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TMI Blog2024 (12) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... against the impugned order dated 03.05.2021 in I.A. No. 696 of 2020 wherein the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad) in CP(IB) No. 266/NCLT/AHM/2019 has allowed the said application for release of an amount of Rs. 1 Crore held in the "No Lien Account" by the Appellant. 2. The application for initiation of Corporate Insolvency Resolution Process (hereinafter called as 'CIRP') in CP(IB) No. 266/NCLT/AHM/2019 was allowed and the Corporate Debtor, M/s Jaybharat Textiles & Real Estate Ltd. was admitted into CIRP on 03.01.2020. The Interim Resolution Professional (hereinafter called as 'IRP') was appointed who called for the claims and thereafter constituted Committee of Creditors (hereinafter called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 18(f) :- take control and custody of any asset over which the Corporate Debtor has ownership rights as recorded in the balance sheet of the Corporate Debtor, or with information utility or the depository of securities or any other registry. that records the ownership of assets including i. assets over which the Corporate Debtor has ownership rights which may be located in a foreign country; ii. assets that may or may not be in possession of the corporate debtor; iii. tangible assets, whether movable or immovable; iv. intangible assets including intellectual property; v. securities including shares held in any subsidiary of the Corporate Debtor, financial instruments, insurance policies; vi. assets subject to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th. iv) Banker's lien over money lying is a statutory right. The money lying in the account is actually asset of the Bank itself. v) The amount of Rs. 1 Crore was paid for showing the bona-fides of the Corporate Debtor, in pursuance to a settlement proposal. vi) The "No Lien Account" is an account of the Bank itself wherein Bank receives money from the various sources. 5. In its oral and written submissions, the Learned Counsel for the Respondent submitted that the amount of Rs. 1 Crore was paid by the Corporate Debtor to show its bona-fide towards 'One Time Settlement' (hereinafter called 'OTS') made by the Appellant on behalf of the Corporate Debtor. A copy of the cheque No. 852249 dated 16.07.2017 appears at page 246 of Appeal Pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deposit would be treated to be a deposit in the Registry of the High Court. 12. Going by the law laid down by this Court in Axis Bank the 'secured creditor would be entitled to proceed only against the secured assets" mentioned in the notice under Section 13(2) of the SARFAESI Act. In that case, the deposit was made to maintain an appeal before the DRAT and it was specifically held that the amount representing such deposit was neither a 'secured asset' nor a 'secured debt' which could be proceeded against and that the appellant before DRAT was entitled to refund of the amount so deposited. The submission that the bank had general lien over such deposit in terms of Section 171 of the Contract Act, 1872 was rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solvency and Bankruptcy Code, 2016, (hereinafter referred to as 'The Code'), the IRP/RP is obligated to take control and custody of all the assets and properties of the 'Corporate Debtor'. Further, the Bank could not have appropriated this money once the period of Moratorium has commenced on 26.11.2019. As per Section 3(27), 'Property' includes money and therefore RP's action of claiming the money lying in the 'no lien account' of the 'Corporate Debtor' is within the provisions of Section 18(f) of the Code. The contention of the Learned Counsel for the Appellant Bank that the Bankers lien over the money held in a customer's account is a Statutory Right, is unable, keeping in view the facts of the attendant case and also that CIRP had commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich on that date belonged to the Corporate Debtor, by natural corollary is an asset of the Corporate Debtor which the IRP/RP was obliged to take under his control/custody as per provisions of Section 18 of IBC, 2016. Since the moratorium had commenced, on initiation of CIRP on 03.01.2020, the Bank in any case could not have appropriated this money. Following the judgment of the Co-ordinate Bench in the case of Bank of India Vs. Vinod Kumar P. Ambavat (supra) and on consideration of the facts of this case, we find that the Adjudicating Authority has rightly held that the said amount of Rs. 1 Crore lying in "No Lien Account" with the Appellant bank is an asset of the Corporate Debtor. The IRP/RP has rightly claimed the said deposit for its u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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