The power under Section 482 of Code of Criminal Procedure cannot be used to overlook the undermining of a statutory dictate, the Supreme Court observed in a judgment delivered on Thursday.
In this case, the High Court allowed an interlocutory application filed by a Company claiming to be an operational creditor to allow it to operate its bank account maintained with the ICICI Bank and to unfreeze the bank account of its creditors over which the lien has been created and the accounts frozen pursuant to the lodging of an FIR by the Interim Resolution Professional.
Before the Apex Court, the IRP contended that the whole purpose of the moratorium would be defeated if members of the previous management of the Corporate Debtor are left free to transfer the funds of the Corporate Debtor.
"We have to also in this context bear in mind that the High Court appears to have, in passing the impugned order, which is an interim order for that matter, overlooked the salutary limits on its power under Section 482. The power under Section 482 may not be available to the Court to countenance the breach of a statuary provision. The words 'to secure the ends of justice' in Section 482 cannot mean to overlook the undermining of a statutory dictate, which in this case is the provisions of Section 14, and Section 17 of the IBC.", the bench comprising Justices UU Lalit and KM Joseph observed.
The Court noted that after a Resolution Professional is appointed, it is for him to conduct the resolution process and manage the operations, though he is is bound to seek prior approval of the Committee of Creditors in certain matters. The court noted that in this case, moratorium was declared and the assets of the company would include the amounts lying to the credit in the bank accounts.
"The Respondent No.1 is allowed to operate its account subject to it to first remitting into the account of the Corporate Debtor, the amount of Rs 32.50 lakhs which stood paid to it by the management of the Corporate Debtor. The assets of the Corporate Debtor shall be managed strictly in terms of the provisions of the IBC. The Appellant as RP will bear in mind the provision of Section 14 (2A) and the object of IBC. We however make it clear that our order shall not be taken as our pronouncement on the 28 issues arising from the FIR including the petition pending under Section 482 of the Cr.P.C.", the court said while allowing the appeal
Case: Sandeep Khaitan, Resolution Professional For National Plywood Industries Ltd. Vs. JSVM Plywood Industries Ltd. [CrA 447 OF 2021]Coram: Justices UU Lalit and KM JosephCitation: LL 2021 SC 228