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2021 (5) TMI 6 - Tri - Insolvency and BankruptcySeeking prohibition from invoking Bank Guarantee given by the applicant - seeking restraint on respondent No. 2 from remitting an amount of ₹ 1,40,42,898/- to respondent No. 1 - HELD THAT:- It is the fact that the Corporate Debtor has executed BG bearing No. 151331BGP00535 (ANNEXURE-3, Page 146) in favour of respondent No. 1 to the tune of ₹ 1,40,42,898/- issued by IDBI, which was valid till 30.07.2016. It was extended from time to time and it is valid till 31st March 2021, as the Adjudicating Authority has extended the same vide order dated 23.12.2020. When Completion Certificate is issued by NEA, whether respondent No. 1 is entitled to invoke PBG executed by the Corporate Debtor? - HELD THAT:- NEA has given Completion Certificate to the applicant even though there are minor pending works as claimed by the applicant and it is also the fact that the project is in commercial operation by NEA - It is further, observed that respondent No. 1 has invoked BG, even though NEA has not resorted to similar invocation - It is true that PBGs are not included under section 14 of the I&B Code. However, we have to go into the facts of the case before deciding the issue in question. In the present case NEA has given Completion Certificate to the applicant even though there are minor pending works as claimed by the applicant and it is also the fact that the project is in commercial operation by NEA. The Hon'ble Supreme Court in M/S GANGOTRI ENTERPRISES LTD. VERSUS UNION OF INDIA & OTHERS [2016 (5) TMI 516 - SUPREME COURT], observed that every case has to be decided with reference to the facts of the case involved therein. Thus, it becomes clear that PBG or regular BG involves only compensation payable to the party, which suffered losses. In the present case it is the contention of the applicant that in absence of invocation of BG by NEA in terms of contract dated 09.09.2011, the question that has to be decided is, can respondent No. 1 invoke BG executed by the Corporate Debtor. Respondent No. 1 has not pointed out that NEA has invoked the BG issued to them. In such case, whether it is correct on the part of respondent No. 1 to invoke BG issued by the applicant, more so when the Corporate Debtor is under CIRP, which certainly result into erosion of value of assets of the Corporate Debtor. Even though the subject matter is PBG, which is not covered under moratorium, but finally any BG is reduced to financial terms. Further, each BG has to be dealt with on merits of each case as decided by the Hon'ble Supreme Court in the matter of M/s. Gangotri Enterprises Ltd. Vs. Union of India and others - thus, invocation of BG by respondent No. 1 against the Corporate Debtor appears to be farfetched. In the instant case, the contention of respondent No. 1 that PBG is not covered under moratorium may not hold good. Application restraining respondent No. 1 from invoking Bank Guarantee is allowed - respondent No. 1 are directed to crystallise residuary works, if any, in financial terms and may file claim with the Resolution Professional in this regard - application allowed.
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