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2022 (5) TMI 1584 - AT - Insolvency and BankruptcyMaintainability of application u/s 95(1) of IBC - rejection of Application by Adjudicating Authority holding that the principal borrower being not under the CIRP or under liquidation. Whether pendency of corporate insolvency resolution process or liquidation proceedings against the Principal Borrower/ Corporate Debtor is condition precedent for initiating CIRP against the Personal Guarantor? HELD THAT:- In view of the law laid down by the Hon’ble Supreme Court in Shiv Kirpal Singh vs. V.V. Giri [1970 (9) TMI 127 - SUPREME COURT], it is clear that the provision of Section 60(2) in no manner can cut down the generality of Section 60(1). Section 60(2) has been engrafted to cover the specific situation and the provision is an addition to and is supplemental to provision of Section 60(1). This Tribunal had occasion to consider this very question in State Bank of India Stressed Asset Management Branch [2022 (1) TMI 1294 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI]. In the above case also the Application under Section 95(1) filed by the Bank was rejected on the same very ground that no insolvency resolution process or the liquidation is pending against the Corporate Debtor before the NCLT and it was held that The Adjudicating Authority erred in holding that since no CIRP or Liquidation Proceeding of the Corporate Debtor are pending the application under Section 95(1) filed by the Appellant is not maintainable. The Application having been filed under Section 95(1) and the Adjudicating Authority for application under Section 95(1) as referred in Section 60(1) being the NCLT, the Application filed by the Appellant was fully maintainable and could not have been rejected only on the ground that no CIRP or Liquidation Proceeding of the Corporate Debtor are pending before the NCLT. One of the submissions raised here is that the Application under Section 7 has been filed against the Principal Borrower, hence, the condition under Section 60(2) is also fulfilled. It is submitted that the mere fact that Application is not admitted does not lead to conclusion that Application is not pending - It is already held that there is no pre-condition of pendency of insolvency resolution process or liquidation against the Corporate Debtor for filing an Application under Section 60(1), there is no necessity to dwell on the submission any further. The Adjudicating Authority committed error in rejecting the Application under Section 95(1) filed by the Appellant against the Personal Guarantor. The impugned orders passed by the Adjudicating Authority in all these Appeals are set aside and the Application under Section 95(1) filed by the Appellant before the Adjudicating Authority is revived to be proceeded with further in accordance with law. Appeal allowed.
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