JUDGMENT :

S.J. Mukhopadhaya, J.

1. In Corporate Insolvency Resolution Process against M/s Lanco Infratech Ltd. (Corporate Debtor), the applicant/appellant, M/s KSB Shanghai Pump Co. Ltd. filed application under Section 60(5) of Insolvency and Bankruptcy Code, 2016 (I&B Code in short) seeking directions to Liquidator to restrain from invoking or encashing the Bank Guarantee bearing No. GC-0608115000737 for US$ 510,000 dated 07th August, 2018 issued by Bank of China and for further direction to Bank of China not to pay any amount to the Corporate Debtor’s Bank.

2. Similar application was filed by the applicant/appellant, M/s TLT-Tourbo (Sichuan) Co. Ltd. under Section 60(5) of I&B Code with similar prayer to restrain from invoking and encashing the Contract Performance Bank Guarantee (PBG) No. LG61205B500032 dated 30th October, 2015 and not to pay any amount to the Corporate Debtor’s Bank.

3. The other applicant/appellant, M/s Beijing Power Equipment Group Co. Ltd. also moved an application under Section 60(5) of the I&B Code for seeking direction to Resolution Professional to restrain from invoking/encashing Performance Bank Guarantee (PBG) No. 11100020003190 dated 11th June, 2015 and to return to the applicant any amounts paid out upon encashment of the PBG.

4. The Adjudicating Authority by similar order all dated 5th March, 2019 taking into consideration the fact that the applicants/appellants have filed their respective claim before the Resolution Professional arising out of their respective contract and the Resolution Professional has not accepted their claim, held that the applicants/appellant cannot seek injunction against Corporate Debtor for refraining it from invoking the ‘Corporate Performance Bank Guarantee’s (CPBG) and made following observations:-

“14. The burden is on the applicant to establish fraud in invoking Bank Guarantee. Admittedly, Bank Guarantee is being invoked which is in terms of Bank Guarantee. It is not the case of Applicant that any fraud was played in obtaining Bank Guarantee. Similarly, there is also no material to come to a conclusion that any fraud was played on the Applicant in invoking the Bank Guarantee. It is also not the case of the Applicant that any fraud was involved in invoking Bank Guarantee. It is true any disputed question of fact cannot be decided in a summary way. It is the case of Applicant that it has not committed any breach of the performance of the obligations covered by the contract. However, Resolution Professional/Liquidator disputed the same. In other words that it is the case of Resolution Professional/Liquidator that Applicant committed breach of the terms of contract. So dispute of this nature cannot be decided in a summary fashion. Therefore, injunction cannot be granted in favour of the Applicant from invoking the Bank Guarantee by Corporate Debtor in the circumstances of the case.

15. Thus, it is clear, no material before the Adjudicating Authority that invocation of Bank Guarantee by Corporate Debtor in the present case is a fraudulent action and that Applicant will sustain irreparable injury. The only grievance of the Applicant that it has completed the contract work assigned to it. The question whether Applicant failed to perform its part of the contract or not, is a question to be determined by way of evidence. The said dispute cannot be resolved by summary procedure. If Bank Guarantee in terms of guarantee, then Corporate Debtor is entitled to invoke it. So injunction as prayed cannot be granted in respect of Bank Guarantee covered by this Application.

16. In the result, Application is dismissed. Interim order, if any stands vacated.”

M/s KSB Shanghai Pump Co Ltd.

5. The case of the applicant/appellant, M/s KSB Shanghai Pump Co Ltd. is that the Corporate Debtor entered into a contract with the appellant on 24th April, 2015 for design, engineering, manufacture, assembly etc for 1 x 660 MW Supercritical Ennore Thermal Power Station Expansion Project alongwith insurance, fo