# In the matter of Tuticorin Coal Terminal Private Limited IA-148-2021 in CP (IB) No.4164-MB-IV-2019

> NCLT judgment dated 2023-06-06. Citation: TCN-2023-NCLT-03054. The case involves an application (IA-148/2021) filed by the Resolution Professional (RP),…

- **Court:** NCLT
- **Order date:** 6 Jun 2023
- **Citation:** TCN-2023-NCLT-03054
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tuticorin-coal-terminal-private-limited-ia-148-2021-in-cp-ib-no4164-mb-iv-2019-93ec4ec7

## Summary

### Background

The case involves an application (IA-148/2021) filed by the Resolution Professional (RP), Dhiren Shantilal Shah, of Tuticorin Coal Terminal Private Limited (Corporate Debtor) seeking the transfer of Rs. 60,00,000/- held as a Fixed Deposit with Indian Bank (Respondent). The RP argued that the Fixed Deposit was wrongly appropriated or marked lien towards a Bank Guarantee issued by the Respondent on behalf of the Corporate Debtor. The Corporate Insolvency Resolution Process (CIRP) commenced on 20.02.2020, following an application under Section 7 of the IBC, 2016, filed by Bank of India. The Respondent, a member of the CoC, had submitted a claim of Rs. 52,55,25,548.17 against the Corporate Debtor.

## Facts

1. The Resolution Professional (RP) of Tuticorin Coal Terminal Private Limited filed an application seeking the transfer of Rs. 60,00,000/- held as Fixed Deposit with Indian Bank.
2. The Corporate Insolvency Resolution Process (CIRP) commenced on 20.02.2020.
3. Indian Bank is a member of the Committee of Creditors (CoC) and had submitted a claim of Rs. 52,55,25,548.17.
4. The RP sent emails to the Respondent seeking the transfer of the monies.
5. The Respondent had issued 3 Bank Guarantees entailing total obligation of Rs. 11,19,50,000/- and held amounts in three fixed deposits (“FDRs”) totalling to a sum of Rs.1,11,95,000/-, being 10% margin money.
6. The Respondent granted a Term Loan Facility to Tuticorin Coal Terminal Private Limited.
7. The Respondent filed an affidavit

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## Issues and analysis

### Issue 1: Whether the Respondent (Indian Bank) wrongly appropriated the Fixed Deposit of Rs. 60,00,000/- …

**Ratio:** The legal principle is that margin money held against a bank guarantee is not an asset of

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**Reasoning:** The NCLT reasoned that the Respondent held the fixed deposits as margin money for bank

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**Interpretation:** The interpretation is that the bank guarantee is an independent contract

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**Application:** In this case, the bank guarantees were still alive, and the applicant had not

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Dhiren Shantilal…
- **Respondents:** Tuticorin Coal…; Indian…

## Timeline

- **2020-02-20 — Commencement…**: Corporate Insolvency…
- **2020-03-05 — Submission o…**: Indian Bank submitted its claim of Rs. 52,55,25,548.17 to the Interim Resolution…

## 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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