TaxTMI 
TaxTMI 
2025 (7) TMI 570
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.... No. 2074/2023 has been allowed. Aggrieved by the aforesaid two orders, these two appeals have been filed. 2. Brief facts of the case necessary to be noticed for deciding the appeals are: i. Corporate Insolvency Resolution Process (CIRP) of the corporate debtor, Topsgroup Services and Solutions Limited commenced on 19.02.2021, on an application filed by the Punjab National Bank (International) Limited. ii. Indian Bank, the appellant filed its claim in 'Form-C' for an amount of Rs.38,85,25,615/- on 09.03.2021. iii. During CIRP of the corporate debtor, appellant received an amount of Rs.4,65,58,425.87/- on 08.06.2021 in current account maintained by the appellant Bank as Income Tax Refund. Appellant detained the amount in the said account. iv. Request was made by Resolution Professional (RP) by several emails and letters from 07.10.2021 onwards till 12.12.2021, requesting the appellant to transfer the said amount to the CIRP account of the corporate debtor. v. The RP filed an I.A. No.2967/2021 on 16.12.2021, seeking a direction to the Indian Bank to transfer the amount of Rs.4,65,58,425/- from account maintained in the Indian Bank to CI....
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....ount. It is submitted that adjudicating authority has held that money receivables as per the Accounting Standards amount received as Income Tax Refund is not receivable, whereas, adjudicating authority has not even referred to Indian Accounting Standard No. 7, which defines tax refund as part of cash flow from operating activities. It is submitted that appellant is fully ready to pay the applicable cost as per Regulation 21 of the Insolvency and Bankruptcy Board of India (IBBI) (Liquidation Process) Regulations, 2016 (for short the 'Liquidation Regulations, 2016'). It is submitted that appellant never refused to transfer the amount rather has communicated that account be transferred to any other member of the Committee of Creditors (CoC) and not to private bank. 4. Learned counsel for the liquidator opposing the submission of the counsel for the appellant submits that CIRP against the corporate debtor having been commenced on 19.02.2021 moratorium was imposed and all amount received by corporate debtor during moratorium including the Income Tax Refund was part of the kitty of the corporate debtor and the amount of Rs.4,65,58,425/- was received by the corporate debtor in its acco....
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....conclusion that in the present Petition, the 'debt' qualifies as a Financial Debt as per Section 5(8) of the Code and there is a 'default' as per Section 3(12) of the Code. Also, this Petition is well within limitation as per Sections 18 and 19 of the Limitation Act, 1963. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Petitioner as a major constituent for admission of a Petition under Section 7 of the Code. Therefore, the Petition under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition prohibiting all of the following of item-(I), namely: (I) (a) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in resp....
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.... Tribunal be pleased to allow this Application; b) That the Hon'ble Tribunal be pleased to direct the Respondent bank to act on the instructions of the Applicant and transfer an amount of Rs. 4,65,58,425.87/- (Rupees Four Crore Sixty Five Lakhs Fifty Eight Thousand Four Hundred Twenty Five and Eighty Seven paise only) from the Account No. 50026264054 maintained in Indian. Bank, Worli Branch, to the CIRP bank account having Account No 052463300002950 maintained in YES Bank; c) To pass such further orders as the Hon'ble Tribunal may deem fit and appropriate in the facts and circumstances of the present case; d) For costs." 8. In the application notices were issued but Bank did not appear and the order passed by the adjudicating authority on 20.12.2022. Order dated 20.12.2022 in I.A.2967/2021 is to the following effect: " I. A. 2967 of 2021 The above captioned Interlocutory application is filed by the Applicant i.e. Mr. Anshul Gupta, RP against Indian Bank, Respondent, seeking the Respondent bank to transfer an amount of Rs. 4,65,58,425.87/- from the Account No. 50026264054 maintained in Indian Bank, Worli Branch to the CIRP bank....
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....nt vide various emails, letters, visits dated 7.10.2021, 8.10.2021, 18.10.2021, 28.10.2021, 9.11.2021, 15.11.2021, 25.11.2021, 4.12.2021, 8.12.2021, 9.12.2021, 12.12.2021 requested the Applicant to transfer the said amount of Rs. 4,65,58,425.87/- to the CIRP account of the Corporate Debtor. The Applicants crave leave to refer to and rely upon the said letters." 11. The adjudicating authority while rejecting the application filed by the appellant to recall the order dated 20.12.2022 has not held that the order dated 20.12.2022 was passed ex-parte to the appellant. Rather adjudicating authority noticed the facts and came to the conclusion that the amount received as a tax refund cannot be treated to its receivables. The adjudicating authority, however, rejected the plea of the bank that it is not liable to remit the amount in kitty of the corporate debtor in the liquidation. 12. Learned counsel for the appellant has submitted that as per the hypothecation deed, the amount received as Income Tax Refund is also covered by receivable. Even accepting the submissions of the appellant that the account received by the corporate debtor was a receivable of the corporate debtor, the RP h....