ltd. had defaulted in repayment of Rs. 7,94,47,080/- of financial debt to the Respondent No. 1 was filed by Respondent No. 1 and which was admitted by the Adjudicating Author....
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....yable by the Corporate Debtor Abloom Infotech Pvt. Ltd./Corporate Debtor to the Financial Creditor (Respondent No. 1); (ii) Whether the financial creditor can invoke multiple remedies by filing claims of the same amount in some other Corporate Insolvency Resolution Processes (in short 'CIRP') going on against other companies of the Ninex Group; and (iii) Whether the claim of Respondent No. 1 which is being considered in the CIRP of the Corporate Debtor/Abloom Infotech Pvt. Ltd. does not preclude him from filing an application for initiating CIRP against the personal guarantor (Appellant No. 2). 7. We heard the oral arguments submitted by the Learned Counsels of both the parties and also perused the record. 8. The Ld. Counsel for the Appellant has submitted the following arguments:- (i) That out of total sanctioned loan amount of Rs. 16 Crores the Corporate Debtor was disbursed an amount of Rs. 6,75,50,000/- against which it has already repaid an amount of Rs. 13,38,99,599/- to Respondent No. 1. (ii) Despite repeated requests, Respondent No. 1 did not provide any clear statement of accounts to the Appellants, neither under Section 7 applicat....
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....ed personal Insolvency Petition against Mr. Ram Mehar Garg, a personal guarantor for the same amount before the NCLT. (vii) Red Topaz Real Estate, a co-borrower, is undergoing CIRP in which the Respondent No. 1 is a secured creditor whose claim has been admitted by the RP. The liquidation value of assets of Red Topaz Real Estate is more than Rs. 102 Crores and the total financial debt due to the secured creditors is less than the liquidation value. After approval of the resolution plan by the Adjudicating Authority the entire debt due to the Respondent No. 1 will be paid and, therefore, the present proceedings CIRP against the Corporate Debtor/Abloom Infotech Pvt. Ltd. is not justified. 9. The Ld. Counsel for the Respondent No. 1 has argued that in accordance with clause 2.5 and Schedule 2 of the loan agreement dated 27.04.2016 (attached at pp. 59-154 of the Appeal Paper Book) a total loan of Rs. 13,35,00,000 was disbursed by Respondent No. 1 against the payment of interest in accordance with the following four letters of drawal:- Sl. No. Date Amount Disbursed in Rs. 1. 04.05.2016 7,00,00,000/- 2. 12.02.2018 2,00,00,000/- 3. 13.03.2018 ....
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....which is not disputed, shows that the loan facility was sanctioned by the Respondent No. 1 for the Corporate Debtor alongwith three other co-borrowers. This loan agreement was between Ninex Developers Limited (First Part), Red Topaz Real Estate (P) Limited, (2nd Part), RMG Developers (P) Limited (3rd Part) and Abloom Infotech Primate Limited (4th Part) who are collectively referred to as 'Borrowers' and the persons/entities listed in Part A of Schedule 1 individually referred as 'Guarantor' and collectively as 'Guarantors' (4th Part) and DMI Finance Limited, 'Lender' (6th Part). 15. We also note that the averments that the Corporate Debtor and the co-borrower have already repaid more than of Rs. 88,73,00,000/- to the Respondent No. 1 which includes principal amount of Rs. 69,51,00,000 and Rs. 16,45,00,000 as interest was never submitted before the Adjudicating Authority and therefore, should not be taken into account here before the Appellate Tribunal. 16. The Applicable Rate of Interest is given in Article 1 "DEFINITIONS AND INTERPRETATION" in the Loan Agreement (supra) which is as follows:- "Applicable Rate of Interest" means in respect of the Loan Facility the rat....
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....r a sum of Rs. 2,19,58,952/- for penal interest and costs despite their full and final settlement between the Financial Creditor and said M/s Ninex Developers Limited. The said claim has till d ate not been verified and approved by the RP. The said claim is an unwarranted claim in light of the no claim letters issued by the Financial Creditor against M/s Ninex Developers Limited on 25.07.2017. The Financial Creditor however has not filed any claim against the company M/s Red Topaz Real Estate Pvt. Ltd. which is also under CIRP. The cop of the list of creditors of M/s Ninex Developers Limited as furnished to the Corporate Debtor in the meeting of the committee of creditors of the said company is enclosed as Annexure R-3 and that of M/s Red Topaz Real Estate Pvt. Ltd. is Annexure R-4. 20. A point raised by the Appellant in his written submissions is that certain amounts were retained by the Respondent No. 1 for future repayment which is referred to as Debt Service Reserve Account (DSRA) and thus a total amount of Rs. 1,06,97,157 was retained from the four disbursements made by the Financial Creditor to the Corporate Debtor. We note that DSRA is allowed to be kept by the Financial ....
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....on over the IT Project Receivables and all movable assets, current assets and work in progress relating to the IT Project; and (c) Escrow of the IT Project Receivables and first charge by way of hypothecation over such Escrow Accounts in respect thereof in favour of the Lender, in a form satisfactory to the Lender, including the terms of Schedule 7C." 23. The details of the 'IT Land' is given in Schedule 7 'Security Governance' of the Loan Agreement (supra) at pg. 127 of Appeal Paper book, which is as hereunder:- (m) "IT Land" means the land admeasuring 20242.60 sq. mtrs. constituted in plot No. A-3A, Sector 132, New Okhla Industrial Development Area, Distt. Gautam Budh Nagar, UP leased to Abloom by NOIDA Authority under lease deed dated 24.08.2006." 24. The permitted purposes for the loan facility is given in clause 8 of Schedule 2 of Loan Agreement (supra) which is as follows:- "Permitted Purpose The Term Loan Facility shall be used only for the following purpose: (i) Proceeds of the First Tranche shall first be used for repayment and full and final settlement of unsecured loans obtained by Abloom as identified below. ......... ....
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....y the loan amounts. Furthermore, statutory demand notice under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Negotiable Instruments Act, 1881 dated 19.03.2019 and legal notice dated 2.06.2019 issued on behalf of the Financial Creditor to the Corporate Debtor also establish the Event of Default. This default has first taken place on 15.09.2019 and hence, the section 7 application is under limitation. 27. From the various clauses and conditions included in the loan agreement dated 27.4.2016 (supra), it is amply clear that admittedly a disbursement amounting to Rs. 13,35,00,000 was made by the Financial Creditor to the Corporate Debtor and an event of default as described in Article 8 'Event of Default and Remedies' of the Loan Agreement, the Corporate Debtor defaulted in the repayment of the due loan amounts. In accordance with clause 8.2 of Article 8 the Lender had the right to terminate the said agreement after giving a notice to the borrower. The terms and conditions relating to Applicable Rate of Interest, Permitted Purpose, Security Interest (regarding the IT Land) define the use of loan amount, the time value of money aspect and the personal guarantors speci....
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.... of termination letter. Be that as it may, the termination of the agreement to sell has no bar on the adjudication of section 7 application. 30. The Ld. Counsel for Appellants has opposed the simultaneously on-going CIRPs against co-borrowers. The judgments of Hon'ble Supreme Court in the matters of Lalit Kumar Jain Vs. Union of India & Ors. [Transferred Case (C) No. 245 of 2020], State Bank of India. Vs. Ramakrishnan & Anr. (Civil Appeal No. 3595 of 2018) and State Bank of India Vs. Athena Energy Ventures Pvt. Ltd. [(2020) SCC Online NCLAT 774] are relevant in this context which hold that the principal debtor and surety have co-extensive liabilities and also that there is no bar under the IBC for the financial creditor to simultaneously file claims against all co-borrowers or there is any prohibition for the financial creditor to proceed against both the corporate debtor and the surety. 31. We also note that the judgment of NCLAT in the matter of Dr. Vishnu Kumar Agarwal Vs. M/s Piramal Enterprises Ltd. [CA (AT) (Ins) No. 346 of 2018 has been subsequently revised through a judgment of NCLAT in the case of State Bank of India Vs. Athena Energy Ventures Pvt. Ltd. (supra) where....
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.... is a pending proceeding. There is no question of looking into Judgments when Section 60 of IBC is clear and makes the two CIRPs maintainable in such matters. If they are maintainable, claim in both (subject to adjustments on receipts) would also be maintainable. There is no need to be tied down with Judgments if we see Section 60 which has been reproduced (supra). That is the law." (Emphasis supplied) 32. Therefore, when the liabilities of the principal borrower and surety are co-extensive under an agreement, it stands to reason that the liabilities of co-borrowers who have equal and similar liabilities under a loan agreement will also be there and CIRPs against them can run simultaneously. Moreover, till the financial creditor is able to get payment of his claim, he can file claim in all the CIRPs and also have voting rights in the respective CoCs based on the quantum of his financial debt. Thus we infer that the liabilities of the corporate debtor and the co-borrower companies are joint and co-extensive in nature and that claims of similar amounts could be submitted by the financial creditor in all the CIRPs. 33. The Respondent No. 1 is also entitled to initiate i....
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....l Appeal No. 3595 of 2018), it is held in Para 23 as follows: "23...... The object of the Code is not to allow such guarantors to escape from an independent and co-extensive liability to pay off the entire outstanding debt, which is why Section 14 is not applied to them. However, insofar as firms and individuals are concerned, guarantees are given in respect of individual debts by persons who have unlimited liability to pay them." 36. In the matter of Lalit Kumar Jain Vs. Union of India & Ors. [Transferred Case (C) No. 245 of 2020], the Hon'ble Supreme Court has held the validity of notification authorising the Central Government and the Insolvency and Bankruptcy Board of India to frame Rules and Regulations on how to allow actions against a Personal Guarantor to a Corporate Debtor before the Adjudicating Authority. In Para 95 of the said Judgment, it is held as follows:- "95. The impugned notification authorises the Central Government and the Board to frame rules and regulations on how to allow the pending actions against a personal guarantor to a corporate debtor before the Adjudicating Authority." 37. Later in the Lalit Kumar Jain Judgment in Para 111 and....