Naresh Kumar Goel Vs Indian Overseas Bank & Anr. (NCLAT Delhi)
Summary: The National Company Law Appellate Tribunal considered an appeal challenging the Adjudicating Authority’s order dated 20 July 2023 in I.A. No. 924 of 2020. The application had been filed by the Liquidator seeking a direction to Respondent No. 1 to create a fresh fixed deposit receipt (FDR) of Rs. 10,00,308/- as 100% margin against a bank guarantee. The bank guarantee had been furnished by the Corporate Debtor to the Customs Department in connection with an EPCG licence. The dispute concerned the Liquidator’s request for creation of a fresh FDR to secure the guarantee.
The Adjudicating Authority heard the Liquidator and considered the submissions of Respondent No. 2, the Customs Department. It relied on the NCLAT decision in Bharat Aluminium Co. Ltd. vs M/s. J.P. Engineers Private Limited, Company Appeal (AT) (Insolvency) No. 759 of 2020. In that decision, the Tribunal had recognised that the assets of a surety are separate from those of the Corporate Debtor and that proceedings against the Corporate Debtor may not be seriously affected by actions involving assets of a third party acting as surety. Applying that reasoning, the Adjudicating Authority dismissed the Liquidator’s application for creation of the fresh FDR.
On appeal, the NCLAT examined the decision of the Adjudicating Authority and found no error in dismissing the Liquidator’s application. The Appellate Tribunal therefore declined to interfere with the order dated 20 July 2023 and dismissed the appeal. Consequently, the Liquidator did not obtain the requested direction for creation of a fresh FDR of Rs. 10,00,308/- as 100% margin against the bank guarantee. The supplied order contains no further substantive reasoning or consequential directions.
Cases Discussed
- Bharat Aluminium Co. Ltd. vs M/s. J.P. Engineers Private Limited — Company Appeal (AT) (Insolvency) No. 759 of 2020. Relied upon regarding the distinction between assets of a surety and those of the Corporate Debtor.
FULL TEXT OF THE JUDGMENT/ORDER OF NCLAT DELHI
This Appeal has been filed against the order dated 20.07.2023 passed by the Adjudicating Authority on I.A No.924 of 2020. IA was filed by the Liquidator seeking direction to Respondent No.1 to make a fresh FDR of Rs.10,00,308/- as 100% margin against the Bank Guarantee.
2. The Adjudicating Authority after hearing the Liquidator, noted the submissions of Respondent No.2 – Customs Department to whom the Bank Guarantee in respect of EPCG license was given by the Corporate Debtor. The Adjudicating Authority relying on the judgment of this Tribunal in “Bharat Aluminium Co. Ltd. vs M/s. J.P. Engineers Private Limited, Company Appeal (AT) (Insolvency) No. 759 of 2020” held that the assets of the surety are separate from those of the Corporate Debtor and proceedings against the Corporate Debtor may not be seriously impacted by the actions against assets of a third party like a surety. Relying on the said judgment the application filed the Liquidator has been dismissed.
3. We do not find any error in the decision of the Adjudicating Authority dismissing the application filed by the Liquidator (Appellant herein). Appeal is dismissed.
