Monitoring Agency Of Ayush Finelease ... vs State Bank Of India Erstwhile State Bank ...

[Arising out of order dated 04.08.2020 in IA-2057(PB)/2020 in (IB)-1705 (PB)/2018 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench]

IN THE MATTER OF: Monitoring Agency of Anush Finlease & Construction Private Limited Through its Chairman .... Appellant.

Versus

1. State Bank of India Erstwhile State Bank of Mysore 3, 4 and 5, DDA Building, Nehru Place, New Delhi - 110019 Mail ID: nehruplace1077@sbi.co.in .....Respondent No. 1

2. State Bank of India A-5, Ring Road, South Extension, Part 1, New Delhi - 110049 Mail ID: sbi.13913@sbi.co.in ....Respondent No. 2 3. Deputy Commissioner Office of Customs ICD TKD, New Delhi - 110020 Mail ID(S): Icdtkd-exp-custdel@gov.in Commrtkdexp-cusdel@nic.in ....Respondent No. 3 2

4. Director General of Foreign Trade Udyog Bhawan, H-Wing, Gate No. 2, Maulana Azad Road New Delhi:- 110011 Email:- dgft@nic.in ....Respondent No. 4

Present:

For Appellant: Mr. Ashish Verma and Mr. Iswar Mohapatra, Advocates. For Respondents: Mr. Apoorv Sarvaria, Advocate for R-1 & R-2. Mr. RP Vats, Advocate for R-4.

JUDGMENT

(4th October, 2021)

Justice Anant Bijay Singh;

This Appeal has been preferred by the Appellant aggrieved and

dissatisfied by the order dated 04.08.2020 passed by the Adjudicating

Authority (National Company Law Tribunal), New Delhi, Principal Bench in

IA-2057(PB)/2020 in (IB)-1705 (PB)/2018 whereby and where under the I.A.

No. 2057(PB)/2020 filed by one Mr. Aashish Gupta, Chairman of the

Monitoring Committee (formed pursuant to approval of Resolution Plan)

seeking directions against State Bank of India (Respondent No. 2 herein) and

Director General of Foreign Trade (Respondent No. 4 herein) for release of

Fixed Deposits Receipts of Anush Finlease and Construction Pvt. Ltd.

(Corporate Debtor) wherein the Ld. Adjudicating Authority passed the

following order:

Company Appeal (AT) (Insolvency) No. 902 of 2020 3

" 39. For this reason alone, it has been said in Section

30(2)(e) that, the Resolution Plan shall not contravene any of

the provisions of the laws for time being in force, the same is

again reiterated in Section 238 of the Code saying that this

Code will have overriding effect over other laws which are

inconsistent with the provisions of this Code.

Harmonisation of statutes is the hall mark of justice, not

invalidating the rights conferred under one enactment by

another enactment save and except to the extent mentioned.

40. Since it has been mentioned that Security Interst shall

not include the Performance Guarantee, the incidental

actions to the performance guarantee cannot be called as

falling within the ambit of the Code. On the day the Bank is

discharged, the applicant can get back this money from the

Bank.

41. Accordingly, this application is hereby dismissed as

misconceived."

2. The facts giving rise to the instant Appeal is as under:

i) That the Corporate Insolvency Resolution Process (for short CIRP)

Application filed by the Financial Creditor / petitioner i.e. Phoenix ARC Private

Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for

short IBC) read with Rule 4 sub rule (1) of Insolvency and Bankruptcy Code

(Application to Adjudicating Authority) Rules, 2016, was admitted by the Ld.

Adjudicating Authority (National Company Law Tribunal), Principal Bench,

Company Appeal (AT) (Insolvency) No. 902 of 2020 4

New Delhi vide order dated 30.05.2019, whereby Mr. Aashish Gupta (IBBI

Registration No.-IBBI/IPA-001/IP-P00687/2017-18/11164) was appointed

to act as Interim Resolution Professional (for short IRP).

ii) Further case is that in terms of the order dated 30.05.2019 a public

announcement was published by the IRP with respect to the initiation of

Corporate Insolvency Resolution Process against the Corporate Debtor, which

was published on 04.06.2019 in the two leading Newspapers, i.e. Financial

Express (NCR English Edition) & Jansatta (NCR Hindi Edition), whereby IRP

invited claims as per Section 15 of the IBC read with Regulation 6 of CIRP.

The said public announcement was also posted on the website of Insolvency

& Bankruptcy Board of India.

iii) That pursuant to the publication inviting claims, it is incumbent upon

the creditors to file their claims with the IRP. But no claim was filed by the

Respondent (s) before the IRP.

iv) Further case is that pursuant to the publication of Form G, EOI was

received from several prospective resolution applicants and final list of

Prospective Resolution Applicants was issued by the Resolution Professional

on 05.01.2020.

v) Further case is that after several discussions and modifications, the

resolution plan dated 14.03.2020 of Kendriya Bhandar (Central Government

Employees Consumer Cooperative Society Ltd. under the aegis of Government

of India, Ministry of Personnel, P.G. & Pensions) (hereinafter 'Resolution Plan')

Company Appeal (AT) (Insolvency) No. 902 of 2020 5

was approved by the Committee of Creditors by 77.54% voting shares on

20.03.2020 (Annexure A-3 at page 102 to 172 of the Appeal Paper Book).

vi) Further case is that the Resolution Professional had preferred an

application under Section 30(6) read with Section 31 of the IBC for approval

of the Resolution Plan. The Ld. Adjudicating Authority was pleased to allow

the said application and the Resolution Plan stood approved vide order dated

01.04.2020 (Annexure A-4 at page 173 to 174 of the Appel Paper Book).

vii) Further case is that 'Anush Finlease & Construction Private Limited'

(for short AFCPL) somewhere in the year 2012/13 prior to the insolvency

resolution, in furtherance of its business operations had obtained

authorisation for 40 export promotion capital goods (hereinafter 'EPCG

Authorisation') from Additional Directorate General of Foreign Trade (CLA),

New Delhi (hereinafter 'DGFT') for Duty Saved amount of INR

3,63,75,515.74/- against an Export Obligation of INR 29,80,86,017.92/- and

USD 55,93,452.05 for import of capital goods.

viii) That as against the authorisations and licenses, 'Anush Finlease &

Construction Private Limited' was maintaining certain Fixed Deposit Receipts

(hereinafter 'FDR') with the Respondents Nos. 1 and 2. The details of the same

are as under:

FDRs with Erstwhile State Bank of Mysore 3,4 and 5, DDA Building, Nehru

Place, New Delhi

FDR No. 1. 64175959969

FDRs with State Bank of India A-5, Ring Road, South Extension, Part 1,

New Delhi.

Company Appeal (AT) (Insolvency) No. 902 of 2020 6

Company Appeal (AT) (Insolvency) No. 902 of 2020 7

Company Appeal (AT) (Insolvency) No. 902 of 2020 8

ix) Further case is that vide later dated 07.04.2020 (Annexure A-8 at page

197 to 199 of the Appeal Paper Book), State Bank of India was requested to

release the said FDR amounts into the controlled account of 'Anush Finlease

& Construction Private Limited'. However, State Bank of India has failed to

comply with the same.

x) Further case is that the representatives of the Monitoring Agency have

on several occasions, telephonically contacted the concerned persons from

State Bank of India requesting them to release the aforesaid FDR amounts.

Company Appeal (AT) (Insolvency) No. 902 of 2020 9

However, on account of the failure of the State Bank of India to comply with

the same, the Appellant was sent legal notice on 15.04.2020 (Annexure A-9

at page 200 to 207 of the Appeal Paper Book).

xi) Being aggrieved, the Appellant filed IA-2057(PB)/2020 before the Ld.

Adjudicating Authority and the Ld. Adjudicating Authority has dismissed the

same on 04.08.2020. Hence this Appeal.

Submissions on behalf of the Appellant

3. The Learned Counsel for the Appellant during the course of argument

and his memo of Appeal as also Written Submissions submitted that M/s

Kendriya Bhandar (a member of the Appellant) filed a resolution plan after

approval of the resolution plan of the Corporate Debtor was appointed as

Chairman of the monitoring agency of Anush Finlease and Construction

(Appellant herein) and further I.A. No. 2057 of 2020 filed before the Ld.

Adjudicating Authority seeking release of certain Fixed Deposits (FDRs).

4. It is further submitted that these FDRs were created by the former

management of the Corporate Debtor and prior to the initiation of Corporate

Insolvency Resolution Process were used as margin money. One of the FDRs

was held with Respondent No. 1 and twenty-four FDRs were held with

Respondent No. 2.

5. It is further submitted that against the FDRs being margin money, the

Respondent No. 1 and the Respondent No. 2 issued certain Bank Guarantees

in favour of the Respondent No. 3. The cumulative value of these guarantees

Company Appeal (AT) (Insolvency) No. 902 of 2020 10

issued by the Respondent Nos. 1 and 2 aggregates to approximately INR 1.60

Cr.

6. It is further submitted that the approved resolution plan stipulated that

all liabilities apart from those dealt with by the Resolution Plan were

extinguished. Therefore, as per the resolution plan the FDRs being the

property of the Corporate Debtor were as per the terms of the plan to be

released to the custody of the Appellant.

7. It is further submitted that Ld. Adjudicating Authority has failed to

consider is that the liability which the Bank Guarantees in question aim to

cover has been extinguished by virtue of law. The Bank Guarantees seek to

secure a liability incurred by the ex-management of the Corporate Debtor

against the Respondent No. 3 - Customs Department.

8. I tis further submitted that admittedly the Respondent No. 3 has not

filed a claim. It is further an established fact that the claim of the Customs

Department if any, is not dealt with under the resolution plan. The Ld.

Adjudicating Authority has failed to consider that the Respondent No. 3 -

Customs Department failed to file a claim before the Resolution Professional,

the liability of the Corporate Debtor to the Customs Department has been

extinguished. The said extinguishment is provided for in the resolution plan

(at page 136, Clause 3.8.2 of the Appeal Paper Book).

9. Learned Counsel for the Appellant further referred on a judgment of the

Hon'ble Supreme Court passed in Committee of Creditors of Essar Steel

India Limited V/s Satish Kumar Gupta and Others (2019 SCC OnLine SC

Company Appeal (AT) (Insolvency) No. 902 of 2020 11

1478), where the Hon'ble Supreme Court has held that no claims apart from

those decided on merits by the RP can survive after plan approval. It is further

submitted that the liability, if any, of the Corporate Debtor towards the

Respondent No. 3 has been extinguished. Consequently, the Bank

Guarantees have no reason to say alive and therefore, the margin money

ought to be returned to the Appellant.

10. It is further submitted that the Ld. Adjudicating Authority has failed to

notice that the resolution plan (at page 159, Clause 23 of the Appeal Paper

Book) specifically provides for the release of the bank guarantees to the

Appellant. The said Clause 23 is reads as hereunder:

" An order approving the Resolution Plan shall be considered

a deemed order upon any authority and/or any entity to

cancel all pledge/lien/other encumbrances upon the fixed

deposits of the Corporate Debtor and a further direction to

any bank(s) holding such fixed deposits to immediately

release in the controlled account. The details of the fixed

deposits are detailed in Annexure3, however this may not be

an exhaustive list and there may be other fixed deposits."

11. Learned Counsel for the Appellant further submitted that by failing to

grant the relief as prayed for, the Ld. Adjudicating Authority has in effect re-

written the resolution plan. So, based on these submissions the impugned

order is set aside and the Appeal be allowed.

Company Appeal (AT) (Insolvency) No. 902 of 2020 12

Submissions on behalf of the Respondent Nos. 1 and 2.

12. The Learned Counsel for the Respondent No. 1 - State Bank of India,

Erstwhile State Bank of Mysore and Respondent No. 2 - State Bank of India

during the course of argument and his Reply Affidavit as also Written

Submissions submitted that the Respondent No. 1 - State Bank of India

issued 23 Bank Guarantees on 100% margin on behalf of M/s Anush Finlease

and Construction Pvt. Ltd. ("AFCPL" Corporate Debtor) involving a total

amount of Rs. 1,12,72,191.00 which are due to mature on different dates in

years 2021 and 2022.

13. It is further submitted that the aforesaid bank guarantees were issued

in favour of the Government Departments / Deputy Commissioner of Customs

and Director General of Foreign Trade, New Delhi ("the beneficiaries") i.e.

Respondent No. 3 and Respondent No. 4.

14. It is further submitted that there are three Bank Guarantees issued in

favour of the Customs Department two of which have expired on 15th February

2019 and one expired on 19th February 2019. However, the Department of

Customs has written to State Bank of India for revalidating the said Bank

Guarantees and the Customs Department is laying their claim on these Bank

Guarantees and is not accepting that these three Bank Guarantees have

expired and has also not discharged the Bank and returned the original Bank

Guarantees to the Bank.

15. It is further submitted that the Appellant herein filed an application

being I.A. No. 2057 of 2020 before the Ld. Adjudicating Authority seeking

directions against Respondent Nos. 1 to 3 for release of fixed deposits receipts

Company Appeal (AT) (Insolvency) No. 902 of 2020 13

of AFCPL. The said application was erroneously based on the resolution plan

approved in the CIRP of AFCPL vide order dated 01.04.2020 passed by Ld.

Adjudicating Authority.

16. It is further submitted that the Appellant has in fact vide its aforesaid

application sought for extinguishment of the guarantees between the bank

and the beneficiaries (to which it is not even a party) and release of margin

money deposited with the Bank without the Bank Guarantees having been

discharged.

17. It is further submitted that the Ld. Adjudicating Authority passed a well-

reasoned order dated 04.08.2020 and rightfully dismissed the IA No. 2057 of

2020 which is challenged in the instant Appeal filed by the Appellant, the same

being unsustainable in law. The appellant challenging the order passed by the

Ld. Adjudicating Authority on baseless and frivolous grounds, therefore, it is

liable to be dismissed.

18. It is further submitted that because it is erroneous to treat the FDRs in

the present case as mere fixed deposits as understood in banking parlance.

These actually comprise of the margin money towards the bank guarantees

issued by the Respondent Bank in favour of the beneficiaries named therein.

These are not FDRs which can be realized by the Corporate Debtor as and

when it wishes.

19. It is further submitted that a bank guarantee is an independent and

distinct contract between the bank and the beneficiary and is not affected or

dependent upon the contract between the person at whose instance the bank

guarantee was given and the beneficiary. As such the contract between the

Company Appeal (AT) (Insolvency) No. 902 of 2020 14

bank and the beneficiaries is independent of the contract between AFCPL and

the concerned Government Department.

20. It is further submitted that the Ld. Adjudicating Authority has rightly

observed that as per RBI Guidelines and various judgments in this regard,

margin money is construed as substratum of a trust created to pay to the

beneficiary to whom the bank guarantee is given and cannot be treated as an

asset of the Corporate Debtor.

21. It is further submitted that even in terms of Section 36(4) of the Code,

assets owned by a third party which are in possession of the Corporate Debtor

including the assets held in trust for any third party do not fall within the

ambit of liquidation estate, clearly indicating that assets held in trust are not

assets of the Corporate Debtor.

22. It is further submitted that explanation to Section 18 provides in explicit

terms that the term "assets" shall not inter alia include assets owned by a

third party in possession of the Corporate Debtor held under trust or under

contractual arrangements including bailment. So, based on these

submissions, it is submitted that the FDRs in question are not assets of the

Corporate Debtor and the same cannot be claimed as a matter of right under

the guise of the demonstrating the same as mere "Fixed Deposits".

23. It is further submitted that the Insolvency and Bankruptcy Code

categorically provides that a resolution plan must not contravene any of the

provisions of the law for the time being in force Section 30(2)(e). Any resolution

plan which is in contravention of the provisions of law is unsustainable in law.

24. It is further submitted that reliance placed on the approved resolution

plan in the CIRP of AFCPL is completely misplaced and untenable in law.

Company Appeal (AT) (Insolvency) No. 902 of 2020 15

Resolution Plan cannot provide for extinguishment or cancellation of a

contract of bank guarantee between third parties i.e. the Bank and the

beneficiaries. The contract between the Bank the Beneficiaries is independent

of the contract between AFCPL and the concerned Government Department.

Therefore, the contention that the bank guarantee stands extinguished by the

resolution plan is highly misplaced as the contract between the bank and the

beneficiary is subsisting, valid and in force and the same could not be

extinguished or cancelled, except in accordance with law.

25. It is further submitted that while obtaining the approval of resolution

plan from the Ld. Adjudicating Authority, it was demonstrated as if the FDRs

are mere fixed deposits as understood in banking parlance. Whereas, these

actually comprise of the margin money towards the bank guarantees issued

by the Respondent Bank in favour of the beneficiaries named therein. There

is no mention or description of the same in the Resolution Plan.

26. It is further submitted that the purported extinguishment of bank

guarantee by way of the resolution plan, is in contravention of Section 30(2)(e)

and the provisions of the Indian Contract Act, 1872 with regard to bank

guarantees.

27. It is further submitted that the beneficiaries of the said bank guarantees

against which the FDR accounts were opened had not filed any claim with the

Resolution Professional and as such as per Clause 7.8 of the Resolution Plan,

any claims that were not received by the Resolution Professional are deemed

to be extinguished and settled against NIL payment made to them.

28. It is further submitted that reliance placed on the decision of the Hon'ble

Supreme Court in Committee of Creditors of Essar Steel India Limited V/s

Company Appeal (AT) (Insolvency) No. 902 of 2020 16

Satish Kumar Gupta and Others (2019 SCC OnLine SC 1478), is highly

misplaced and the Ld. Adjudicating Authority has rightly observed that

decision of Essar (Supra) is about a claim, that claim is also an undecided

claim and in this case, co claim has been made against the Resolution

Applicant / Corporate Debtor.

29. It is further submitted that the Ld. Adjudicating Authority with regard

to the concept of clean slate that if anybody makes any claim against the

Resolution Applicant / Corporate Debtor after the approval of the resolution

plan, the Applicant can make use of character of the asset of the Corporate

Debtor. So, based on these submissions the Ld. Adjudicating Authority has

rightly passed the impugned order. There is no merit in the instant Appeal,

the Appeal is fit to be dismissed.

30. From the perusal of the order dated 16.07.2021 it appears that despite

valid service of notice the Respondent No. 3 failed to appear and the matter is

proceeded ex-parte against Respondent No. 3.

Submissions on behalf of the Respondent No. 4.

31. The Learned Counsel for the Respondent No. 4 - Director General of

Foreign Trade during the course of argument and his Reply Affidavit as also

Written Submissions submitted that the Bank Guarantee No.

0505112BG1000305 was issued by the Respondent No. 1 (State Bank of India)

in favour of the Director General of Foreign Trade, New Delhi, i.e. the

Respondent No. 4 on behalf of M/s Anush Finlease and Construction Pvt. Ltd.

(AFCPL / Corporate Debtor). The said bank guarantee is admittedly valid till

Company Appeal (AT) (Insolvency) No. 902 of 2020 17

25.10.2022 and the liability of the Bank still remains towards the answering

Respondent under the said guarantee.

32. It is further submitted that the Ld. Adjudicating Authority passed a well-

reasoned order dated 04.08.2020 rightfully dismissed the I.A. No. 2057 of

2020 filed by the Appellant herein, the same being unsustainable in law. The

appellant challenging the order passed by the Ld. Adjudicating Authority on

baseless and frivolous grounds, therefore, it is liable to be dismissed.

33. It is further submitted that the moratorium as envisaged under Section

14 of the Insolvency and Bankruptcy Code would not be applicable to the bank

guarantee as firstly the same is not covered under the moratorium and also

because the moratorium period subsists only till the approval of the resolution

plan and not indefinitely. So, based on these submissions the Ld. Adjudicating

Authority has rightly passed the impugned order. There is no merit in the

instant Appeal, the Appeal is fit to be dismissed.

FINDINGS

34. After hearing the parties and gone through the records of the case as

also Written Submissions, we are of the considered view that the following

facts are admitted in the instant Appeal.

 The Respondent No. 1 - State Bank of India issued 23 Bank Guarantees

on 100% margin on behalf of M/s Anush Finlease and Construction Pvt.

Ltd. ("AFCPL" Corporate Debtor) involving a total amount of Rs.

1,12,72,191.00 which are due to mature on different dates in years

2021 and 2022.

Company Appeal (AT) (Insolvency) No. 902 of 2020 18

 The aforesaid bank guarantees were issued in favour of the Government

Departments / Deputy Commissioner of Customs and Director General

of Foreign Trade, New Delhi ("the beneficiaries") i.e. Respondent No. 3

and Respondent No. 4.

 It is also admitted fact that the Appellant filed an application being I.A.

No. 2057 of 2020 before the Ld. Adjudicating Authority seeking

directions against Respondent Nos. 1 to 3 for release of Fixed Deposits

Receipts of AFCPL.

 It is also admitted fact that the said application was erroneously based

on the resolution plan approved in the CIRP of AFCPL vide order dated

01.04.2020 passed by Ld. Adjudicating Authority.

 It is also admitted fact that the State Bank of India and Director General

of Foreign Trade submitted before the Ld. Adjudicating Authority that

this is not simple fixed deposit rather it is bank guarantee along with

margin money is an independent contract between the beneficiary and

the Bank, though these are shown as FDRs, issued by SBI in favour of

the beneficiary, it is not refundable to the Corporate Debtor unless the

Bank is discharged.

 It is also admitted fact that the Ld. Adjudicating Authority has rightly

observed that as per RBI Guidelines and various judgments in this

regard, margin money is construed as substratum of a trust created to

pay to the beneficiary to whom the bank guarantee is given and cannot

be treated as an asset of the Corporate Debtor.

 The State Bank of India has relied upon Hon'ble Supreme Court

judgment in Ansal Engineering Projects Ltd. Vs. Tehri Hydro

Company Appeal (AT) (Insolvency) No. 902 of 2020 19

Development Corpn. Ltd. [1996 (5) SCC 450] wherein the Hon'ble

Supreme Court observed as follows:

" It is settled law that bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given and the beneficiary...."

"5. It is equally settled law that in terms of the bank guarantee the beneficiary is entitled to invoke the bank guarantee and seek encashment of the amount specified in the bank guarantee. It does not depend upon the result of the decision in the dispute between the parties, in case of the breach. The underlying object is that an irrevocable commitment either in the form of bank guarantee or letters of credit solemnly given by the bank must be honoured. The court exercising its power cannot interfere with enforcement of bank guarantee/letters of credit except only in cases where fraud or special equity prima facie made out in the case as triable issued by strong evidence so as to prevent irretrievable injustice to the parties..."."

 It is also admitted fact that the assets of the Corporate Debtor are

envisaged in Section 36 of the Code which is read as hereunder:

" 36. Liquidation Estate.- (1) For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in sub-section (3), which will be called the liquidation estate in relation to the corporate debtor.

(2) The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors.

(3) Subject to sub-section (4), the liquidation estate shall comprise all liquidation estate assets which shall include the following:--

Company Appeal (AT) (Insolvency) No. 902 of 2020 20

(a) any assets over which the corporate debtor has ownership rights, including all rights and interests therein as evidenced in the balance sheet of the corporate debtor or an information utility or records in the registry or any depository recording securities of the corporate debtor or by any other means as may be specified by the Board, including shares held in any subsidiary of the corporate debtor;

(b) assets that may or may not be in possession of the corporate debtor including but not limited to encumbered assets;

(c) tangible assets, whether movable or immovable;

(d) intangible assets including but not limited to intellectual property, securities (including shares held in a subsidiary of the corporate debtor) and financial instruments, insurance policies, contractual rights;

(e) assets subject to the determination of ownership by the court or authority;

(f) any assets or their value recovered through proceedings for avoidance of transactions in accordance with this Chapter;

(g) any asset of the corporate debtor in respect of which a secured creditor has relinquished security interest;

(h) any other property belonging to or vested in the corporate debtor at the insolvency commencement date; and

(i) all proceeds of liquidation as and when they are realised.

(4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation:--

(a) assets owned by a third party which are in possession of the corporate debtor, including--

(i) assets held in trust for any third party;

(ii) bailment contracts;

Company Appeal (AT) (Insolvency) No. 902 of 2020 21

(iii) all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund;

(iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and

(v) such other assets as may be notified by the Central Government in consultation with any financial sector regulator;

(b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral trading or clearing transactions;

(c) personal assets of any shareholder or partner of a corporate debtor as the case may be provided such assets are not held on account of avoidance transactions that may be avoided under this Chapter;

(d) assets of any Indian or foreign subsidiary of the corporate debtor; or

(e) any other assets as may be specified by the Board, including assets which could be subject to set-off on account of mutual dealings between the corporate debtor and any creditor."

And the duties of the IRP are mentioned in Section 18 of the

Insolvency and Bankruptcy Code, 2016.

 Admittedly, in terms of the Section 36(4) of the IBC, it is a clear

indication that assets held under Trust cannot be considered as the

asset of the Corporate Debtor. The Ld. Adjudicating Authority has

considered all these facts in correct prospective.

Company Appeal (AT) (Insolvency) No. 902 of 2020 22

ORDER

35. We are of the considered view that there is no illegality in the impugned

order and we hereby affirm the order dated 04.08.2020 passed by the Ld.

Adjudicating Authority (National Company Law Tribunal), New Delhi,

Principal Bench and Ld. Adjudicating Authority has rightly dismissed the IA-

2057(PB)/2020 in (IB)-1705 (PB)/2018. There is no merit in the instant

Appeal, the Appeal is hereby dismissed. No order as to costs.

36. Registry to upload the Judgment on the website of this Appellate

Tribunal and send the copy of this Judgment to the Ld. Adjudicating Authority

(National Company Law Tribunal), New Delhi, Principal Bench, forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 4th October, 2021 R. Nath.

Company Appeal (AT) (Insolvency) No. 902 of 2020