Bank ordered to refund debited amount to debtor during moratorium, emphasizing sanctity of resolution process.

The Adjudicating Authority directed the bank to deposit the debited amount back into the corporate debtor's account after finding that the bank was not permitted to debit any amount post the moratorium declaration date. The Appellate Tribunal emphasized the prohibition on actions like recovery of security interests during the moratorium period to maintain the resolution process's sanctity. Previous judgments reinforced that banks cannot debit amounts post moratorium, allowing adjustments only after resolution plan approval or rejection. The final decision directed the Resolution Professional to prevent unauthorized withdrawals and maintain accurate books of account for the corporate debtor's ongoing operations.

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Issues:
1. Debiting of amount by a bank from the corporate debtor's account post moratorium declaration.
2. Interpretation of the moratorium order's effective date.
3. Applicability of Section 14 of the Insolvency and Bankruptcy Code.
4. Bank's actions during the Corporate Insolvency Resolution Process.

Analysis:
1. The case involved a Miscellaneous Application by the Interim Resolution Professional regarding the ICICI Bank debiting amounts from the corporate debtor's account after the moratorium declaration. The Adjudicating Authority directed the bank to deposit the debited amount back into the corporate debtor's account.

2. The Appellant argued that the moratorium order was communicated after the debit transactions, but the Adjudicating Authority emphasized that regardless of the order's receipt date, the bank was not permitted to debit any amount post the moratorium declaration date.

3. Referring to the Insolvency and Bankruptcy Code, the Appellate Tribunal highlighted that during the moratorium period, actions like recovery of security interests or alienation of assets of the corporate debtor were prohibited to maintain the sanctity of the resolution process.

4. Previous judgments by the Appellate Tribunal in similar cases reinforced the stance that banks cannot debit amounts from the corporate debtor's account post moratorium. However, after the resolution plan approval or rejection, the bank could adjust its ledger accordingly, including accrued interest, but not beyond the available balance to prevent excessive withdrawals.

5. The final decision allowed the bank to act as per the observations made in previous cases, directing the Resolution Professional to ensure no unauthorized withdrawals during the resolution process. Any withdrawals made should be debited to maintain accurate books of account, ensuring the corporate debtor's ongoing operations. The order clarified the Adjudicating Authority's previous decision and disposed of the appeal without costs.

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