Once CIRP was initiated and Section 14 of IBC applied Fixed Deposit adjustment with demand loans by Bank cannot be maintained – UCO Bank Vs. Mr. G. Ramachandran RP of M/s. Sai Regency Power Corporation Pvt. Ltd – NCLAT New Delhi
November 7, 2020
The Learned Counsel for the Respondent refers to the Impugned Order where the Adjudicating Authority relied on Indian Overseas Bank Vs. Mr. Dinkar T. Venkatsubramaniam [2017] ibclaw.in 50 NCLAT and in which this Tribunal had made observations that once moratorium has been declared, it is not open to any person including the Financial Creditor and the Appellant Bank to recover any amount from the account of the Corporate Debtor, nor it can appropriate any amount towards its own dues. The Learned Counsel for Appellant has also submitted that she may be given further opportunity to file Rejoinder and Written Submission. We are however not ready to give further time for this. We have already heard the learned counsel for both sides.. The facts and developments are apparent from the above letter and considering the provisions of Section 14, we have no doubt that the impugned order as passed by the Adjudicating Authority is required to be maintained. Once CIRP was initiated and Section 14 of IBC applied such adjustment by Appellant cannot be maintained. Lack of knowledge of initiation of CIRP would not be relevant. When CIRP was initiated, the Appellant Bank could not have adjusted the amounts as has been done in this matter.