NCLAT dismissed a liquidator’s plea to obtain a fresh fixed deposit receipt as collateral against a bank guarantee issued to Customs.
NCLAT Rejects Liquidator’s Plea for Fresh FDR Against Bank Guarantee
NCLAT dismissed an appeal by a liquidator seeking a direction to obtain a fresh ₹10 lakh fixed deposit receipt (FDR) as margin security against a bank guarantee issued to the Customs Department during liquidation proceedings. The tribunal upheld the NCLT’s refusal, noting that the request lacked statutory basis and financial prudence.
The liquidator argued that the FDR was necessary to safeguard estate assets, but the tribunal found no provision under the IBC or Companies Act permitting such a step. It emphasized that bank guarantees issued for statutory compliance cannot be substituted or collateralized unilaterally by the liquidator without creditor or tribunal approval.
“The liquidator cannot create new financial obligations or security mechanisms not contemplated under law.”
This ruling clarifies the scope of a liquidator’s powers under liquidation regimes. Practitioners should ensure that any financial instruments issued or sought during liquidation are strictly within statutory authority. The decision reinforces fiscal discipline and protects public authorities’ legitimate financial claims.
