Liquidator granted leave to pursue arbitration claims against concessionaire for wrongful bank guarantee invocation under Section 66

The NCLAT dismissed an appeal regarding wrongful invocation of bank guarantee by a concessionaire after agreement termination. The Adjudicating Authority had granted leave to the liquidator to proceed in arbitration against the concessionaire, including claims for wrongful guarantee invocation, and correctly directed deletion of the respondent's name from the Section 66 application under the Insolvency Code. The tribunal granted liberty to file a fresh Section 66 application if circumstances arise after the arbitrator's decision that would oblige such action.

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Issues involved:
The judgment involves the challenge to an Order passed by the National Company Law Tribunal regarding the deletion of a party from a Section 66 Application under the Insolvency and Bankruptcy Code, 2016.

Details of the Judgment:

Issue 1: Invocation of Bank Guarantee
- The Liquidator challenged the Order deleting the Concessionaire as Respondent No. 8 in the Application.
- The Liquidator claimed the invocation of the bank guarantee after termination was wrongful and fraudulent.
- The Adjudicating Authority believed pursuing two proceedings simultaneously was not permissible.
- The Liquidator had sought approval to initiate arbitration proceedings against the Concessionaire.
- The Adjudicating Authority granted leave for arbitration against the Concessionaire on a previous date.

Issue 2: Arbitration Proceedings
- The Liquidator filed an application seeking authorization to institute arbitration for recovery.
- The Liquidator detailed claims against the Concessionaire, including compensation for illegal termination and wrongful invocation of bank guarantees.
- The claims in the application totaled INR 570.14 Crores.
- The Adjudicating Authority had already granted leave for arbitration against the Concessionaire.

Conclusion:
- The Tribunal dismissed the appeal but granted liberty to the Liquidator to file a fresh application under Section 66 if necessary after the arbitration proceedings.
- The Adjudicating Authority's decision to delete the Concessionaire as a party in the Section 66 Application was upheld.
- The Tribunal observed that the Liquidator could pursue further action if circumstances required, post the arbitration proceedings.

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