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2021 (5) TMI 921 - AT - Insolvency and BankruptcySeeking direction against the Appellant Banks and Financial Institutions to reimburse all the amounts appropriated by them after the Insolvency Commencement Date - Seeking to resume the working capital limits as available to the ‘Corporate Debtor’ as on the Insolvency Commencement Date. HELD THAT:- As per Section 17(1)(d) of the I&B 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’. This Tribunal in a catena of Judgements has held that Banks cannot debit any amounts from the account of the ‘Corporate Debtor Company’ after the Order of moratorium, as it amounts to recovery of amount - the Banks cannot freeze accounts nor can they prohibit the ‘Corporate Debtor’ from withdrawing the amount as available on the date of moratorium for its day-to-day functioning. Section 14 of the I&B 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. It is seen from the record that payments due under the LCs have been made out of the funds of the ‘Corporate Debtor’ as is established from the reduction of liabilities under non-fund based facilities. Adjusting of the ‘Claims’ by the Appellant Banks during the CIRP out of the funds of the ‘Corporate Debtor’ results in unjust enrichment of the Banks and further, crediting amounts towards non-fund and fund based accounts during the moratorium period is against the provisions of Section 14 of the Code. The non-Applicants are directed to release the title deeds for effective implementation of the terms of the ‘Resolution Plan’ as provided for under Section 31 of the Code - application allowed.
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