Tribunal rules in favor of RP, dismisses OBC's claim on premature FD cancellation & invalid bank guarantees.

The Tribunal dismissed OBC's claim, finding merit in the RP's application regarding premature cancellation of fixed deposit receipts and rejection of OBC's claim. The Tribunal emphasized compliance with the Insolvency and Bankruptcy Code, ruling that the invocation of bank guarantees by OBC was invalid. The judgment highlighted the prohibition on withdrawing cash from the Corporate Debtor's accounts post-CIRP initiation. Costs were awarded to the RP, with the Tribunal referencing legal precedents to support its decision.

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Issues:
1. Premature cancellation of fixed deposit receipts and transfer of proceeds.
2. Rejection of claim by the Oriental Bank of Commerce (OBC) and request to be a member of the Committee of Creditors (CoC).
3. Invocation of bank guarantee, appropriation of fixed deposit amounts, and compliance with Insolvency and Bankruptcy Code.

Issue 1: Premature Cancellation of Fixed Deposit Receipts and Transfer of Proceeds
The Resolution Professional (RP) filed an application seeking directions for the Oriental Bank of Commerce to cancel fixed deposit receipts and transfer the proceeds to a specified account. The RP also requested the balance in the current account of the Corporate Debtor to be remitted to another account. The RP and CoC desired the discontinuation of fixed deposits, with instructions issued to OBC for the same.

Issue 2: Rejection of Claim by OBC and Request to Join CoC
OBC filed an application to set aside the RP's order rejecting its claim of a substantial amount. OBC sought acceptance of its claim and to be included as a member of the CoC. OBC claimed that the bank guarantees were invoked, leading to the appropriation of fixed deposit amounts.

Issue 3: Invocation of Bank Guarantee and Compliance with Insolvency and Bankruptcy Code
The case involved the invocation of bank guarantees by OBC and subsequent appropriation of fixed deposit amounts. The Tribunal analyzed the letters indicating the invocation of guarantees and the appropriateness of such actions post the initiation of Corporate Insolvency Resolution Process (CIRP). The Tribunal emphasized the importance of compliance with the moratorium under Section 14 of the Insolvency and Bankruptcy Code.

The Tribunal, after considering the arguments, found merit in the RP's application and dismissed OBC's claim. It was established that the endorsements in the letters did not constitute a valid invocation of the bank guarantees. The Tribunal highlighted the prohibition on withdrawing cash from the Corporate Debtor's accounts post-CIRP initiation. The judgment referenced relevant legal precedents and regulations to support the decision. OBC's contestation was deemed unwarranted, and the RP's application was allowed, with costs awarded to the RP.

This detailed analysis of the judgment showcases the intricate legal considerations and interpretations made by the Tribunal concerning the premature cancellation of fixed deposit receipts, rejection of claims, invocation of bank guarantees, and adherence to the provisions of the Insolvency and Bankruptcy Code.

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