The Appellate Tribunal held that the Performance Bank Guarantee ...

Appellate Tribunal: Bank Guarantee can be invoked in moratorium. Assets of surety separate from Corporate Debtor. Appeal allowed.

Case Laws     Insolvency and Bankruptcy

August 13, 2024

The Appellate Tribunal held that the Performance Bank Guarantee could be invoked during the moratorium period u/s 14 of IBC. Referring to a Supreme Court case, it clarified that the assets of the surety are separate from those of the Corporate Debtor. The Tribunal found that the Guarantee was rightfully invoked as the Contractor failed to complete the Contract within the specified period. The Adjudicating Authority erred in restraining the Appellant from encashing the Guarantee, and the Appeal was allowed.

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