“Decoding the Code”
All about the Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 including judicial pronouncements
(Updated up to 18th July, 2019)
Since the enforcement of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ or ‘the Code’), the moratorium term has been constructed by judiciaries on various issue. This part of Decoding the Code elaborates the moratorium term and important judicial pronouncements on the Moratorium.
I. Legal content, meaning and purpose of the Moratorium
The term moratorium is not defined under the Code. Definition of the word in the oxford dictionary is “a legal authorization to debtors to postpone payment“. In Cambridge Dictionary the expression ‘Moratorium’ has been defined to mean “a stopping of an activity for an agreed amount of time”. In Merriam Webster Dictionary to mean “legally authorized period of delay in the performance of a legal obligation or the payment of a debt; a waiting period set by an authority; or a suspension of activity”.
The moratorium under the Insolvency and Bankruptcy Code, 2016 (‘IBC’) means a period wherein no judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can be instituted or continued against the Corporate Debtor. Under section 13(1)(a) of the Code, the adjudicating authority is required to impose a moratorium for matters referred to in section 14.
Legal content of provisions related to the moratorium under the Code reproduced here before Decoding the Section 14:
“Declaration of moratorium and public announcement
13. (1) The Adjudicating Authority, after admission of the application under section 7 or section 9 or section 10, shall, by an order—
(a) declare a moratorium for the purposes referred to in section 14;
(b) cause a public announcement of the initiation of corporate insolvency resolution process and call for the submission of claims under section 15; and
(c) appoint an interim resolution professional in the manner as laid down in section 16.
(2) The public announcement referred to in clause (b) of sub-section (1) shall be made immediately after the appointment of the interim resolution professional.”
14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:—
(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.
1[(3) The provisions of sub-section (1) shall not apply to —
(a) such transaction as may be notified by the Central Government in consultation with any financial regulator;
(b) a surety in a contract of guarantee to a corporate debtor.]
(4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process:
Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.
1. Substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, w.e.f. 06.06.2018.(see State Bank of India Vs. V. Ramakrishnan & Anr.-SC) Prior to the substitution, sub-section (3) of section 14 as under:
“(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.”
The purposes of the moratorium include keeping the corporate debtor’s assets together during the insolvency resolution process and facilitating orderly completion of the processes envisaged during the insolvency resolution process and ensuring that the company may continue as a going concern while the creditors take a view on resolution of default and the moratorium on initiation and continuation of legal proceedings, including debt enforcement action ensures a stand-still period during which creditors cannot resort to individual enforcement action which may frustrate the object of the CIRP.
II. What is the term ‘Moratorium’ used under the Code[Sec. 14(1)]
The provisions of section 14(1)(a) of the Code are very wide and appear to be a complete bar against the institution or continuation of suits or any legal proceedings against a corporate debtor on the declaration of moratorium by the adjudicating authority. We decode the moratorium in details in following terms:
Hon’ble Delhi High Court in Power Grid Corporation Of India Ltd Vs. Jyoti Structures Ltd. has interpreted terms “proceedings” “including” and “against the corporate debtor” used under Section 14 as under:
(i) ‘proceedings‘ under Sec. 14(1)(a) do not mean ‘all proceedings’;
(ii) the term ‘proceeding’ would be restricted to the nature of action that follows it i.e. debt recovery action against assets of the corporate debtor;
(iii) the use of narrower term ‘against the corporate debtor’ in section 14(1)(a) as opposed to the wider phase ‘by or against the corporate debtor’ used in section 33(5) of the code further makes it evident that section 14(1)(a) is intended to have restrictive meaning and applicability.
(iv) term ‘including‘ is clarificatory of the scope and ambit of the term ‘proceedings‘;
Sec. 14 is not applicable to the criminal proceeding or any penal action taken pursuant to the criminal proceeding or any act having essence of crime or crime proceeds:
Hon’ble Bombay High Court in the matter of Tayal Cotton Pvt. Ltd. Vs. The State of Maharashtra & Othrs interpreted the clause (a) of Section 14 (1) that word ‘proceedings’ used therein and even the words ‘order’ and ‘in Court of law’ will have to be interpreted as a proceeding arising in the nature of a suit and orders passed in such proceedings and suits. Apart from the fact that the Legislature has not conspicuously used the words ‘criminal’ as an adjective to the word ‘proceedings’ and as an adjective to the noun Court of law, it must be assumed that the Legislature in its wisdom has consciously omitted to use such adjectives since it must have intended to prohibit only the suits and execution of the judgments and decrees or a proceeding of the like nature. Therefore, applying the principle of interpretation, one cannot put any other interpretation on this provision contained in Section 14 of the Code except that it only prohibits a suit or a proceeding of a like nature and does not include any criminal proceeding.
In the matter of Varrsana Ispat Limited Vs. Deputy Director Directorate of Enforcement, NCLAT held that the Prevention of Money Laundering Act, 2002 relates to proceeds of crime and the offence relates to money-laundering resulting confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto. Thus, as the Prevention of Money Laundering Act, 2002 or provisions therein relates to proceeds of crime, the Section 14 of the Code is not applicable to such proceeding.
The same view has been taken in the matter of Shah Brothers Ispat Pvt. Ltd. Vs. P. Mohanraj & Ors. where NCLAT held that as Section 138 the Negotiable Instrument Act, 1881 is a penal provision, which empowers the court of competent jurisdiction to pass order of imprisonment or fine, which cannot be held to be proceeding or any judgment or decree of money claim. Imposition of fine cannot held to be a money claim or recovery against the Corporate Debtor nor order of imprisonment, if passed by the court of competent jurisdiction on the Directors, they cannot come within the purview of Section 14. In fact no criminal proceeding is covered under Section 14 of Code.
No arbitration proceedings under section 36 of the Arbitration Act:
In the matter of Alchemist Asset Reconstrution Company Ltd. Vs. M/S. Hotel Gaudavan Pvt. Ltd. & Ors., Hon’ble Supreme Court held that after moratorium under Sec. 14 come into effect, arbitration proceedings cannot start or continue against the Corporate Debtor.
Proceedings which are in the benefit of the corporate debtor:
Hon’ble Delhi High Court in the matter of Power Grid Corporation Of India Ltd Vs. Jyoti Structures Ltd. held that in Jyoti Structures case for testing the applicability of Section 14 of IB code one has to see the nature of proceedings and see if such proceedings are against the corporate debtor or is in its favour. In the light of the purpose or object behind the moratorium, Section 14 of the Code would not apply to the proceedings which are in the benefit of the corporate debtor. Stay of proceedings against an award in favour of the corporate debtor would rather be stalking the debtor’s effort to recover its money and hence would not fall in the embargo of Section 14(1)(a) of the Code. The High Court held that:
(a) moratorium under section 14(1)(a) is intended to prohibit debt recovery actions against the assets of corporate debtor;
(b) continuation of proceedings under sec. 34 of the Arbitration Act which do not result in endangering, diminishing, dissipating or adversely impacting the assets of corporate debtor are not prohibited under section 14(1)(a) of the code;
(c) the Arbitration Act draws a distinction between proceedings under section 34 (i.e. objections to the award) and under section 36(i.e. the enforceability and execution of the award). The proceedings under section 34 are a step prior to the execution of an award. Only after determination of objections under section 34, the party may move a step forward to execute such award and in case the objections are settled against the corporate debtor, its enforceability against the corporate debtor then certainly shall be covered by moratorium of section 14(1)(a).
If continuation of the counter claim would not adversely impact the assets of the corporate debtor, Section 14 could not be triggered:
Hon’ble Delhi High Court in the matter of SMP Industries Ltd Vs. Perkan Food Processors Pvt. Ltd held that till the defence is adjudicated, there is no threat to the assets of the corporate debtor and the continuation of the counter claim would not adversely impact the assets of the corporate debtor. Once the counter claims are adjudicated and the amount to be paid/recovered is determined, at that stage, or in execution proceedings, depending upon the situation prevalent, Section 14 could be triggered. At this stage, due to the reasons set out above, the counter claim does not deserve to be stayed under Section 14 of the Code.
All the proceedings pending before all court automatically stop and the RP is not required to take any further step:
In the matter of Haravtar Singh Arora Vs. Punjab National Bank & Ors. it is contended before the NCLAT that during the period of Moratorium cases pending against the Corporate Debtor has not been stopped by the Resolution Professional. NCLAT held that such submission cannot be accepted as in terms of Section 14 of the Code, all the proceedings pending before all court against the Corporate Debtor automatically comes to halt and cannot be decided. Therefore, the Resolution Professional is not required to take any further step.
Personal & individual assets of Director:
NCLAT in the matter of Suresh Chand Garg Vs. Aditya Birla Finance Ltd. held that the personal and individual assets of a Director is not the subject matter of the corporate insolvency resolution process and the moratorium only extends to the assets of the Corporate Debtor.
Moratorium will not affect any suit or case pending before the Hon’ble Supreme Court under Article 32 or where an order is passed under Article 136 or the power of the High Court under Article 226:
NCLAT in Canara Bank Vs. Deccan Chronicle Holdings Limited held that there is no provision to file any money suit or suit for recovery before the Hon’ble Supreme Court except under Article 131 of the Constitution of India where dispute between Government of India and one or more States or between the Government of India and any State or States on one side and one or two or more States is filed. Some High Courts have original jurisdiction to entertain the suits, which may include money suit or suit for recovery of money. The Hon’ble Supreme Court has power under Article 32 of the Constitution of India and Hon’ble High Court under Article 226 of Constitution of India which power cannot be curtailed by any provision of an Act or a Court. In view of the aforesaid provision of law, we make it clear that moratorium will not affect any suit or case pending before the Hon’ble Supreme Court under Article 32 of the Constitution of India or where an order is passed under Article 136 of Constitution of India. Moratorium will also not affect the power of the High Court under Article 226 of Constitution of India. However, so far as suit, if filed before any High Court under original jurisdiction which is a money suit or suit for recovery, against the corporate debtor such suit cannot proceed after declaration of moratorium, under Section 14 of the Code.
SEBI or Stock Exchange cannot recover any amount nor can sell the assets of the Corporate Debtor during the moratorium period:
From the Sec. 17, it is clear that the Interim Resolution Professional is responsible for complying with the requirements under any law for the time being in force on behalf of the Corporate Debtor, which includes the SEBI Act, 1992 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 framed therein. In the matter of Ms. Anju Agarwal Vs. Bombay Stock Exchange & Ors.─ Company Appeal (AT) (Insolvency) No. 734 of 2018, the question arises for consideration is whether on failure to perform the duties, if any, penal order is passed for penalty imposed on the Corporate Debtor or any recovery can be made in terms of Section 28A of the SEBI Act, 1992. NCLAT held that Section 14 of the Code will prevail over Section 28A of the SEBI Act, 1992 and SEBI cannot recover any amount including the penalty from the Corporate Debtor. The Bombay Stock Exchange for the same very reason cannot take any coercive steps against the Corporate Debtor nor can threaten the Corporate Debtor for suspension of trading of shares.
The same view has been considered in the matter of Mr. Bohar Singh Dhillon Vs. Mr. Rohit Sehgal (Interim Resolution Professional) & Ors. and held that the application under Section 7 is maintainable while step has been taken by the SEBI the Resolution Professional is required to act in terms of Section 17(2)(e) of the Code for complying with the requirements under the SEBI Act and Regulations framed thereunder as well as the guidelines issued by the Regulatory Authority. It is also made clear that the SEBI is however entitled to take action against individual including the former Directors and Shareholders of the Corporate Debtor.
Absence of any agreement with the State Government in respect to any property, RP on behalf of the Corporate Debtor cannot claim that the property is under occupation or in possession of the Corporate Debtor:
In the matter of Monnet Ispat & Energy Ltd. Vs. Government of India, Ministry of Coal, after initiation of the CIRP, the Government of India, Ministry of Coal(GoI), issued notice for termination of Coal Mines Development and Production Agreement between Monnet Ispat & Energy Ltd.(Corporate debtor) and GoI. The Resolution Professional of Monnet Ispat & Energy Ltd. challenged this letter of termination on the ground that it is against the provisions of Section 14 of the Code where under moratorium has been declared by the NCLT.
NCLAT has held that the vesting of the Coal Mines is not complete in absence of any agreement with the State Government in respect to the mines in question, therefore, the Resolution Professional on behalf of the Corporate Debtor cannot claim that pursuant to lease the mines are under occupation or in possession of the Corporate Debtor.
Security interest mentioned in clause (c) of Section 14(1) do not include the Performance Bank Guarantee:
NCLAT in the matter of GAIL (India) Limited Vs. Rajeev Manaadiar & Ors. held that from sub-section (31) of Section 3, it is clear that the security interest do not include the Performance Bank Guarantee(PBG), therefore, the security interest mentioned in clause (c) of Section 14(1) do not include the PBG. Thereby the PBG given by the Corporate Debtor in favour of the Appellant[GAIL (India) Ltd.] is not covered by Section 14. The Appellant is entitled to invoke its Performance Bank Guarantee in full or in part. Definition of security interest and secured creditors as under:
“(30) “secured creditor” means a creditor in favour of whom security interest is created;”
“(31) “security interest” means right, title or interest or a claim to property, created in favour of, or provided for a secured creditor by a transaction which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person:
Provided that security interest shall not include a performance guarantee;”
III. Outside the purview of the Moratorium [Sec. 14(2) &(3)]
a. Essential Goods or Services covered by section 14(2):
Section 14(2) of the Code states that the supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. Section 14(2) of the Code requires the continuation of supply of essential goods or services to the corporate debtor during the moratorium period. Section 30(2)(a) read with regulation 31(a) makes it clear that dues to suppliers for essential goods and services supplied during the moratorium period are a part of the IRP costs and are required to be paid back in priority to any other creditor as a part of the resolution plan.
As per regulation 32 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, essential supplies mean-
(3) telecommunication services; and
(4) information technology services,
to the extent these are not a direct input to the output produced or supplied by the corporate debtor.
Illustration- Water supplied to a corporate debtor will be essential supplies for drinking and sanitation purposes, and not for generation of hydro-electricity.
The Mumbai Bench of the NCLT in ICICI Bank v. Innoventive Industries(MA 157 in CP 01/I&BP/2016. Decision date- 23.08.2017), explained this position as follows “By reading this Regulation, it appears that electricity, water and telecommunication services and Information Technology service are to be considered as essential as long as these services are not a requirement to the output produced or supplied by the Corporate Debtor. Under this regulation, an illustration also been given saying that water is to be considered as essential service as long as it is used for drinking purpose and sanitization purpose but not for generating electricity. Whenever any illustration is given, it will be given to have an understanding about the provision of law. If supply of water for drinking and sanitization purpose is an essential service, the supply of electricity is also deemed to be limited for lighting purpose and other domestic purposes, which are in modern days considered as essential service. If the same electricity is used as input for manufacturing purpose making huge bill of lakhs of rupees to get output from that industry, then to our understanding, supply of electricity is used as input for manufacturing purpose to get output from the factory and it obviously to make profits. Essential service is a service for survival of human kind, but not for making business and earn profits without making payment to the services used. When company is using it for making profit, then the company owes to make payment to the services/goods utilized in manufacturing purpose.”
NCLT, Hyderabad Bench in the matter of Canara Bank v. Deccan Chronicle Holdings Limited (2017) held that “Section 14(2) Of the IBC Code, 2016 already exempted supply of essential goods and services to the Corporate Debtor and in addition the Learned Counsels for the Respondent submitted that goods/services viz. Water, Electricity, printing ink, Printing plates, Printing Blanket, Solvents etc. will also come under the purview Of exemption and thus prayed to exempt above good/services from moratorium. We are convinced with the prayer of the Respondent that the above goods and services would come under exemption under this Section. Hence, we clarify that goods/services viz. Water, Electricity, Printing ink, Printing plates, Printing Blanket, Solvents etc. will come under this Section and these essential goods or services to Corporate Debtor shall not be terminated or suspended and interrupted during the moratorium period.“[(para 3(c)(v)] (emphasis provided)
b. Moratorium on proceedings against surety to corporate debtor-amendment under Section 14
Section 14 (3) set out that moratorium is not applicable against assets of guarantors to the debts of the corporate debtor. Some courts have taken the view that section 14 may be interpreted literally to mean that it only restricts actions against the assets of the corporate debtor, a few others have taken an interpretation that the stay applies on enforcement of guarantee as well, if a CIRP is going on against the corporate debtor.
In Alpha and Omega Diagnostics (India) Ltd. v. Asset Reconstruction Company of India, the personal properties of the promoters were given as security to the banks. The issue was whether properties that are not owned by the corporate debtor would come within the scope of moratorium under section 14 of the Code. The NCLAT held that section 14 only applies to assets of the corporate debtor and would not bar proceedings or actions against assets of third parties. A literal interpretation of section 14 was undertaken, and it was noted that the word “its” in section 14(1)(b) and (c) is used in relation to the corporate debtor only. A similar issue came up in Schweitzer Systemtek India Private Limited v. Phoenix ARC Private Limited, and following its previous decision, the NCLAT noted that moratorium in Section 14 has no application on the properties beyond the ownership of the corporate debtor.
The Allahabad High Court subsequently took a differing view in Sanjeev Shriya v. State Bank of India by applying moratorium to enforcement of guarantee against personal guarantor to the debt. The rationale being that if a CIRP is going on against the corporate debtor, then the debt owed by the corporate debtor is not final till the resolution plan is approved, and thus the liability of the surety would also be unclear. The Court took the view that until debt of the corporate debtor is crystallised, the guarantor’s liability may not be triggered.
A contract of guarantee is between the creditor, the principal debtor and the surety, where under the creditor has a remedy in relation to his debt against both the principal debtor and the surety. The surety here may be a corporate or a natural person and the liability of such person goes as far the liability of the principal debtor. As per section 128 of the Indian Contract Act, 1872, the liability of the surety is co-extensive with that of the principal debtor and the creditor may go against either the principal debtor, or the surety, or both, in no particular sequence.
Sub-section 3 of the section 14 has been substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, w.e.f. 06.06.2018. That is a new clause has been inserted to carve outs surety in a contract of guarantee to a corporate debtor on recommendation by the Insolvency Laws Committee in the report published in March, 2018.
The Committee recommendations as under:
“5.10 The Committee further noted that a literal interpretation of Section 14 is prudent, and a broader interpretation may not be necessary in the above context. The assets of the surety are separate from those of the corporate debtor, and proceedings against the corporate debtor may not be seriously impacted by the actions against assets of third parties like sureties. Additionally, enforcement of guarantee may not have a significant impact on the debt of the corporate debtor as the right of the creditor against the principal debtor is merely shifted to the surety, to the extent of payment by the surety. Thus, contractual principles of guarantee require being respected even during a moratorium and an alternate interpretation may not have been the intention of the Code, as is clear from a plain reading of section 14.
5.11 Further, since many guarantees for loans of corporates are given by its promoters in the form of personal guarantees, if there is a stay on actions against their assets during a CIRP, such promoters (who are also corporate applicants) may file frivolous applications to merely take advantage of the stay and guard their assets. In the judgments analysed in this relation, many have been filed by the corporate applicant under section 10 of the Code and this may corroborate the above apprehension of abuse of the moratorium provision. The Committee concluded that section 14 does not intend to bar actions against assets of guarantors to the debts of the corporate debtor and recommended that an explanation to clarify this may be inserted in section 14 of the Code. The scope of the moratorium may be restricted to the assets of the corporate debtor only.“
Section 14(3) of the Code (introduced vide 2018 amendment) is retrospective:
The supreme Court in the matter of State Bank of India Vs. V. Ramakrishnan & Anr. held that Section 14(3) of the Code (introduced vide 2018 amendment) which states that provisions of moratorium shall not apply to a surety in a contract of guarantee for corporate debtor, is retrospective.
c. Other matters:
The moratorium period is not applicable on following:
- No criminal proceeding is covered under Section 14 of the Code.(Bombay HC)
- Proceeding under Section 138 of the Negotiable Instrument Act, 1881.(NCLAT)
- Any suit or case pending before the Hon’ble Supreme Court under Article 32 or where an order is passed under Article 136 or the power of the High Court under Article 226.(NCLAT)
- The arbitration that has been instituted after the aforesaid moratorium is non est in law.(SC)
- Moratorium would not apply to the proceedings which are in the benefit of the corporate debtor(Delhi HC)
- The personal and individual assets of a Director is not the subject matter of the CIRP and the moratorium only extends to the assets of the Corporate Debtor.(NCLAT)
- Moratorium is not applicable on proceeding under ‘Prevention of Money Laundering Act, 2002’ or provisions therein relates to ‘proceeds of crime’.(NCLAT)
- Performance Bank Guarantee given by the Corporate Debtor is not covered by Section 14.(NCLAT)
IV. Commencement & effective period of the Moratorium [Sec. 14(4)]
The moratorium comes into effects on the insolvency commencement date. The insolvency commencement date defines under section 5 (12) means the date of admission of an application for initiating CIRP by the Adjudicating Authority under sections 7, Section 9 or section 10, as the case may be and where the interim resolution professional is not appointed in the order admitting application under section 7, 9 or section 10, the insolvency commencement date shall be the date on which such interim resolution professional is appointed by the Adjudicating Authority.
Section 14(4) sets out the time limit for which the moratorium can be in effect, i.e until the completion of the CIRP or on the approval of a resolution plan by the adjudicating authority or on a resolution of the committee of creditors to liquidate the corporate debtor, whichever is earlier.
As per section 12 of the Code, the CIRP shall be completed within a period of 180 days from the date of admission of the application to initiate such process, and the period can only be extended by 90 days, subject to an application being made to the adjudicating authority after a resolution is passed at a meeting of the committee of creditors by a vote of seventy-five percent of the voting share.
Remedy under sec. 60(6) after completion of moratorium period:
Sub-section (6) of Section 60 of the Code provides that where the claim of a creditor involves a disputed question or any other reason of fact as it cannot be decided by the Resolution Professional or the Adjudicating Authority, such creditor can raise such issue and claim at an before the Court of Competent Jurisdiction or an application before the appropriate forum after completion of the period of moratorium in accordance with Section 60(6) of the IBC. The sub section reproduced here:
“Section 60: Adjudicating Authority for corporate persons:
xxxx xxxxx xxxxx xxxx
(6) Notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded.”
The cases in which the Adjudicating Authority(NCLT) or Appellate Tribunal(NCLAT) could not decide the claim on merit, such claims or issues can be raised before an appropriate forum in terms of Section 60(6) of the Code. The Financial Creditors and the Operational Creditors whose claims have been decided by the Adjudicating Authority or Appellate Tribunal, such decision being final and is binding on all such Financial Creditors and the Operational Creditors in terms of Section 31 of the Code. If their total claims stand satisfied, they cannot avail any remedy under Section 60(6) of the Code. The Financial Creditors in whose favour guarantee were executed as their total claim stands satisfied to the extent of the guarantee, they cannot reagitate such claim from the Principal Borrower.
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