Punjab-Haryana High Court
Pradeep Aggarwal vs Reserve Bank Of India And Ors on 1 July, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:081404-DB
CWP-1156-2022 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
1.
CWP-1156-2022 (O&M)
Date of Decision: July 1, 2024
Pradeep Aggarwal ..... Petitioner
Versus
Reserve Bank of India and others ..... Respondents
2. CWP-1160-2022 (O&M)
Vikas Aggarwal ..... Petitioner
Versus
Reserve Bank of India and others ..... Respondents
3. CWP-26276-2021 (O&M)
Kamlesh Devi Aggarwal ..... Petitioner
Versus
Reserve Bank of India and others ..... Respondents
4. CWP-26668-2021 (O&M)
Archana Aggarwal ..... Petitioner
Versus
Reserve Bank of India and others ..... Respondents
5. CWP-26715-2021 (O&M)
Sapna Aggarwal ..... Petitioner
Versus
Reserve Bank of India and others ..... Respondents
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Neutral Citation No:=2024:PHHC:081404-DB
CWP-1156-2022 (O&M) 2
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MS. JUSTICE AMARJOT BHATTI
Present: Mr. Anand Chhibbar, Senior Advocate with
Mr. Nitin Kaushal, Advocate,
Mr. Tony Anand, Advocate,
Mr. Ajay Kumar, Advocate and
Ms. Stuti Vatsa, Advocate for petitioner.
Mr. Inderesh Goel, Advocate
for respondent No. 1
(in CWP Nos. 1156, 1160 of 2022 and 26668 of 2021)
Mr. Puneet Bali, Senior Advocate with
Ms. Sonia Madan, Advocate and
Mr. Vishavjeet S. Beniwal, Advocate for respondent no.3
(in CWP Nos. 1156 and 1160 of 2022)
Mr. Gaurav Goel, Advocate for respondents no.4 and 5
(in CWP-1156-2022)
Mr. Ankur Mittal, Advocate;
Mr. D.K. Gupta, Advocate;
Mr. Bhaskar, Advocate and
Ms. Preety Choudhary, Advocate (through VC)
for respondent No. 4 (in CWP-1156 & 1160-2022)
for respondent No. 2 (in CWP-26276, 26668, 26715-2021).
Mr. Shailender Kashyap, Advocate for respondent no.6
(in CWP-1156-2022).
****
LISA GILL, J.
1. This order shall dispose of CWP Nos. 26276, 26668, 26715 of 2021 and 1156, 1160 of 2022.
2. CWP Nos. 26276, 26668, 26715 of 2021 and 1156, 1160 of 2022 are being taken up together for consideration and adjudication together at request and with consent of learned counsel for parties.
3. Petitioners in all the writ petitions are individuals having given personal guarantees for term loan and working capital facilities granted between 2 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 3 2010-15 to M/s Asian Colour Coated Ispat Limited (for short - 'ACCIL') by consortium of lenders including respondents No. 3 and 4, respondents No. 7 to 11 besides Dena Bank, Laxmi Vilas Bank, Indian Overseas Bank, Corporation Bank, Karnataka Bank Ltd. and Andhra Bank. JM Financial Asset Reconstruction Company Limited - respondent No. 5 and Union Bank of India - respondent No. 6 are assignees of the said banks. Prayer in all the writ petitions is identical. Petitioners seek directions to set aside recovery action(s) initiated by respondents No. 3 to 11 including:
(i) Application filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 having C.P. (IB) No. 478/2021 before the National Company Law Tribunal, New Delhi by Respondent No. 3;
(ii) Original Application No. 743/2018 filed by Respondent No. 4-10 (4) Original Application No. 367/2021 filed by Respondent No. 3 and
(iii) Original Application No. 1095/2019 filed by Respondent No. 11 qua the Petitioner in light of assignment of debt (as evidenced by Assignment Deed dated October 27, 2020- Annexure P-10 and no-dues certificate dated November 23, 2020-Annexure P-11) and consequent extinguishment thereof in the hands of Respondents No. 3-11 subsequent to the approval of resolution plan (Annexure P-6) pertaining to the Principal Borrower on October 26, 2020 and applicable guidelines issued by the Respondent No. 1.
4. All the petitioners further seek release and return of personal guarantees issued by them in view of assignment of debt vide Assignment Deed dated 27.10.2020 and No Due Certificate dated 23.11.2020 alleging 3 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 4 extinguishment of debt in the hands of respondents No. 3 to 11 pursuant to approval of resolution plan vide order dated 26.10.2020 passed by learned NCLT and in terms of para 1(C) (16) of Reserve Bank of India (Prudential Framework for Resolution of Stressed Asset) Directions 2019 dated 07.06.2019 as well as para 10.3 of Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated 01.10.2021 besides para 2.5.2(iv) (c) of Master Circular - Loans and Advances - Statutory and other restrictions dated 01.07.2015. Petitioners further seek direction to respondent No. 1 to ensure compliance by respondents No. 3 to 11 of all the abovesaid directions/regulations/guidelines. Interim relief has also been prayed for.
5. Brief facts, as pleaded in the writ petitions, are that principal borrower i.e. AICCL availed of various loan facilities from consortium of lenders in the year 2010 for Rs. 453 crores; Rs.338 crores in the year 2011, Rs.138.50 crores in 2012, and Rs. 150 crores in 2014. In the year 2015 existing working capital was increased to the tune of Rs.2420 crores to the principal borrower and then to Rs.2910 crores. Admittedly, petitioners executed personal guarantees, detail of which is not being narrated being unnecessary at this stage.
6. Shorn of unnecessary detail, it is to be noted that account of principal borrower was declared Non Performing Asset (NPA) in the year 2016. Application under Section 7 of Insolvency and Bankruptcy Act, 2016 i.e. CP(IB) 50 PB/2018 titled State Bank of India versus M/s Asian Colour Coated Ispat Limited was filed for initiation of Corporate Insolvency Resolution Process (CIRP) of the principal borrower before the National Company Law Tribunal (Principal Bench). CIRP was admitted vide order dated 20.07.2018 by learned NCLT. Original applications were filed by some of the respondents before learned DRT as have been detailed above. Respondents, who had filed Original 4 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 5 Applications, sought attachment and sale of properties of petitioners which were located in the State of Maharashtra as well as in State of Haryana and guarantees submitted by them were sought to be enforced by the applicant banks.
7. Resolution Professional admitted the debt owed by M/s AICCL to all the respondents as financial debt. Resolution plan was submitted by resolution applicant M/s JSW Steel Coated Products Limited on 08.03.2019. Committee of Creditors (COC) in the meeting held on 17.06.2019 approved resolution plan by majority of 79.3%. Learned NCLT, New Delhi approved resolution plan vide order dated 19.10.2020 published on 26.10.2020. Respondent No. 4 i.e. State Bank of India entered into debt assignment agreement dated 27.10.2020 with M/s Hasaud Steel Limited and No Due Certificate dated 23.11.2020 was issued by respondent No. 4 in favour of principal borrower declaring that no debt or payment is due or outstanding from the principal borrower to it. Principal borrower and M/s Hasaud Steel Limited (Special Purpose Vehicle of M/s JSW Steel Coated Products Limited) in the interregnum have amalgamated into M/s JSW Steel Coated Products Limited in terms of order dated 05.01.2023 passed by learned NCLT, Mumbai.
8. Present writ petitions were filed claiming that by virtue of approved resolution plan, entire debt of M/s ACCIL i.e. principal borrower alongwith interest stood assigned to M/s Hasaud Steel Limited and as there is no debt in the books of respondents No. 3 to 11, there is no cause of action left with the said respondents to proceed against the petitioners with respect to debt extended to principal borrower.
9. During pendency of these writ petitions, appeals filed by present petitioners challenging order dated 26.10.2020 passed by learned NCLT, New Delhi approving the resolution plan have been dismissed by learned NCLAT 5 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 6 (Principal Bench), New Delhi vide order dated 01.03.2024 and said order has been upheld by Hon'ble the Supreme Court with appeals filed by present petitioners challenging decision dated 01.03.2024 being dismissed on 19.04.2024 and 29.04.2024. It is the case of petitioners that in terms of approved resolution plan of principal borrower and order dated 19.10.2020 passed by learned NCLT, resolution applicant had already deposited the agreed amount as consideration for assignment/novation of entire debt of principal borrower held by its creditors, entire debt having been assigned alongwith security to M/s Hasaud Steel Limited, their remains no debt in the books of respondents No. 3 to 11. Therefore, without existence of a valid debt, said respondents cannot pursue or continue with recovery proceedings against petitioners, who are only the personal guarantors of M/s ACCIL - principal borrower. Therefore, the action to enforce security interest without existence of debt is stated to be in contravention of provisions of Indian Contract Act, 1872 and Transfer of Property Act, 1882. Debt cannot be retained and assigned at the same time. Reference is made to various RBI circulars to substantiate the said argument while submitting that said circulars have statutory flavor. Liability of guarantors/surety can be co-extensive with that of their principal debtor alone or once no debt qua principal debtor exists, proceedings against personal guarantors cannot continue. Learned counsel for petitioners referred extensively to terms and conditions of assignment deed, resolution plan as approved by learned NCLT besides findings returned by learned NCLAT to submit that continuance of proceedings against petitioners who are the personal guarantors of principal debtor should not be allowed to continue, same being illegal and arbitrary. Approval of resolution plan vide order dated 19.10.2020 by extending the concept of excluded rights cannot clothe the respondents with a right to proceed against the petitioners.
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10. Learned counsel for petitioners with great vehemence argued that if at all, any entity has a right to enforce the personal guarantees, it is the assignee of debt and not the respondents in this writ petition. Financial creditors cannot be vested with any right to pursue any remedy against the petitioners (personal guarantors) on account of "excluded rights" as inserted in resolution plan.
11. While responding to the objection raised by learned counsel for respondents that once appeals filed by the petitioners challenging order dated 26.10.2020 have been dismissed by learned NCLAT, New Delhi on 01.03.2024 with the said decision being upheld by Hon'ble the Supreme Court, present writ petitions should be dismissed. Learned counsel for petitioners submitted that said proceedings before learned NCLAT and Hon'ble the Supreme Court would have no bearing on the present proceedings inasmuch as the only issue to be considered by learned NCLT was as to whether approval of resolution plan under Section 31 of IBC is legally sound or not. Issues as raised in these writ petitions should be adjudicated upon independently by this Court with decision of learned NCLAT having no effect or bearing. Learned counsel for petitioners vehemently argued that learned NCLAT does not have any jurisdiction to decide the question of liability of personal guarantors under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It was submitted that perusal of order dated 01.03.2024 passed by learned NCLAT reveals that matter has not been considered in the correct perspective and infact the questions raised have been left unanswered. Moreover, Hon'ble the Supreme Court has dismissed the petition filed by petitioners challenging order dated 01.03.2024 in limine and not by speaking order, therefore, matter is liable to be considered by this Court on merits. Learned counsel for petitioners further argued that right to sue cannot be transferred in terms of Section 6 (e) of 7 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 8 Transfer of Property Act.
12. Learned counsel for petitioners strenuously urged that this court should look into the facts and decide the matter independently with order dated 01.03.2024 passed by NCLAT having no bearing on the matter. It was reiterated that learned NCLAT has not returned any concrete findings on all the issues raised by petitioners and in any case, learned NCLAT cannot usurp the powers of this Court. Moreover, respondent No. 3 i.e. IFCI Limited was one of the dissenting creditors with waterfall mechanism followed to give it the benefit in question. Therefore, it has no right whatsoever against present petitioners. It was, thus, prayed that all the writ petitions be allowed as prayed for.
13. Learned counsel for respondents vehemently refuted the arguments as raised on behalf of petitioners while firstly submitting that all questions, as sought to be raised by petitioners, have been considered independently by learned NCLAT and adjudicated upon vide order dated 01.03.2024. This order has been upheld by Hon'ble the Supreme Court while dismissing the statutory appeal filed by petitioners under Section 62 of IBC vide orders dated 19.04.2024/29.04.2024. It is submitted that even as per resolution plan, duly approved by learned NCLT upheld by learned NCLAT and Hon'ble the Supreme Court, there is no assignment of excluded rights. Moreover, IBC is a comprehensive code overriding all RBI circulars and notifications.
14. Learned counsel for respondents submitted that sole aim of petitioners is to delay the recovery proceedings against them. It was submitted that the purpose and intent of IBC is evident, which is to provide for and aid in revival of the corporate debtor and not to provide freedom from all responsibility to the personal guarantors. Reference was made to the Final Resolution Plan dated 06.05.2019 read with addendum dated 17.06.2019 and specifically to 8 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 9 Clause 1.3, 1.8, 1.10, 1.12, 1.13, 1.14 to submit that there is no indication in the Resolution Plan that it shall operate or have the effect of revoking, cancelling or extinguishing the excluded right as defined. The financial creditors are free to avail rights and remedies as permissible under applicable laws in respect of 'excluded rights'. The assignment of debt under the Resolution Plan cannot be equated with general principals of assignment as the IBC is a self contained Code with a non obstante clause as contained in Section 238 thereof. It was further submitted that averments in respect to rights of subrogation as raised by the petitioners are devoid of any merit as said rights may be available under normal circumstances to a surety against the principal debt, however under the IBC subrogation rights against the corporate debtor get extinguished with approval of the resolution plan by the adjudicating authority. It was thus prayed that these writ petitions be dismissed.
15. We heard learned counsel for the parties at considerable length and have carefully perused the files as well as copy of order dated 01.03.2024 passed by learned NCLAT, New Delhi and orders of Hon'ble the Supreme Court in Civil Appeals No. 4713 and 4957 of 2024.
16. Availing of financial credit by AICCL (Principal Debtor/Borrower) with petitioners being the personal guarantors, subsequent financial indiscipline on the part of Principal Borrower for reasons as may be, declaration of its account NPA and proceedings under SARFAESI Act being initiated against it are a matter of record. It is further a matter of record that proceedings under IBC were initiated and resolution plan ultimately approved by the adjudicating authority vide order dated 26.10.2020. Resolution plan submitted by applicant - M/s JSW Steel Coated Products Limited was approved with voting percentage of 79.3% by the COC. As per the resolution plan, there was the assignment of debt 9 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 10 of financial creditors to Hasaud Steels Limited i.e., the Special Purpose Vehicle (SPV) of the successful resolution applicant i.e. JSW Steel Coated Products Limited. It was brought to our notice that the principal borrower and Hasaud Steels Limited have amalgamated into JSW Steel Coated products limited in terms of order dated 05.01.2023 passed by learned NCLT, Mumbai Bench approving the scheme of amalgamation. Petitioners in all writ petitions are admittedly personal guarantors for the financial credit which had been availed by AICCL from the consortium of lenders as has been detailed in the foregoing paras. Petitioners claimed that with the assignment of debt and 'No Due Certificate' (NDC) being issued, the personal guarantors are also absolved of any liability towards the principal creditors. It is thus the case of petitioners that;
(i) entire debt of the principal borrower having been wiped out from the books of the assigner lenders, petitioners are not liable in any manner towards the creditors;
(ii) with the issuance of NDC qua Principal Debtor, execution of deed of assignment, the debt qua the Principal Debtor having been wiped out, no liability of petitioners i.e., personal guarantors remains;
(iii) right to sue cannot be transferred. If at all, it is only Hasaud Steel Private Limited to whom the debt has been assigned, which can proceed against the petitioners;
(iv) decision dated 01.03.2024 by learned NCLAT, New Delhi, would have no effect on the present proceedings as this Court should consider the merits of the matter independently. Dismissal of Civil Appeal Nos. 4713 and 4957 of 2024 filed by petitioners challenging order dated 01.03.2024 by Hon'ble the Supreme Court would have no effect upon the present proceedings as the appeals were dismissed in limine.
17. It is to be noticed at this stage that present writ petitions had been filed by petitioners after passing of order dated 26.10.2020 whereby the 10 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 11 resolution plan was approved by the Adjudicating authority. Petitioners filed appeals challenging order dated 26.10.2020 passed by learned NCLT, New Delhi which were dismissed on 01.03.2024 by learned NCLAT. Perusal of order dated 01.03.2024 reveals that identical arguments as aforesaid were raised before learned NCLAT. Learned NCLAT vide detailed order dated 01.03.2024 has negated the arguments as raised by petitioners while referring to the facts and circumstances including the specific applicable provisions of the resolution plan. Learned NCLAT culled out the following questions to be decided:-
"The moot question is whether the Financial Creditor can proceed against the Personal Guarantors in absence of any debt after extinguishment of such debts upon assignment in terms of the RBI Prudential Framework for Resolution of Stressed Assets dated 07.06.2019 and as stipulated in the approved Resolution Plan.
Other issues which are required to be considered shall, inter- alia, include:
a. Whether, the right of subrogation shall stand extinguished after approval of the Resolution Plan under the Code or the same will continue to vest with Personal Guarantors in terms of the Indian Contract Act, 1872.
b. Whether, "mere right to sue" in terms of Section 6(e) of the Transfer of Property Act, 1882 will come into play in the present Appeals.
c. The implications on the rights and obligations of the Personal Guarantor to the Corporate Debtor in case the entire debt stand transferred or assigned and the Financial Creditors retained rights to peruse legal remedies against such Personal Guarantor by way of "Excluded Rights".
18. It is specifically held by learned NCLAT in its order dated 01.03.2024 that financial creditors have a right to proceed against personal guarantors of the corporate debtor and that personal guarantors in terms of Section 31 of the Code are duty bound by the terms of resolution plan approved by the adjudicating authority. It is held that a categoric right has been carved out in favour of financial creditors under the umbrella of "excluded rights" which have not been assigned to the SPV. It is held that "the resolution plan defined the 11 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 12 term 'remaining debt' which has been assigned to the SPV of respondent no.2 and perusal of the relevant provisions clearly reveals that such 'remaining debt' assigned to the SPV of respondent no.2 explicitly preclude the excluded rights."
19. It is cogently held that clear, express provisions and stipulations were present under the resolution plan safeguarding the right of financial creditors to pursue legal remedies against the personal guarantors including the petitioners. Learned NCLAT further referred to the argument regarding right of subrogation. While referring to Section 140 and 141 of the Indian Contract Act 1872, it was held that treatment of personal guarantors under the Code are to be treated differently viz a viz under contract of guarantees under the Indian Contract Act, 1872. Reference was made to judgments of Hon'ble the Supreme Court in Essar Steel India Limited Committee of Creditors Vs. Satish Kumar Gupta, (2020) 8 SCC 531, State Bank of India Vs. V. Ramakrishnan and another, Civil Appeal No. 4553 of 2018, besides Lalit Kumar Jain Vs. Union of India and others, (2021) 9 SCC 321 to hold that rights of subrogation which may arise against the corporate debtor can be extinguished under the resolution plan. In this respect, it was held by learned NCLAT, New Delhi in order dated 01.03.2024 as under:-
"82. It is now well settled law, in light of the Essar Case (Supra) that rights of subrogation that may arise against the Corporate Debtor can be extinguished under the Resolution Plan and therefore the arguments of the Appellant on issue of rights of subrogation's are not convincing. If the rights of subrogation are allowed to continue against the Corporate Debtor under the management of the new SRA, the same would have the effect of putting the SRA and the Corporate Debtor in the same position as prior to its insolvency resolution. The allegation of the Appellant pertaining to differential treatment due to extinguishing their rights of subrogation under the approved Resolution Plan against the Corporate Debtor is 12 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 13 unfounded, which is only to ensure that the SRA takes control of the Corporate Debtor on a clean slate without carrying any previous liability baggage.
83. We feel that the extinguishment of Personal Guarantors right of subrogation is unavoidable and inaccessible fact in insolvency cases and it requires to be respected by all stakeholders and any departure from such principals will have adverse impact on revival of the Corporate Debtors, interest of the Financial Creditors and overall negative impact on the national economy.
84. Therefore, we are not inclined to accept the pleas of the Appellants regarding their rights of subrogation.
Be that as it may, we are of the clear opinion that the Code seeks to prevent such Personal Guarantors to the Corporate Debtor from benefitting themselves from the CIRP at the expenses of the Financial Creditors who takes a big hit through substantial hair cuts and therefore cannot be allowed to take shelter of Section 140 and 141 of the India Contract Act, 1872."
20. Similarly, the argument in respect to a mere right to sue not being assignable, a detailed discussion was carried out by learned NCLAT and the argument on behalf of petitioners rejected while holding that in the light of "excluded rights" continuing to exist with the financial creditors under the terms of the approved resolution plan, transfer of mere right to sue under Section 6 (e) of the Transfer of Property Act, 1872, is not applicable. It is specifically so held in para 91 and 92 of order dated 01.03.2024 that resolution of debts cannot be misconstrued as full satisfaction of debts payable to the creditors and resolution of debts under a resolution plan is only to the extent of the obligation against and would not take away rights of the financial creditors to proceed against appellants as promoters who stood as guarantors and the assets mortgaged by others against the loan availed of by the principal debtor. It was held that 13 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 14 financial creditors are at liberty to independently pursue their legal remedies against the personal guarantors.
21. The final resolution plan dated 06.05.2019 read with the addendum dated 17.06.2019 was duly approved by majority of COC and excluded rights were carved out in favour of financial creditors. Paras 1.12, 1.13 and 1.14 of the Addendum of Resolution Plan read as under:-
"2. Para 1.13 of the Addendum : Definition of "Remaining Debt" - "Remaining Debt" shall mean all rights, title, interests of the creditors in and to Admitted Financial Debt less the Corporate Guarantee Debt, along with all rights, assets, title, charges, encumbrancex, mortgages and guarantees (including the personal guarantees issued by Mr. Pradeep Kumar Aggarwal to the Direct Financial Creditors, to the extent of the Loan Assignment Payment), and any beneficial interest therein, securing such debt. (but excluding the Excluded Rights), which will be assigned/novated to the Purchaser pursuant to this Resolution Plan. The assignment and novation of the personal guarantees issued by Mr. Pradeep Kumar Aggarwal to the Direct Financial Creditors, to the extent of the Loan Assignment Payment is an integral part of the Resolution Plan."
3. Para 1.12 of the Addendum: Definition of "Excluded Rights"-
"Excluded Rights" shall mean (A) personal guarantees provided by persons other than Mr. Pradeep Aggarwal, (B) any mortgage and/or hypothecation provided by ACCIL Hospitality Limited, and (C) corporate guarantees provided by AGR Steel Strips Private Limited and ACCIL Hospitality Limited (D) the personal guarantees provided by Mr. Pradeep Aggarwal to the Direct Financial Creditors, but only to the extent of the Residual Guarantee Amount, and (b) the mortgage created by the Company over land bearing Plot No. 6 & 13 measuring 18900 sq.mts., located in the Industrial estate, Bawal, Haryana, pursuant to the Memorandum of Entry dated June 27, 2013 executed by the Company in favour of IL & FS Trust Company Limited (now known as Vistra ITCL (India) Limited) for the benefit of Andhra 14 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 15 Bank, Central Bank of India, Corporation Bank and Dena Bank (now Bank of Baroda), for securing the loans granted to ACCIL Auto Steel Private Limited by the aforesaid lenders."
4. Para 1.14 of the Addendum: Definition of "Residual Guarantee Amount"
"Residual Guarantee Amount" shall mean the amount equal to the Admitted Financial Debt owed to the Direct Financial Creditors less than the Loan Assignment Payment""
22. In respect to violation of RBI guidelines, argument as raised before us on behalf of petitioners who were the appellants before NCLAT, it was held in para 98 that RBI guidelines do not intend to give undue benefit to personal guarantors of corporate debtors or debar financial creditors from pursuing their legal rights qua the personal guarantors. It is specifically observed that public money cannot be written off by such circuitous route or hypothetical legal resumption. Reference was made to judgment of Hon'ble the Supreme Court in Swiss Ribbons Private Limited Vs. Union of India, (2019) 4 SCC 17. Learned NCLAT also examined the aspect of exercise of commercial wisdom of COC viz a viz judicial review and interference with reference to judgment of Hon'ble the Supreme Court in K. Shashidhar Vs. Indian Overseas Bank, (2019) 12 SCC
150. The resolution plan approved vide order dated 26.10.2020 by the adjudicating authority was found to be in order calling for no interference. Statutory appeals under Section 62 of IBC filed by present petitioners have admittedly been dismissed by Hon'ble the Supreme Court on 19.04.2024/29.04.2024.
23. We have also perused the ground of appeals which were raised before Hon'ble the Supreme Court. It is undeniable that identical grounds as have been raised before us were indeed raised in the grounds of appeal 15 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 16 challenging order dated 01.03.2024 passed by learned NCLAT. We do not find any merit in the argument raised by learned counsel for petitioners that there should be a separate independent adjudication by this Court on all these issues, yet again. It is a settled position that IBC is a complete Code in itself. Petitioners have availed of the remedies available thereunder.
24. In our considered opinion, it is not open to petitioners to seek parallel adjudication in this manner. The same if permitted would indeed amount to confer a license upon petitioners to indulge in forum hunting. Such a course is clearly not to be allowed. There is no merit in the argument raised by learned counsel for petitioners that as the appeals have been dismissed by Hon'ble the Supreme Court in limine, this Court should examine the matter yet again. Apart from the fact that petitioners are not entitled to challenge the findings returned in order dated 01.03.2024 in this oblique manner, it is to be noticed that Hon'ble the Supreme Court vide order dated 19.04.2024 and 29.04.2024 dismissed the statutory appeals filed by petitioners challenging order dated 01.03.2024 while specifically observing that there was no error found in the impugned order. In this view of the matter, it is apparent that with Hon'ble the Supreme Court having affirmed order dated 01.03.2024, the order of learned NCLAT would merge in the order passed by the superior Court. Gainful reference in this respect can be made to judgment of Hon'ble the Supreme Court in Experion Developers Private Limited vs Himanshu Dewan And Sonali Dewan, 2023 (SCC online) SC 1029. Reference made by learned counsel for petitioners to judgment of Hon'ble the Supreme Court in The State of Odisha vs Dhirendra Sundar Das and others, 2019 (6) SCC 270 and State of Punjab Vs. Devender Pal Singh, 2011 (14) SCC 270, wherein the SLP filed under Article 136 of the 16 of 17 ::: Downloaded on - 20-07-2024 12:56:28 ::: Neutral Citation No:=2024:PHHC:081404-DB CWP-1156-2022 (O&M) 17 Constitution of India was dismissed in limine, is, thus, not applicable in the given facts and circumstances.
25. In the given factual matrix, we do not find any ground to cause interference in these matters. All the writ petitions are accordingly dismissed with no order as to costs. Needless to say, petitioners are at liberty to raise all pleas available to them in accordance with law in the pending proceedings.
26. Pending application(s), if any, stand(s) disposed of accordingly.
( LISA GILL )
JUDGE
(AMARJOT BHATTI)
July 1, 2024 JUDGE
rts/s.khan
Whether speaking/reasoned : Yes/No.
Whether reportable : Yes/No.
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