# In the matter of Bank of Maharashtra Vs. Manjeet Cotton Pvt. Ltd. & Anr,Company Appeal (AT) (Insolvency) No. 581 of 2022

> NCLAT judgment dated 2022-11-14. Citation: TCN-2022-NCLAT-00106. The appeal was filed by Bank of Maharashtra under Section 61 of the Insolvency & Bankruptcy…

- **Court:** NCLAT
- **Order date:** 14 Nov 2022
- **Citation:** TCN-2022-NCLAT-00106
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/bank-of-maharashtra-vs-manjeet-cotton-pvt-ltd-anrcompany-appeal-ac48d8a1

## Summary

### Background

The appeal was filed by Bank of Maharashtra under Section 61 of the Insolvency & Bankruptcy Code, 2016, challenging an order dated 20.04.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench). The Corporate Insolvency Resolution Process (CIRP) was initiated based on an application under Section 7 of the IBC filed by Bank of Maharashtra, State Bank of India, and Vijaya Bank (now Bank of Baroda). A Resolution Plan for Fabtech Projects and Engineers Ltd. was submitted jointly by Manjeet Cotton Pvt. Ltd. and Parason Machinery (India) Pvt. Ltd., approved by the Committee of Creditors (CoC) with 85.18% voting share, and approved by the Adjudicating Authority on 16.11.2021.

## Facts

The Bank of Maharashtra, along with State Bank of India and Vijaya Bank, initiated Corporate Insolvency Resolution Process (CIRP) against Fabtech Projects and Engineers Ltd. A resolution plan was submitted by Manjeet Cotton Pvt. Ltd. and Parason Machinery (India) Pvt. Ltd. (Successful Resolution Applicants). The resolution plan was approved by the Committee of Creditors (CoC) with a voting share of 85.18% and subsequently by the Adjudicating Authority. The appellant, Bank of Maharashtra, invoked bank guarantees after the CoC approval but before the Adjudicating Authority's approval. The Successful Resolution Applicant (SRA) refused to pay the invoked amount, claiming the invocation occurred before the 'Transfer Date'. The Bank of Maharashtra filed an application

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## Issues and analysis

### Issue 1: Whether the Appellant and other member banks of consortium were entitled to payment towards live …

**Ratio:** The legal principle applied is that the terms of the approved Resolution Plan govern the

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**Reasoning:** The court reasoned that the Resolution Plan clearly stipulated that payments for invoked

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**Interpretation:** The interpretation of the Resolution Plan's clauses regarding the 'Transfer

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**Application:** In this specific case, the bank guarantees were invoked prior to the 'Transfer

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +1 more
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Fabtech Projects…; Manjeet Cotton…

## Timeline

- **2021-04-20 — Order by Adjudicating…**: Order passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench)…
- **2019-01-01 — CP No. (IB) 1222/(MB)…**: Corporate Insolvency…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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