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2022 (5) TMI 18 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAIMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - debt became due and payable or not - liability of Guarantor - liability of the Guarantor being coextensive with the Principal Borrower or not - validity of Letter of Invocation/Demand - HELD THAT:- The term Guarantee is a continuous one and therefore, the right to sue accrues when the Guarantee Agreement was invoked and the date when the Corporate Debtor had failed to discharge its obligation, in terms of Guarantee - there is no two opinion of a primordial fact that the liability of the Guarantor being coextensive with the Principal Borrower, in terms of the ingredients of Section 128 of the Indian Contract Act, 1872. The liability of a Guarantor will be cemented up on the document like Guarantee Deed, Mortgage by Deposit of Title Deeds, etc. In the instant case, one cannot remain oblivious of the fact that the outstanding debt Viz., the defaulted sum of the Corporate Debtor stood at ₹ 1,50,39,59,607.73 paise, which was payable on 27.09.2018, on the date when the Account as Non Performing Asset - the Appellant in its One Time Settlement had recognised itself as the Debtor in respect of the outstanding sum to be paid to the ₹ 1st Respondent/Applicant/Financial Creditor, in the latter’s position as Assignor. The other vital fact to be kept in mind is that the Guarantee has a Live Force and that the Appellant’s obligation is not wiped out in discharging its liability. It is to be remembered that under the I & B Code, 2016, the Quantum of Liability is not a relevant factor to be taken into account and has no nexus in respect of the Initiation of Corporate Insolvency Resolution Process, in as much as the Default of a Debt is equivalent to ₹ 1 Crore and above. An Adjudicating Authority is not to determine a money claim or suit. The I & B Code, 2016, requires an Adjudicating Authority only, to find out and record satisfaction in a summary adjudication, in regard to the occurrence of Default, as per ingredients of Section 4, before admitting a Petition. In the light of foregoing detailed Qualitative and Quantitative discussions, this Tribunal taking into account of the fact that in the instant case that the Debt was assigned by the Applicant/Financial Creditor/State Bank of India to the ₹ 1st Respondent/ASREC (INDIA) Limited and bearing in mind another fact that the Corporate Debtor had not replied to the Letter / Notice of the ₹ 1st Respondent/Financial Creditor in pressing into service the Corporate Guarantee Agreement dated 19.07.2018 and considering the cumulative attendant facts and circumstances of the instant case, which float on the surface, comes to an inescapable, inevitable and irresistible conclusion that the impugned order passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench – I, Chennai) in CP(IB)/82/CHE/2021 in arriving at the conclusions that the Financial Debt was proved by the ₹ 1st Respondent/Applicant/Financial Creditor’ and that the Default was committed by the Corporate Debtor and ultimately admitting the Application (filed under Section 7 of the Code by the 1st Respondent/Applicant/Financial Creditor) are free from any legal infirmities. Appeal dismissed.
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