Encashment of Bank Guarantee would not impact the assets of the Corporate Debtor, only difference will be that instead of Creditor, the claim against the said amount from the Corporate Debtor will be shifted and will have to be raised by Bank – The National Small Industries Corporation Ltd. Vs. Sh. Prabhakar Kumar Liquidator of Sh. Ganesh Equipment Pvt. Ltd. – NCLAT New Delhi
Hon’ble NCLAT referred the Sec. 14(3)(b) held that:
(i) The Moratorium was envisaged to ensure that the Corporate Debtor’s Assets are not liquidated or reduced till the CIRP is completed. The idea behind Moratorium was that no additional stress is brought on the business which is being rescued.
(ii) Since the assets of the surety (Bank) are separate from those of the Corporate Debtor, encashment of Bank Guarantee would not impact the Assets of the Corporate Debtor. Only difference will be that instead of the Appellant, the claim against the said amount from the Corporate Debtor will be shifted and will have to be raised by the Canara Bank.
(iii) In the instant case, the Appellant has raised the demand on the Bank for payment which was guaranteed by the Bank much prior to the initiation of the CIRP. No recovery is being made from the Corporate Debtor and therefore there is no threat immediately to the Assets of the Corporate Debtor.
