Appellants directed to file claims before Liquidator. Court upholds Corporate Debtor's right to invoke Bank Guarantees.

The appeals were disposed of with the observation that the appellants could file their respective claims before the Liquidator. The Adjudicating Authority's decision to dismiss the applications for restraining the invocation of PBGs was upheld, as the Corporate Debtor was entitled to invoke the Bank Guarantees per their terms, and no evidence of fraud was established. The Adjudicating Authority and the Appellate Tribunal emphasized that they cannot decide on disputed facts or claims summarily, advising the appellants to follow the procedure under the I&B Code for resolution.

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Issues Involved:
1. Invocation of Performance Bank Guarantees (PBGs) by the Corporate Debtor.
2. Allegations of fraud in invoking the PBGs.
3. Admissibility of claims by the appellants.
4. Powers of the Resolution Professional/Liquidator under the Insolvency & Bankruptcy Code (I&B Code), 2016.
5. Jurisdiction of the Adjudicating Authority to decide disputed facts and claims.

Detailed Analysis:

Invocation of Performance Bank Guarantees (PBGs) by the Corporate Debtor:
The appellants, M/s KSB Shanghai Pump Co Ltd, M/s TLT-Turbo (Sichuan) Co Ltd, and M/s Beijing Power Equipment Group Co Ltd, filed applications under Section 60(5) of the I&B Code seeking to restrain the Liquidator from invoking or encashing their respective PBGs. The Adjudicating Authority dismissed these applications, stating that the Corporate Debtor is entitled to invoke the Bank Guarantees as per their terms, and no injunction can be granted in such cases.

Allegations of Fraud in Invoking the PBGs:
The appellants argued that the invocation of the PBGs was fraudulent and would cause irretrievable harm. However, the Adjudicating Authority found no evidence of fraud in obtaining or invoking the Bank Guarantees. It was emphasized that any disputed questions of fact, such as whether the appellants breached their contractual obligations, cannot be decided summarily and require evidence.

Admissibility of Claims by the Appellants:
The Adjudicating Authority noted that the appellants had filed claims before the Resolution Professional, which were not accepted. The claims were found inadmissible as the goods were not supplied, and the conditions for payment under the contract were not met. The appellants contended that the Corporate Debtor failed to inspect the materials and issue necessary certificates, which hindered their performance.

Powers of the Resolution Professional/Liquidator under the I&B Code:
The Resolution Professional/Liquidator argued that the PBGs are unconditional and irrevocable, allowing the Corporate Debtor to demand payment without conditions. The Adjudicating Authority supported this view, stating that the Resolution Professional acted within his rights to invoke the PBGs to recover advance payments made to the appellants.

Jurisdiction of the Adjudicating Authority to Decide Disputed Facts and Claims:
The Adjudicating Authority and the Appellate Tribunal emphasized that they cannot decide on disputed facts or claims summarily. The appellants were advised to file their claims before the Liquidator, who would decide them under Section 40 of the I&B Code. If aggrieved, the appellants could appeal under Section 42.

Conclusion:
The appeals were disposed of with the observation that the appellants could file their respective claims before the Liquidator. The Adjudicating Authority's decision to dismiss the applications for restraining the invocation of PBGs was upheld, as the Corporate Debtor was entitled to invoke the Bank Guarantees per their terms, and no evidence of fraud was established.

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