NCLAT Delhi: Margin Money FDRs Stay with Bank Until Guarantees Are Discharged, Despite Approved Resolution Plan

In Monitoring Agency of Anush Finlease & Construction Private Limited Vs State Bank of India (NCLAT Delhi), the National Company Law Appellate Tribunal, Principal Bench, New Delhi, considered whether fixed deposit receipts (FDRs) pledged as margin money for bank guarantees must be released once a resolution plan has been approved.

Background

  • The corporate insolvency resolution process (CIRP) against Anush Finlease & Construction Private Limited began on 30 May 2019 on an application by Phoenix ARC Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016.
  • The Committee of Creditors approved the resolution plan of Kendriya Bhandar with a 77.54% voting share on 20 March 2020, and the NCLT approved it on 1 April 2020.
  • Before insolvency, the company had obtained export promotion capital goods authorisations from the DGFT.