TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 1618
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....ns) No. 851 of 2023 titled as 'Piramal Capital & Housing Finance Ltd. Vs. Hydric Infrastructure Pvt. Ltd.' (hereinafter referred to as 'first appeal') and CA (AT) (Ins) No. 852 of 2023 titled as 'Piramal Capital & Housing Finance Ltd. Vs. Hydric Town Planners Pvt. Ltd.' (hereinafter referred to as 'second appeal') because the issue involved in both the appeals is common. However, for the sake of convenience, the facts are being extracted from the first appeal. 2. In short, the Appellant filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short 'Rules') for the initiation of Corporate Insolvenc....
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....plication under Section 7 of the Code, the Appellant served a notice dated 22.02.2020 to CFMPL and other guarantors including the guarantor in the second appeal, namely, Hydric Town Planners Pvt. Ltd. Since, they failed to pay the amount as claimed, the Appellant filed an application under Section 7 of the Code against the borrower i.e. CFMPL which has been admitted on 19.01.2023 and the principal borrower has now been admitted to liquidation. 7. The Appellant filed the application under Section 7 of the Code against the guarantor (Respondent herein) on 23.05.2022 simultaneously in the first appeal as well as in the second appeal. 8. Counsel for the Appellant has submitted that the application has been dismissed by the Adjudicating Au....
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....bligation in respect of amount of debt. For, the obligation of the guarantor is coextensive and coterminous with that of the principal borrower to defray the debt, as predicated in Section 128 of the Contract Act. As a consequence of such default, the status of the guarantor metamorphoses into a debtor or a corporate debtor if it happens to be a corporate person, within the meaning of Section 3(8) of the Code. For, as aforesaid, expression "default" has also been defined in Section 3(12) of the Code to mean non-payment of debt when whole or any part or instalment of the amount of debt has become due or payable and is not paid by the debtor or the corporate debtor, as the case may be". 12. He has further relied upon two decisions of this ....
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....td., CA (AT) (Ins) No. 1186 of 2019 the following observations have been made "For above reasons discussed by us in the matter of "Athena Energy", we find that the present Appeal is required to be allowed. We do not find that there is bar for the Financial Creditor to proceed against the principal borrower as well as Corporate Guarantor at the same time, either in CIRPs or file claims in both CIRPs". 13. Besides the aforesaid argument, Counsel for the Appellant has drawn our attention to an order dated 28.02.2023 passed by the Adjudicating Authority, New Delhi, Court IV in the matter of M/s CFM Asset Reconstruction Pvt. ltd. Vs. M/s Nikhil Footwears Pvt. Ltd. in which reliance has been placed on the judgment of Laxmi Pat Surana (Supra). ....
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....he application of the Appellant on 26.05.2023 after passing the order on 28.02.2023 in the case of M/s CFM Asset Reconstruction Pvt. Ltd. Vs. M/s Nikhil Footwears Pvt. Ltd. holding that the application filed under Section 7 is maintainable both against the borrower as well as guarantor on the same set of debt even is filed simultaneously. 16. In reply, Counsel for the Respondent has submitted that the CIRP against the borrower was admitted on 19.01.2023 and the Appellant has also filed its claim which was admitted to the tune of Rs. 15,99,37,500/- and the claim has also been filed and the said facts were not disclosed anywhere by the Appellant, therefore, the application has rightly been dismissed by the Adjudicating Authority. 17. We....