09/08/2024

Section 14 of IBC in no manner impact invocation of Bank Guarantee during pendency of the Moratorium – Mitsubishi Heavy Industries Ltd. Vs. Punj Lloyd Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that the issue as to invocation of Performance Bank Guarantee during the period of Moratorium is now well settled. It is useful to refer to definition of Section 3(31) which define “Security Interest”. The proviso of Section 3(31) makes it clear that “Security Interest” shall not include Performance Bank Guarantee. Section 14(3) was amended by Act 26/2018 with effect from 06.06.2018. Section 14(3) clearly excluded security in a Contract of Guarantee to Corporate Debtor from the Application of Section 14(1). It is well settled that Section 14 in no manner impact the right of the Appellant to invoke the Bank Guarantee during pendency of the Moratorium. The dispute between the beneficiary and the party at whose instance the Bank has given the Guarantee is immaterial and is of no consequence.

Section 14 of IBC in no manner impact invocation of Bank Guarantee during pendency of the Moratorium – Mitsubishi Heavy Industries Ltd. Vs. Punj Lloyd Ltd. and Ors. – NCLAT New Delhi Read Post »

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court

The Hon’ble Bombay High Court (Division Bench) did not find that Clause 23A of the Schedule of IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 travel beyond what has been empowered to be done under the Code.

The Bench also considered the office noting placed on record which indicates that DGM (IBBI) was directed to undertake investigation and held that it cannot be said that the Investigating Authority in the absence of any order in writing proceeded to conduct an investigation in terms of Section 218(1) of the Code.

The Court referring the decision in CA V. Venkata Sivakumar Vs. IBBI and Ors. (2024) ibclaw.in 59 HC did not find that the suspension of AFA pending consideration of the show cause notices is in any manner contrary to law or unwarranted in the facts of the present case.

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court Read Post »

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