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2020 (5) TMI 703 - NATIONAL COMPANY LAW TRIBUNAL, SPECIAL BENCH, CHENNAIViolation of Section 14 of the Insolvency and Bankruptcy Code, 2016 during the moratorium period by one of the Financial Creditors (Punjab National Bank) - Financial Creditors (Punjab National Bank) is holding voting share of 0.58% in the CoC - HELD THAT:- Upon perusing the material and documents placed before this Bench, it is seen that the Respondent-Financial Creditor (Punjab National Bank) admits that an amount of ₹ 1.87 crores lying in the CC account (as on 22.05.2019) was further debited for the LC payment; during the CIRP period, the Respondent-Bank issued fresh LC of ₹ 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. 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 amount distributable among all creditors after the conclusion of CIRP. (details of dates of LC and date if appropriate of the amount are given in Page.28 of the application). Further, no records could be found to ensure that the Respondent Bank has included the claim of LC in the outstanding credit prior to CIRP. The Respondent-Bank (Punjab National Bank) is required to credit to the Corporate Debtor’s Account the amount of ₹ 17,95,04,271.79 (₹ 1,87,39,588.90 presently operated by the RP; ₹ 14,57,64,682,89 from the LC honored before CIRP and appropriated after CIRP and also GST refund of ₹ 1,50,000/- received during the CIRP period) which were meant to settle the liability on account of the LCs opened during pre-CIRP period. Application is allowed to the extent of amounts debited to the Corporate Debtor’s account during the CIRP for having honored pre-CIRP LCs opened by the Corporate Debtor.
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