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2020 (3) TMI 1132 - AT - Insolvency and BankruptcyMaintainability of application - Appellant submits that the Deed of Guarantee for overall limit was executed by M/s. Genegrow Commercial Pvt. Ltd. on 05.10.2009 as ‘Guarantor’ and that the account of the ‘Corporate Debtor’ ‘Gee Pee Infotech Pvt. Ltd.’ (Principal Borrower) was declared ‘Non Performing Asset’ - scope of ‘Claim and Default’ primarily committed by the Principal Borrower - section 7 of the ‘I&B’ Code - HELD THAT:- It is not in dispute that the ‘Corporate Debtor’ (Being Corporate Guarantor of the Principal Borrower ‘Gee Pee Infotech Pvt. Ltd.) had executed the Guarantee Deed on 05.10.2011 in respect of overall Limit and sanctioned in favour of the ‘Financial Creditor’. Also that a supplementary Guarantee Deed was executed between ‘Corporate Guarantor’ & and the ‘Financial Creditor’ - As per Section 145 of the Indian Contract Act, 1872 in every ‘contract of ‘Guarantee’, there is an implied promise by the ‘Principal Debtor’ to indemnify the ‘Surety’. This court pertinently points out that a ‘Financial Debtor’ includes Debt owed to the Creditor by both the Principal and the Guarantor. Section 3(11) of ‘I&B’ Code refers to a sum that it is due from any person including ‘Corporate Debtor’. A mere failure of the Guarantor to pay the ‘Financial Creditor’ when the principal sum is demanded will come within the purview of default u/s 3(12) of the Code. A ‘Financial Creditor’ who has a ‘Guarantee’ on the Debt due can commence proceedings u/s 7 of ‘I&B’ Code against the ‘Guarantor’ for failure to repay the sum borrowed by the Principal Borrower. It is to be remembered that if the ‘Contract of Guarantee’ itself mentions that the liability of a Guarantor will be independent and separate than that of ‘Principal Debtor’s liability, then an application against the Guarantor as per Section 7 is maintainable. The only rider will be that a Creditor is not permitted to do the same, sue the principal Debtor and claim in the Guarantor’s Insolvency at the same time. The Learned Adjudicating Authority had admitted the application u/s 7 of the ‘I&B’ filed by the Principal Borrower on 02.08.2019 in CP(IB)No.353/KB/2018. Also, on 02.08.2019 itself, the Learned Adjudicating Authority had admitted an application filed u/s 7 of the ‘I&B’ Code filed by the ‘Financial Creditor’ against the ‘Corporate Debtor’ ‘Gengrow Commercial Pvt. Ltd. being the ‘Corporate Guarantor’ of the ‘Principal Borrower’ viz. ‘Gee Pee Infotech Pvt. Ltd.’ for the very same debt/claim it is impermissible. Viewed in that perspective, this Tribunal comes to a consequent conclusion that the Application u/s 7 of the ‘I&B’ Code filed by the 1st Respondent/Bank/’Financial Creditor’ against the ‘Corporate Debtor’ Gengrow Commercial Pvt. Ltd. is not maintainable in law and the same is accordingly dismissed but without costs.
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