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TMI Blog2022 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 as follows: "Para 34: Conclusion (i). We hold that, in the present case, due to lack of demand notice by the applicant as per clause 6 Deed of Guarantee, the Guarantee stands un-invoked and consequently, the claim filed by the applicant is not ascertained and accrued liability. (ii) We hold that time barred claims or contingent claims cannot be admitted during the CIRP though such claims will be part of information memorandum being provided to perspective Resolution Applicant. (iii) We hold that so far as the meaning of various words/terms such as "debt due", "debt incurred", "debt owed", "debt due and payable", "claims" and "claims due" which have been used in various Sections / Regulations pertaining to collation / adjudication of claims for the purpose of ascertainment of liability in respect of such claims under CIRP/ Liquidation would mean a debt which is due and payable, both in law or in fact and the provision of Limitation Act, 1963 will be applicable thereto. (iv) We hold that claims in respect of a time barred debt, whether such claim is principal debt or arise out of a contract of Guarantee, cannot be entertained in CIRP/ Liquidation Proceedings. 35. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice cum Arbitration notices' were issued to the 'Principal Borrower' and the Corporate Guarantor/CD on 07.03.2015 for default committed by the 'Principal Borrowers' and simultaneously Arbitration was also initiated. The Appellant issued separate 'Termination -cum - Arbitration Notices' on 07.03.2015 to the Borrowers and Guarantors including the CD for the repayment of outstanding amount alongwith interest etc., and also invoked Arbitration Clause. The Appellant has also submitted that the 'Termination of the Loan' and 'Invocation of Corporate Guarantee' vide notices dated 07.03.2016 took place well within the period of limitation qua all the loans. 'Arbitral Awards' have also been passed on 21.08.2015 and total amount awarded is Rs. 3,62,30,729/- against 'Umiya Ceramic Pvt. Ltd' and similarly 'Arbitration Award' given against 'Gokul Ceramic Pvt. Ltd'. dated 08.01.2016 amount to Rs. 1,69,30,411/-. 6. It is also submitted by the Appellant that none of the three 'Arbitration Award' was set aside by the 'Competent Court'. All these are 'Arbitration Award' is at Annexure A-6 of the Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty as stated above and the 'Corporate guarantee' has not been given by the CD. c. It is also not in dispute that the 'Principal Debtor' has committed a 'default' leading to issue of 'Termination cum Arbitration notice' way back on 07.03.2015 to the 'Corporate Guarantor' and others including the 'Guarantors' were asked to repay the outstanding dues which has been 'defaulted' by the 'Principal Debtor'. d. It is also not in dispute a 'Demand cum Legal Notice' dated 04.02.2015 were not issued to the 'Guarantor'. All these notices are demanding repayment of dues. The terms and conditions were also not disputed between the parties. e. It is very much clear that the 'Deed of Guarantee' provides for 'Continuing Guarantee' and shall be deemed to have given separately for payment of loan, interest thereon cost and other expenses in the agreement and shall be enforced till the entire amount guarantees is paid in full. f. The record reveals that the CIRP commenced on 21.01.2020. The 'Interim Resolution Professional' (IRP) invites claim from the Creditors of the CD on 30.01.2020. The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his clause; Section 7: Initiation of corporate insolvency resolution process by financial creditor. 7. (1) A financial creditor either by itself or jointly with 1[other financial creditors, or any other person on behalf of the financial creditor, as may be notified2 by the Central Government] may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. [Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class,whicheverisless: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. h. From the details available on record, it is amply clear that the Appellant has invoked the 'Corporate Guarantee'. The Appellant has invoked the Guarantee well within the expiry of the term of 'Loan Agreement' concerned. The claim was also filed within 30 days from the date of invitation of the claim. Para 132, 142, 144 of the Dena Bank Vs. C.ShivaKumar Reddy and Anr. 2021 SCC online SC 453 states as follows: Para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also a difference between a guarantee which stipulates that the Guarantor is liable to pay only on a demand by the creditor, and a guarantee which does not contain such a condition. Further, depending on the terms of Guarantee, the liability of a guarantor may be limited to a particular sum, instead of the liability being to the same extent as that of the principal debtor. The liability to pay may arise, on the principal debtor and Guarantor, at the same time or at different points of time. A claim may be even time-barred against the principal debtor, but still enforceable against the Guarantor. The parties may agree that the liability of a guarantor shall arise at a later point of time than that of the principal debtor. We have referred to these aspects only to underline the fact that the extent of liability under a guarantee as also the question as to when the liability of a guarantor will arise, would depend purely on the terms of the contract. n. It is very much clear that the Appellant has submitted its claim within due time frame and with relevant papers and Guarantee is a continuing guarantee. o. All this do not suggests that the amount is not due and payable in law and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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