BEDORE THE NATIONAL COMPANY LAW APPELLATE TRIBIUNAL AT

NEW DELHI

APPELLATE JURISDICTION

COMPANY APPEAL (AT) (INSOLVENCY) NO. ____ OF 2019

IN THE MATTER OF:

ORIENTAL BANK OF COMMERCE //VS.// Helios photo voltaic

Ltd.

FINAL WRITTEN ARGUMENTS ON BEHALF OF APPELLANT/APPLICANT

NAMELY ORIENTAL BANK OF COMMERCE

1. That it is pertinent to mention in the beginning itself that the money here involved is
public money and the money actually belongs to the deposit of public in the security
of the bank with people’s confidence in judiciary and a hope that their money is
secured under the umbrella of judicial process. Moreover, the money i.e. involved
amounts to 939,10,91,379.60/- (Nine Hundred Thirty Nine crore Ten Lakh Ninety
One Thousand Three Hundred Seventy Nine Rupees and Sixty Paise only) and
dismissal of the petition under section 7 of the Appellate/Applicant against the
corporate debtor shall amount to further perpetrating the illegality already committed.

2. That the prime objective of the Insolvency Code,2016 is to expedite the procedure of
insolvency and settle the debts smoothly under liquidation process which is explicitly
mentioned in the Statement of Object and Reasons of the Code. Thus, the
Appellant/Applicant being a public sector bank, and considering a huge amount of
public money is at stake the whole burden would fall on the public money, if not
recovered soon by exercising its rights under the code to secure its money as a
secured creditor against the corporate debtor.

3. That the right of a secured creditor and unsecured creditor are not the same or
substitutable. Wherein, valuable and unconditional right of the Appellant/Applicant
bank to initiate the CIRP proceedings against the corporate debtor cannot be equated
with its right against the corporate guarantor.

4. That the Ld. National Company Law Tribunal has erroneously dismissed the petition
filed by the Appellate/Applicant under Section 7 of the code on duplicacy of claims
and the respondent in his application relied on a judgement passed by Ld. National
Company Law Tribunal, New Delhi in Dr. Vishnu Kumar Agarwal v. Piramal
Enterprises, Company Appeal (AT) (Insolvency) No. 346 and 347 of 2018. However,
the said judgement is currently under challenge before the Hon’ble Supreme Court of
India, and a status quo order has been passed by the Hon’ble Apex court in the same.
Therefore, this judgement is not given effect till date.

5. That there is no duplicacy of proceedings as the proceedings against Corporate debtor

and the corporate guarantor are different in their effect. Moreover, the
 Appellate/Applicant bank while trying to recover the huge debt, couldn’t have
apprehended that filing of claims against the corporate guarantor would render
dismissal of its petition for initiation of CIRP proceedings against the corporate
debtor.

6. That the Appellate/Applicant is ready to withdraw its claims filed with the office
liquidator of the corporate guarantor, if directed to do so.

7. That under Section 128 of the Indian Contract Act, 1872, liability of the Principal
Borrower and the Guarantor is co-extensive and the Creditor is entitled to proceed
against either or both and no sequence is required to be followed.

8. That in the matter of “State Bank of India versus V. Ramakrishnan & Anr.”
(2018) 17 SCC 394 it was submitted that the Creditor has remedy with regard to
his debt against both the Principal Debtor as well as the surety.

9. That the Insolvency Law Committee in its Report of February, 2020. Relevant part of
the Report Para 7.5 referred to subsequent Judgement of “Edelweiss Asset
Reconstruction Company Ltd. v. Sachet Infrastructure Ltd. and Ors.” dated 20th
September, 2019 which permitted simultaneously initiation of CIRPs against Principal
Borrower and its Corporate Guarantors. In that matter Judgment, the matter of
Piramal was relied on, but the larger Bench mooted the idea of group Corporate
Insolvency Resolution Process in para – 34 of the Judgement. The ILC thus rightly
observed that provisions are there in the form of Section 60(2) and (3) and no
amendment or legal changes were required at the moment. We are also of the view
that simultaneously remedy is central to a contract of guarantee and where Principal
Borrower and surety are undergoing CIRP, the Creditor should be able to file claims
in CIRP of both of them.

10. That in “SBI Vs Athena Energy Ventures” (In this case, Athena Energy Ventures, a
finance company, guaranteed a SBI loan of ₹2,769-crore given to its subsidiary,
Athena Chattisgarh Power). Wherein, NCLAT has allowed the simultaneous
insolvency proceedings against the principal borrower and the corporate guarantor.
This order was in contradiction with the order passed by the tribunal in Vishnu Kumar
Agarwal Vs Piramal Enterprise and overruled the above captioned judgement in
“SBI Vs Athena Energy Ventures” verbatim inter alia:-

“19. It is clear that in the matter of guarantee, CIRP can proceed

against Principal Borrower as well as Guarantor. The law as laid
down by the Hon’ble High Courts for the respective jurisdictions, and
law as laid down by the Hon’ble Supreme Court for the whole country
is binding. In the matter of Piramal, the Bench of this Appellate
Tribunal “interpreted” the law. Ordinarily, we would respect and
adopt the interpretation but for the reasons discussed above, we are
unable to interpret the law in the manner it was interpreted in the
matter of Piramal. For such reasons, we are unable to uphold the
Judgement as passed by the Adjudicating Authority.”

11. That as an unsecured creditor, Appellate/Applicant cannot have a better position as a

creditor in comparison of being a secured creditor under waterfall mechanism section
 53 of IBC, for the purpose of distribution of proceeds from the sale of the liquidation
assets of corporate guarantor, Appellate/Applicant will be ranked below other secured
creditors.

12. That the Appellate/Applicant bank is a public sector bank and hence more
accountable than any other private bank. The level of Transparency to which the
Appellate/Applicant bank is subjected to, it is not possible for the Appellate/Applicant
bank to receive the same amount twice from both corporate debtor and corporate
guarantor as alleged by the respondent.

13. That mere admission of its claims as unsecured creditor before the Official Liquidator
of the corporate guarantor does not mean that the Appellate/Applicant is capable of
receiving the same amount twice.

14. That only because of the huge financial burden and necessity of doing away with the
burden that the Appellate/Applicant filed its claims before the Official Liquidator of
Moser Baer Limited. The Appellate/Applicant bank has no malafide intentions behind
doing the same.

Prayer: It is therefore most respectfully prayed that this Appellate Hon’ble Appellate
tribunal may be pleased to set aside the Impugned order dated 10.10.2019 passed by
the Ld. National Company Law Tribunal, Principal bench at New Delhi in C.P.No.
IB-154(PB)/2018.

New Delhi Filed Through

Dated: 00/00/0000
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