TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1671
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....ncluding the appellant as member of the committee of creditor (CoC), resolution plan has been approved. 2. Ld. Counsel for the appellant submits that appellant is a body corporate constituted under the banking companies (acquisition and transfer of undertakings) Act, 1970, carrying business of banking and having its diverse branches throughout India. The appellant had extended loans to Krishna Knitwear Technology Ltd. (KKTL) and Eskay Knit India Ltd. (EKIL) and in order to secure the credit facilities the Corporate Debtor (CD) i.e. KSL and Industries Ltd. stood as a Corporate Guarantor and extended guarantee pursuant to guarantee deed dated 25.03.2011 to secure the claim of the appellant and in this regard the CD also mortgaged its asset in favour of the appellant. 3. It is also submitted that the accounts of the Principal borrower namely KKTL and EKIL were classified as non-performing assets (NPA) on 13.11.2015 and 23.11.2015, respectively. 4. It is submitted that the repayment obligation of the credit facilities is co-extensive so far as the principal borrowers and guarantors are concerned. The CD along with other entities executed and undertaking dated 25.03.2011 and a ....
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....d the same in right perspective. 10. It is further submitted that appellant in order to invoke the guarantee of the CD has served a demand notice dated 19.05.2016, under Section 13(2) of the SARFAESI Act to M/s KKTL as well as to its guarantors and mortgagers including the CD clearly indicating the property of the CD which was charged to the bank and therefore clearly calls upon the borrower and their guarantors and mortgagers, including the CD, to pay the default amount and therefore for all purposes the guarantee was invoked against the CD. 11. It is further submitted that aggrieved by the decision of the Respondent No. 1 appellant filed an IA No. 54 of 2022 before the adjudicating authority which has been dismissed by Ld. Adjudicating authority by passing impugned order without appreciating the merits and pleadings on record. 12. It is submitted that Ld. Adjudicating authority while dismissing the application of the appellant has relied on two judgments of this appellant tribunal namely, Aashray Social Welfare Society and Ors. Vs. Saha Infratech Pvt. Ltd. & Ors. And Judgment of the Hon'ble Apex Court in Ghanshyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Assets Reconstruc....
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....e notice dated 19.05.2016. In this regard reliance has been placed on Amanjyot Singh vs. Navneet Kumar Jain & Ors., CA (AT) (Ins.) No. 961 of 2022 as well as on State Bank of India vs. Mr. Deepak Kumar Singhania, (2025) ibclaw.in 153 NCLAT. 18. It is submitted with considerable force that in case of guarantee the right to payment only accrues when the demand is specifically made which is absent in the instant case, in absence of any breach of contract and in absence of any demand/invocation notice there is no occasion to claim payment from the CD. Reliance has been placed on the law laid down by the Hon'ble Supreme Court in Ghanshyam Mishra (supra), State Bank of India vs. Orissa Manganese and Minerals Ltd., order dated 20.06.2018 in CA No. 402 of 2018 by Ld. NCLT Kolkata Bench, judgment of this appellate tribunal passed in IDBI Trusteeship vs. Abhinav Mukherjee, (2022) SCC Online NCLAT 267, dated 12.07.2022. While the judgments relied on by the appellant is not having any relevance. 19. It is further submitted that under various provisions of the Code it is the duty of the IRP or the RP to verify the documents supplied by a claimant in support of the claim while the claim of....
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....s subsequently, removed and the instant RP i.e. Kiran C. Shah was appointed as such vide order 28.07.2020 passed by the adjudicating authority in IA No. 691 of 2019 moved in aforesaid company petition. 25. It is also not disputed that appellant was invited at first to attend the 4th CoC meeting which it did not, however, the appellant was part and parcel of the 5th to 8th meetings of the CoC of the CD. 26. It is also not in dispute that vide email dated 07.09.2021, the claim of the appellant was rejected by the Respondent on the ground that the appellant has not invoked the guarantee as furnished by the CD and it is also not in dispute that vide email dated 12.10.2021, the RP also conveyed to the appellant that it is no more part of the CoC of the CD and thereafter the CoC was reconstituted and a resolution plan was approved by the CoC. 27. The appellant admittedly has moved an IA No. 54 of 2022 before Ld. Adjudicating Authority against the decision of the Respondent/Resolution Professional as it was aggrieved by the rejection of its claim and also of not including it as the member of the CoC of the CD. 28. The adjudicating authority however dismissed this application o....
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....he guarantee and also as to whether in the instant case the guarantee has been properly invoked as claimed by the appellant. If the answer to the first issue would be in affirmative, then there would not be any occasion for us to proceed further as the matter would end there. Thus, we proceed to adjudicate as to whether a financial creditor can maintain its claim before the IRP/RP in the CIRP of CD even without invoking the guarantee against the guarantor. 30. Ld. Counsel for the appellant has relied on the law laid down by this appellate tribunal in Andhra Bank v. F.M. Hammerle Textiles Ltd., Company Appeal (AT)(Insolvency) No.61 of 2018, wherein it was held as under: "11. For example, if there is a default, a 'Financial Creditor' or 'Operational Creditor' may file application under Sections 7 or 9 for initiation of 'Corporate Insolvency Resolution Process'. Once it is initiated, order of 'Moratorium' is passed and the advertisement is issued all claimants whether his claim is matured or not are supposed to file claim before the 'Resolution Professional'. The 'Resolution Professional' cannot reject one or other claim on the ground that only the person whose claim has b....
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....counting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; Explanation. -For the purposes of this sub-clause, - (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institutio....
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....ract becomes a guarantee when the contract is to perform the promise or discharge the liability of a third person in case of default. Thus, when a person enters into a contract to perform or discharge the liability of a third party, the contract becomes a contract of guarantee. 51. Section 127 of the Contract Act reads thus: "127. Consideration for guarantee. - Anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee. Hence, any promise made or anything done for the benefit of principal debtor may be sufficient consideration to the surety for giving guarantee. REQUIREMENT OF OCCURRENCE OF 'DEFAULT' 61. There is an argument canvassed before us that default under the DoH has not occurred. We have already quoted the definition of 'financial debt' under Section 5(8) of the IBC. There is no requirement incorporated therein that a debt becomes financial debt only when default occurs. Under Section 5(7) of the IBC, any person to whom financial debt is owed becomes a Financial Creditor even if there is no default in payment of debt. Therefore, this argum....
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....h "Claims by other creditors". There is a difference between 'claim', 'debt' and 'default', which was noticed by Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors. - (2019) 4 SCC 17. The Hon'ble Supreme Court in paragraph 65 of the judgment laid down following: "65. In this context, it is important to differentiate between "claim", "debt" and "default". Each of these terms is separately defined as follows: "3. Definitions. -In this Code, unless the context otherwise requires- * * * (6) "claim" means- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; * * * (11) "debt" means a liability or obligation in respect of a claim which is due from any Company Appeal (AT) (Ins.) No.1039 of 2024 10 person and includes a financial debt and operational debt; (12) "defau....
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....h the guarantee was not invoked. The acceptance of consideration of such claim is, thus, clearly permissible as per the law laid down by the Hon'ble Supreme Court in paragraph 65 as noted above. 23. We notice that judgment of the Ankur Kumar was delivered on 06.02.2025, whereas judgment of the Hon'ble Supreme Court in China Development Bank was delivered earlier on 20.12.2024 and the judgment of the Hon'ble Supreme Court in China Development Bank was neither placed before this Tribunal, nor noticed by this Tribunal in Ankur Kumar's case. We, thus, need to follow the judgment of the Hon'ble Supreme Court in China Development Bank with respect to definition of 'claim' and the claim submitted by Respondent No.1" (Emphasis Provided) Therefore, this appellate tribunal after considering Ghanshyam Mishra (Supra) and other relevant judgments was of the considered view that the invocation of guarantee is not required for maintaining a claim as the same would only be necessary for initiation of CIRP. We do not have any occasion to take a different view other than taken by a coordinate bench in Hemant Sharma (Supra). Thus above placed law reports would show that the claim on th....