Amit Narang Suspended Director of Narang Developers Private Limited Vs Aditya Birla Finance Limited (NCLAT Delhi)
NCLAT Delhi held that insolvency resolution process against co-borrower justified as obligation of the Co-Borrower is coextensive and coterminous with that of the Primary Borrower. Accordingly, application u/s. 7 by the Financial Creditor against co-borrower duly admitted by Adjudicating Authority.
Facts- A Section 7 application under IBC was filed against the Corporate Debtor-Narang Developers Pvt. Ltd (NDPL) by Aditya Birla Finance Ltd-Financial Creditor. The Financial Creditor, a Non-Banking Finance Company had sanctioned a loan facility aggregating Rs 11.50 Cr wherein NDPL-Corporate Debtor, an MSME entity, is a Co-Borrower, subject to terms and conditions contained in Sanction letters dated 19.09.2016 and 04.12.2018 and the Facility Agreement dated 29.09.2016 and Supplementary Facility Agreement dated 07.12.2018. An Indenture of Mortgage was also executed on 17.10.2016 by the Corporate Debtor in favour of the Financial Creditor creating security interest over the secured asset.
On account of default in repayment of the loan, the loan accounts were classified as Non-Performing Assets (NPA) on 16.06.2019. The Financial Creditor-Respondent No. 1 issued a Demand Notice on 05.07.2019 to the Corporate Debtor u/s. 13(2) of the SARFAESI Act. Thereafter, the Corporate Debtor made payments of Rs 30 lakhs and Rs 70 lakhs besides offering to clear the entire outstanding dues of Rs 2.38 Cr. on or before 15.03.2020. Due to non-payment of the dues, the Financial Creditor filed a Section 7 petition against the Corporate Debtor by holding the date of default as 15.03.2020. The Corporate Debtor was admitted into CIRP by the Adjudicating Authority on 28.03.2024. Aggrieved by this order, the present appeal has been preferred by the Suspended Director of the Corporate Debtor.
