An Application for initiation of Corporate Insolvency Resolution Process (CIRP) was filed against a Corporate Debtor (CD) and the following four Banks submitted their claims as under : A Bank Limited: ₹14 crore, B Bank L

The facts of the case are similar to the case of Bank of India vs. Bhuban Madan R.P. (Principal Bench, Delhi) - No. 590 of 2020 . The National Company Law Appellate Tribunal (NCLAT), vide its order held as under: Section 14(1) of the Insolvency & Bankruptcy Code reads as under; "(1) Subject to provisions of sub-sections (2) and (3), on the Insolvency Commencement Date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: - (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein, (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor." National Company Law Appellate Tribunal, New Delhi (NCLAT) in Company Appeal (AT) NO. 267 of 2017 in 'Indian Overseas Bank' vs. 'Mr. Dinakar T. M. Venkatsubramaniam, Resolution Professional for Ambtek Auto Ltd.' held as follows: "... Once Moratorium has been declared, it is not open to any person including '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" As per Section 17(1)(d) of the Insolvency & Bankruptcy Code, the Financial Institutions maintaining the accounts of the Corporate Debtor' have to act on the instructions of the Interim Resolution Professional in relation to such accounts and furnish all information relating to the Corporate Debtor'. However, Section 14 of the Insolvency & Bankruptcy Code overwrites any other provision contrary to the same and any amount due prior to the date of CIRP cannot be appropriated during the moratorium period. Hence, it was held that merely because the 'Corporate Debtor had enough liquidity to run the Company as a going concern, the act of the appellant Banks to adjust the credit balance in the Cash Credit Account towards the debit balance after CIRP commenced, cannot be justified.