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TMI Blog2019 (9) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent to release the funds of the corporate debtor i.e. Magma Autolinks Pvt. Ltd., lying with the respondent in the form of fixed deposit. 2. CP (IB) No. 127/Chd/HP/2018 ('CP') filed by the corporate debtor i.e. Magma Autolinks Pvt. Ltd., under Section 10 of the Code for initiation of Co rporate Insolvency Resolution Process ('CIRP') was admitted on 13.09.2018 and moratorium was declared in terms of Section 14(1) of the Code. The respondent-bank is also one of the financial creditor of the corporate debtor and accordingly, a member of the Committee of Creditors ('COC'). The Resolution Professional had written a letter to the respondent-bank on 04.02.2019 to release the fixed deposit of Rs. 10 lacs lying with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to the extent. Exception 1.--Saving of contract to refer to arbitration dispute that may arise.--This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred. Exception 2.-- Saving of contract to refer questions that have already arisen.--Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Act, 1949 (10 of 1949); (g) "a multi-State co-operative bank" as defined in clause (cciiia) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); and (ii) In Exception 3, the expression "a financial institution" means any public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956)." 7. The bank guarantee dated 21.01.2017 executed by the respondent-bank in favour of Honda Cars India Ltd., on behalf of the corporate debtor to the extent of Rs. 10 Lacs was valid upto 20.01.2018 and the relevant paragraph of the said deed reads as under:- "This guarantee is not recoverable except with the provision by written consent by the HCIL and save as aforesaid will remained in force for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within which a claim can be lodged. Where a claim is not lodged within the time period prescribed, no claim can be made thereafter. However, if a claim is made within the time prescribed and no payment is made against the claim, the claimant is entitled to sue within the limitation period.' 9. The effect of the Exception to Section 28 is to limit the period provided under the Limitation Act from 3 years to 1 year in case of banks and financial institutions to issue a guarantee. If a claim is made and not honoured then the party is entitled to a period of 3 years to sue for enforcement of the rights. If a claim is not made within that time, the right to make a claim for breach of guarantee is lost. In the present case, claim itself was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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