Moratorium on assets bars unilateral set offs; refund ordered with interest from filing date until payment.

Tribunal jurisdiction under Section 60(5)(c) is affirmed: questions of law or fact arising from CIRP and an approved resolution plan fall within its competence, notwithstanding prior dispute-resolution provisions in other statutes. The shares and dividends recorded in the Information Memorandum were treated as assets of the corporate debtor for CIRP purposes, and unilateral adjustments/set offs aggregating the stated amount by a participant during CIRP and post plan were held to contravene the moratorium under Section 14, constituting wrongful appropriation. Relief: refund directed with interest at 10% per annum, interest to run from the filing date of the application until payment; payment within 45 days.

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Issues: (i) Whether the adjudicating authority/Tribunal has jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to entertain the application post-approval of the resolution plan; (ii) Whether the adjustments/set-offs effected by the appellant from the share/dividend account aggregating Rs. 56,00,000/- during CIRP and post-plan violated the moratorium under Section 14 and/or the extinguishment provisions under Section 32A, and whether the shares are assets of the corporate debtor; (iii) What reliefs are to be granted, in particular whether refund with interest is payable and from which date.

Issue (i): Whether the Tribunal has jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to decide the application arising out of the CIRP and approved resolution plan.

Analysis: Section 60(5)(c) confers jurisdiction on the National Company Law Tribunal over questions of law or fact arising out of or in relation to insolvency resolution or liquidation proceedings. The definition of "person" in Section 3(23) of the Insolvency and Bankruptcy Code, 2016 includes entities established under a statute, bringing Multi-State Cooperative Societies within the Code's scope when they participate in CIRP. Section 238 of the Insolvency and Bankruptcy Code, 2016 gives the Code overriding effect over other laws. The appellant filed and got its claim admitted in the CIRP, participated in the process, and received payments under the resolution plan. The question raised by the successful resolution applicant arises from the CIRP and the approved plan, engaging Section 60(5)(c). Prior exclusive dispute-resolution provisions in the Multi-State Cooperative Societies Act, 2002 (such as Section 84 or exclusions of Companies Act applicability under Section 121) do not oust the Code where matters arise in relation to CIRP and fall within Section 60(5)(c).

Conclusion: In favour of the respondent on this issue; the Tribunal has jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to entertain and decide the application arising out of the CIRP and approved resolution plan.

Issue (ii): Whether the adjustments/set-offs from the share/dividend account during CIRP and post-plan violated the moratorium under Section 14 and/or the extinguishment provisions under Section 32A, and whether the shares are assets of the corporate debtor.

Analysis: The shares and dividends attributable to the corporate debtor were recorded in the Information Memorandum and constitute assets for purposes of CIRP under Section 18 read with Section 3(37) of the Insolvency and Bankruptcy Code, 2016, subject to exceptions in the Explanation to Section 18. Adjustments made by the appellant of dividends and share value during the CIRP and after plan approval reduced assets and receipts belonging to the corporate debtor. Section 14 moratorium restricts actions that interfere with corporate debtor assets during CIRP. Where adjustments amount to unilateral appropriation of sums due to the corporate debtor during the moratorium or in breach of the entitlements recognized in CIRP, they contravene the moratorium and the protective scheme of the Code. The adjudicating authority found the adjustments of Rs. 56,00,000/- violative of the moratorium and treated the shares and dividends as assets of the corporate debtor; that finding was supported by the record of dividends and by the appellant's participation in CIRP without declaring mutual credits or security over the shares.

Conclusion: In favour of the respondent on this issue; the adjustments/set-offs aggregating Rs. 56,00,000/- violated the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 and the shares/dividends qualify as assets of the corporate debtor for the purposes of CIRP.

Issue (iii): What reliefs are to be granted, specifically whether the appellant must refund Rs. 56,00,000/- with interest and from which date.

Analysis: The adjudicating authority directed refund of Rs. 56,00,000/- with 10% per annum interest from the respective adjustment dates. The Tribunal found the refund direction appropriate but held that interest should run from the date of filing of the SRA's application (04.03.2025) rather than from each respective earlier adjustment date. The adjudicating authority's other directions, including denial of relief on Prayer (B), were examined and upheld where not inconsistent with the Code and precedent relied upon.

Conclusion: Partly in favour of the appellant on this issue; the refund of Rs. 56,00,000/- is directed with interest at 10% per annum, but interest is to be calculated from 04.03.2025 until payment, and payment is to be made within 45 days. The rest of the adjudicating authority's order dated 30.10.2025 is upheld.

Final Conclusion: The appeal is partly allowed to the limited extent of modifying the interest commencement date for the refund; the adjudicating authority's finding that the Tribunal has jurisdiction, that the shares/dividends were assets of the corporate debtor, and that the adjustments violated the moratorium is affirmed, with the refund and interest direction adjusted as stated.

Ratio Decidendi: The Insolvency and Bankruptcy Code, 2016 has overriding effect over conflicting statutory provisions; Section 60(5)(c) empowers the Tribunal to decide questions of law or fact arising out of or in relation to CIRP, and adjustments of assets or receipts belonging to the corporate debtor in breach of the moratorium under Section 14 constitute wrongful appropriation entitling the resolution applicant to refund with interest.

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