Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 952 - AT - Insolvency and BankruptcyAdmission of claims by Liquidator - Validity of decision of the Liquidator of the Corporate Debtor admitting the claim of the Respondent Nos. 2 to 6 (Consortium of Banks) for Rs. 399.1 crores - loan taken by related entity of the Corporate Debtor - Whether the Appellants are deemed to have discharged their liability as a guarantor, on approval of claim of Respondent Nos. 2 to 6 in CIRP proceeding of PMPL? - HELD THAT:- The acceptance of Resolution Plan is such permitting the creditor i.e., Consortium of Banks, Respondent Nos. 2 to 6 to proceed against the sureties to recover un-discharged loan amount by the principal debtor. When there is a contract to the contrary, the Respondent Nos. 2 to 6 are entitled to proceed against the Guarantors since the clause specifically excluded the Guarantor provided by the Financial Creditor in terms of clause 2.9.5. In subsequent clause 2.9.6, the rights of the Financial Creditor are reserved. Therefore, the alleged discharge of principal debtor would not absolve the Guarantors from their liability to discharge the debt due to the Creditors i.e., Respondent Nos. 2 to 6. The IBC legislation is subsequent to the Indian Contract Act and as such it will prevail over the provision of Indian Contract Act. In view of the principle laid down in State Bank of India vs. V. Ramakrishnan [2018 (8) TMI 837 - SUPREME COURT] and Lalit Kr. Jain vs. Union of India [2021 (5) TMI 743 - SUPREME COURT], the Guarantors are not absolved from their liability since Consortium of Banks, i.e., Respondent Nos. 2 to 6 reserved their right in the Resolution Plan to proceed against the Guarantors for recovery of the balance amount of loan. The finding of the Adjudicating Authority is hereby affirmed by holding the point against the Appellants and in favour of the Respondents. Whether Respondent Nos. 2 to 6 are entitled to proceed against the guarantor i.e., Hari Machine Ltd. without proceeding against other guarantors, if not, whether the admission of claim of the Respondent No. 2 to 6 by Respondent No. 1 in the liquidation proceeding is liable to be set aside? - HELD THAT:- It is for the Creditors to decide the mode of recovery by proceeding either against one or other or all Guarantors of this choice. At best, the Appellants may recover the amount, if any, paid in excess of their share under the Agreement of Guarantee in absence of contract to the contrary, any such Creditor may proceed against other Guarantor for recovery of amount, if any, paid in excess of their share. Therefore, the contention that the Respondent Nos. 2 to 6 Consortium of Banks cannot proceed against the Appellants is not based on any law. Respondent Nos. 2 to 6 are not getting any double benefit on the other hand they are loosing part of the claim even after admission of claim in the liquidation process of Hari Machines Ltd, thereby the reduction in the claim of the Petitioner/Appellant on account of admission of the claim of the Respondents is not sufficient ground to reject the claim of Respondent Nos. 2 to 6 - there are no error in the order passed by the Adjudicating Authority, warranting interference by this Tribunal while exercising the power under Section 61 of IBC since the order is free any illegality. The Adjudicating Authority recorded its findings based on the material. Hence the finding of the Adjudicating Authority is hereby affirmed - appeal dismissed.
|