Amount Paid By Co-Applicant From Account Other Than That Of Corporate Debtor Is Not Covered U/S 43 Of IBC, Reversal Can't Be Directed: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that the amount paid by the co-applicant of the corporate debtor during the Corporate Insolvency Resolution Process (CIRP), from an account other than that of the corporate debtor, cannot be directed to be reversed by the Adjudicating Authority, as it does not fall under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC).
The present appeal has been filed against an order passed by National Company Law Tribunal (NCLT) by which it directed the Appellant to reverse Rs. 8,92,980/- into the accounts of the corporate debtor.
The Appellant submitted that the amount having not been received from the corporate debtor, there was no applicability of Section 14 of the IBC and moratorium was not applicable with regard to any payment by co-applicant. After receiving the amount, the charge which was on the vehicle was released.
Per contra, the Respondent submitted that after enforcement of the moratorium the bank could not have received any amount in the loan account of the corporate debtor. The order of the adjudicating authority directing for reversal of amount by ICICI Bank is supported by the Respondent.
The Tribunal noted that after commencement of moratorium under section 14 of the IBC, financial creditors are barred from enforcing or realising any security interest. The amount was not paid from the accounts of the corporate debtor. Instead, it was paid from a different account maintained by the co-applicant
It held that the financial creditor did not withdraw any amount from the account of the corporate debtor or from the corporate debtor, we fail to see any violation of Section 14 of the IBC.
It further observed that section 43 of the IBC comes into operation when the corporate debtor gives preference in a transaction. In the present case, the said amount was deposited by the Co-Applicant by a different account, not by the corporate debtor.In this case, section 43 of the IBC would not be applicable, the directions for reversal issued by the Adjudicating Authority are not supported by sections 43 or 14 of the IBC.
It also held that there is no prohibition from taking steps to take possession of the assets of the corporate debtor by authorised persons.
Accordingly, the present appeal was allowed and the impugned order was set aside.
Case Title: ICICI Bank Ltd. Versus Chanchal Dua & Ors.
Case Number:Company Appeal (AT) (Insolvency) No. 293 of 2024
Judgment Date: 16/07/2025
For Appellant : Mr. Gautam Singhal & Mr. Rajat Chaudhary, Advocates.
For Respondents : Mr. Amit Sanduja, Ms. Sakshi Singh, Mr. Tushar Batra, Advocates for R-4.