TaxTMI 
TaxTMI 
2018 (9) TMI 1396
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.... 60(5) of the Insolvency and Bankruptcy Code, 2016 (for brevity 'Code, 2016') is whether the moratorium could be extended to the bank guarantees furnished by non applicant-respondent nos. 2 & 3 namely State Bank of India and Bank of Maharashtra by restraining them to encash those bank guarantees. 2. Brief facts of the case are that a petition under Section 9 of the Code, 2016 was filed and vide order dated 05.09.2017 the petition was admitted. Consequently, moratorium under section 14 of the Code, 2016 was imposed. It is pertinent to mention that Respondent No. 1 Company-Corporate Debtor is engaged in the business of Engineering Procurement and Construction (EPC) services which includes customized turnkey solutions for Material Handling/....
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....0 Telangana State Power Generation Corporation Limited 3139014BG2000014 3542100.00 Telangana State Power Generation Corporation Limited 3139014BG2000016 9058500.00 Telangana State Power Generation Corporation Limited Total 199600600.00 4. In the email sent to the Resolution Professional it was further stated that as you are the Insolvency Resolution Professional in the aforesaid account and that he should provide funds for remittance of the above bank guarantees to be paid to the beneficiary. 5. Another e-mail was received by the Resolution Professional on 13.12.2017 from State Bank of India stating that as per claim request received from non applicant-respondent no. 1 for encashment of the bank gu....
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....16.12.2017. The application in any case has been rendered infructuous. 7. We have heard learned counsel at length. 8. Having heard the learned counsel for the parties and perusing the pleadings with their able assistance we are of the view that the application would not warrant acceptance. The question of law raised in the instant application would not survive for consideration as the Legislation itself has taken care of the situation like the one in hand. The provisions of Section 14(3) of the Code, 2016 has been amended and the same reads as under:- Moratorium. 14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for p....
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....se of personal guarantors against whom insolvency resolution processes may be initiated under Part III. Secondly, the protection of the moratorium under these Sections is far greater than that of Section 14 in that pending legal proceedings in respect of the debt and not the debtor are stayed. The difference in language between Sections 14 and 101 is for a reason. Section 14 refers only to debts due by corporate debtors, who are limited liability companies, and it is clear that in the vast majority of cases, personal guarantees are given by Directors who are in management of the companies. The object of the Code is not to allow such guarantors to escape from an independent and coextensive liability to pay off the entire outstanding debt, wh....