Moratorium Under IBC Does Not Prevent Reversal Of Funds Mistakenly Transferred To Corporate Debtor: NCLT New Delhi

The National Company Law Tribunal, New Delhi Bench, comprising Jyotsna Sharma (Member-Judicial) and Anu Jagmohan Singh (Member-Technical), has held that the moratorium under section 14 of the IBC doesn't prevent reversal of funds mistakenly transferred to the corporate debtor's account. The applicant claims that it mistakenly transferred the 'relevant funds' through RTGS. It also sent an email to the bank officials seeking reversal of the funds transferred. The Assistant General Manager (Finance) of the applicant's bank wrote an email to the bank of the corporate debtor requesting him to re-credit/reverse the 'relevant funds' either to the account of the applicant or to the rightful beneficiary. It also highlighted that the corporate debtor has acknowledged the receipt of the funds and has asked the applicant to take the steps for the reversal. However, the amount was not reversed due to the imposition of the moratorium. Therefore, the present application was preferred by the applicant. The applicant requested the tribunal to lift the moratorium only for the reversal of the 'relevant funds,' as public money was involved in that. Per contra, the respondent submitted that the moratorium can only be lifted if either the CIRP stands concluded or liquidation proceedings are initiated. Hence, the present situation does not allow the lifting of the moratorium. Observations of the NCLAT The adjudicating authority observed that the amount was wrongfully credited into the account of the corporate debtor and could not be considered as the asset of the corporate debtor. The bench expressed its opinion, saying that it cannot be the intention of the legislature to impose a blanket ban on any type of operation of the bank account of the corporate debtor just because a moratorium has been imposed. The bench further observed that neither the corporate debtor nor any other person can claim the amount inadvertently credited to the respondent's account. It also laid down that the moratorium cannot be said to have any effect on the money that belongs to an outsider and not to the financial creditor or any other stakeholder. Thus, the question of lifting the moratorium does not arise. Lastly, it directed that the 'relevant funds' should immediately be recredited to the account of the rightful beneficiary or to the transferor. Case Name: Mr. B. A. Chandrasherkara Setty and Ors v. M/s. Intec India Limited Ltd Case No.: IA 625/2024 IN Company Petition No. (IB) – 2432/(PB)/2019 Coram: Jyotsna Sharma (Member-Judicial) and Anu Jagmohan Singh (Member-Technical) Order Date: 04.09.2025 Click Here To Read/Download The Order

Moratorium Under IBC Does Not Prevent Reversal Of Funds Mistakenly Transferred To Corporate Debtor: NCLT New Delhi

Mohd.Rehan Ali

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