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TMI Blog2019 (8) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, so that it could earn interest. After that day and definitely on the date of passing of the impugned order dated 7th February, 2019, there was no BG in existence. The question therefore of the applicability of Section 14 (3) (b) of the IBC to any such BG on the date of the impugned order i.e. 7th February, 2019 would not arise. It is then contended by Mr. Datta that in any event, the amount obtained as a result of encashment of the bank guarantee was not the asset of VIL. According to him, at best it was the asset of the bank, which was now being held by the Registrar General of this Court pursuant to the order dated 16th August, 2018. It is contended that under Section 18 (f) of the IBC, it is only those assets which are under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Arbitration and Conciliation Act, 1996 ( Act ) filed by the present Appellant. 2. The background to the present appeal is that an Award dated 29th April, 2013 was passed in favour of the Appellant and against the Respondent/ Videocon Industries Limited (VIL). That Award was challenged by VIL before the learned Single Judge by filing O.M.P. No.665/2013 under Section 34 of the Act. During the pendency of the said petition, the following order was passed by the learned Single Judge on 13th November, 2013: Mr. Sethi, learned senior counsel for Videocon Industries Ltd. (VIL), says that for the moment, VIL will be able to furnish a bank guarantee in the sum of ₹ 20 crores. He says that the bank guarantee will be fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is directed that the Registrar General may invoke the bank guarantee issued by Allahabad Bank Industrial Finance Branch) Mumbai bearing no. 0156113IFG000104 for a sum of ₹ 20 crores. The said amount be credited with the Registrar General's account within 10 days. The amount shall be kept in an interest earning fixed deposit initially for a period of six months on an automatic renewal mode. 4. With the above directions, I.A. is disposed of List before the Registrar General for issuing the invocation of the bank guarantee and appropriate orders on 21st August 2018. 4. Subsequently, on 7th February, 2019 the learned Single Judge dismissed OMP No. 665/2013, affirming the Award dated 1st March, 2013 (as corrected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult of encashment of the BG provided by the Allahabad Bank on behalf of the VIL, should not be made subject to the orders of the NCLT, Mumbai in the insolvency proceedings involving VIL. Mr. Datta has also referred to the judgment of the Supreme Court of India in State Bank of India v. V. Ramakrishnan AIR 2018 SC 3876, where the background to the introduction to the above amendment to the IBC was discussed. 8. This Court is unable to accept the above submission concerning the applicability of Section 14 (3) (b) of the IBC as amended, to the facts of the present case. The BG in question was encashed on 16th August, 2018 and the amount as a result of such encashment was kept as Fixed Deposit in the name of the Registrar General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent Appellant in the arbitration proceedings. It was not yet the asset of the Appellant as well. This is because the outcome of the petition i.e. OMP 665/2013 filed by VIL was not yet known on 16th August, 2018. 11. To that extent, the learned Single Judge was right in concluding that as on the date of passing of the impugned order i.e. 7th February, 2019 with the insolvency proceedings having already commenced, the moratorium in terms of Section 14 of the IBC would be in place. How the said amount of ₹ 20 crores together with interest accrued thereon should be dealt with would, therefore, be subject to the orders passed by the NCLT in such insolvency proceedings. 12. Consequently, this Court rejects the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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