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2020 (9) TMI 358 - Tri - Insolvency and BankruptcyMaintainability of application - Liquidation of Corporate Debtor - initiation of proceedings under SARFAESI Act, 2002 - sale of assets of the Applicant companies which are subsidiaries (while three are 100% subsidiaries and one being 66%) of the Corporate Debtor as a going concern - diminishing of value of the Corporate Debtor or not? - section 60(5)(c) of the IB Code, 2016. HELD THAT:- In the present case, during the CIRP, as there was no viable resolution plan, this Adjudicating Authority passed an order for liquidation. Against the said order of liquidation, an appeal came to be preferred before Hon'ble NCLAT. The fact on record is that one M/s. Gabs Megacorp, is the successful auction bidder, who is acquiring the Corporate Debtor as a going concern for a bid of ₹ 1654.77 Crores. It is also a fact that the assets of the Corporate Debtor includes investments in the subsidiary companies. The value of the said investments would depend, inter-alia, on the value of the assets owned by the subsidiary companies, apparently, the successful bidder has bid the acquisition amount based on the value of the assets of the Corporate Debtor which include the investment in the shares of the Applicant companies i.e., the subsidiary companies herein - In case, the Respondent No. 1 bank is allowed to proceed with the sale of the Applicants, there is every chance that it would diminish the value of the Applicants, which would result in diminishing the value of the Corporate Debtor, since the value of the Corporate Debtor includes the value of its shareholding in the Applicant companies. Though it is a settled position of Law that the liabilities of a surety is coextensive with that of principal debtor and further in view of the Law settled by the Hon'ble NCLAT and Hon'ble Supreme Court that a Financial Creditor can proceed to enforce the guarantees against the guarantors. Thus the settled position of Law, that there should not be any restraints on a Financial Creditor to proceed against the Guarantor even after the initiation of CIRP, approval of Resolution Plan or liquidation proceedings being commenced or closed. However, in the instant case, it is not the question of the right of the Financial Creditor to enforce the guarantee against the guarantor, but the point for consideration is whether the Respondent No. 1 Bank can proceed with the enforcement of security interest and sell the properties owned by guarantor companies within Applicant No. 1 to 4, which also would certainly result in diminishing the value of the Corporate Debtor, which would impact the sale of the Corporate Debtor as a going concern. This Adjudicating Authority feels it proper to direct Respondent No. 1 bank not to take any coercive steps such as sale of the properties mortgaged by the Applicant companies in favor of Respondent No. 1 bank till the completion of Liquidation proceedings of the Corporate Debtor - Application disposed off.
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