Liquidation bank account lien removed to allow the liquidator to access and administer corporate debtor funds.

In liquidation, where the Income Tax Department had marked the corporate debtor's bank accounts with lien, the Tribunal followed its earlier liquidation approach and directed that the restraint be removed so the liquidator could deal with the funds. The bank was also directed to defreeze the accounts to enable completion of the liquidation process. The operative effect was to permit release of the corporate debtor's bank balances from lien-based restriction in favour of the liquidator.

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Issues: Whether the Income Tax Department was required to remove its lien from the corporate debtor's bank accounts and whether the bank was to defreeze the accounts during liquidation.

Analysis: The application concerned bank accounts marked with lien by the Income Tax Department, which prevented transfer of the corporate debtor's funds. The Tribunal noted that in a similar liquidation matter it had directed release of seized accounts to facilitate completion of liquidation and applied the same approach to the present facts.

Conclusion: The lien was directed to be removed and the bank accounts were directed to be defrozen in favour of the liquidator.

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