Tribunal Allows Separate Bank Account for CIRP Assets

The Tribunal granted permission for the Resolution Professional to open a separate bank account with ICICI Bank for the Corporate Insolvency Resolution Process (CIRP) of a company. It held that assets generated for the CIRP are not subject to attachment by other authorities under the Insolvency Code, superseding conflicting laws. The account will operate as a "No Lien Account" supervised by NCLT and the Committee of Creditors, with withdrawals requiring approval from the Committee and the Adjudicating Authority.

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Issues involved:
1. Application for opening a separate bank account for CIRP purpose.
2. Conflict between Insolvency Code and other laws regarding attachment of funds.
3. Compliance of NCLT directions for Corpus Fund arrangement.

Analysis:
1. The Tribunal addressed an application by the Resolution Professional (R.P.) to open a separate bank account with ICICI Bank for the Corporate Insolvency Resolution Process (CIRP) of a company. The R.P. sought permission for this account to manage funds for the CIRP cost, as approved by the Committee of Creditors (C.O.C.).

2. The Tribunal considered a conflict where the Directorate of Enforcement had provisionally attached assets of the company under the Prevention of Money Laundering Act, 2002. The Tribunal held that the provisions of the Insolvency Code supersede other laws under section 238 of the Insolvency Code. It emphasized that assets generated for the CIRP, as per NCLT directions, are not assets of the defaulter company and are beyond attachment by other authorities.

3. The Tribunal directed the R.P. to open an account for CIRP purposes as a "No Lien Account," not under the control of any authority or bank. This account would operate as an "Escrow Account," supervised by NCLT, Mumbai Bench, and the Committee of Creditors. Withdrawals from this account would require ratification and verification by the Committee of Creditors, with final permission for withdrawal to be sought from the Adjudicating Authority. The Tribunal granted permission for the application and scheduled the matter for further hearing.

This detailed analysis covers the issues of opening a separate bank account for CIRP, the conflict with other laws regarding asset attachment, and the compliance with NCLT directions for the Corpus Fund arrangement.

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