Moratorium bars coercive recovery from a corporate debtor's bank account for pre-CIRP dues; claims must be filed in insolvency.

On commencement of CIRP, moratorium takes immediate effect and the Resolution Professional assumes control over the corporate debtor's management, assets and bank accounts. A taxing authority cannot continue attachment or freezing of the debtor's account to recover pre-CIRP dues, because such coercive recovery interferes with the insolvency process; the creditor must instead lodge its claim in CIRP. The attachment was therefore unsustainable, the bank account had to be defreezed, and the amount already debited from the account was directed to be refunded.

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Issues: Whether the attachment and freezing of the corporate debtor's bank account for pre-CIRP commercial tax dues could be sustained after commencement of CIRP and whether the amount debited from the account was liable to be refunded.

Analysis: On admission of CIRP, moratorium operates immediately and the Resolution Professional assumes control over the corporate debtor's management, assets, and bank accounts. Any recovery step by a taxing authority that attaches or freezes the corporate debtor's account after commencement of CIRP interferes with the statutory duties of the Resolution Professional and is contrary to the moratorium. The claimed tax dues are to be pursued by lodging a claim in the CIRP rather than by coercive recovery from the debtor's account. Since the bank also had no objection to defreezing, the freeze could not continue and the amount already debited from the account could not be retained by the recovery authority.

Conclusion: The attachment order was unsustainable, the bank account was directed to be defreezed, and the amount debited from the corporate debtor's account was directed to be refunded.

Ratio Decidendi: After commencement of CIRP, coercive recovery against the corporate debtor's assets is barred by moratorium and pre-CIRP dues must be pursued through the insolvency claims process, not by attachment or debit from the debtor's bank account.

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