JUDGMENT :

Sudhansu Jyoti Mukhopadhaya, J.

1. Two appeals preferred by ‘Export Import Bank of India’ (hereinafter referred to as ‘EXIM Bank’) relates to Corporate Insolvency Resolution Process initiated against ‘JEKPL Private Limited’, whereas appeal preferred by ‘Axis Bank Limited’ relates to Corporate Insolvency Resolution Process against ‘Edu Smart Services Private Limited’. However, as the question of law is common, they were heard together and are decided by this common judgment.

EXIM Bank Vs. Resolution Professional, JEKPL Private Limited:

2. The JEKPL Pvt. Ltd. filed an application under Section 10 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘I&B Code’) for initiation of Corporate Insolvency Resolution Process against itself. It was admitted by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench and one Mr. Mukesh Mohan was appointed as Resolution Professional replacing one Mr. Dinkar T. Venkatasubramanian.

3. Pursuant to the advertisement, the creditors including ‘Financial Creditors’ and ‘Operational Creditors’ filed their respective claim including EXIM Bank. However, the EXIM Bank was not treated to be the ‘Financial Creditor’.

4. EXIM Bank filed an application under Section 60 (5), before the Adjudicating Authority for direction to the Resolution Professional to treat its claim as ‘Financial Debt’ and to include the EXIM Bank in the ‘Committee of Creditors’ with voting share proportionate to its amount of claim. It was alleged that the Resolution Professional through its email communicated decision dated 04.08.2017 rejecting claim of EXIM Bank as a ‘Financial Creditor’ without calling for any explanation including the objections/comments from it.

5. Case of the EXIM Bank is that it disbursed Dollar Loan to the tune of US$ 50 Million to a Netherland based company, namely, Jubilant Energy N.V., (‘JENV’ for short) (Principal Borrower) by its Letter dated 13.04.2011 as modified by letter dated 18.05.2011 for which ‘Corporate Guarantee’ was executed by the Jubilant Enpro Private Limited (‘JEPL’ for short) on 01.08.2011 in favour of the EXIM Bank. Contractual obligation of ‘JEPL’ (Corporate Guarantor) was further secured by the execution of ‘Corporate Guarantor Guarantee’ with ‘Counter Corporate Guarantee’ by JEKPL (Corporate Debtor) on 01.08.2011 in favour of the EXIM Bank.

6. The EXIM Bank invoked its ‘Counter Corporate Guarantee’ on 30.03.2017 which led to the present dispute and its claim to treat it as a ‘Financial Creditor’ has not been accepted by the Resolution Professional.

7. The EXIM Bank declared the amount of loan advanced to Principal Borrower (JENV, Netherlands) as Non-Performing Asset (NPA) on 17.05.2016. Therefore, the EXIM Bank recalled the loan facilities advanced to JENV by letter dated 30.03.2017. Consequently, it had invoked its ‘Corporate Guarantee’ as well as the ‘Counter Corporate Guarantee’ against the JEPL and JEKPL by its letters dated 30.03.2017. Thus, according to EXIM Bank Principal Borrower having defaulted and the liability of Corporate Guarantee as ‘Counter Corporate Guarantee’ being joint and co-extensive with Principal Borrower, the EXIM Bank comes within the meaning of ‘Financial Creditor’ of JEKPL (Corporate Debtor), in terms of Section 5(7) r/w Section 5(8)(h) of I&B Code.

8. The Adjudicating Authority by the impugned order dated 27.11.2017 taking into consideration the objection raised by the ‘Resolution Professional’ and the ‘Committee of Creditors’, affirmed the decision of the Resolution Professional and rejected the claim of EXIM Bank.

9. The question arises for consideration is as to whether the EXIM Bank, which has been provided with ‘Counter Corporate Guarantee’ by JEKPL (Corporate Debtor) comes within the meaning of ‘Financial Creditor’?

Stand of EXIM Bank :

10. Mr. Pallav Shishodia, learned senior counsel for EXIM Bank referred to loan agreement dated 01.08.2011 entered by the parties with the EXIM Bank and submitted that the Dollar Loan