TMI Blog2021 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... :- A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be - the defence raised by the corporate guarantor about non-observing guideline issued by RBI by the Financial Creditor cannot be the defence to be considered in this proceedings - It is not recovery proceedings, hence, rejected. Allegation that Financial Creditor did not comply the provision of Section 215 of the IBC, 2016 - HELD THAT:- Section 215 of IBC, 2016 states the procedure of submitting financial statements of the debtor to Information Utility Service Provers. However, atleast till date, it is not necessary for the Financial Creditor to file certificate of default issued by Information Utility for initiating CIRP of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Impex Limited to start CIRP of corporate guarantor/Corporate Debtor on the ground that Corporate Debtor has committed default in paying the financial debt of ₹ 55,38,117/-. The date of default is stated at 13.06.2018. 2. CP(IB) 132 of 2019 is field by Dena Bank (Now Bank of Baroda) against another corporate guarantor Supreme Fine Fab Pvt. Ltd. The second Guarantor of M/s. Supreme (India) Impex Limited on the ground that corporate guarantor/Corporate Debtor committed default in paying the financial debt of ₹ 58,75,000/-. 3. Since the Financial Creditor Dena Bank has filed these two applications under Section 7 of IBC, 2016 against two corporate guarantors of same principal borrower M/s. Supreme (India) Impex Limited and as the facts of the applications filed by the Financial Creditor and the defence raised by the Corporate Guarantors are the same, this common order is passed to dispose of both above CP(IB) 131 of 2019 and CP(IB) 132 of 2019. 4. For the brevity, the fact of CP(IB) 132 of 2019 are stated below. The facts are admitted in both petition by the both corporate guarantors and they are as follows: Supreme (India) Impex Limited and M/s. Utility A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loan agreement. It has committed default. The guarantees given by the corporate guarantors are rightly invoked by the bank vide letter dated 17.01.2019. They were called upon to pay the debt but they also failed to pay. In case of Innoventive Industries Ltd. Vs. ICICI Bank Ors., Supreme Court held that It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be . Hence, the defence raised by the corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India in Judgement in the matter of State Bank of India V. Ramakrishnan Anr. (which was pronounced on 14th August, 2018 three days before the above Notification) ( (2018) 17 SCC 394) and discussed Section 60(2) and (3) as they stood before this amendment was enforced. We will refer to the above Judgement in the matter of Ramakrishnan later. At present, we have referred to the above provision which had come on the statute book when Act 26 of 2018 was enforced and the Judgement in the matter of Piramal which was passed on 8th January, 2019 did not notice the above amendment. If the above provisions of Section 60(2) and (3) are kept in view, it can be said that IBC has no aversion to simultaneously proceeding against the Corporate Debtor and Corporate Guarantor. If two Applications can be filed, for the same amount against Principal Borrower and Guarantor keeping in view the above provisions, the Applications can also be maintained. It is for such reason that Sub-Section (2) of Section 60 provides that if insolvency resolution process or liquidation or bankruptcy proceedings of a Corporate Guarantor or Personal Guarantor as the case may be of the Corporate Debtor is pending i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order has to be followed. For which he relied rulings of Hon'ble Apex Court in case of Union of India Anr vs Raghubir Singh reported in 1989 AIR 1933 : 1989 SCR (3) 316. We have gone through that ruling. However, in this case, Hon'ble NCLAT while deciding the case of Athena Energy has made it clear as to why it could not support the interpretation of the law as made by earlier Bench of Hon'ble NCLAT in case of Dr. Vishnu Kumar Agarwal v. Piramal Enterprises Ltd. Hon'ble NCLAT has relied on ruling of State Bank of India V. Ramakrishnan and Another and also various amendment carried in IBC, 2016 relating to corporate insolvency process of principal borrower and guarantor and held that simultaneous proceedings against borrower and guarantor are permitted to go on. Hence, we hold that this defence as raised by the Corporate Debtor (corporate guarantor) is not maintainable. 14. It is also submitted by the Learned Counsel for the Corporate Debtor (corporate guarantor) that the officer who had filed this application on behalf of bank was not properly authorized. These proceedings are filed on the basis of power of attorney are not maintainable. We make it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Corporate Debtor. 5. Further, litigation or any application, if any, is pending before any competent Court of law under the provisions of the SARFAESI Act and RDB Act, prior to pronouncement of this order such proceedings are expected to be dealt with in accordance with law r.w. Section 14 and Section 238 of the Insolvency Bankruptcy Code, 2016. 6. That the supply of essential goods or services to Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the Moratorium, period. The Corporate Debtor to provide effective assistance to the IRP as and when he takes charge of the Corporate Debtor. 7. The IRP so appointed shall make Public announcement of Corporate Insolvency Resolution Process (CIRP) be made immediately as specified under Section 13 of the Code and by calling for submissions of claim under Section 15 of the Code. 8. The IRP shall perform all his functions as contemplated, inter-alia, by Sections 17, 18, 20 21 of the Code. It is further made clear that all personnel connected with Corporate Debtor, its Promoter or any other person associated with management of the Corporate Debtor are under legal obligation under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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