Case Law Details
Liberty House Group Pte Ltd Vs State Bank of India & amp; Ors. (Delhi High Court)
FACTS –
Liberty House approached the high court, seeking that SBI be barred from encashing the bid bond guarantees provided by the U.K.-based investor when bidding for Castex Technologies Ltd. (bid bond guarantees INR 40 Crore) and ARGL Ltd. (bid bond guarantees INR 10 Crore).
In 2017, both the companies entered insolvency resolution proceedings, and in each case the Committee of Creditors (CoC) approved Liberty House as the winning bidder. However, the Liberty (winning bidder) changed its mind and bidder did the same in case of the parent company Amtek Auto. Also.
On being approved as the winning bidder, the resolution professional of each company asked Liberty to also submit performance bank guarantees (PBG) —Rs 100 crore in the case of Castex Technologies and Rs 60 crore for ARGL. The PBG were to be submitted within 10 days of the bidder receiving the letter of intent from the CoCs, failing which its resolution plan would be considered non-responsive and the CoC would be free to invoke the bid bond guarantees submitted earlier.
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