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2021 (8) TMI 797 - Tri - Insolvency and BankruptcyMaintainability of application - Initiation of CIRP - Personal Guarantors to Corporate Debtors failed to make repayment of guarantee undertaken - existence of debt and dispute or not - whether a Financial Creditor can initiate CIRP against the personal guarantor in the absence of any resolution process/liquidation process against the corporate debtor? - HELD THAT:- Though it is settled law that the liability of principal borrower and guarantor is coextensive as enunciated u/s 128 of the Contract Act, 1872, and the Creditor may proceed against the principal borrower or the guarantor simultaneously, however, the judgement of Hon’ble NCLAT in the case of Dr. Vishnu Kumar Agarwal Vs. Piramal Enterprises Limited, [2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] it was laid down that there cannot be two CIRP proceedings, one against the borrower and one against the guarantor. Upon conjoined reading of section 60 r/w section 128 of the Contract Act, 1872, it is clear that the CIRP can be initiated against the Corporate Debtor as well as corporate guarantor. But however, in the instant case, section 60(2) contains a non-obstante clause which specifies that only where a CIRP process or liquidation process of a Corporate Debtor is pending before NCLT, an application initiating Insolvency Resolution Process against the Personal Guarantor, of such Corporate Debtor shall be filed before such NCLT - While Section 7 petition can be filed by the Financial Creditor against the Corporate Debtor and Corporate Guarantor, but under Section 95 of the Code can be filed by Financial Creditor only against personal guarantor of Corporate Debtor, which is already been undergoing CIRP or is in Liquidation. In view of the judgement of Hon’ble NCLAT in State Bank of India Vs. Atheena Energy Ventures Limited [2020 (11) TMI 800 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI] and the law as entailed in section 60(2), this bench is of the considered view that an application for insolvency for resolution against the personal guarantor is not maintainable unless that CIRP/liquidation is ongoing against the Corporate Debtor. The petition is dismissed.
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