TMI Blog2020 (4) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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. - C.P. (I.B.) NO. 796/KB/2018 - - - Dated:- 4-9-2019 - M.B. Gosavi, Judicial Member And Virendra Kumar Gupta, Technical Member Ms. Suhani Dwivedi and Deepanjan Dutta Roy, Advs. for the Applicant. Abhrajit Mitra, Sr. Adv., D.N. Sharma, Nilay Sengupta and Ms. Swati Agarwal, Advs. for the Respondent. ORDER Madan B. Gosavi, 1. State Bank of India (Financial Creditor) filed this application under section 7 of Insolvency and Bankruptcy Code, 2016 against M/s Sungrowth Share Stock Limited- one of the Corporate Guarantors of State Bank of India v. Adhunik Alloys Power Ltd. [2019] 101 taxmann.com 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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? Our findings to this point is in the affirmative for the following reasons:- 6. The Corporate Debtor is a guarantor of the loan that was disbursed to principal debtor - Adhunik Alloys and Power Limited. Deed of guarantee dated 23-9-2011 is on record. In fact the terms of deed of guarantee are so explicitly clear and as such there is no scope to record any other findings than the fact that the Corporate Debtor is bound to pay back balance outstanding irrespective of the fact whether the creditor, State Bank of India, gave discharge to the principal borrower or did not give such discharge. It will be convenient to note relevant terms in deed of guarantee dated 23-9-2011 (latter renewed on 23-8-2017) Notwithstanding Lender rights under any security which Lender may have obtained or may obtain, Lender shall have fullest liberty to call upon the Guarantor to pay the principal sum not exceeding ₹ 30.00 Crores (Rupees Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have been or could have been taken. 8. Above all, 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. It is made clear by the Bank while approving the plan that, As the aforesaid credit facilities have been failure secured by hypothecation of the Borrower's movable properties and/or mortgage of the Borrower's immovable properties under separate security documents executed by the Borrower with Lender which security documents would contain stipulations as to insurance assignment and delivery of Insurance Policy to Lender, the margin or value of properties to be maintained and the periodical furnishing of different statements to Lender and other matters, the Guarantor agree that no failure in requiring or obtaining such security or in the observance or performance of any of the stipulations or terms of the said security documents and no default of Lender in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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. 14. In view of the above and in our considered opinion, the law on above subject is clearly spelt out by Hon'ble NCLAT and Hon'ble Apex Court. The Guarantor (Corporate Debtor, herein) cannot get sheild to protect him from being liable to clear outstanding only because the Bank consented resolution plan of the principal debtor, thereby, giving discharge from paying its debt. Hence, we answer the point in affirmative. 15. Coming back to the factual aspect of this case, there is no dispute to the fact that financial debt more than permissible limit stated under section 4 of I B Code, 2016 is due and payable by the Corporate Debtor to the State Bank of India. It has committed default in paying the debt. The Financial Creditor suggested name of one Mr. Kamal Nayan Jain, having registration no. IBBI/IPA-001/IP-P00029/2016-17/10065 for appointment as Interim Resolution Professional. There is nothing on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. (ix) Necessary public announcement as per section 15 of the IBC, 2016 may be made. (x) Mr. Kamal Nayan Jain, of 2, Lal Bazar Street 205, Todi Chamber, Kolkata, West Bengal- 700001, email id knjian@knjainco.com having registration no. IBBI/IPA-001/IP-P00029/2016-2017/10065 is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan. (xi) The Financial Creditor to pay sum of ₹ 50,000/- (Rupees Fifty Thousand Only) to IRP as advance fees as per Regulation 33(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016 which shall be adjusted from final bill. (xii) The Resolution Professional shall conduct CIRP in time bound manner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016. (xiii) Registry is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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