# In the matter of Lanco Vidarbha Thermal Power Limited IA No. 212 & 528-2020 in CP (IB) No. 529-7-HDB-2018

> NCLT judgment dated 2020-09-02. Citation: TCN-2020-NCLT-00738. The case involves an application filed by the Resolution Professional (RP) of Lanco Vidarbha…

- **Court:** NCLT
- **Order date:** 2 Sept 2020
- **Citation:** TCN-2020-NCLT-00738
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-vidarbha-thermal-power-limited-ia-no-212-528-2020-in-cp-ib-no-529-7-hdb-20-0c922124

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Lanco Vidarbha Thermal Power Limited, a Corporate Debtor undergoing Corporate Insolvency Resolution Process (CIRP). The RP sought to quash letters issued by Customs Department (respondent no.1) invoking bank guarantees furnished by the Corporate Debtor. These bank guarantees were provided to avail exemption from customs duty under the Mega Power Project policy. The RP argued that invoking the bank guarantees during the moratorium period under CIRP is illegal and detrimental to the resolution process. The Customs Department contended that the bank guarantees are unconditional and can be invoked regardless of the moratorium.

## Facts

Lanco Vidarbha Thermal Power Limited, a Corporate Debtor, is undergoing CIRP. Punjab National Bank filed a petition under Section 7 of the I&B Code against the Corporate Debtor, which was admitted on 03.10.2019. Vijay Kumar Garg was appointed as the Interim Resolution Professional (IRP) and later confirmed as the Resolution Professional (RP). The Corporate Debtor is a Special Purpose Vehicle (SPV) of Lanco Group, setting up a domestic coal-based supercritical Thermal Power Plant. To avail exemption from customs duty under the Mega Power Project policy, the Corporate Debtor furnished bank guarantees to the Customs Department. The Customs Department issued notifications granting exemption from customs duty to specified goods when imported to India, subject to certain

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## Issues and analysis

### Issue 1: Whether respondent no.1 is in order in invoking Bank Guarantees when O.M. dated 12.04.2017 (EXHIBIT …

**Ratio:** The Corporate Debtor was given time to submit Final Mega Power Project Certificate within

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**Reasoning:** The court agreed with the applicant's contention that the Corporate Debtor was granted an

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**Interpretation:** The O.M. dated 12.04.2017 extended the time period for furnishing Final Mega

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**Application:** Since the Corporate Debtor imported machinery in 2011 and was granted the

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## Parties

- **Judges:** Ratakonda…; Veera Brahma Rao…
- **Appellants:** Vijay Kuma…
- **Respondents:** Lanco Vidarbha…; Punjab National…

## Timeline

- **2019-10-03 — CIRP Init…**: Punjab National Bank's petition under Section 7 of the I&B Code against the Corporate…
- **2019-10-03 — Moratorium D…**: Moratorium was declared…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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