Bank of Baroda Vs IDBI Bank Ltd (NCLT Ahmedabad)
The National Company Law Tribunal, Ahmedabad Bench, allowed an application originally filed by the Resolution Professional of Sintex Prefab and Infra Limited under Sections 14, 60(5) and 74 of the Insolvency and Bankruptcy Code, 2016, seeking transfer of Fixed Term Deposits amounting to Rs.4,46,58,317.44 with accrued interest to the Corporate Insolvency Resolution Process (CIRP) account of the Corporate Debtor. Following approval of the Resolution Plan, Bank of Baroda, as the lead financial creditor, continued the proceedings on behalf of the consortium of lenders. The CIRP commenced pursuant to the Tribunal’s order dated 24.02.2021 admitting the Section 7 application. During CIRP, the Resolution Professional discovered fixed deposits maintained with IDBI Bank, repeatedly sought their transfer through letters, emails, meetings and Committee of Creditors discussions, and alleged that the bank failed to act in accordance with Sections 14 and 17 of the Code.
IDBI Bank contended that the amount had not been appropriated and continued to remain in the fixed deposit account. It further argued that the funds did not constitute assets of the Corporate Debtor, relying upon a forensic audit report alleging diversion of approximately Rs.717.04 crore from Sintex Industries Limited to the Corporate Debtor and asserting that the amount represented part of those diverted funds.
