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2019 (6) TMI 1353 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - default in repayment of total amount alongwith the interest - section 7 of Insolvency & Bankruptcy Code, 2016 (I&B Code) - HELD THAT:- The present proceedings are not concerned with the validity of the lease deed, the existence of security interest upon an asset of the Corporate Debtor. The present proceedings under section 7 of the I&B Code are only concerned with the existence of Debt and Default. The credit facility was extended to the Borrower, and the same was secured by hypothecation and mortgage. Thus, it would not make any difference whether the Petitioner has a secured interest on an asset belonging to the Corporate Debtor or not as it is having a security interest in the assets of the Borrower Company. The Corporate Debtor has admitted that it has executed the Corporate Guarantee dated 06.11.1987 in its letter dated 20.05.2017 addressed to the Petitioner. Thus, the fact of the execution of Corporate Guarantee is admitted by the Corporate Debtor. When the deed was signed at the time of taking a loan, the Guarantor now cannot contend that the deed is treated as revoked based on its notice to the Petitioner and Lenders as this can only be adjudicated by a Court of appropriate jurisdiction. The Petitioner has been assigned the loans by the Lenders of the Borrower Company. The Corporate Debtor is a Corporate Guarantor of the Borrower Company. The Petitioner is thus a Financial Creditor of the Corporate Debtor within the meaning of section 5(7) of the I&B Code - The Corporate Debtor has not denied the sanction and disbursement of loan from the Lenders to the Borrower Company. The said loan is in default is also not disputed. The Application under sub-section (2) of Section 7 of I&B Code, 2016 is complete - the application is admitted - moratorium declared.
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