Invocation of Bank Guarantee during the CIRP – Madhya Gujarat VIJ Company Ltd. Vs. CMA George Samuel, Resolution Professional – NCLAT New Delhi
The Bank Guarantee was given by the Corporate Debtor on 03.08.2017 for a period of two years to secure the electricity dues payable to the Appellant. The CIRP proceedings were initiated against the Corporate Debtor on 19.12.2019. Immediately after the initiation of proceedings, on 03.01.2020, the Appellant wrote to the Bank – Respondent No. 2 for invocation of the Bank Guarantee. Bank on 08.01.2020 refused to the Appellant that the Corporate Debtor has been admitted for CIRP by the NCLT and the RP has informed that the moratorium is in operation. NCLAT set asides the order of the Adjudicating Authority dated 06.09.2021 and holds that counsel for the Resolution Professional submits that the approval of the Resolution Plan is pending before the Adjudicating Authority. We are of the view that the Appellant was clearly entitled for invocation of Bank Guarantee.