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2020 (11) TMI 982 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt and dispute - time limitation - Whether the Application filed under section 7 of IBC by Applicant/Financial Creditor is maintainable against the Corporate Debtor? - HELD THAT:- The guarantee stood extinguished on approval of the resolution plan. Such extinguishment of the guarantee cannot extinguish the right of a lender available against the principal borrower. Discharge from guarantee cannot be construed as a discharge of the principal borrower. The approved Resolution Plan nowhere stated that the right of the Financial Creditor against the principal borrower stands extinguished - As per Section 128 of the Indian Contract Act, 1872, the liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract. In the matter of GOURI SHANKAR JAIN VERSUS PUNJAB NATIONAL BANK & ANR. [2019 (11) TMI 1169 - CALCUTTA HIGH COURT], the Kolkata High Court has considered the issue that when a secured financial creditor received a haircut in respect of its pursuit of claim against a guarantor, what is the effect of a secured financial creditor receiving payment of a part of its claim, on full and final settlement basis, in terms of the Resolution Plan, on the guarantor's liability. The HC held that the liability qua a surety gets extinguished. However, it cannot be said that, the financial creditor entered into a voluntary compromise with the corporate debtor with regard to the quantum of the claim. Acceptance of the haircut amount from approval of a resolution plan where the FC is a member of the COC, does not mean that the right of the financial creditor to recover the balance amount from the guarantor of the corporate debtor is impaired. Whether the Application is filed within Limitation? - HELD THAT:- The present application is within period of limitation. The reason is that although the loan was defaulted for the very first time on 15.04.2012, the parties were exploring settlement by way of DRSA. The DRSA was entered within three years from the date of default where the loan amount was expressly acknowledged. The DRSA was cancelled by way of Cancellation Deed dated 29.05.2017, on that date, both parties once again unequivocally admitted the outstanding liability to the tune of ₹ 231 ,48,67,202/- as due and payable by the CD to the Financial Creditor. The said acknowledgment gave rise to a new and fresh period of limitation. The present petition filed in February, 2020, is within three years from the last date of express and undisputed acknowledgment dated 29.05.2017 and is within limitation from such date of acknowledgment - In case of B.K Educational Services Pvt Ltd v. Parag Gupta and Associates [2018 (10) TMI 777 - SUPREME COURT], the Hon'ble Supreme Court held that the Limitation Act, 1963 is applicable to applications filed under Section 7 and Section 9 of the Code and will be governed by Article 137 of the Schedule of the Limitation Act, which provides three years' period of limitation for initiation of the proceedings. The documentary evidence placed on the case file by the Financial Creditor is sufficient to ascertain the existence of a default on the part of the Corporate Debtor. The Financial Creditor has fulfilled all the requirements of law and proposed the name of the Resolution Professional for appointment as the IRP. Hence, the Application stands admitted and the commencement of the Corporate Insolvency Resolution Process is initiated. Application admitted - moratorium declared.
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