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2021 (2) TMI 1196 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Guarantor - Principal Borrower is not a Corporate Debtor or Corporate Person - initiation of CIRP against two ‘Corporate Guarantors’ simultaneously for the same set of debt and default - Pledge is a Bailment of goods for security for payment or performance of a promise - HELD THAT:- Once the CIRP against the Premier Limited is initiated, CIRP against this Corporate Debtor in the capacity of Borrower/Pledgor who defaulted in repayment of debt due to the Petitioner. Infact, it can be said that the Corporate Debtor has accepted the additional liability of being a Borrower and a Pledgor. The tenure of Loan cum Pledge Agreement dated 04.05.2016 was extended by a period of 18 months up to 04.05.2018 through an addendum dated 06.10.2016. Under the Loan Agreement, the Corporate Debtor being the Co-borrower had pledged 53,01,000 shares of Corporate Debtor in favour of the Petitioner. In view of default of not servicing the loan/pledge Agreement by Premier Ltd. who is already under CIRP vide admission order dated 29.01.2021 and no recoveries were possible under the said pledge document, the debt and default are established and the ingredients of Section 7 of the Code are thus fulfilled. The definition of Pledge under Section 172 of the Indian Contract Act, 1872 states that Pledge is a Bailment of goods for security for payment or performance of a promise. The principles of promise of payment are akin to the principles of contract of Surety under Section 126 of the Contract Act, 1872. The facts of the present case, the Corporate Debtor as borrower No.1 and Pledgor. The entire Loan cum Pledge Agreement executed in favor of the Petitioner confirms the liability of borrower(s) is co-extensive/ joint and several as entailed in the terms & conditions of payment/repayment, and even where the events of default is triggered under the contract - It is an undisputed fact that the default is proved and liability is established and that an order of admission is passed against the Borrower (Premier Limited) for the same set of loan. This Bench, on perusal of the documents filed by the Financial Creditor, is of the view that the Premier Limited and the Corporate Debtor defaulted in repaying the loan availed. In the light of facts and circumstances, the existence of debt and default is reasonably established by the Petitioner as a major constituent for admission of a Petition under Section 7 of the Code. Therefore, the Petition under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition. Petition admitted - moratorium declared.
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