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Court Grants Relief: Bank Guarantees Not Encashed During Pandemic Crisis The court granted the Resolution Professional's request for limited relief against the encashment of bank guarantees by IOCL during the n-COVID-2019 ...
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Court Grants Relief: Bank Guarantees Not Encashed During Pandemic Crisis
The court granted the Resolution Professional's request for limited relief against the encashment of bank guarantees by IOCL during the n-COVID-2019 pandemic crisis. The court allowed a temporary injunction preventing IOCL from encashing the bank guarantees until one week after the lockdown restrictions were lifted. This decision did not determine the merits of the case but aimed to provide temporary relief to the petitioner due to the exceptional circumstances faced during the pandemic.
Issues: 1. Invocation of bank guarantees by IOCL during the n-COVID-2019 pandemic crisis. 2. Jurisdiction of NCLT to pass orders regarding bank guarantees. 3. Petitioner's inability to approach NCLT due to lockdown restrictions. 4. Request for limited relief against encashment of bank guarantees.
Analysis: 1. The writ petition filed by the Resolution Professional of a company sought to quash communications from IOCL invoking bank guarantees related to a refinery project. The petitioner cited unavoidable circumstances due to the n-COVID-2019 pandemic crisis as the reason for approaching the court. The petitioner highlighted a previous order by NCLT and subsequent court proceedings regarding similar bank guarantees.
2. The respondent, representing IOCL, challenged the jurisdiction of NCLT to issue orders staying the invocation of bank guarantees. Despite IOCL's reservations, the NCLT's order remained in force, preventing IOCL from encashing the bank guarantees. The petitioner intended to seek a similar injunction from NCLT but faced challenges due to lockdown restrictions.
3. The petitioner's counsel requested a limited amnesty to prevent IOCL from encashing the bank guarantees until one week after the lockdown is lifted. The respondent expressed reservations but acknowledged the reasonableness of the request. The court granted the limited relief, emphasizing that it did not imply a judgment on the case's merits.
4. The court disposed of the writ petition by granting the requested relief, specifying the bank guarantees subject to the injunction and the duration of the restraint. The judgment clarified that it did not delve into the case's merits and should not be construed as an opinion on the petitioner's entitlement to an injunction. The court also disposed of related applications in light of the writ petition's judgment.
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