9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 982 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt and dispute - time limitation - Whether the Application filed under section 7 of IBC by Applicant/Financial Creditor is maintainable against the Corporate Debtor? - HELD THAT - The guarantee stood extinguished on approval of the resolution plan. Such extinguishment of the guarantee cannot extinguish the right of a lender available against the principal borrower. Discharge from guarantee cannot be construed as a discharge of the principal borrower. The approved Resolution Plan nowhere stated that the right of the Financial Creditor against the principal borrower stands extinguished - As per Section 128 of the Indian Contract Act 1872 the liability of the surety is coextensive with that of the principal debtor unless it is otherwise provided by the contract. In the matter of GOURI SHANKAR JAIN VERSUS PUNJAB NATIONAL BANK ANR. 2019 (11) TMI 1169 - CALCUTTA HIGH COURT the Kolkata High Court has considered the issue that when a secured financial creditor received a haircut in respect of its pursuit of claim against a guarantor what is the effect of a secured financial creditor receiving payment of a part of its claim on full and final settlement basis in terms of the Resolution Plan on the guarantor s liability. The HC held that the liability qua a surety gets extinguished. However it cannot be said that the financial creditor entered into a voluntary compromise with the corporate debtor with regard to the quantum of the claim. Acceptance of the haircut amount from approval of a resolution plan where the FC is a member of the COC does not mean that the right of the financial creditor to recover the balance amount from the guarantor of the corporate debtor is impaired. Whether the Application is filed within Limitation? - HELD THAT - The present application is within period of limitation. The reason is that although the loan was defaulted for the very first time on 15.04.2012 the parties were exploring settlement by way of DRSA. The DRSA was entered within three years from the date of default where the loan amount was expressly acknowledged. The DRSA was cancelled by way of Cancellation Deed dated 29.05.2017 on that date both parties once again unequivocally admitted the outstanding liability to the tune of Rs. 231 48, 67, 202/- as due and payable by the CD to the Financial Creditor. The said acknowledgment gave rise to a new and fresh period of limitation. The present petition filed in February 2020 is within three years from the last date of express and undisputed acknowledgment dated 29.05.2017 and is within limitation from such date of acknowledgment - In case of B.K Educational Services Pvt Ltd v. Parag Gupta and Associates 2018 (10) TMI 777 - SUPREME COURT the Hon ble Supreme Court held that the Limitation Act 1963 is applicable to applications filed under Section 7 and Section 9 of the Code and will be governed by Article 137 of the Schedule of the Limitation Act which provides three years period of limitation for initiation of the proceedings. The documentary evidence placed on the case file by the Financial Creditor is sufficient to ascertain the existence of a default on the part of the Corporate Debtor. The Financial Creditor has fulfilled all the requirements of law and proposed the name of the Resolution Professional for appointment as the IRP. Hence the Application stands admitted and the commencement of the Corporate Insolvency Resolution Process is initiated. Application admitted - moratorium declared.
Issues Involved:
1. Maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code (IBC). 2. Applicability of the Law of Limitation to the application. Issue-wise Detailed Analysis: 1. Maintainability of the Application under Section 7 of IBC: The Financial Creditor, M/S SREI Infrastructure Finance Limited, filed an application under Section 7 of the IBC for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/S Gujarat Hydrocarbons and PowerSEZ Limited. The Corporate Debtor had defaulted on a loan amount of Rs. 100 crores, which was sanctioned on 03.01.2011. The loan was secured by various securities, including a mortgage on project land, hypothecation of movable assets, and personal and corporate guarantees. The Corporate Debtor argued that the application was misconceived, filed with ulterior motives, and barred by principles of estoppel, waiver, acquiescence, and limitation. They contended that a Debt Recovery Settlement Agreement (DRSA) dated 25.03.2015 had settled all dues, and the Financial Creditor had filed an application for sine die adjournment of the main application in the Debt Recovery Tribunal (DRT). The Financial Creditor countered that the DRSA was terminated due to non-compliance by the Corporate Debtor, and a cancellation agreement was signed on 29.05.2017, acknowledging the outstanding liability. The Financial Creditor also argued that the liability of the guarantor is co-extensive with that of the principal debtor, and the discharge of the guarantor does not absolve the principal debtor. The Tribunal held that the amount received from the resolution plan of the corporate guarantor (ACIL) does not act as full and final settlement of the outstanding dues against the Corporate Debtor. The Tribunal cited several judgments, including Ferro Alloys Corporation Ltd. Vs Rural Electrification Corporation and IDBI Bank Limited Vs. M/S. Neueon Towers Limited, to support the view that insolvency proceedings can be initiated against the principal borrower even after pursuing remedies against the guarantor. 2. Applicability of the Law of Limitation: The Corporate Debtor argued that the application was barred by limitation, as the loan default occurred on 15.04.2012, and the application was filed in February 2020. The Financial Creditor argued that the DRSA and subsequent cancellation agreement extended the limitation period, as they constituted an acknowledgment of liability. The Tribunal held that the application was within the period of limitation. The DRSA and the cancellation agreement provided a fresh period of limitation from the date of acknowledgment of the outstanding liability. The Tribunal referred to several judgments, including B.K Educational Services Pvt Ltd v. Parag Gupta and Associates and MM Ramachandran vs. South Indian Bank & Ors., to support the view that an acknowledgment of debt within the limitation period starts a fresh period of limitation. Conclusion: The Tribunal concluded that the application under Section 7 of the IBC was maintainable and within the period of limitation. The Corporate Debtor's plea was rejected, and the application was admitted. The Tribunal appointed Mr. Rakesh Kumar Agarwal as the Interim Resolution Professional (IRP) and declared a moratorium as per Section 14 of the IBC. The IRP was directed to take charge of the Corporate Debtor's management and comply with the provisions of the IBC.
|
