Garden Silk Mills Limited Vs Gayatri Industries (Bombay High Court)
Bombay High Court directed release of bank guarantees since claim stood extinguished due to default on part of respondent to lodge their claim with Resolution Professional. Accordingly, interim application stands allowed.
Facts- The First Appeal was preferred by the original Defendant No.1 challenging the judgment and decree dated 20th January 2003 decreeing the suit for sum of Rs.28,97,629/- together with interest @ 24% per annum. First Appeal was permitted to be withdrawn by order of 25th February 2025.
The present Interim Application has been preferred by the Appellant seeking a declaration that the impugned judgment and decree dated 20th June 2003 stands extinguished and no proceedings in respect thereof can be continued or initiated and for a direction to release all bank guarantees issued by the Appellant’s bank in favour of the Registrar pursuant to order of 17th June 2003. In the alternative, the Appellant seeks release of all original bank guarantees issued by the Bank of Baroda, Bhaga Talav branch in favour of the Registrar of this Court and only retain the bank guarantee dated 17th August 2021 issued by Union Bank of india.
Conclusion- Held that as the Respondent 1’s claim did not form part of the Resolution Plan due to failure of the Respondent No.1 to lodge its claim with the Resolution Professional, upon approval of the Resolution Plan by NCLT vide order dated 1st January, 2021, the debt stood extinguished. Upon extinguishment of debt, no right vests in the Respondent No.1 in respect of the bank guarantees or to oppose the release of bank guarantees. Consequently, the Interim Application stands allowed.
