Lien created prior to initiation of CIRP cannot sustain during moratorium u/s 14 of IBC

Teena Saraswat Pandey Vs Regional Provident Fund Commissioner (NCLT Mumbai)

NCLT Mumbai held that lien created prior to the initiation of the ‘Corporate Insolvency Resolution Process cannot sustain during moratorium under section 14 of Insolvency Bankruptcy Code (IBC).

Facts- The Applicant is the Insolvency Professional of M/s S & H Gears Private Limited (Corporate Debtor). The Applicant has submitted that even after the erstwhile IRP had published Form A on 18.03.2020, the Respondent issued a notice through its authorised recovery officer on 15.06.2020 to initiate recovery proceedings against the Corporate Debtor.

The Applicant has submitted that the Respondent had filed its claim vide email dated 01.12.2020 for an amount of Rs.2,98,11,102/- which the erstwhile IRP had accepted vide email dated 01.12.2020. In respect of the said claim, the Respondent had passed multiple orders calling upon the Corporate Debtor to pay the outstanding dues.

The Applicant has submitted that the erstwhile IRP had specifically taken the permission of the COC to operate the current account of the Corporate Debtor which was maintained in HDFC Bank, Dewas Branch for the receipts and payments during the CIRP Period until the new current account was opened.

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