Court rules in favor of Resolution Professional, denies bank's claim as financial creditor, citing violations.

The National Company Law Tribunal allowed the Resolution Professional's request to cancel fixed deposit receipts held by 'Oriental Bank of Commerce' and transfer the proceeds into a trust account with the 'Central Bank of India'. The court rejected the bank's application, citing violations of moratorium regulations and the invocation of a corporate guarantee. The Adjudicating Authority denied 'Oriental Bank of Commerce' recognition as a financial creditor due to issues with the guarantee invocation and fund appropriation timing. The bank's claims were consistently dismissed throughout the proceedings, leading to the disposal of appeals without costs.

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Issues:
1. Direction to cancel fixed deposit receipts and transfer proceeds into a trust account.
2. Consideration of Oriental Bank of Commerce as a financial creditor.
3. Interpretation of invocation of corporate guarantee and appropriation of fixed deposits.
4. Claim of Oriental Bank of Commerce as a financial creditor.
5. Participation of Oriental Bank of Commerce in the Committee of Creditors.
6. Liquidation of the Corporate Debtor and filing of claims by the Oriental Bank of Commerce.

Issue 1: The judgment pertains to an application in the 'Corporation Insolvency Resolution Process' against 'Moser Baer India Limited' for the cancellation of fixed deposit receipts held by 'Oriental Bank of Commerce' and transfer of the proceeds into a trust account with the 'Central Bank of India'. The National Company Law Tribunal allowed the Resolution Professional's prayer but rejected the bank's application, citing the invocation of corporate guarantee and violation of moratorium regulations.

Issue 2: 'Oriental Bank of Commerce' sought recognition as a financial creditor due to a corporate guarantee given by the 'Corporate Debtor'. The Adjudicating Authority rejected this claim based on the interpretation of the guarantee invocation and the timing of fund appropriation post-insolvency commencement date.

Issue 3: The judgment analyzed the invocation of the corporate guarantee by the bank and the subsequent appropriation of fixed deposits. The court emphasized that the bank's actions violated the moratorium regulations and the Resolution Professional's duties under the Insolvency and Bankruptcy Code, leading to the rejection of the bank's claim.

Issue 4: The bank's claim as a financial creditor was disputed based on the invocation of the corporate guarantee and the timing of fund withdrawals post-insolvency commencement date. The court upheld the Resolution Professional's view that the bank's claim was not valid due to the violation of regulations and the moratorium provisions.

Issue 5: The Appellate Tribunal allowed 'Oriental Bank of Commerce' to attend the Committee of Creditors meeting as a financial creditor but without voting rights, pending the decision on the appeals. The bank's participation was subject to the approval of the resolution plan during the appeal process.

Issue 6: The judgment noted the liquidation of the 'Moser Baer India Limited' during the appeal process, with the bank filing claims before the Liquidator. The court declined to interfere with the impugned order, directing the Liquidator and Adjudicating Authority to act in accordance with the law, ultimately disposing of the appeals without costs.

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