ICICI Bank Limited Vs Era Infrastructure (India) Limited (Supreme Court of India)
Supreme Court held that simultaneous proceedings for Corporate Insolvency Resolution Process [CIRP] under Insolvency and Bankruptcy Code against the principal debtor as well as corporate guarantor is maintainable.
Facts- These appeals, arising out of different orders of the National Company Law Appellate Tribunal and the National Company Law Tribunal, raise a common question of law; one which would appear to be well settled, yet, has been canvassed before us in its entirety.
The issue, at large, is, whether simultaneous proceedings for Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 against the principal debtor as well as its corporate guarantor, or vice-versa, are maintainable?
Conclusion- The Insolvency Law Committee in its Report of February, 2020 had also noted the issue. It was stated that as the right to simultaneous remedy is central to a contract of guarantee, the Committee suggested that in cases were both the principal borrower and the surety are undergoing CIRP, the creditor should be permitted to file claims in the CIRP of both of them. Since, as the Code does not prevent this, the Committee recommended that no amendments were necessary in this regard.
