TMI Blog2019 (7) TMI 1588X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecuted the judgement and Decree it obtained as early as 2015 till now and as to why it has selectively chose only the Corporate Debtor herein leaving other personal Guarantors principal borrower. It is settled position of law that Law of Limitation would apply to proceedings under Code. The Petitioner has filed a suit before the Delhi High Court against the Principal Borrower. Personal Guarantors as well as the present Corporate Debtor. Therefore, initiating proceedings under the Code against the Corporate Debtor amounts to parallel proceedings against the principle of double jeopardy. Admittedly, cause of action both in the Suit before Hon ble High court and in the present case is on set of documents. The Adjudicating Authority cannot interfere with powers of the Hon ble High Court Delhi and it is for the Hon ble High Court of Delhi to take a decisions on review pending wherein among other grounds, the issue of referring the matter to the Arbitration is also raised. As per Section 3 (12) default means non-payment of debt when whole or any pa.rt or instalment of the amount of debt has become due and payable and is not (paid) by the Debtor or the Corporate Debtor, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/S. Bangalore Dehydration and Drying Equipment Co. Pvt. Ltd. ('Respondent/ Corporate Guarantor/ Corporate Debtor') on the ground that it has committed default for a total outstanding amount of ₹ 25,81,85,297/- (Rupees Twenty Five Crores Eighty One Lakhs Eighty Five Thousand Two Hundred Ninety Seven Only) while the total amount of debt granted was (Rupees Four Crores Only), which has been disbursed as under: i. Principal Amount of ₹ 1,50,00,000/-(Rupees One Crores Fifty Lakhs Only) disbursed on 24th March, 2008 ii. Principal Amount of Rs. One Crore Fifty Lakhs Only) disbursed on 31 th March, 2008. iii. Principal Amount of ₹ 50,00,000/-(Rupees Fifty Lakhs Only) disbursed on 16th June, 2008. iv. Principal Amount of ₹ 50,00,000/-(Rupees Fifty Lakhs Only) disbursed on 17th June, 2008. 2. Brief facts of this case, as mentioned in the Company Petition, are as follows: (1) M/S. Asia Pragati Capfin Private Limited, formerly known as M/S. Zwirn Pragati Capfin Private Limited is a company registered under the Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement. Therefore, the Financial Creditor was constrained to initiate proceedings both against the principal debtor and the Corporate Debtor before the Hon ble High Court of Delhi, New Delhi for recovery of money and the same was numbered as CS (OS) No. 1030/2012. The Hon ble Court vide its order dated 22.05.2015 decreed the suit in favour of the Financial Creditor and accordingly, the Principal Debtor as well as Corporate Debtor shall jointly and severally be liable to pay a sum of ₹ 8,04,43,637/-(Rupees Eight Crores Four Lakhs Forty Three Thousand Six Hundred and Thirty Seven Only) along with interest at the rate of 21% p.a. from 23.03.2012 LA. along with costs of the suit. However, the Corporate Debtor failed to honour the directions of the Hon ble High Court. Therefore, the Corporate Debtor is due and payable ₹ 25,81,85,297/-(Rupees Twenty Five Crores Eighty One Lakhs Eighty Five Thousand Two Hundred and Ninety Seven Only) as on the date of filing of this Petition. The Corporate Debtor has defaulted in making payments to the Financial Creditor and has breached the terms of the Guarantee Agreement. The Corporate Debtor is due and liable to pay the same to the Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other remedy available to it under law. The Corporate Debtor cannot now re-claim or re-agitate his right and belatedly file an application with the intention to prolong the case and deny the Financial Creditor of any relief which it is rightfully entitled to. They have relied upon the judgement rendered in Ramakrishna Theatre Limited, Rep. by Chairman, Udupi vs, General Investments and Commercial Corporation Limited, Rep. by its Director, Udupi reported in AIR 2003 Kar 502. Therefore, IA seeking to refer the matter to arbitration is not maintainable and deserves to be dismissed with exemplary costs. (9) It is further stated that as per Section 238 of the IBC, 2016, provisions of this Code shall override other law. Therefore, the Financial Creditor is entitled to initiate CIRP against the Corporate Debtor without taking recourse to any other remedy available to it. It is contended that the object of the Code will be defeated in case the present matter is referred to any Arbitrator, especially when the Corporate Debtor has no right under law to maintain an application U/ s 8 of Arbitration and Conciliation Act 1996. 3. The Corporate Debtor / Respondent has filed Statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not privy to the variance in the terms as Guarantor in terms of the Loan Agreement. That a Supplementary Term Loan Agreement, dated 11.07.2009, was executed between M/S. BT FC Pvt. Ltd. and the Petitioner, but the Respondent No. 1, M/s.Bangalore Dehydration Drying Equipment Co. Pvt. Ltd. was not privy to the said Supplementary Agreement. And in terms of the provisions of Section 133 of the Indian Contract Act, 1872, the Respondent No. 1 stood discharged from its alleged guarantee, if any, Section 133 of the India Contract Act, 1872, reads as follows: 133. Discharge of surety by variance in terms of contract - Any variance, made without the surety's consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance. - Any variance, made without the surety's consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance. Therefore, the Respondent stood discharged from its alleged guarantee when the Supplementary Agreement, dated 11.07.2009, was executed without intimating the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the DRT, Bangalore, in O.A. No.277/2012, subsequently recovery certificate is also issued vide bearing No.8736, for a sum of ₹ 2,50, 14,350/-(Rupees Two Crores Fifty Lakhs Fourteen Thousand Three Hundred Fifty Only) against the said Company. (2) It is stated that, in terms of final order dated 31.12.2014 passed by the Debt Recovery Tribunal in the above case , it is ordered that, the Applicant/ Certificate Holder/ Bank is entitled to recover a sum of ₹ 2,50,14,350/- along with cost and expenses and current and future interest at 14.50% per annum compounded with monthly rests and penal interest at 1% from the date of filing of O.A. till date of realization in full, jointly, severally and personally from certificate debtors i.e. the Petitioner herein and others, In case of failure to pay the aforesaid adjudicated amount within 30 days same shall be recover from the sale of the schedule properties as per the recovery certificate issued by the Debt Recovery Tribunal vide dated 14.07.2015. (3) It is stated that the Bank has also initiated the proceedings under 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us averments made in the Statement of Objection, as briefly stated supra, has further submitted that instant case is barred by laches and limitation and he is relying upon the Judgement passed by Hon ble Supreme Court of India in B.K.Educational Services Private Limited Vs. Parag Gupta and Associates Civil Appeal No. 23988 of 2017. He has also disputed that the judgement and decree of the Hon'ble Delhi High Court at Delhi, passed in CS (OS) No. 1030/2012 dated 22.05.2015 became final as Defendants No. 1 and 2 of the suit (M/s.BT FC Private Limited Mr. M.V.Muralidhar, Managing Director and Guarantor) have filed a Review Petition on 13.12.2018 U/ S 114 R/ w Order XLVII Rule 1 of the Code of Civil Procedure, 1908, by seeking review of the Judgment and Order dated 22.05.2015 and 06.08.2015 passed in CS(OS) No. 1030/2012. And the same is still pending before the Hon'ble High Court of Delhi, wherein it is inter alia contended that there is an Arbitration Clause 14 contained in the Deed of Guarantee, the guarantors were neither personally present before the Hon'ble Court nor were they properly represented by their counsel on the date when the impugned order dated 22.05.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the SARFAESI Act , 2002 and public notice or sole immovable property of Respondent, through Auctions was given on 22.11.2013, by reserve price of schedule property was fixed at ₹ 21,25,00,000/- Aggrieved by that, the Corporate Debtor has field a Writ Petition No.58444/2017 before the Hon ble High Court of Karnataka and obtained an interim order dated 26.12.2017. Subsequently, it is also stated that M/s.Radico Khaitan Ltd, Unsecured Creditor of M/ s.BT FC Private Limited has filed OMP No.940 of 2011 against the BT FC Private Limited before the Hon ble High Court of Delhi for recovery of money and in the said petition, Radico Khaitan Limited prayed for deposit of the balance of the sale proceeds realized from the proposed auction of the Schedule Property by the State Bank of India. The Hon'ble High Court of Delhi vide order dated 20.12.2011, directed the Respondent to preserve the balance of auction proceeds, if any, after satisfying the dues of State Bank of India until further order. Subsequently, the Hon ble High Court of Delhi has disposed of O.M.P.940/2011 is made absolute. It is also stated that the Plant and machineries are all hypothecated in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court against the Principal Borrower. Personal Guarantors as well as the present Corporate Debtor. Therefore, initiating proceedings under the Code against the Corporate Debtor amounts to parallel proceedings against the principle of double jeopardy. Admittedly, cause of action both in the Suit before Hon ble High court and in the present case is on set of documents. The Adjudicating Authority cannot interfere with powers of the Hon ble High Court Delhi and it is for the Hon ble High Court of Delhi to take a decisions on review pending wherein among other grounds, the issue of referring the matter to the Arbitration is also raised. 13. As per Section 3 (12) default means non-payment of debt when whole or any pa.rt or instalment of the amount of debt has become due and payable and is not (paid) by the Debtor or the Corporate Debtor, as the case may be; and as per Section 3(11) debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt . In the instant case, where the debt in question has become due against principal borrower as well as Personal Guarantors and the Corporate together. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly the question of referring to the matter to arbitration is raised. 15. Therefore, the Adjudicating is of the considered opinion that the instant Company petition suffers parallel proceedings as suit was filed against the Principal Borrower and Guarantors namely Mr. M.V. Murlidhar as Managing Director and Guarantor, Mrs. Padma Muralidhar as Guarantor and Ms. Sowmya Muralidhar as another Guarantor apart from the instant Corporate Guarantor and invoking provisions of the Code only against the Corporate Debtor is not tenable. The Company Petition under the principal of double jeopardy as Corporate Debtor has already suffered judgment and decree and the same is sub-judice before the Hon ble High Court of Delhi. Hence, the Company petition is liable to be dismissed without prejudice to rights of petitioner in the pending case before the Hon'ble High court and other Courts. 16. In the result, 135 of 2018 is hereby dismissed consequently I.A. No. 191 of 2019 is also stands dismissed. However, this order will not come in the way of Petitioner to prosecute the review pending before the Hon ble High Court of Delhi and other civil remedies available to it under any other law. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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