Case Note & Summary
The case involved a challenge by Assets Care & Reconstruction Enterprises Ltd. against an order dated 06.08.2019, which allowed an application by IL&FS Financial Services and rejected the claim of the appellant in the corporate insolvency process of Golden Glow Estates Pvt. Ltd. The appellant contended that the claim was improperly rejected as it was based on the same debt already admitted in another insolvency process. The Tribunal noted that the liability of the guarantor is co-extensive with that of the principal debtor and referenced the precedent set in Dr. Vishnu Kumar Agarwal v. M/s. Piramal Enterprises Ltd., which established that a Financial Creditor cannot file claims in multiple insolvency processes for the same debt. The Tribunal ultimately set aside the claim of Respondent No. 2, directing the amendment of the list of Financial Creditors and the reconstitution of the Committee of Creditors. The appeal was initially heard with interim arrangements to maintain the Corporate Debtor as a going concern. However, the matter was deferred multiple times due to the pendency of related civil appeals before the Hon’ble Apex Court. Following a judgment from the Apex Court on 26.02.2026, which addressed similar legal questions, the parties expressed intentions to settle the dispute under Section 12A of the I&B Code. Consequently, the Tribunal closed the appeal without addressing the merits, allowing for the possibility of revival based on future proceedings under Section 12A. The closure did not affect the rights of the parties to revive the appeal if necessary (Paras 1-12).
Headnote
A) Insolvency Law - Corporate Insolvency Resolution Process - Claim Repetition - Insolvency and Bankruptcy Code, 2016, Section 12A - The Tribunal held that a Financial Creditor cannot file claims in multiple Corporate Insolvency Resolution Processes for the same debt, leading to the rejection of Respondent No. 2's claim as it was deemed a repetition. The Tribunal directed the reconstitution of the Committee of Creditors accordingly (Paras 1-3).
Issue of Consideration
Whether the claim of Respondent No. 2 in the Corporate Insolvency Resolution Process was valid given the prior admission of a similar claim.
Final Decision
The Tribunal set aside the claim of Respondent No. 2, directing the reconstitution of the Committee of Creditors and allowing the appeal to be closed without addressing the merits, while preserving the right to revive the appeal based on future proceedings under Section 12A of the I&B Code.
Law Points
- Corporate Insolvency Resolution Process
- claim repetition
- Financial Creditor rights
- Section 12A of the I&B Code
