NCLAT Upholds Order for Release of Bank Guarantee Funds to Liquidation Estate

Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: September 25, 2026

Case Overview

The appeal was filed by the Assistant Commissioner (EPM), Office of The Principal Commissioner of Customs (Import), ICD Tughlakabad, New Delhi against the order dated December 19, 2024 passed by the National Company Law Tribunal (NCLT), New Delhi Bench-III in IA No.1357/2024. The NCLT had directed the Appellant to return original bonds pertaining to Bank Guarantees and further directed Bank of Baroda to immediately remit the amount of FDRs (₹89,16,128) to the Liquidation Account of Corporate Debtor Metalite Eco Future Labs Private Limited.

The Corporate Debtor was incorporated on December 9, 2010 and involved in research and development in natural sciences, medical sciences, agriculture and engineering & technology. During 2014-2015, the Corporate Debtor imported goods availing custom duty exemption under Government schemes and executed eight EPCG Bonds with the Appellant with export obligations. Corresponding Bank Guarantees were executed by Bank of Baroda in favor of the Appellant totaling ₹89,16,128.

| Bank Guarantee No. | Date | Amount (₹) | Expiry Date |

| 6017IBGIS140064 | 01.07.2014 | 15,03,000 | 01.07.2022 |

| 6017IBGIS140065 | 01.07.2014 | 10,46,000 | 30.06.2016 |

| 6017IBGIS140086 | 22.08.2014 | 3,52,000 | 22.08.2016 |

| 6017IBGIS140087 | 22.08.2014 | 16,50,000 | 21.08.2024 |

| 6017IBGIS140064 | 03.09.2014 | 13,03,128 | 03.09.2016 |

| 6017IBGIS140064 | 02.06.2015 | 8,70,000 | 01.06.2021 |

| 6017IBGIS140064 | 08.06.2015 | 3,80,000 | 07.06.2023 |

| 6017IBGIS140064 | 31.07.2015 | 18,12,000 | 30.07.2017 |

The Corporate Debtor was admitted into insolvency on March 14, 2023 under Section 10 of IBC and subsequently ordered into liquidation on November 21, 2023 with Ms. Shruti Gupta appointed as Liquidator. The Appellant filed its claim of ₹1,81,27,632 on February 1, 2024 for non-fulfillment of export obligations, which was admitted in full by the Liquidator.

The principal dispute centered on whether the Bank Guarantees and underlying FDRs formed part of the liquidation estate. The Appellant argued that these were performance bank guarantees with auto-renewal clauses (5 guarantees) and auto-pay clauses (3 guarantees), and thus constituted independent contracts that should not be included in the liquidation estate under Sections 14, 18 and 36(4) of IBC.

The Tribunal analyzed Regulation 21A of IBBI (Liquidation Process) Regulations, 2016, which mandates that secured creditors must intimate their decision to relinquish or not relinquish security interest within 30 days of liquidation commencement date. The Appellant filed its claim in Form 'B' on December 15, 2023 but failed to intimate non-relinquishment within the 30-day period ending December 20, 2023. The subsequent filing in Form 'C' on January 30, 2024 was beyond the statutory timeline.

The Tribunal also examined the terms of the EPCG Bonds and Bank Guarantees, noting that the export obligation periods ended in 2020-2021 and the Bonds were valid for six years from execution as per Customs Notifications No. 102/2009-CUSTOM, 96/2009-CUSTOMS (both dated September 11, 2009) and 22/2013-CUSTOMS (dated April 18, 2013). The Appellant had not taken action to renew or encash the Bank Guarantees despite the expiry of obligation periods.

Final Outcome

The NCLAT dismissed the appeal, upholding the NCLT order. The Tribunal held that by operation of Regulation 21A, the Appellant was deemed to have relinquished its security interest due to failure to intimate non-relinquishment within 30 days. The Bank Guarantees had not been renewed or invoked, and the underlying FDRs therefore formed part of the liquidation estate. Bank of Baroda was directed to remit the amount of ₹89,16,128 to the Liquidation Account of the Corporate Debtor.

Topics: Insolvency Proceedings, Bank Guarantees, Customs Bonds