Financial creditor's CIRP claim based on corporate guarantee-must it be invoked first? Tribunal orders claim admitted.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The dominant issue was whether a financial creditor's claim in the corporate debtor's CIRP could be rejected merely because the creditor had not invoked the corporate guarantee. Relying on SC precedent distinguishing "claim", "debt" and "default", and holding that enforceability impediments (including moratorium) or non-arising of cause of action to invoke the guarantee do not negate the existence of a claim, the tribunal held that invocation of the guarantee is not a precondition to admission of the claim. Consequently, the impugned order was set aside and the resolution professional was directed to verify and admit the creditor's claim without requiring proof of guarantee invocation; the appeal was allowed. - NCLAT....