The Kolkata Bench of the National Company Law Tribunal ( NCLT ) observed that the simultaneous Corporate Insolvency Resolution Process ( CIRP ) can be initiated against principal borrower and corporate guarantor.
The instant application is filed under Section 7 of the Insolvency and Bankruptcy Code, for brevity I&B Code, read with Rule 4 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, by “State Bank of India”, referred to as ( “Financial Creditor” “Applicant”/ “FC” ) against “Anupriya Management Private Limited”, referred to as “Corporate Guarantor” ( “Respondent”/ “CG” ) seeking direction to initiate Corporate Insolvency Resolution Process ( “CIRP” ) in respect of the Corporate Guarantor.
The counsel for the applicant contended that the Respondent being Corporate Guarantor of Corporate Debtor in respect of loans availed from Financial Creditor, this application has been made and that there is no dispute about the credit facilities availed by the Corporate Debtor from the Financial Creditor, with regard to amount, tenure, terms and conditions of the Facilities etc.
The Counsel for the respondent submitted that there has been non-compliance with the provisions of Rule 20 (1A) of IBBI ( Information Utilities ) Regulation 2017 in as much as, before filing an application under Section 7 of the I&B Code, it is mandatory for the Financial Creditor to file the “information of default” Information utilities and the same has not done by the applicant.
A Two-Member Bench comprising D. Arvind, Member ( Technical ) and Bidisha Banerjee, Member ( Technical ) observed that “We find, no reason to dismiss the application on the other grounds concassed by Corporate Guarantor. We are of the considered view that the Corporate Debtor has built a few apartments on the very same land as a Joint venture Partner and is in the process of seeking Liquidation. When the Corporate Debtor himself could not seek any resolution plan as a builder, the question of the Corporate Guarantor getting Resolution Plan does not arise.”
“In the light of the facts stated in the application bearing Company Petition (IB) No. 18/KB/2023, and the evidence placed on record and the discussion hereinabove, we allow this application filed under Section 7 of I&B Code, and accordingly, we order the initiation of Corporate Insolvency Resolution Process ( CIRP ) in respect of the Corporate Debtor that the Application filed by the State Bank of India ( Financial Creditor ), under Section 7 of the Insolvency & Bankruptcy Code, 2016, is hereby, admitted for initiating the Corporate Insolvency Resolution Process in respect of Anupriya Management Private Limited ( Corporate Debtor )” the Bench noted.
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