Tribunal Upholds Liquidator's Decision on Rejected Claims and Denies Restraint Request

The Tribunal dismissed the application, upholding the Liquidator's decision to reject the claims due to lack of supporting documentation and the necessity for claims of damages to be adjudicated by a competent authority. The Tribunal also denied the request to restrain the invocation of ABGs, finding no evidence of fraud.

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Issues Involved:
1. Admission of Claims by the Liquidator
2. Return of Advance Bank Guarantees (ABGs)
3. Alleged Breach of Contract and Damages
4. Invocation of Bank Guarantees

Issue-wise Detailed Analysis:

1. Admission of Claims by the Liquidator
The Applicant, M/s. Bray Controls India Private Limited, filed claims under Section 42 of the Insolvency and Bankruptcy Code, 2016, seeking directions for the Liquidator to honor obligations under the Amended Purchase Order and admit the Applicant's claims in full. The Liquidator rejected these claims, stating that the Applicant did not provide necessary documentation, such as invoices, to establish the Corporate Debtor's liability. The Tribunal upheld the Liquidator's decision, emphasizing that the Liquidator's role is to verify claims based on available documentation and not to adjudicate disputes.

2. Return of Advance Bank Guarantees (ABGs)
The Applicant sought a direction for the Liquidator to return the ABGs and issue a No Objection Certificate to the Bank of America. The Liquidator argued that the Corporate Debtor's books showed an advance payment to the Applicant, and thus, the ABGs were justified. The Tribunal concurred, noting that the Corporate Debtor had given an advance, and the Applicant had provided ABGs in return. The Tribunal found no grounds to direct the Liquidator to return the ABGs, as there was no evidence of fraud in obtaining them.

3. Alleged Breach of Contract and Damages
The Applicant contended that the Corporate Debtor breached the contract by not taking delivery of the manufactured valves, which were inspected and cleared by a third-party agency. The Liquidator argued that claims for damages due to breach of contract must be adjudicated by a competent authority, not by the Liquidator. The Tribunal agreed, referencing the Supreme Court's decision in Union of India vs. Raman Iron Foundry, which states that a claim for unliquidated damages does not constitute a debt until adjudicated by a court or arbitrator. The Tribunal concluded that the Liquidator rightly rejected the claims since they were in the nature of damages for breach of contract.

4. Invocation of Bank Guarantees
The Applicant sought to restrain the Corporate Debtor from invoking the ABGs, alleging that the Corporate Debtor's actions were unethical. The Liquidator maintained that there was no fraud involved in obtaining the ABGs, and thus, there were no grounds for an injunction. The Tribunal cited the Supreme Court's decision in Himadri Chemicals Industries Limited vs. Coal Tar Refining Co., which held that an injunction against invoking a bank guarantee can only be granted if there is evidence of fraud of an egregious nature. The Tribunal found no such evidence and refused to grant the relief sought by the Applicant.

Conclusion:
The Tribunal dismissed the application, upholding the Liquidator's decision to reject the claims due to lack of supporting documentation and the necessity for claims of damages to be adjudicated by a competent authority. The Tribunal also denied the request to restrain the invocation of ABGs, finding no evidence of fraud.

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