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Judgment
Santanu Kumar Mohapatra, Member (T)
M/s. Edelweiss Asset Reconstruction Company Limited, claimed to be one of the financial creditor of the corporate debtor M/s. Gwalior Bypass Projects Limited (in CIRP) has filed the present application with the prayer for issuance of directions to the Interim Resolution Professional to accept and admit the claim of the applicant and consequently to direct the Interim Resolution Professional to revise the list of creditors of the corporate debtor.
It is case of the applicant that ECL Finance Limited had sanctioned a term loan of Rs. 170 crores to M/s. Adel Landmarks Limited (hereinafter referred as borrower) vide loan agreement dated 07.10.2013. Thereafter, ECL Finance Limited original creditor assigned the said debt along with all right, title and interest in the underline securities and guarantees to the applicant vide assignment agreement dated 23.03.2017. Consequent upon the deed of assignment the applicant M/s. Edelweiss Asset Reconstruction Company Limited stepped into the shoe of the original creditor and therefore can claim the dues outstanding from the debtors pursuant to the loan agreement dated 07.10.2013.
It is pertinent to mentioned here that the corporate debtor for the purpose for securing the debt of Adel Landmarks Limited had executed corporate guarantee agreement dated 03.05.2018 and the deed of hypothecation dated 03.05.2018.
Subsequently, on the occasion of failure of Adel Landmark Limited to adhere to the terms and conditions of the Loan Agreement and committing default and repayment of the loan amount, the applicant issued notice dated 02.07.2018 to Adel Landmarks Limited for repayment of said loan. The applicant also invoked corporate guarantee of the corporate debtor vide notice dated 10.07.2018.
It is appropriate to mention here that CIR Process against corporate debtor was initiated vide order dated 29.05.2019 passed by this bench and Mr. Rajesh Samson was appointed as IRP for the corporate debtor.
Thereafter, applicant filed its claim along with all relevant details and copies of documents on 11.06.2019 before the IRP. The claim of the applicant was however rejected by the IRP vide email dated 19.06.2019 on the basis of judgement passed in the matter of Dr. Vishnu Kumar Agarwal vs. M/s. Piramal Enterprises Ltd. Company Appeal (AT) (Insolvency) No. 346 of 2018 decided on 08.01.2019.
It is claimed by the applicant that both the corporate debtor (gurantor) as well as Adel Landmarks Limited (borrower) jointly and severally owes Rs. 4,587,862,930/- to the applicant as on 29.05.2019.
The contention of the applicant is that the judgement which has been relied upon by the IRP has been challenged before Hon'ble Supreme court of India and a status quo order has been passed by the Hon'ble Supreme Court, therefore the same judgment cannot be the ground to reject the claim of the applicant. It is also contended that mere admission of the CIR Process against the Principal Borrowers i.e. Adel Landmarks Limited would not eliminate the debt payable by the guarantor as the CIR Process against Principal Borrowers does not operate as a bar on applicant in getting its claim admitted in CIR Process initiated against the corporate debtor.
In the reply to the application it has been stated that Hon'ble Supreme Court has directed the parties in that case to maintain status quo, however the Piramal Judgment has not been stayed and thus, it lays down the position of law to be abided by the respondent.
This bench in the case of M/s. IFCI Vs. Hi-Point Investment Finance Private Limited vide order dated 07.06.2019 passed in IB-478(PB)/2017 has already rejected such practice of filing duplicate claims by holding that no duplicate claim would be maintainable for the same set of claim and default.
The Resolution Professional in his reply filed on 26.08.2019 has submitted that the applicant had filed application under section 7 of the Code against the principal borrowers on the basis of the same claim which was allowed vide order 05.12.2018 and Corporate Insolvency Resolution Process against the principal borrowers has been initiated. It is submitted that the applicant has already filed its claim arising out of the loan agreement in the CIRP against the principal borrower. Therefore, the IRP relying on the settled position of law denied to admit the claim of applicant vide email dated 19.06.2019.
The IRP Further submitted that as per the list of creditors available on the website of the principal borrower the applicant has claimed an amount of Rs. 731,19,03,815 from the principal borrower, which clearly shows that the applicant has already claimed the principal amount as well as the interest under the said loan agreement from the principal borrowers.
During hearing learned counsel for applicant fairly admitted that the amount of claim arising on account of loan given to the principal borrower, has already been claimed by the applicant under a separate CIR Process of the principal borrower.
Admittedly, the total claim of M/s. Edelweiss Assets Reconstruction Company Limited is only based upon the corporate guarantee dated 03.05.2018 for the purpose to secure loan sanctioned to the principal borrower vide loan agreement dated 07.10.2013 and nothing more. However, M/s. Edelweiss Assets Reconstruction Company Limited has lodged the very same claim, for admission in different insolvency processes respectively. Not only there is duplication of selfsame claim, but also the applicant financial creditor, if such duplicate claims are allowed, will enjoy proportionate voting rights in both the CoCs.
No doubt the liability of guarantor is co-extensive with that of the principal debtor, however the applicant couldn't place any precedent in support of their contention that when a claim has been admitted in one CIRP, similar selfsame claim can also be admitted and pursued in other Insolvency Processes simultaneously.
Hon'ble NCLAT has settled the proposition of law in this respect in the case of Dr. Vishnu Kumar Agarwal vs. M/s. Piramal Enterprises Ltd. Company Appeal (AT) (Insolvency) No. 346 of 2018 decided on 08.01.2019 with the following observations:
"Admittedly, for same set of debt, claim cannot be filed by same 'Financial Creditor' in two separate 'Corporate Insolvency Resolution Processes'."
The finding of the Hon'ble NCLAT that for the same set of debt, claim cannot be filed by same 'Financial Creditor' in two separates 'Corporate Insolvency Resolution Processes' has not yet been varied, modified or set-aside nor has been stayed. Judicial discipline therefore demands that the precedent laid down by Hon'ble Appellate Court needs to be followed.
The view taken by the Hon'ble Appellate Tribunal is binding on us as per the principles of stare decisis and the precedent.
The claim of the applicant being a repetition of the claim which already stands admitted in other insolvency process, cannot again be admitted in the present CIRP.
As a sequel to the above discussion the company application is dismissed.
Let the copy of the order be communicated to the parties.