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2020 (4) TMI 503 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - CIRP - whether by virtue of approval of the resolution plan for Adhunik Alloys and Power Limited -(the Principal Debtor of State Bank of India) and State Bank of India has consented for approval of that plan, right to file this proceeding against Corporate Debtor who is the guarantor of Adhunik Alloys and Power Limited for any default? - HELD THAT:- If we peruse the relevant portion of the resolution plan for Adhunik Alloys and Power Limited, approved by this Adjudicating Authority, we certainly come to know that the guarantor is not exonerated or discharged from its liability of paying balance outstanding though SBI - one of the members of the CoC in that proceeding gave consent for the approval of the plan. Under the I & B Code, 2016, the debtor is discharged on approval and implementation of the resolution plan. The resolution plan is approved when the Adjudicating Authority is satisfied that the resolution plan is approved by CoC and its contents are in accordance with the law. Therefore, the principal debtor discharged under I & B Code, 2016 not on the instance of a creditor but due to operation of law that is approval of the resolution plan. Hence, the Guarantor is not discharged of its liability towards the creditor on discharge of principal debtors liability under the I & B Code, 2016. The application filed by the Financial Creditor under section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Sungrowth Share & Stocks Ltd., is hereby admitted - Application admitted - moratorium declared.
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