TaxTMI 
TaxTMI 
2022 (8) TMI 478
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....court. 2. Briefly stated, Mr. Sanjay Sarin ['Petitioner'], stood as a guarantor to a loan of Rs. 34 crores advanced by Canara Bank (formerly known as Syndicate Bank) ['Respondent No. 1'] to the borrower - Alphabet Heights Pvt. Ltd. (formerly known as Maple Realcon Private Ltd.) ['Respondent No. 3']. Subsequently, corporate insolvency resolution proceedings ['CIRP'] under the Insolvency and Bankruptcy Code, 2016 ['IBC'] were initiated against Respondent No. 3 (which became the corporate debtor) in 2018. Respondent No. 1 participated in the said proceedings as a financial creditor, and filed its claim (for Rs. 10,35,18,740/-) before the National Company Law Tribunal, New Delhi Bench ['NCLT']. A resolution plan, accepted by the Committee of Creditors ['CoC'] was approved by the NCLT vide approval Order dated 20th February 2020 ['Approval Order']. Under the approved resolution plan, the resolution applicant - Apex Heights Pvt. Ltd. ['Respondent No. 2'], was to make payment of Rs. 10,35,00,000/- to Respondent No. 1 (Rs. 03 crores in FDR on the date of the Approval Order, and the remaining in 24 equal instalments), but it defaulted. 3. Thereafter, proceedings were initiated by Resp....
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....ed claim. As the same is to be liquidated over a period of 24 months, equitable mortgage of properties belonging to the ex-Directors for the remaining admitted amount i.e., Rs. 7 Crores approx. shall be created/renewed in their favour or retained by them. In our opinion the same shall be sufficient to secure the balance of the admitted claim of the creditor." 4.3. Once the resolution plan is approved, the loan stands restructured and the financial creditor is estopped from taking any further recovery action in respect of the same claims. However, even after the passing of the Approval Order, another possession notice was issued by Respondent No. 1 dated 02nd September 2021 under Section 13(4) of the SARFAESI Act. Thereafter, proceedings under Section 14 of the SARFAESI Act were launched by Respondent No. 1 before the Chief Metropolitan Magistrate, Karkardooma District Court, Delhi. Misc. Crl. 101 of 2021 titled Canara Bank v. Maple Realcon Pvt. Ltd. etc. Initiation of SARFAESI proceedings on the basis of the aforenoted notices - issued before and after the Approval Order respectively, is bad in law. In fact, the Petitioner had filed an application under Section 17 of the SARFAES....
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....posal. Thus, the present petition should not be entertained by this Court. 5.2. Despite the approval of the plan, Respondent No. 2 has failed to adhere to the timeline of payments. As on date, out of 24 instalments, 15 are still pending, amounting to Rs. 4,53,60,000/-, and Respondent No. 1 reserves its right to take appropriate legal remedy against Respondent No. 2 for the same. In fact, Respondent No. 1 had filed an application before the NCLT seeking directions to Respondent No. 2 with respect to payment of instalments in a time-bound manner. The said application was disposed of on 21st February 2022, with a direction to the resolution applicant to act strictly as per the approved resolution plan. 5.3. Irrespective, the Petitioner, as a guarantor, is not discharged of its liability on account of sanction and approval of a resolution plan by the NCLT. For this, reliance is placed on the judgment of the Supreme Court in State Bank of India v. V. Ramakrishnan and Anr. 2018 SCC Online SC 963., and Lalit Kumar Jain v. Union of India and Ors. 2021 SCC Online SC 396. 5.4. While the amount of Rs. 10,35,18,740/- (including interest due as on the date of commencement of insolvency....
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....a grievance regarding the proceedings being in derogation of the Approval Order of the NCLT, and implored for this Court's intervention on the ground that there is no other remedy available. This contention is founded on the plea that, with the approval of the resolution plan, the guarantors' liabilities are also discharged. This contention has been categorically negated by the Supreme Court in Lalit Kumar Jain v. Union of India (supra), wherein the Court held as under: "107. In Committee of Creditors of Essar Steel (I) Ltd. v. Satish Kumar Gupta [(2020) 8 SCC 531] (the "Essar Steel case") this court refused to interfere with proceedings initiated to enforce personal guarantees by financial creditors; it was observed as follows: "106. Following this judgment in V. Ramakrishnan case [SBI v. V. Ramakrishnan, (2018) 17 SCC 394], it is difficult to accept Shri Rohatgi's argument that that part of the resolution plan which states that the claims of the guarantor on account of subrogation shall be extinguished, cannot be applied to the guarantees furnished by the erstwhile Directors of the corporate debtor. So far as the present case is concerned, we hasten to add t....
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....act Act by any contract between the creditor and the principal debtor by which the principal debtor is released or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor. But a discharge which the principal debtor may secure by operation of law in bankruptcy (or in liquidation proceedings in the case of a company) does not absolve the surety of his liability (see Jagannath Ganeshram Agarwala v. Shivnarayan Bhagirath [AIR 1940 Bom 247; see also In re Fitzgeorge Ex parte Robson [(1905) 1 KB 462] )." xx ... xx ... xx 110. In Kaupthing Singer and Friedlander Ltd. (supra) the UK Supreme Court reviewed a large number of previous authorities on the concept of double proof, i.e. recovery from guarantors in the context of insolvency proceedings. The court held that: "The function of the rule is not to prevent a double proof of the same debt against two separate estates (that is what insolvency practitioners call "double dip"). The rule prevents a double proof of what is in substance the same debt being made against the same estate, leading to the payment of a double dividend out of one estate. It is for that....
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....the Petitioner is not absolved of his liability, the proceedings initiated by the bank under the SARFAESI Act cannot be held to be unconstitutional or in derogation of the Approval Order of the NCLT. 10. In relation to the other grievance raised by Respondent No. 1 qua non-implementation of the resolution plan, it must be noted that the aggrieved party is actually Respondent No. 1, who has not been paid in terms of the resolution plan approved by NCLT. As pointed out by the counsel for Respondent No. 1, there has been a default on the part of the resolution applicant in payment of instalments, and as per the counter affidavit (as noted above), 15 instalments amounting to Rs. 4,53,60,000/- remain pending. It is therefore for Respondent No. 1 to now take action for recovery of its dues from the resolution applicant, as it may deem fit, utilizing any remedy available to it under law. 11. We must also take note of Section 33(3) of the IBC, which envisages a liquidation process in the event of contravention of a resolution plan. The same reads as under: "Where the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any ....