NCLT Mumbai (14.02.2019), in L & T Infrastructure Finance Company Limited vs Maharashtra Vidyut Nigam Private Limited [CP (I&B) 593/NCLT/MB/2018] In the present case CD had executed Guarantee deed in favour of FC on 05.01.2015. FC invoked the said guarantee on 27.04.2017 & present application U/c 7 was filed on 09.04.2018. AA held that the application was within the limitation period, following the law laid down by the Hon’ble SCI in Syndicate Bank vs. Channaveerappa Beleri and Ors. (2006 11 SCC 506), that limitation in respect of a guarantee of demand would run from the date that the guarantee is invoked,
Excerpts of the order;
# 1. It is a Company Petition filed u/s 7 of Insolvency & Bankruptcy Code, 2016 (IBC) by the financial creditor namely L & T Infrastructure Finance Company Limited against the Corporate Debtor namely Maharashtra Vidyut Nigam Pvt. Ltd. to initiate corporate insolvency resolution process against the corporate debtor. The amount claimed to be in default is Rs. 94,95,68,366/- as on 21.3.2018. The date of default has been stated as 31.01.2015, and the date of declaration of Corporate Debtor’s account as a non performing asset has been stated as 31.3.2016.
# 3. ………..... On 05.01.2015, under the MRA, the Corporate Debtor executed an unconditional
guarantee. The Financial Creditor called upon GGRPL to pay the outstanding dues through letters dated 16.05.2016, 07.06.2016, 13.07.2016. On 14.06.2016, GGRPL responded to the Financial Creditor, informing it of the initiation of SDR mechanism.
# 5. It is further stated by the Financial Creditor that on 27.04.2017, the Financial Creditor sent a Notice to the Corporate Debtor inter alia, invoking the corporate guarantee dated 5th January 2015. After that, the petition filed before the Hon’ble Bombay High Court, Nagpur Bench by the Financial Creditor was transferred to this Tribunal and numbered as TCP 999/2017.
# 13. The Corporate Debtor did not file a reply even though several opportunities were given for the same. During the hearing the Corporate Debtor raised, inter-alia, following defences:
c) The petition is barred by limitation as it was filed on 9.4.2018 for an alleged default that occurred on 31.1.2015. Further, that this is in non-compliance of S. 238A, IBC. The Financial Creditor contends that they are within the period of limitation as they had filed a winding-up petition before the Hon’ble High Court at Nagpur, which was transferred to the NCLT, Mumbai. After that the Financial Creditor filed a petition u/s 7 ,but it was rejected vide order dated 15.9.2017 giving the Financial Creditor liberty to make its claim before the Interim Resolution Professional in CP 1140/I&BP/NCLT/MB/MAH/2017 and financial creditor was not authorised to file a fresh petition.
# 14. The Financial Creditor rebutted the defences raised by arguing the following:
a. The present Petition is not time-barred since the Deed of Guarantee dated 5th January 2015 annexed as Annexure K to the Application, at Pg. 253, is a continuing guarantee, payable on demand as stipulated in Clause 3b.It is further submitted that in Syndicate Bank vs. Channaveerappa Beleri and Ors. (2006 11 SCC 506), the Supreme Court held that limitation in respect of a guarantee of demand would run from the date that the guarantee is invoked, and the guarantor commits a breach by refusing to make payment. In the present case, the Guarantee was invoked by the Applicant on 27th April 2017 (Annexure L at Pg. 269 of the Petition, Vol I). The Corporate Debtor after that failed to pay. Thus, limitation if at all, would begin from 27th April 2017. In view thereof, the present Petition is within the limitation.
# 16. The Corporate Debtor is a guarantor vide a Deed of Guarantee dated 05.01.2015 regarding the loans given to Gupta Global Resources Private Limited (GGRPL). A guarantee is covered by the definition of financial debt provided in Section 5(8), IBC.
# 18. The contention of the Corporate Debtor that the present petition is barred by the law of limitation does not survive as the guarantee was invoked by the Financial Creditor on 27th April 2017 and the Financial Creditor filed the present petition on 09.04.2018.
# 23. This Petition reveals that there is a debt as defined in Section 3(11) of IBC. Also, there is a default in this case within the meaning of Section 3(12) of IBC. Though the Corporate Debtor has raised a dispute regarding his liability to pay the debt. However, the dispute is irrelevant for admitting a petition U/S 7 of the Code. The application of the Financial Creditor is complete, amount of more than Rs one lac is a due and application is complete. No disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted.
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