West Bengal State Electricity Distribution Company Limited vs PNB
IA 699 of 2023
Facts:
1) Corporate Debtor was admitted into CIRP vide an order dated 22.07.2022 and as a result a moratorium under Section 14 of IBC, 2016 was declared. The Corporate Debtor had not paid the electricity charges since February 2022, therefore the applicant after serving disconnection notice as mandated under Section 56 of the Electricity Act, 2003, disconnected the connection on 09.09.2022.
2) Applicant states that as an amount of Rs.3,20,12,379/- became due and payable by the Corporate Debtor as on 21.07.2022, the applicant invoked the Bank Guarantee of Rs.3,00,00,000/- vide a letter dated 08.08.2022 requested to disburse the said Bank Guarantee within 7 (seven) days from receipt of the said letter. The Respondent No.3 on 20.08.2022 attached the communications dated 10.08.2022 and 16.08.2022 sent by the IRP and advised the applicant to take up the issue of invocation with the IRP.
3) Applicant again on 04.01.2023 addressed a communication to the Respondent No.3 via electronic mode to release the Bank Guarantee to which the Respondent No.2 vide a letter dated 06.01.2023 replied and refused to disburse the said Bank Guarantee by stating that as the claim of the applicant has been accepted by the RP therefore the Bank Guarantee cannot be claimed as it would amount to dual claim.
4) The applicant states that this act of the Respondents is against the provision of Section 14(3)(b) of IBC, 2016. It was always communicated to the Applicant by Respondent No.4 that its claim would automatically stand reduced in case the payment is received against the bank guarantee. Therefore, the present application shall be admitted.
Issue: Whether the application can be allowed ?
Arguments:
Applicant:
1) Counsel for the Applicant submitted that on a plain reading of Section 14(3)(b) of the IBC, 2016 which states that a surety in a contract of guarantee to a corporate debtor shall not apply to the working of Section 14 (1) that is Moratorium. Therefore, the initial action of working of the then IRP and the Bank in refusing to disburse the sum of Rs. 3.00 crore indisputably was not correct and in violation of the provision of Section 14 (3) (b) of the Code.
2) Applicant submitted its claim/demand of Bank Guarantee amounting to Rs 3.00 crore letter dated 08/08/2022 within the validity period i.e., 17/06/2023 and claim period 17/06/2024. Therefore, in terms of the relevant clauses of the declaration dated June 25, 2012, the respondent bank is contractually and statutorily bound to release the Bank Guarantee amount in favour of the applicant.
Respondent:
1) Counsel submitted that Respondent No.1 had issued a Bank Guarantee dated 25.06.2012 for Rs.3 Crore on behalf of the Corporate Debtor for drawal of bulk supply to its premises at Hazinagar, Naihati, 24 Parganas (North) in favour of the applicant. The Respondent No.1 received the letter dated 08.08.2022 from the applicant for invoking the Bank Guarantee as the Corporate Debtor had defaulted in paying the electricity bill within time and was requested to invoke the said guarantee in full and send the outstanding payment by Pay Order/Bank Draft to be drawn in favour of the applicant.
2) It submitted that the IRP sent a letter dated 18.08.2022 and once again requested to not invoke the Bank Guarantee in view of the moratorium as envisaged under Section 14 of IBC, 2016. The Respondent Nos. 1 to 3 informed the same to the applicant vide letter dated 20.08.2022 and requested to take up the matter with the IRP. The claim of the applicant has been admitted in full and it has been stated that in case any amount is recovered by invoking the bank guarantee, the same shall be informed to the RP and claim should be revised accordingly. The applicant cannot insist on encashment of the Bank Guarantee as the same will lead to double recovery.
3) The applicant once again requested to invoke the bank guarantee vide letter dated 04.01.2023 and the respondent bank vide letter dated 06.01.2023 stated that since the applicant has lodged its claim which is accepted in full by the RP, the same would amount to dual claim.
Order: NCLT allowed the application.
Rationale:
1) NCLT held that one of the necessary conditions for any transaction to be labelled as a Preferential transaction relates to the assets of the Corporate debtor, so to say that any transaction done in the relevant time by the Corporate debtor would be eligible for being called so only if done by the Corporate debtor i.e. out is its assets.
2) It held that applicant has the right to invoke such Bank Guarantee of Rs.3,00,00,000/- and the Respondents should not come in the way of invoking the same. It shall not amount to dual claim as the amount recovered by invoking such Bank Guarantee can be adjusted and the admitted claim shall be revised accordingly.
Order:
