2021 (6) TMI 736 - Tri - Insolvency and Bankruptcy

Deposit with HDFC Bank Account - HELD THAT - The Applicant-RP intimated the Respondents in all the three applications regarding the initiation of CIRP against the Corporate Debtor through emails. The Respondents advised not to allow any debit transaction in the account of the Corporate Debtor without prior authorisation of the RP. Permission to use the amount as available in the current account of the Corporate Debtor with HDFC Bank - seeking removal of lien on the said account for the purpose of allowing the Resolution Professional to use the said amount - HELD THAT - It is pertinent to observe here that on an earlier occasion, through an application bearing IA No. 1477/KB/2020 in the underlying company petition, the Applicant/RP had prayed for direction on ICICI Bank to release the attachment and defreeze account of the Corporate Debtor bearing No. 635405000368. This Adjudicating Authority had ordered the Respondent therein to defreeze the bank account in respect of which the prayer was made, i.e., 635405000368 along with another account bearing 635405000356 with the same bank - we direct the release or removal of lien or attachment, as the case may be, of all the bank accounts of the Corporate Debtor mentioned supra by all the banks including the Respondents in IA No. 1475/KB/2020 and IA No. 158/KB/2021. The applicability of the directions contained in this order are extended to all the accounts that may be discovered by the RP in future, in the present company petition, that might have been attached or on which lien might have been created by any of the authorities, to avoid the multiplicity of proceedings. The properties of the corporate debtor, which include the accounts lying at credit in the bank accounts of the corporate debtor, should be available to the resolution professional to keep it as a going concern. Application disposed off.

Summary

Issues:
1. Release of lien/attachment on bank accounts of Corporate Debtor
2. Unclaimed deposits and payment to employees
3. Cooperation from banks and authorities
4. Utilization of funds for Corporate Insolvency Resolution Process (CIRP)

Issue 1: Release of lien/attachment on bank accounts of Corporate Debtor

In the case before the National Company Law Tribunal, Kolkata Bench, multiple applications were filed by the Resolution Professional against various banks regarding the release of lien/attachment on the bank accounts of the Corporate Debtor. The Tribunal noted that the Corporate Debtor had several accounts with the Respondents, and the imposition of lien or attachment on these accounts was due to notices received from statutory authorities. The Tribunal observed that freezing the bank accounts of the Corporate Debtor could worsen the situation, especially concerning the payment of workers and employees. Referring to a previous decision, the Tribunal directed the release or removal of lien or attachment on all bank accounts of the Corporate Debtor by the banks, and restrained authorities from issuing further attachments during the Corporate Insolvency Resolution Process (CIRP). The Tribunal emphasized that the Resolution Professional should have access to the funds to carry out the duties during the CIRP.

Issue 2: Unclaimed deposits and payment to employees

Another aspect of the case involved unclaimed deposits held by the Corporate Debtor and the unpaid salaries of seventeen employees. The Resolution Professional sought directions to utilize the unclaimed amount for the benefit of creditors and the smooth functioning of the CIRP. The Tribunal acknowledged the unsecured debts and the need to consider any claims against the unclaimed amount. It directed the Resolution Professional to use the funds available in the Corporate Debtor's current account for the benefit of creditors and the CIRP. Additionally, the Tribunal instructed the Resolution Professional to make payments to the employees in line with government directives on wages during lockdown periods.

Issue 3: Cooperation from banks and authorities

The Tribunal highlighted the lack of cooperation from banks and authorities in providing necessary information and removing lien/attachment on accounts. It noted that despite repeated requests from the Resolution Professional, the banks and other entities failed to provide essential details regarding account holders and orders of lien/attachment. The Tribunal directed all bankers of the Corporate Debtor to refrain from giving effect to any lien or attachment orders without the leave of the Adjudicating Authority during the CIRP. It extended these directions to any accounts discovered in the future to avoid multiple proceedings and ensure the Corporate Debtor's assets remain available for the Resolution Professional.

Issue 4: Utilization of funds for Corporate Insolvency Resolution Process (CIRP)

Lastly, the Tribunal emphasized the importance of utilizing the funds in the bank accounts of the Corporate Debtor for the CIRP. It directed the Resolution Professional to prioritize the payment of outstanding dues to workers and employees, ensuring compliance with government wage directives. The Tribunal underscored the need to maintain the Corporate Debtor as a going concern and instructed the Resolution Professional to manage the funds efficiently for the benefit of creditors and the CIRP. The case was disposed of with directions to all parties and counsel, emphasizing compliance with the orders issued.

This detailed analysis of the judgment from the National Company Law Tribunal, Kolkata Bench, highlights the key issues addressed, the Tribunal's directives, and the implications for the Corporate Debtor, Resolution Professional, banks, and other stakeholders involved in the insolvency resolution process.