Interim transfer and fixed deposit of disputed company funds pending further orders in company proceedings

Funds held by State Bank of India, Erode Branch were directed to be transferred to Canara Bank, Green Park Branch, and placed in an interest-bearing fixed deposit pending further orders in the company petition. Entitlement to the amount was expressly kept subject to the final directions in those proceedings, preserving the status quo while ensuring the money continued to earn interest.

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Issues: Whether the money lying with the State Bank of India, Erode Branch, was to be transmitted to the credit of Cheran Enterprises Pvt. Ltd. through Canara Bank and kept in an interest-bearing fixed deposit pending further orders in the company petition.

Outcome: The State Bank of India, Erode Branch was directed to transfer the amount with accrued interest to Canara Bank, Green Park Branch, for deposit in an interest-bearing fixed deposit, and the entitlement to the amount was kept subject to further orders in the company petition.

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