JUDGMENT :

SUDHANSU JYOTI MUKHOPADHAYA, J.

The Appellant, as ‘Financial Creditor’, filed application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “I&B Code”) for initiation of the ‘Corporate Insolvency Resolution Process’ against the Respondent- ‘CHL Limited’ (‘Corporate Debtor’) on the ground of default in discharging its obligations upon invocation of its guarantee. However, the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi, dismissed the application on the finding that the Respondent’s liability as a surety was not co-extensive with that of the ‘principal borrower’ by reason of Clause 4 of the ‘Deed of Guarantee’. The Adjudicating Authority held that Clause 4 of the ‘Deed of Guarantee’ is an agreement contrary to the general law of surety's liability being co-extensive with that of the ‘principal borrower’ as provided in Section 128 of the ‘Indian Contract Act, 1872’

Stand of the Appellant- ‘Export Import Bank of India’

2. Learned Senior Counsel for the Appellant submitted that the ground given by the Adjudicating Authority is untenable and the order is liable to be set aside for the following reasons:

3.