TMI Blog2018 (6) TMI 1702X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot hide itself behind its own failure to obtain any required approval to wriggle out of its liability or consequences of default - further, the failure on the part of the corporate debtor/guarantor to obtain such approval, does not impinge upon the validity of the guarantee issued. The application of the financial creditor is complete in all respect - application admitted - moratorium declared. - C. P. No. 699/(IB)/CB/2017 - - - Dated:- 20-6-2018 - Ch. Mohd. Sharief tariq Judicial Member For the Financial Creditor : Arun Karthik Mohan For the Corporate Debtor : Rahul Jain ORDER CH. MOHD. SHARIEF TARIQ (JUDICIAL MEMBER). - 1. Under adjudication is an application that has been filed by M/s. Baobab Broadband Ltd. (here-inafter referred to as financial creditor ) under section 7 of the Insolvency and Bankruptcy Code, 2016 read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Gemini Communication Ltd. (hereinafter referred to as the corporate debtor/guarantor). The prayer made is to admit the application, to initiate the corporate insolvency resolution process against the corporate debtor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Gemini Communication Ltd., has executed a deed of guarantee on June 12, 2010 in favour of the financial creditor M/s. Baobab Broadband Ltd., wherein, inter alia, the deed of guarantee under paragraphs 13, 15 and 18 provides as follows : 13. In order to give effect to this guarantee, Baobab shall be entitled to act as if the guarantor was the principal debtor to RB for all payments under the loan agreement hereby guaranteed by the guarantor as aforesaid . . . 15. The guarantor shall have no right to the benefit of the securities (if any) created by GCL Infotek in favour of Baobab and/or to be created pursuant to the loan agreement in connection with the repayment of amounts until all amounts claimed by Baobab from the guarantor has been fully paid . . . 18. The guarantee hereby given is independent and distinct from any security that Baobab has taken or may take in any manner whatsoever whether it be by way of hypothecation, pledge and/or mortgage and/or any other charge over goods, movables or other assets and/or any other property movable or immovable and that the guarantor has not given this guarantee upon any understanding faith or belief that Baobab has taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The corporate debtor/guarantor has filed the reply through its director, viz., R. Vijaykumar, who has stated in the reply affidavit that the application filed by the financial creditor under section 7 of the I and B Code, 2016 is neither maintainable in law nor on facts of the case, and is therefore, liable to be dismissed in limine. It has been averred that the financial creditor has suppressed the material facts and misrepresented the factual position and the application is incomplete. It has also been alleged that the debt arises from guarantee which is conditional on transfer of shares in the financial creditor and unless the transfer occurs, the guarantee cannot be invoked. Thus, as per the sub-missions of the corporate debtor, there is neither a debt due nor a default. The corporate debtor/guarantor has further submitted in the reply affidavit that the mandatory record from information utility has not been furnished and the deed of guarantee dated June 12, 2010 on the basis of which the financial creditor is claiming monies, is a nullity in the eyes of law, as no sanction/approval of RBI has been taken and the jurisdiction of the Adjudicating Authority is barred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is payable and it is of no matter that the debt is disputed so long as the debt is due. The financial creditor has relied upon paragraphs 29 and 30 of the judgment of the hon'ble Supreme Court delivered in Innoventive Industries Ltd. v. ICICI Bank reported in [2017] 205 Comp Cas 57 (SC) ; [2017] SCC Online SC 1025. 11. In relation to the issue that has been raised by the corporate debtor/ guarantor that the record of default maintained by the information utility has not been produced, counsel for the financial creditor has referred to section 7(3)(a) of the I and B Code, 2016 and has submitted that the said provision alternatively provides for production of other record or evidence of default as may be specified. The record/evidence that has been mentioned in preceding paragraph is sufficient to ascertain the existence of default on the part of the corporate debtor/guarantor. 12. On the issue that there is no sanction/approval of RBI due to which the corporate guarantee in question is not enforceable is stated to be wholly vague and baseless because as per article 3 of the loan agreement, the corporate debtor/guarantor assured the financial creditor of its ability to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IRP is directed to take charge of the respondent-corporate debtor's management immediately. She is also directed to cause public announcement as prescribed under section 15 of the I and B Code, 2016 within three days from the date the copy of this order is received, and call for submissions of claim in the manner as prescribed. 17. The moratorium is hereby declared which shall have effect from the date of this order till the completion of corporate insolvency resolution process, for the purposes referred to in section 14 of the I and B Code, 2016. It is hereby ordered to prohibit all of the following, namely : (a) The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, Tribunal, arbitration panel or other authority ; (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein ; (c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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