2020 (5) TMI 703

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....AL) It is an application filed by the Applicant/Corporate Debtor for claiming the amount that was allegedly appropriated in violation of Section 14 of the Insolvency and Bankruptcy Code, 2016 during the moratorium period by one of the Financial Creditors (Punjab National Bank) holding voting share of 0.58% in the CoC. 2. The Applicant/Corporate Debtor submitted that the Respondent/ Financial Creditor (Punjab National Bank) appropriated the amount during the moratorium period which started from 22.05.2019 in spite of being prohibited by the Code as given below: S.No Particulars Amount (in Iakhs) Amount (in lakhs) 1. Outstanding as on 22.05.2019   187.39   2. Supplier: i) Trafigura India Pvt. L....

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....wn dues" (a) The Applicant further relied upon the matter in CP No.03/KB/2017 Nicco Corporation Limited case ¡t was held that "after the declaration of moratorium, no adjustment can be made by the Corporate Debtor against any amount even if the Corporate Debtor acts as the creditor in that transaction. No adjustment would be allowed during the moratorium period" 5. In the circumstances, the Applicant seeks for a direction to the Respondent/Financial Creditor (Punjab National Bank) to credit the amount of Rs. 1,87,39,588.90 to the Corporate Debtor's Account presently operated by the RP and Rs. 14,57,64,682.89 recovered for the LC honoured before the commencement of CIRP and appropriated after CIRP and also to credit the recovered....

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.... per norms. Further, the Corporate Debtor Company had executed the loan security documents accepting the terms and conditions more specifically that in the event of default in honouring the LC payment, cash credit account will be debited after getting permission from IRP. During the CIRP period, there was a need for issuing fresh LC after considering the urgency of business commitment of Corporate Debtor Company. The Respondent Bank issued new LC of Rs. 2,38,46,467/- on 01.06.20 19 after obtaining approval from the IRP. 8. It is further submitted that with regard to issuance of fresh LCs, the same cannot be allowed at present since the term loan account of the Corporate Debtor Company slipped into NPA category. As per bank's guidelines, ....

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.... on 22.05.2019) was further debited for the LC payment; during the CIRP period, the Respondent-Bank issued fresh LC of Rs. 2,38,46,467/- on 01.06.2019 considering the urgency of business commitment of Corporate Debtor Company after obtaining approval from the IRP. It is pertinent to mention here that in the 4th CoC meeting held on 07.0 1.2020, the members from SBI (consortium of Banks) holding 32,59% voting share pointed out that the issue relates to accounting treatment, the amount as claimed by the Applicant/Corporate Debtor could be reversed with the approval of appropriate authority. Thus, the Respondent-Bank has, in violation of the provisions under Section 14 of the IBC, unilaterally appropriated the amount due on LCs which is an amou....