The Delhi High Court has restrained Indian Oil Corporation from encashing bank guarantees of around Rs 203 crore furnished by engineering, procurement and construction firm Punj Lloyd in connection with a contract for certain work at Haldia Refinery in West Bengal.
Justice C Hari Shankar in his order earlier this month had also restrained the state-owned oil marketing firm from invoking two other bank guarantees furnished by the company.
“…till the expiry of the period of one week from the lifting of the lockdown, imposed by the central government consequent to an n-COVID-2019 pandemic, IOCL shall remain injuncted from encashing/invoking the aforesaid three bank guarantees,” the court said while dealing with one of two petitions filed by Ashwini Mehra, resolution professional of Punj Lloyd.
In the second plea, the court ordered, “Counter affidavit be filed within four weeks with an advance copy to the petitioner, who may file rejoinder within two weeks thereof.”
The judge, in his order on April 17, also directed both the parties to renotify the case on June 10 to an appropriate bench of the High Court.
Senior counsel Rajiv Nayar, arguing for Punj Lloyd, told the court that the resolution professional had earlier approached the National Company Law Tribunal (NCLT) seeking similar orders against encashment of bank guarantees for a different project, where the tribunal has passed a restraining order against Indian Oil Corporation from encashing bank guarantees.
However, the government-owned company had moved the High Court against the tribunal order with the argument that NCLT doesn’t have jurisdiction to pass any such order.
The counsel for the RP argued that 99% of the project-related work has been completed but on account of the present lockdown, work had stopped on the project site. Also, he argued that the permission to work in any event continued till June 2020.
“The bank guarantees were alive and existing until September 2020 despite that bank guarantees were invoked especially when the invocation itself is also a breach of the ‘moratorium’ under the Insolvency and Bankruptcy Code, 2016,” he argued.
Anindita Roychowdhury, partner at AZB & Partners along with Vatsala Rai, counsel were representing RP in the case. While Indian Oil was being represented by Advocate VN Koura in the dispute.
Last year in March, NCLT had admitted the insolvency resolution plea against Punj Lloyd filed by the ICICI Bank, after it defaulted on around Rs 853 crore to its lender. The company owes around Rs 6,000 crore to its lenders.
Source: Economic Times