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2020 (11) TMI 620 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCHRecovery of amounts from Bank Guarantees - Whether respondent no. 1 is in order in invoking Bank Guarantees when O.M. dated 12.04.2017 (EXHIBIT A5), provides time period for Provisional Mega Projects, for furnishing Final Mega Certificates to the Tax authorities to 120 months, viz. by which validity is available upto 2021, for the applicant to avail benefit of exemption from payment of customs duty? - HELD THAT:- We agree with the contention of the applicant as regards the issue as the Corporate Debtor was given time to submit Final Mega Power Project Certificate within the period of 120 months and in the instant case the Corporate Debtor has imported machinery in the year 2011 and it enjoys benefit of exemption from payment of customs duty for 120 months till 2021. We therefore, have no hesitation in accepting the contention of the applicant that respondent no. 1 is estopped from recovering any amounts whatsoever upto the said period of 120 months from the date of import. Accordingly, Issue No. 1 is answered in affirmative. Respondent no. 1 cannot invoke Bank Guarantee before expiry of 120 months from the date of import. Whether the impugned Bank Guarantees can be termed as PBGs and are exempted from the moratorium under section 14(a)(1) of the IBC as amended by Insolvency and Bankruptcy Code (Amendment) Act, 2020? - HELD THAT:- The important question to decide is whether the impugned Bank Guarantees issued by Corporate Debtor are PBGs or NBGs. When we go into the purpose for which the impugned Bank Guarantees are issued, we understand that these were issued for availing the benefits of exemption from payment of customs duty. Even though the underlying action is to furnish final Mega Power Project Status Certificate in time, then only this exemption is available to the Corporate Debtor. The basic object of this Bank Guarantee is to avail exemption only, not for completion of the project. Therefore, these Bank Guarantees cannot be termed as PBG. These can be termed as NBGs only. As such these guarantees are covered under security interest under section 14(1)(c) of the Code, and not under section 14(3)(b) of the Code, which was amended by Insolvency and Bankruptcy Code (Second Amendment) Act, 2018. The invocation of Bank Guarantee in question will result in decreasing value of the Corporate Debtor and it dissuades participation of prospective applicants from submitting their bids and increase cost of power as there will be substantial impact on the capital cost of the project - issue is answered that the impugned Bank Guarantees are NBGs and are covered by rigor of moratorium under section 14 of the Code. Whether it is in order for respondent no. 1 to invoke Bank Guarantees when, respondent no. 1 has filed its claim with the Resolution Professional for the amount due from the Corporate Debtor for which these Bank Guarantees are issued? - HELD THAT:- As on one hand respondent no. 1 has filed its claim with Resolution Professional for consideration and on the other hand respondent no. 1 tried to invoke Bank Guarantee to recover its dues, thereby putting itself on a higher pedestal than other creditors. The objective of the Code emphasizes on revival and resolution of the Corporate Debtor in a time bound manner while aiming for optimization of value of assets keeping in view the interest of all stakeholders. By indulging in the above act, respondent no. 1 has attempted to better its position and to place itself on a higher pedestal than the other creditors of the same class. Therefore, we are of the view that respondent no. 1 has already filed its claim with the RP, invoking Bank Guarantees, which is not in the spirit of the IBC, viz. maximization of value of assess of the Corporate Debtor and protection of interest of all the stakeholders.
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