# In the matter of Oriental Bank of Commerce & Ors. Vs. Moser Baer India Limited Through Devendra Singh (R.P.) CA(AT)(Insolvency) No. 239 & 240-2018

> NCLAT judgment dated 2019-05-31. Citation: TCN-2019-NCLAT-00517. The case involves two appeals (No. 239 and 240 of 2018) filed against an order dated April…

- **Court:** NCLAT
- **Order date:** 31 May 2019
- **Citation:** TCN-2019-NCLAT-00517
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/oriental-bank-of-commerce-ors-vs-moser-baer-india-limited-through-devendra-singh-a54470b5

## Summary

### Background

The case involves two appeals (No. 239 and 240 of 2018) filed against an order dated April 25, 2018, passed by the National Company Law Tribunal (NCLT), Principal Bench, New Delhi. The appeals relate to the 'Corporate Insolvency Resolution Process' against ‘Moser Baer India Limited' (Corporate Debtor). The Resolution Professional sought a direction to the Appellant, ‘Oriental Bank of Commerce', to prematurely cancel Fixed Deposit Receipts (FDRs) held in the name of the Corporate Debtor and transfer the proceeds to the Trust and Retention Account with the ‘Central Bank of India'. The Oriental Bank of Commerce also filed an application to be considered a ‘Financial Creditor' based on a guarantee given by the Corporate Debtor.

## Facts

Oriental Bank of Commerce (OBC) filed appeals against the NCLT's order regarding the 'Corporate Insolvency Resolution Process' of Moser Baer India Limited. The Resolution Professional sought cancellation of FDRs held by OBC in the name of Moser Baer and transfer of proceeds. OBC also claimed to be a ‘Financial Creditor' based on a guarantee. The NCLT rejected OBC's claim, leading to the appeals. Moser Baer had stood as a ‘corporate guarantor' for credit facilities to Helios Photo voltaic Limited, with an agreement executed on September 12, 2008. Moser Baer created five FDRs with OBC amounting to Rs. 2,45,45,832 during 2012-13. The principal borrower was declared an NPA on March 31, 2013, and demand notices were issued in July 2014 and December 2015. The amount was

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in allowing the Resolution Professional's prayer and …

**Ratio:** Section 14 of the Code imposes a moratorium, and Regulation 19 prohibits appropriation

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**Reasoning:** The Adjudicating Authority found that the Corporate Insolvency Resolution Process was

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**Interpretation:** Section 14 of the Code and Regulation 19 of the Insolvency and Bankruptcy Board

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**Application:** The appropriation of FDRs by OBC after the CIRP commencement date was deemed

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…
- **Appellants:** Oriental Bank of…
- **Respondents:** Moser Baer India…; Devendra…

## Timeline

- **2008-09-12 — Agreement of G…**: Agreement of Guarantee executed between Moser Baer India Limited and Oriental Bank of…
- **2012-01-01 — Creation of Fixed…**: Moser Baer India Limited created 5 Fixed Deposits with Oriental Bank of Commerce during…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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