# In the matter of Lanco Amarkantak Power Limited

> NCLT judgment dated 2023-12-12. Citation: TCN-2023-NCLT-00301. The case involves an application filed by the Resolution Professional (RP) of Lanco Amarkantak…

- **Court:** NCLT
- **Order date:** 12 Dec 2023
- **Citation:** TCN-2023-NCLT-00301
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-amarkantak-power-limited-d03780b9

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Lanco Amarkantak Power Limited, seeking to quash letters invoking bank guarantees issued on behalf of the Corporate Debtor (CD) and to direct the extension of benefits under an Office Memorandum related to achieving 'Final Mega Power' status. The CD was undergoing Corporate Insolvency Resolution Process (CIRP) after being admitted by the Adjudicating Authority. Prior to CIRP, the CD was constructing a power plant and was granted 'Provisional Mega Power' status, entitling it to certain fiscal benefits, including exemptions from customs duty, against which bank guarantees were furnished. The project stalled due to the EPC contractor also being admitted into CIRP, and the CD could not achieve

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## Facts

Lanco Amarkantak Power Limited (Corporate Debtor) was constructing a 660 MW power plant and was granted 'Provisional Mega Power' status, entitling it to fiscal benefits, including customs duty exemptions. The Corporate Debtor furnished bank guarantees aggregating to approximately INR 412.97 Crores to Respondent No.1 (Customs Department) to avail of these exemptions. The engineering, procurement, and construction (EPC) contractor was admitted into CIRP on August 7, 2017, which stalled the project. Subsequently, the Corporate Debtor was also admitted into CIRP on September 5, 2019. The Corporate Debtor failed to achieve 'Final Mega Power' status by October 2021, the deadline for achieving this status. The Resolution Professional (RP) requested an extension of the

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## Issues and analysis

### Issue 1: Whether the invocation of bank guarantees during the Corporate Insolvency Resolution Process (CIRP) …

**Ratio:** Bank Guarantees are excluded from the moratorium under Section 14(3)(b) of the IBC, which

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**Reasoning:** The court reasoned that the bank guarantees, although issued on behalf of the Corporate

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**Interpretation:** Section 14 of the IBC imposes a moratorium on the initiation or continuation of

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**Application:** In this case, the bank guarantees were provided by the Banks to the Customs

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Saurabh Kumar…
- **Respondents:** Lanco Amarkantak…; The Principal…

## Timeline

- **2009-08-27 — Contract Ag…**: A Contract Agreement (CIF Contract) dated 27.08.2009 was executed for supply of equipment…
- **2010-08-18 — PIR 86 Regis…**: The CIF contract was registered under Project Imports Regulation, 1986 (PIR 86) vide…

## 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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