In Brief
Maitreya Doshi, a suspended director of Doshi Holdings Pvt. Ltd., challenged the admission of a corporate insolvency petition against his company by Anand Rathi Global Finance Limited. Doshi Holdings had pledged shares in another company (Premier Limited) as security for a loan disbursed only to Premier. The Court held that even though Doshi Holdings received no loan proceeds, it could be proceeded against as a co-borrower under Section 7 of the IBC. The Court ruled that financial debt does not require disbursement to the debtor itself, and two co-borrowers can be separately liable. However, the same amount cannot be recovered twice.
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