TMI Blog2022 (9) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... that the OTS, as proposed, did not materialise and the amount of Rs.1 Crore was parked in the no lien account maintained with the Bank. CIRP was initiated on 26.11.2019. Despite repeated requests of the RP, the Appellant Bank did not release the said amount. The said amount was to be adjusted/utilised upon approval of the Resolution Plan and was not to be adjusted towards Interest or Principal till then. Prior to the commencement of CIRP, this amount was not adjusted by the Bank towards the loan account of Bank as the OTS Proposal had failed. Once the CIRP was initiated, keeping in view that the OTS had failed, the amount lying in the no lien account belongs to the Corporate Debtor and under Section 18(f) of the Insolvency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /NCLT/AHM/2019, wherein the Adjudicating Authority has allowed the Interim Application preferred by the Resolution Professional ( RP ) seeking a direction to Bank of India/the Appellant herein to release an amount of Rs.100Lakhs/- held in the no lien account for the purpose of CIRP of the Corporate Debtor Company / M/s. Actif Corporation Limited . The Adjudicating Authority allowed the application observing as follows: 11. Gone through the application and the reply. It is noted that the Corporate SDebtor, to show their commitment and banafide towards reolution plan (i.e., one time settlement proposal) has furnished a Cheque for Rs.1 Crore to the Respondent/bank on 12.07.2017 along with a letter with a request to keep the poceeds in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual arrangement including bailment. The Corporate Debtor has not shown under what capacity this amount Rs.1Crore/- was received from M/s. Avazy Realcom Private Limited and if it is under some contractual arrangement then it would not be an asset of the Corporate Debtor . It is submitted that Bankers Lien over money held in a customer s account is a Statutory Right. The amount of Rs.1Crore/- was paid for showing the bona fide of the Corporate Debtor in pursuant to a Settlement Proposal. This amount was delinked from the proposal and was supposed to be put into a no lien account , which is not an account of the Corporate Debtor , but an account of the Bank itself. This amount of Rs.1Crore/- was paid against the 5% amount of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of the OTS/Resolution Plan being approved, the Bank had no right on the said money. The amount of Rs.1Crore/- was paid at the behest of the Corporate Debtor and hence the same is to be treated as the property of the Corporate Debtor . The Appellant Bank itself admits that the amount was paid by the Corporate Debtor through another Company to show their bona fide towards OTS. The purpose of the no lien account is to avoid realisation of funds lying in such an account and therefore the Bank has no right over such money as the same was deposited with a specific understanding that the said money shall not be utilised by the Bank until approval of the OTS. The Learned Counsel relied on the Judgement of the Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in our view, the appellants are entitled to withdraw the sum deposited by them in terms of said order dated 11.10.2017. Their entitlement having been established, the claim of the appellants cannot be negated by any direction that the money may contrinute to be in deposit with the Bank. 5. It is contended that the Claim of the Bank that money lying in no lien account of the Corporate Debtor are assets of the Bank, is baseless. 6. Heart both sides at length. 7. The brief point that falls for consideration in this Appeal is whether the amount of Rs.1Crore/- lying in the no lien account belongs to the Appellant Bank. At the outset, it is relevant to note that this amount was admittedly paid by the Corporate Debtor pursuan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate 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 commenced on 26.11.2019, and having regard to the fact that the amount was deposited with a specific understanding that the amount shall not be used by the Bank until approval of OTS. Admittedly, the said amount was paid at the behest of the Corporate Debtor by a third party and it was lying with the Bank for more than five years. 9. The submission of the Learned Counsel for the Appellant that an Appeal against IA 522/2020 was also preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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