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Judgment
i.,Cash credit limit,Rs.20.00 crores
ii.,"Bills remitted/inland bills discounted
(sublimit of CC)",Rs.3.00 crores
iii,Term loan,Rs.8.05 crores
iv.,Inland letter of Credit (sublimit CC),Rs.5.00 crores
v.,Foreign Letter of Credit,Rs.3.25 crores
vi.,Bank Guarantee limit,Rs.2.65 crores
Vii,"Forward Contract-Foreign
currency.",Rs.3.25 crores
in CC limit of the corporate debtor. When a letter was written by IRP dated 27TH June, 2018 instructing the bank to reverse adjustment of FDR",,
explaining that such adjustment is prima facie is impermissible and prohibited under Section 14 of the Insolvency and Bankruptcy Code. Following the,,
instructions of IRP the adjustment of FDR was reversed by the bank and the same was placed in FDR account, once again.",,
The bank further states that in 4th COC meeting held on 17.10.2018 the bank again revised the claim on 05.11.2018 and filed the claim in Form,,
‘C’ to the tune of Rs.26,80,432.41. Again, in the COC meeting when the resolution professional objected to the same adjustment in the Form",,
‘C’ dated 14.11.2018 reflecting the amount of Rs.26,29,85,049/- was accepted by the RP. The bank further states that RP had taken legal",,
opinion and referred to Section 14 of Insolvency and Bankruptcy Code which clearly prohibits adjustment of security by financial creditor during the,,
moratorium.,,
The stand taken by the bank that since the FDR formed part of the security credits in favour of the bank towards repayment of the bank’s,,
dues, the IRP is asking for the money to be used during the CIRP which is lying with the bank in the form of security credit by the corporate debtor.",,
The bank guarantee issued on the request of corporate debtor and no payment was made by the creditor hence the bank has charge/security over,,
FDR and the said money cannot be asked by the RP to be brought in the account of corporate debtor for utilization of said money during CIRP of CD.,,
After going through the contentions raised by both the parties and the documents placed on record in support of thereof and in the light of,,
provisions Section 14 of the Insolvency and Bankruptcy Code more particularly 14(1)(c) clearly covers the same security as claimed by the bank. The,,
financial creditor being the sole member of the COC though passing resolution by 100% for any of the agenda cannot be permitted to transgress the,,
provisions of law.,,
In view of the above, the application is allowed in terms of the prayer which respondent financial creditor (member of COC) allowed. Bank is",,
directed not to adjust the FDR in the claim after discharge of bank guarantee and transfer the said amount of FDR to lie in the bank account of,,
corporate debtor for the purpose of continuing the CIRP.,,
Application is allowed.,,