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TMI Blog2024 (11) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... led against the same order of the Adjudicating Authority (National Company Law Tribunal) Mumbai Bench, Court III dated 01.10.2024 in IA No.4844 of 2023, IA No.126 of 2024 and IA No.57 of 2023. All the above Appeals have been filed by the Financial Creditors of the Corporate Debtor except Company Appeal (AT) (Insolvency) No.1978- 1979 which has been filed by the Resolution Professional of the Corporate Debtor- Siti Networks Limited. We shall notice the facts and parties from Company Appeal (AT) (Insolvency) No.1975 of 2024. 2. Brief facts giving rise to these Appeals are:- 2.1. On an application filed under Section 7 of the IBC, CIRP against the Corporate Debtor has commenced by order dated 22.02.2023 passed by the Adjudicating Authority. The Respondent No.11- Ms. Shilpi Asthana, one of the members of the suspended Board of Directors filed a Company Appeal (AT) (Insolvency) No. 274 of 2023 challenging the order dated 22.02.2023. In the Company Appeal, an interim order to the effect "in the meantime, operation of the impugned order shall remain stayed" was passed by this Tribunal on 07.03.2023. After the interim order, the management of the Corporate Debtor was taken over by the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.11 challenged the order dated 12.06.2023 before the Hon'ble Supreme Court by filing Civil Appeal No.4110 of 2023 which was dismissed by the Hon'ble Supreme Court on 07.07.2023 noticing that the IA was coming up for hearing before the Appellate Tribunal. Other IAs were filed by the suspended director before the Adjudicating Authority. On 10.08.2023, this Tribunal dismissed the Company Appeal (AT) (Ins.) No.274 of 2023. The IRP took over the management and control of the corporate debtor on 16.08.2023. The suspended director challenged the dismissal order dated 10.08.2023 before the Hon'ble Supreme Court which was dismissed on 01.09.2024. Respondent No.11 also filed an IA in 2nd Civil Appeal seeking reversal of transaction. Respondent No.2 filed a Clarification Application No.4844 of 2023 seeking a clarification whether the cut-off date for all CIRP related activities, including claims admission date, should be reckoned as 10.08.2023. The suspended management also filed an Intervention Petition No.57 of 2023 seeking intervention in the Clarification IA. Respondent No.1- ARCIL filed an IA 126 of 2024 seeking various directions. Appellant- Axis Bank Limited filed response to the ARCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor in a bank other than Respondents 2 to 6 is rejected; vi. Prayer 'g' seeking direction to Respondents 2 to 6 to pay interest on the amounts withdrawn is rejected; vii, Thus, IA/126/2024 is partly allowed." 2.5. Aggrieved by the aforesaid order, the above appeals have been filed by the lenders except Company Appeal (AT) (Insolvency) No.1978-1979 which was filed by the Resolution Professional. In the appeals which have been filed by the lenders they have prayed for setting aside the order passed by the Adjudicating Authority in IA No.126 of 2024. The Resolution Professional in Company Appeal (AT) (Insolvency) No.1978-1979 has prayed for setting aside the observations and findings of the NCLT in paragraph 78 of the order dated 01.10.2024 passed in IA No.4844 of 2023. 3. We have heard Counsel for the Appellant, Counsel for the Respondent No.1 as well as Counsel for the Suspended Director on the appeals as well as applications filed for the interim relief in support of the above appeals. 4. Counsel for the Appellants challenging the order directing for reversal of the directions which took place after 22.02.2023 till 01.06.2023, it is contended that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter admission of application under Section 7 on 22.02.2023, Moratorium was enforced and even if the order is stayed on 07.03.2023, Moratorium shall not come to an end. The CIRP commencement was not set aside and Axis Bank and other lenders has no jurisdiction to appropriate amount from the accounts of the corporate debtor. Lenders who are well aware of the provisions of the IBC and various consequences cannot be heard in saying that on stay being obtained by suspended director they are free to appropriate the amount from the account of the corporate debtor. Interpretation which is sought by Axis Bank and other lenders shall make scheme of the IBC meaningless and unworkable. It is submitted that the Respondent No.1 has always objected to the appropriation made by the Axis Bank in the JLM. IA No.126 of 2024 filed by the Respondent No.1 was on substantial ground and has rightly been allowed by the Adjudicating Authority. Axis Bank and other lenders who have illegally appropriated amounts from the account of the corporate debtor are liable to reverse the same in the account of the corporate debtor as directed by the Adjudicating Authority. 7. Shri Krishnendu Datta, Learned Senior Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who are the Banks, no apprehension can be raised by the Respondents that the Appellant shall not be able to reverse the amount if any such final decision is taken in the appeal. 13. Counsel for the Respondents opposing the interim prayer contends that the amount having been appropriated, is clear violation of moratorium which commenced on 22.02.2023. Appellants who are lenders cannot be allowed to retain the said amount and direction to reverse the amount is in accordance with law. 14. We having already issued notices in the Appeals and fixed a date for hearing, are of the view that the ends of justice be served in directing the Axis Bank and other lenders, who are Appellants before us, to keep the amount which is to be reversed under the impugned order in a separate interest bearing account so that in the event amount is finally decided to be reversed the interests of the corporate debtor are protected. Appellant being themselves banks and financial institutions there can be no apprehension that the banks shall not reverse the amount in the account of the corporate debtor in event any final decision is taken in the appeal to that effect. The above interim management shall protec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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