[The court established that the approval of a resolution plan for a corporate guarantor does not discharge the principal debtor's liability, and creditors retain the right to pursue both the guarantor and the principal debtor for recovery of debts.]

JUDGMENT :

ABHAY S. OKA, J.

FACTUAL ASPECTS

1. The 2nd respondent–Gujarat Hydrocarbon and Power SEZ Limited, is a corporate debtor. The corporate debtor approached the 1st respondent–SREI Infrastructure Finance Limited (the financial creditor), for a grant of a loan. Under the agreement dated 5th January 2011, the financial creditor granted the corporate debtor a loan of Rs.100 crores for setting up a SEZ project. The corporate debtor is a subsidiary of M/s. Assam Company India Limited (ACIL). The loan granted by the financial creditor to the corporate debtor was secured by a mortgage made by the corporate debtor of its leasehold land and a pledge of shares of the corporate debtor and ACIL. The loan was also secured by the corporate guarantee dated 5th : January 2011 furnished by ACIL. The financial creditor filed an Original Application before the Debt Recovery Tribunal-I, Kolkata (for short, ‘the DRT’) to recover the outstanding loan amount. On 24th March 2015, a “debt repayment and settlement agreement” was executed to which the financial creditor, the corporate debtor and ACIL (the guarantor) were parties. On account of the default committed by the corporate debtor, the financial creditor invoked the corporate guarantee of ACIL. Thereafter, an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, ‘the IBC’) was filed concerning ACIL as the guarantee was not honoured. The adjudicating authority vide order dated 26th October 2017 admitted the said application. Thus, the Corporate Insolvency Resolution Process (for short, ‘CIRP’) of ACIL commenced. The 1st respondent-financial creditor filed a claim of Rs.648.81 crores, out of which the claim of Rs.357.29 crores was admitted towards the claim by the Interim Resolution Professional (for short, ‘IRP’). After the appointment of the Resolution Professional (RP), the claim amount of the 1st respondent financial creditor was reassessed at Rs.241.27 crores inclusive of the principal amount of Rs.100 crores. The appellant is the successful Resolution Applicant of ACIL. The appellant submitted a resolution plan. The resolution plan was approved on 13th August 2018 by the Committee of Creditors (for short, ‘the COC’), which was approved by the adjudicating authority by the order dated 20th September 2018. The order of the adjudicating authority was confirmed in appeal by the National Company Law Appellate Tribunal (for short, ‘the NCLAT’). The appellant paid Rs.38.87 crores to the 1st respondent-financial creditor, against the admitted claim of Rs.241.27 crores in full and final settlement of all its dues and demands submitted in the resolution plan.

2. On 10th February 2020, the 1st respondent financial creditor filed an application under Section 7 of the IBC against the 2nd respondent corporate debtor. The claim of the 1st respondent-financial creditor was of Rs.1428 crores, which is claimed to be the balance amount payable to the financial creditor under the loan facility of Rs.100 crores. By the order dated 18th November 2020, the adjudicating authority admitted the application under Section 7 of the IBC. Aggrieved by the said order, the appellant preferred an appeal before the NCLAT. A suspended Director of the corporate debtor also preferred an appeal against the said order of the adjudicating authority. By the impugned judgment of the NCLAT, both appeals have been dismissed.

3. M/s. Zaveri & Co. Pvt. Ltd. has filed I.A. No.11685 of 2023 for intervention. It is stated in the application that the applicant and other interested parties had submitted the resolution plan of the 2nd respondent-corporate debtor. A final resolution plan was submitted by the applicant on 23rd August 2021, proposing to pay a sum of Rs.135 crores within a period of 15 months to the creditors of the 2nd respondent-corporate debtor. The COC of the 2nd respondent-corporate debtor approved the resolution plan of the applicant on 30th August 2021. As required by the approved resolution