2022 (1) TMI 1239

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....20 has been filed by Resolution Professional under Section 14(1) read with Section 18(1)(f) of the Insolvency and Bankruptcy Code, 2016 seeking direction from this Tribunal to the Respondent, Engineering Projects (India) Limited to refund the money equivalent to the Bank Guarantee against "mobilisation advances" which has been invoked and encashed during the CIRP without any termination of contract or any dispute regarding the services provided by the Corporate Debtor. 2. The Applicant mentions that the CIRP against the Corporate Debtor Company had commenced vide order dated 27.03.2019 by this Tribunal admitting the Company Petition under Section 9 of the Code. The Bench notes that multiple Bank Guarantee were provided against 'mobilisat....

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.... the Respondent is a clear violation of the provisions of Section 14 of the Code i.e. moratorium and the Respondent should not have proceeded with encashing the Bank Guarantee during the CIRP period. The Bench also notes that these Bank Guarantees are covered within the definition of the Terms Security Interest and is hit by Section 14(1)(c) of the Code. 8. The Bench would like to refer to the Provisions of Section 14 of the Code. The relevant portion of the Code are stated as under: "...Section 14- Moratorium Subject to provision of Sub-Section 2 and 3 on the Insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting of the all the following namely: (a) ...... ....

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.... Hon'ble Delhi High Court which clearly bring out that Bank Guarantee are security interest and any invocation of Bank Guarantees during the CIRP is prohibited. 10. Reference is also made to a decision of Hon'ble NCLAT in the case of Indian Overseas Bank Vs. Mr. Dinkar T Venkatsubramaniam [Company Appeal (AT) (Insolvency) 267 of 2017] "5. Having heard learned counsel for the Appellant, we do not accept the submissions made on behalf of the appellant in view of the fact that after admission of an application under Section 7 of the "I&B Code", once moratorium has been declared it is not open to any person including 'Financial Creditor' and the appellant bank to recover any amount from the account of the 'Corporate Debtor', nor it ....