2019 (2) TMI 1692 - HC - Companies Law

Crediting the amount encashed form Bank Guarantee, in the account of the Registrar General of this Court - insolvency proceedings pending before the NCLT Mumbai - HELD THAT - Considering the fact that insolvency proceedings are pending before the NCLT Mumbai, the amount is directed to be retained in the account of the Registrar General. The same would be subject to further orders that may be passed in the insolvency proceedings - No further orders can be passed as the moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016 has already kicked in. Petition disposed off.

Summary

Issues:
1. Upholding of the award dated 1st March, 2013 in OMPs 665/2013 and 972/2013.
2. Enforcement of the bank guarantee by Videocon Industries Ltd.
3. Retention of the encashed amount in the account of the Registrar General due to pending insolvency proceedings.
4. Application of the moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016.

1. Upholding of the Award:
The judgment upheld the award dated 1st March, 2013, corrected on 29th April, 2013, in OMPs 665/2013 and 972/2013. The award directed Respondent No. 2 to pay a specific sum to the Claimant, along with interest at varying rates. The Claimant was entitled to receive interest at 21% p.a. till the date of the demand notice, and post-award interest at 18% p.a. on the principal amount thereafter. The decision was based on findings by the Tribunal, and the award amount was specified as per the Tribunal's determination.

2. Enforcement of Bank Guarantee:
Under Section 9 of the Arbitration & Conciliation Act, 1996, Videocon Industries Ltd. was directed to furnish a bank guarantee of ?20 crores, which was later encashed on 16th August, 2018. The encashed amount was then credited to the account of the Registrar General of the Court. The judgment acknowledged that the bank guarantee had been encashed and the funds transferred to the designated account.

3. Retention of Funds due to Insolvency Proceedings:
Given the pending insolvency proceedings before the NCLT Mumbai, the judgment directed the retention of the encashed amount in the account of the Registrar General. This decision was made in consideration of the ongoing insolvency proceedings and was subject to any further orders that might be issued in relation to the insolvency case. The funds were to be held until such time as additional directives were provided by the relevant authorities.

4. Application of Moratorium Period:
As the moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016 was in effect, the judgment noted that no further orders could be issued. However, Morgan Securities was granted the liberty to file an appropriate application, subject to any orders that might be issued during the insolvency proceedings. The Section 9 petition was disposed of, taking into account the restrictions imposed by the moratorium period.

This comprehensive summary covers the key issues addressed in the judgment, detailing the decisions made by the Court regarding the upheld award, enforcement of the bank guarantee, retention of funds, and the application of the moratorium period in light of the ongoing insolvency proceedings.