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2023 (5) TMI 341 - AT - Insolvency and BankruptcyRejection of Section 7 application filed by the Financial Creditor - rejection on the ground that application is barred by Section 10A - date of invocation of bank guarantee against the Corporate Debtor - Whether the default on the part of the Corporate Debtor i.e. Corporate Guarantor can be on any date prior to when the guarantee was invoked is the question to be considered? HELD THAT:- The question as to when the default on part of the Guarantor is to considered has been decided by this Tribunal in a recent judgment in POOJA RAMESH SINGH VERSUS STATE BANK OF INDIA, ESSEL INFRAPROJECTS LTD. THROUGH THE RESOLUTION PROFESSIONAL MR. KAIRAV ANIL TRIVEDI [2023 (5) TMI 17 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], where it has been held that default on the part of the Corporate Guarantor shall be held to have been committed only when guarantee was invoked, when Deed of Guarantee itself mentions issue of demand notice by the Bank. The issues which have been raised in the present appeal are fully covered by the judgment in “Pooja Ramesh Singh vs. State Bank of India”. The Guarantee Deed contemplates demand by the bank, hence, unless demand is made by the bank to the Corporate Debtor, no default can be said to have been committed by the Corporate Guarantor and in the present case, demands for payment were invoked in the period covered under Section 10A. The date of default by the Guarantor shall arise only when demand is issued by the Bank to the Corporate Guarantor. The fact that the Corporate Guarantor has given indemnity to the Bank also shall operate only after default is committed by the Guarantor. Indemnity can be enforced against the Corporate Guarantor but it cannot itself change the date of default on part of the Guarantor. When the invocation of the bank guarantee is admittedly within the period of 10A, the Application which is based on invocation of guarantee is clearly barred by 10A. One of the submission pressed by learned counsel for the Appellant is that even after 10A period was over, no payments were made and default still continues, hence, the application could not have been rejected - HELD THAT:- When application filed under Section 7 was based only on the default which was committed during the 10A period, the Adjudicating Authority did not commit any error in not entertaining the application. The application was not based on any default which is committed subsequent to 10A period, hence, such question does not arise. There is no good ground to entertain this Appeal - Appeal dismissed.
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