2024 (8) TMI 1706

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....Vs. Union Bank of India & Anr. (hereinafter referred to as the second appeal) as the issue involved in both the appeals is common. 2. In the first appeal, an application was filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 (in short 'Rules') by Union Bank of India as the Financial Creditor for initiating insolvency process against the Appellant (Dheeraj Wadhawan/Personal Guarantor of the CD, namely, Dewan Housing Finance Corporation Limited 'DHFL') for a default amount of Rs. 3958,30,48,963.71/- including interest or penalties in relation to credit facilities. 3. The aforesaid application was assigned CP (IB) No. 4/MB/2021 by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court II). A similar application was filed by the same Financial Creditor against another Personal Guarantor (Kapil Wadhawan) before the same AA bearing CP (IB) No. 5/MB/2021. 4. The aforesaid two applications i.e. CP (IB) No. 4/MB/2021 in the first appeal was admi....

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....he application filed by R1 alone is not maintainable as it should have been filed either by security trustee or by all the banks. This point was noticed by the AA in its impugned order and returned a finding in Para 21 of the impugned order in the first appeal which read as under:- "43. Each of the Guarantors agree and confirm that in the event of occurrence of default by the Borrower as specified under the Facility Agreements, the said Banks shall be entitled to proceed against the Guarantors even without exhausting the remedies available with the said Banks against the Borrower." Furthermore, the Security Trstee Agreement executed by the Banks in favour of Security Trustee provides as under: "8.5 PERFORMANCE BY THE SAID BANKS Any duty or obligation of the Security Trustee hereunder or under any Security Document or other agreement, document or instrument contemplated herein or therein may be performed by the said Banks and any such performance shall not be construed as revocation of trust or agency created hereby." A conjoint reading of the aforementioned clauses make it very clear that the rights of the Banks to enforce the guarantee ....

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....ements, the said Banks shall be entitled to proceed against the Guarantors even without exhausting the remedies available with the said Banks against the Borrower. The Liability of the guarantors shall be immediate. In the event any of the guarantors refuses to comply with the demand made by the said Banks, despite having sufficient means to make payment of the dues, such guarantor would also be treated as a wilful defaulter." "8.5 PERFORMANCE BY THE SAID BANKS Any duty or obligation of the Security Trustee hereunder or under any Security Document or other agreement, document or instrument contemplated herein or therein may be performed by the said Banks and any such performance shall not be construed as revocation of trust or agency created hereby." 17. In support of his submissions, he has relied upon a decision of this Court rendered in the case of Rakshit Dhirajlal Doshi (one of the suspended directors) Vs. IDBI Bank Ltd. and Ors., 2022 SCC OnLine NCLAT 4524 decided on 15.11.2022. 18. On the other hand, Counsel appearing on behalf of the Respondents i.e. Financial Creditor and the RP, have vehemently contested the stand taken by the Appellants on the gro....

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....ith other lenders and their consent and authorisation". It is submitted that this issue has been decided by this Court in the following manner "the allegation of the Appellant regarding want of support of other three bankers to the Respondent No. 1 are also found baseless as the proposed intervenors for three other lenders supported the CIRP proceedings of the Corporate Debtor and confirm the same during hearing before us and the same has been mentioned in their intervention applications filed in the present appeal. Thus, the contention of the Appellant on this ground stand rejected." 20. In rebuttal, Counsel for the Appellant has submitted that argument raised by the Respondents is that this issue cannot be raised in the second round as alleged is totally misplaced because at the time when first round of litigation reached up to the Hon'ble Supreme Court and concluded, STA did not come into being, therefore there was no occasion to raise the issue. 21. In respect of the other arguments raised by Respondents that Section 95(1) of the Code itself permits to file the petition either by a single creditor or by the creditors collectively or by RP cannot be looked into because of ....