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2019 (8) TMI 1596 - Tri - Insolvency and BankruptcyInjunction against the invocation of four Bank Guarantees - HELD THAT:- The provisions of the I&B Code are clear that the invocation of Performance Bank Guarantee cannot be stayed since as per the Proviso the Moratorium does not apply on ‘performance bank guarantees’. But fact of the each case ought to have bearing for applying the provisions of a Statute. Therefore, in view of the facts of the present case, since there was an ongoing dispute between the parties regarding the issue of non-completion of contract, hence the entitlement of encashment of a Bank Guarantee got jeopardised. This is a contractual dispute and has to be adjudicated by the Commercial court in view of the arbitration clause in the contract. The correctness of invocation of performance bank guarantees shall be decided by the Arbitrator post moratorium in view of the fact that the arbitration proceedings are stayed during moratorium. There is an ongoing dispute regarding completion of work and arbitration proceedings are pending to that effect. The purpose of the Counter Bank Guarantee as per Clause 4.2 of the contract was to enable the Corporate Debtor to furnish a Bank Guarantee of the corresponding amount to the Jamnagar municipal Corporation. Parties have made efforts for an amicable settlement. The proceedings are stated to be stayed due to the moratorium. In a situation when the question is that whether it is matured that a Bank Guarantee is fit to be invoked or that the claim has become final having no scope of contingency, then only the question of dealing with a Bank Guarantee can be decided under the provisions of the Insolvency Code. Else, the issue of invocation of a Bank Guarantee is better left to be decided by the Arbitral Authorities. The Counter bank guarantee cannot be ordered to be released during the CIRP because of the suspension of amicable settlement - Application rejected.
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