The National Company Law Tribunal (NCLT) at Amaravati has held that once a corporate debtor is admitted into the Corporate Insolvency Resolution Process (CIRP), its suspended management has no authority to operate the company’s bank accounts or transfer its funds.
A coram of Judicial Member Kishore Vemulapalli and Technical Member Umesh Kumar Shukla observed that any operation of the company’s bank account or transfer of funds without the Interim Resolution Professional’s (IRP) authorisation violates Sections 14 and 17 of the Insolvency and Bankruptcy Code, 2016.
“Upon admission of the Corporate Debtor into CIRP, the management of the affairs of the Corporate Debtor vested exclusively with the IRP under Section 17 of the Code and the…