In Brief
The Supreme Court allowed an appeal against a High Court order that had permitted a company (JSVM Plywood Industries Ltd.) to operate a frozen bank account despite a moratorium imposed under the Insolvency and Bankruptcy Code. The Court held that the High Court's power under Section 482 of the Code of Criminal Procedure cannot be used to override the statutory prohibition on asset transfers during insolvency moratorium. Once an application for insolvency is admitted and moratorium declared, no assets can be disposed without the Resolution Professional's authority. The Court modified the order to permit account operation only upon first remitting Rs. 32.50 lakhs (the disputed payment) into the corporate debtor's account, while preserving the claimant's right to pursue its claim through appropriate forums.
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