The monies held by Bank as margin towards the live bank guarantee reverts to Corporate Debtor only in case where the corresponding Bank Guarantee has expired and in no other case – Dhiren Shantilal Shah Vs. Indian Bank – NCLT Mumbai Bench
The Adjudicating Authority held that it is not the case of the applicant that the bank guarantee(s), against which the respondent bank is holding fixed deposits as margin money, are not live. The Adjudicating Authority notices that the Hon’ble NCLAT in the case of Indian Overseas Bank Vs. Arvind Kumar (2020) ibclaw.in 285 NCLAT has categorically held that the monies held as margin towards the live bank guarantee reverts to the Corporate Debtor only in case where the corresponding Bank Guarantee has expired and in no other case. Further, it is settled legal proposition that the bank guarantee(s) do not expire with the commencement of moratorium in case of corporate debtor.