In Brief
The Supreme Court allowed a criminal appeal challenging a High Court order that had unfrozen bank accounts of a supplier company during insolvency proceedings. After admission of an insolvency application for National Plywood Industries Limited, a moratorium was declared. The company's previous management allegedly transferred Rs. 32.50 lakhs to the supplier without the Resolution Professional's authorization, violating the moratorium. The High Court had granted interim relief allowing the supplier to operate its accounts. The Supreme Court held that Section 482 CrPC cannot override the mandatory moratorium provisions of the Insolvency Code. The court modified the order: the supplier could operate its account only after remitting the Rs. 32.50 lakhs to the corporate debtor's account, thereby protecting assets under insolvency protection while preserving the supplier's right to pursue legitimate claims.
The lawyer headnote and full judgment text are available to registered users.