- (1.) These are two separate Company petitions filed by this Financial Creditor, namely Bank of India against Gupta Infrastructure (India) Pvt. Ltd. (CP 1397/2017) and Gupta Infratec Pvt. Ltd. (1398/2017) on the same facts stating that these two Corporate Debtor Companies, Gupta Corporation Pvt Ltd and one Gupta Global Resources Pvt Ltd. executed a Deed of Guarantee on 12.7.2014 standing as Guarantors to the working capital facility availed by their own group company, namely, Gupta Coal India Pvt. Ltd" on having executed so, when this Gupta Coal India Pvt Ltd defaulted in making repayment of the working capital loan facility availed by it, these two companies (Corporate Debtor) along with others having agreed to repay the working capital facility loan along with interest accrued upon it in the event Gupta Coal India Pvt. Ltd. failed to repay the same, this Financial Creditor, i.e. Bank of India issued notice to these guarantors to pay off the liability for the principal borrower defaulted in making repayment, as there was no response from these guarantors also, this financial creditor filed these two company petitions against the Corporate Debtors u/s 7 of Insolvency & Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
(2.) Since the facts and legal proposition in respect to these two company petitions are common, for the sake of brevity and avoiding repetition, instead of dealing with these petitions separately, this Bench hereby passes common order covering both the company petitions with separate reliefs against each of these corporate debtors.
(3.) As it has been said above, the principal borrower had earlier availed a total financial assistance of Rs. 906 crores, out of which Rs. 196 crores is fund based and remaining Rs. 710 crores is non-fund based. Then a Supplemental Working Capital Consortium Agreement was executed by this principal borrower on 27.6.2014 in favour of Consortium of Banks led by this Financial Creditor revising the existing working capital limit to Rs. 2547.25crores as shown in the schedule annexed to this Supplemental Working Capital Consortium Agreement. In support of this Supplemental Working Capital Consortium Agreement, these Corporate Debtors along with other group companies and the principal borrower, on 12.7.2014, executed the Deed of Guarantee by paying sufficient stamp duty at New Delhi in favour of the Consortium Banks namely, Bank of India, Indian Overseas Bank, Union Bank of India, IDBI Bank, Allahabad Bank, Vijaya Bank, ICICI Bank, Punjab National Bank, incorporating the following terms and conditions: (a) It has been stated that the principal borrower Gupta Coal India Pvt. Ltd. has availed of/agreed to avail of working capital facilities from BOI Consortium on having BOI Consortium granted working capital facilities to the borrower aggregating to Rs. 2547.25 crores on the terms and conditions as set out in the Working Capital Consortium Agreement (WCCA) dated 14.2.2011 entered in between the borrower and BOI r/w WCCA dated 27.6.2014. (b) In this Agreement, it has been said that the terms and conditions in the WCCA reflect that the borrower shall procure and furnish an unconditional and revocable guarantee from the guarantors to the working capital lenders guaranteeing due repayment, payment and discharge by the borrower of the said facilities together with interest in respect to the facilities mentioned in the WCCA. (c) These Guarantors, in consideration aforesaid and the request of the borrower, have agreed to execute this Guarantee in favour of the working capital lenders on the terms appearing in this Deed. (d) In consideration of the above premises, the Guarantors jointly and severally covenanted and guaranteed to each of the working capital lenders in the terms subsequently mentioned. (e) In the event of default in payment of the facilities together with interest by the borrower, the Guarantors shall forthwith on demand being made in that behalf, pay, without any demur and notwithstanding any objection on the part of the borrower to the working capital lenders and shall indemnify and keep indemnified the working capital lenders against all losses pertaining to the facilities together with interest and other expenses whatsoever the lenders incur by reason of default on the part of the borrowers. (f) The interest shall be paid by the guarantors as may be determined by each of the working capital lenders from time to time. The lender shall have full liberty without affecting the guarantee to vary the amounts of the individual limits of the facilities as may be agreed from time to time between the lenders and principal borrower. The lenders shall be at liberty to stipulate, in addition to the subsistence securities, any other securities for the facilities and also to release or forbear to enforce all or any of the remedies upon such security and any collateral security or securities presently held by the working capital lenders and no such release or forbearance as aforesaid shall have the effect of releasing or discharging the liability of the guarantors and the remedies against the guarantors under this Guarantee Deed, the Guarantors shall not be relieved from this liability until their debt is fully satisfied. (g) To give effect to the Guarantee, the lenders are entitled to act as if the Guarantors were the principal debtors to the lenders for all payments guaranteed by them as aforesaid to the lenders. This Guarantee is a continuing one for all amounts advanced by the lenders to the borrower in respect of or under the facilities together with interest as the case may be and other expenses which may from time to time become due and payable and have remained unpaid to the lenders. Notwithstanding the rights the lenders have under any security, they shall have full liberty to call upon the guarantors to pay the facilities together with interest as the case may be. The Guarantee shall not be determined or in any way prejudiced by any absorption by the lenders or by any amalgamation thereof but shall inure and be available for the benefit of the absorbing or amalgamated lenders or concern. Till the repayment of entire amount being due and payable under the facilities together with interest as the case may be, the guarantee shall be revocable and enforceable against the guarantors notwithstanding any dispute between the working capital lenders and the borrower. The declaration of confirmation or acknowledgement given by the borrower to the lenders shall be deemed to have been given by or on behalf of the guarantors. The guarantors shall not be released or discharged their obligations even if any variation made in the terms of working capital consortium agreement or any other security documents given by the borrower. (h) The guarantors further agreed that in the event the borrower enters into liquidation or winding up (whether compulsory or voluntary) or the management of the undertaking of the borrower is taken over under any law or the borrower/its undertaking is nationalized, the lenders may rank the guarantors as debtors and prove against the estate for paying off the amounts payable by the borrower until the entire claim of the lenders against the borrower for the full amount has been paid by the guarantors. (i) The guarantee given here is independent and distinct from any security that the lender has taken and that notwithstanding the provisions of sections 140 and 141 of the Indian Contract Act, 1872 or any other sections of that Act or any other law, the guarantors will not claim to be discharged to any extent because of the failure of the lenders to take any or other security or in requiring or obtaining any other such security losing for any reason whatsoever including reasons attributable to its default and negligence, benefit of any or other such security or any rights to any or other any security that has been taken. (j) They further agree that they will not prove or seek to claim in the case of liquidation of the borrower, so long as any amount remains unpaid to the lenders under the given facilities. The terms and conditions these guarantors entered into with the lenders can be summed up saying that they agree to repay the loan amount along with interest in the event the borrower defaulted notwithstanding any other impediment that comes in realizing the dues of the lenders either from the borrower or from these guarantors, they have even stated that their guarantee shall not be effected by any change in the constitution or winding up of the borrower or any absorption, merger, amaigamation of the borrower with any other company or any change in the management of the borrower or even takeover of the management of the borrower by the State or the Central Government.;