Deposited amount in insolvency proceedings cannot be returned merely because release is disputed; affidavit must be considered on the existing record.

A corporate debtor had deposited the amount within the time allowed, and an affidavit stated that the amount should not be released to the operational creditor while sanctions-related constraints continued. That statement did not justify undoing the deposit or directing its return, especially since the operational creditor had no objection to the amount remaining in deposit. As the matter had already been reserved, the adjudicating authority was required to decide on the basis of the deposit and affidavit already filed. The direction returning the deposited amount and refusing to take the affidavit on record was set aside, and the amount was ordered to remain in court custody.

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Issues: Whether the direction to return the deposited amount to the corporate debtor and to decline acceptance of the affidavit was justified.

Analysis: The corporate debtor had deposited the amount pursuant to the earlier order within the time allowed. The affidavit filed in support of the deposit recorded the debtor's submission that the amount should not be released or remitted to the operational creditor while the stated sanctions-related constraints continued. That statement did not furnish a basis to undo the deposit or to direct its return. The operational creditor also had no objection to the amount continuing in deposit. Since the matter had already been reserved, the adjudicating authority was required to take a decision on the basis of the deposit and the affidavit already filed.

Conclusion: The direction returning the deposited amount and refusing to take the affidavit on record was set aside, and the deposited amount was ordered to remain with the Assistant Registrar.

Final Conclusion: The impugned order was modified to preserve the deposited amount in court custody and to permit the adjudicating authority to proceed on the basis of the deposit and affidavit already filed.

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