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2019 (11) TMI 1679 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Guarantor/ Corporate Debtor failed to make repayment of its dues - recovery of entire alleged dues of the Principal borrower by way of sale of immovable and movable properties - time limitation - application complete or not as mandated under Section 7(3) of I &B Code - HELD THAT:- In the present application, South Indian Bank had granted credit facility amounting to ₹ 237 Crore in favour of the principal borrower and in pursuance of the sanction letter issued by the Bank, the Corporate Debtor herein, had executed various documents, including a guarantee agreement and letter confirming deposit of Title Deeds. Thereafter, the principal borrower defaulted in payment of the loan. The recovery proceedings under DRT was initiated by the financial creditor in Debt Recovery Tribunal II, Kerala & Lakshadweep, for recovery of dues are well within the period of limitation. The notice of invocation of guarantee was issued by the Financial Creditor on 01.01.2016 to the Corporate Debtor. This application was considered under a question of Limitation as the application was placed before the Tribunal after 3 years on 10.04.2019. In the guarantee agreement, which boils down to whether the principal borrower has furnished any acknowledgement of debt or revival letter regarding his loan amount - the principal borrower has admitted his liability as well as default to the Financial Creditor in the Writ Petition filed by him in the Hon'ble High Court of Kerala. A Financial Creditor falls under section 5(7) can file an application for Initiating Corporate Insolvency Resolution Process against a Corporate Debtor before this Adjudicating Authority when the default has occurred. No doubt the debt claimed is a financial debt as defined under section 5(8) of I & B Code - Financial Creditor also produced statement of accounts and computation statement to show that amount claimed in the application is due from the Corporate Debtor. The same can be considered as "such other record or evidence of default" under Section 7 (3) of I & B Code as proof for the due amount. The existence of default is, therefore, stand proved by the Financial Creditor. The Financial Creditor succeeded in establishing that the application is complete in all respects - Petition admitted - moratorium declared.
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