Challenge to Bank Guarantee Invocation During IBC Moratorium Dismissed by Chhattisgarh HC

 The Chhattisgarh High Court has dismissed a writ petition filed by Educomp Solutions Limited, which sought to halt the invocation and encashment of a bank guarantee worth over ₹3 crore by the State. The court’s decision was not a ruling on the merits of the dispute but was based on the finding that the matter had become redundant, or “infructuous,” due to the initiation of new arbitration proceedings between the same parties. The court concluded that no further purpose would be served by continuing with the petition, as the core issues are now being deliberated by a competent arbitral forum.

The case, Educomp Solutions Limited Vs State of Chhattisgarh, centered on a bank guarantee valued at ₹3,03,60,030. According to court records, the bank guarantee was issued on July 15, 2011, and had a stated expiry date of November 15, 2016. Its terms stipulated that any claim arising from it had to be made by December 15, 2016. The State of Chhattisgarh, however, attempted to invoke and encash the guarantee on July 11, 2022, nearly six years after the claim period had lapsed.

Educomp Solutions Limited, represented by its legal counsel, argued that this invocation was unlawful and without jurisdiction. The petitioner’s primary contention was that the claim was made well beyond the contractual deadline set out in the bank guarantee itself. This delay, the company asserted, rendered the state’s action invalid and in direct contravention of the guarantee’s terms. The counsel for the petitioner characterized the invocation as fraudulent, mala fide, and an arbitrary attempt to unjustly enrich the state.