Whether Cheques dated prior to commencement of CIRP can be encashed during the Moratorium u/s 14 of IBC – Ms. Vaishali Patrikar, RP Vs. Darshan Developers and Others – NCLT Mumbai Bench
Hon’ble NCLT Mumbai Bench holds that Section 14 of the Code provides that the Adjudicating Authority shall by order declare moratorium for prohibiting, amongst others, transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein. Upon commencement of CIRP, the Bank Accounts of the Corporate Debtor are to be managed and operated by the appointed Insolvency Professional. Further, we find that if the argument of the Ld. Counsel for the Respondent that Section 14 of the Code does not apply to cheques dated prior to commencement of CIRP but intended to be cleared after funds are available therein, we feel that this will defeat the basic object of scheme of the Code which mandates resolution of claims of creditors out of assets of the Corporate Debtor available as on Insolvency Commencement date. Hence, we are of considered view that these cheques were encashed in violation of provisions of Section 14 of the Code.