Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2021 (1) TMI 1159

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Navy after the date of commencement of CIRP when the moratorium is in force to the Corporate Debtor. As per Section 14 of 1B Code, the amount received during the CIRP when the moratorium is in force, is the asset of the Corporate Debtor and RP has to deal with the same as per the provisions of the 1B Code. The Respondent is not entitled to adjust the same when the moratorium is in force. If, he has any dues pending from the Corporate Debtor on the date of commencement of CIRP, it is open for him to file his claim before the RP. Application allowed. - IA 911 of 2020 in CP(IB) 418 /NCLT/AHM/2018 - - - Dated:- 29-1-2021 - Ms. MANORAMA KUMARI AND CHOCKALINGAM THIRUNAVUKKARASU, JJ. Appearance: Learned Senior Counsel, Mr. Navin Pahwa for the Applicant. Advocate, Mr. Shobhabrata Chakraborti for the Respondent. Learned Senior Counsel, Mr. Navin Pahwa for the Applicant. Advocate, Mr. Shobhabrata Chakraborti for the Respondent. ORDER Mr. ChockalingamThirunavukkarasu, J. I. The instant application is filed by the RP seeking with the following relieves: (i) to direct the Respondent to forthwith refund the Refund Amount and deposit the same in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... he Corporate Debtor. (ii) second pari passu charge in favour of lenders by way of mortgage/ Hypothecation on all movable/ immovable properties of the Corporate Debtor both present future; and (iii) second pari passu charge by way of mortgage of leasehold rights on 124.1199 hectares of land belonging to M/S. E- Complex Pvt Ltd (100% subsidiary of PDOECL) situated at Village Rampura-ll of Taluka Rajula and Village Lunsapur of Taluka Jafrabad Amreli, Gujarat. (Out of which 95 hectares of land is already mortgaged to PDOECL lenders and balance mortgage of leasehold rights shall be in favour of PDOECL subject to approval from govt./ concerned authority). 7. The Applicant submits that the Corporate Debtor duly completed the Normal Refit of INS Savitri and handed over the same to the Customer on 15th September, 2018. Consequently, the Customer issued certificate of acceptance to the Corporate Debtor. A copy of certificate of acceptance dated 15th September, 2018 has been annexed and marked hereto as Exhibit H . 8. The Applicant submits that as per the terms of the Contract, the warranty period for Normal Refit done by the Corporate Debtor was rendered till November 15, 2019 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... reconciliation of dispute in relation to the Bank Guarantee between the Respondent and the Corporate Debtor pursuant to the letter dated 23rd December 2019 from the Customer, the IRP vide its letter dated 4th March, 2019 informed to the Respondent as to how the Refund Amount forms part of the assets of the Corporate Debtor and the Respondent is not entitled to the same. A copy of the letter dated 4th March, 2019 has been annexed and marked hereto as Exhibit K . 15. The Applicant submits that in order to once again resolve and reconcile the issue pertaining to the Refund Amount, the same was discussed and deliberated amongst the Applicant, Respondent and/ or Proforma Respondent in various COC meetings of the Corporate Debtor. However, the Respondent always maintained the position that the said matter is pending with the corporate office and awaiting legal opinion from the corporate office of the Respondent on the same. 16. The Applicant submits that since the Customer vide its letter dated 23rd December, 2019 had stated that Corporate Debtor and the Respondent should reconcile the conflict amongst themselves regarding the which bank account in which the Refund Amount was requ .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t submits that the Respondent instead of duly remitting the money into the bank account of the Company, vide its email dated November 3, 2020 informed the Applicant that the Refund Amount had been adjusted by the Respondent towards dues originally claimed by it under FORM C dated 29th January 2020. The Applicant further submits that the Respondent submitted its revised FORM C dated 29th October, 2020 wherein it deducted the amount equivalent to the Refund Amount from its total claim amount. The copy of the revised FORM C has been annexed and marked as Exhibit Q . 21. The Applicant submits that the Respondent however vide its email dated 17th November 2020 responded to the above said email wherein it wrongfully stated that since the Bank Guarantee was invoked prior to the commencement of CIRP, it was constrained to file the claim in relation to the Refund Amount in the original claim form dated 29th October 2020. However, since the money was now remitted into the current account of the Corporate Debtor, the Applicant had no authority to appropriate the assets of a third party in held in trust or maintained in the account of the Corporate Debtor in accordance with the contractual .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ding all the financial creditors, hence the Financial Creditors cannot recover any amount from the account of the corporate Debtor, nor can it appropriate any amount towards its own dues. Relevant paragraph has been reproduced below: Having heard learned counsel for the Appellant, we do not accept the submissions made on behalf of the Appellant in view of the fact that after admission of any application under Section 7 of the 'I B Code', once moratorium has been declared it is not open to any person including 'Financial Creditors' and the appellant bank to recover any amount from the account of the 'Corporate Debtor nor it can appropriate any amount towards its own dues. A copy of the order dated November 15, 2017 has been annexed and marked hereto as Exhibit T . 23. The Applicant submits that placing reliance on the above mentioned judgment, Hon 'ble NCLAT in the matter of State Bank of India vs. Debashish Nanda, Company Appeal (AT) (Insolvency) No. 49 of 2018 vide its order dated April 24, 2018 has held that: Prima facie, we are of the view that the appellant cannot debit any amount from the 'Corporate Debtor's account' .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of the 60 days beyond the date of warranty period (i.e 15th November, 2019), the Respondent vide its email dated 19th December, 2019, requested Indian Navy for refund of the said Amount in Its account bearing Current Account No. 19080210000632 ( UCO Bank Current Account ). The said Amount was paid by the Respondent from its own funds and not funds belonging to the Corporate Debtor, therefore the Respondent requested the Indian Navy to remit the refund of said Amount to UCO Bank Current Account. A copy of email dated 19th December, 2019, is annexed herewith and marked as Annexure B . (vi). Since, the Indian Navy, despite intimation, delayed in remitting the refund under the Performance Guarantee payable to the Respondent, the Respondent was not left with any option and constrained to file a proof of claim (Form-C) with the Interim Resolution Professional of the Corporate Debtor, in relation to the said Amount. (vii). Subsequently, the Indian Navy refunded the said Amount to the Respondent on 28th September, 2020. The Indian Navy, for the sake of its procedural ease and convenience, transferred the said Amount in the Corporate Debtor's Current Account No. 19790210003060 ma .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... account maintained by the Corporate Debtor. (xi). The said Amount is not an asset of the Corporate Debtor. Merely, because, after considerable delay, the said Amount was, remitted in the current account of the Corporate Debtor; the said Amount does not become an asset of the Corporate Debtor. The Corporate Debtor has no ownership rights over the said Amount. (xii). Accordingly, the Respondent has rightly appropriated the refund of the said Amount, which was paid by the Respondent from its own funds, in discharge of the Performance Bank Guarantee which was invoked prior to the commencement of CIRP of the Corporate Debtor and moratorium period. 25. Gone through the records and arguments made by the learned counsels of both sides. 26. It is noted that Bank Guarantee was issued on 14.07.2016 for ₹ 3,34,90,458/- in favour of the customer of the Corporate Debtor, which was valid upto 31.08.2019. The Bank Guarantee was invoked by the Customer, Indian Navy on 22.08.2019 for warranty obligations before the commencement of the CIRP date i.e on 15.01.2020. The amount paid by the Respondent Bank on invocation of Bank Guarantee from its own funds on account of non-availability .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates