# In the matter of Beauty Etiole Pvt. Ltd. Vs.
C. Sanjeevi & 2 Ors. Company Appeal (AT) (CH) (Ins.) No. 316/2021

> NCLAT judgment dated 2022-06-07. Citation: TCN-2022-NCLAT-00432. The case involves an appeal against an order dated 01.11.2021 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 7 Jun 2022
- **Citation:** TCN-2022-NCLAT-00432
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/beauty-etiole-pvt-ltd-vs-c-sanjeevi-2-ors-company-appeal-147a87b8

## Summary

### Background

The case involves an appeal against an order dated 01.11.2021 passed by the National Company Law Tribunal (NCLT), Chennai Bench, in IA(IBC)/926(CHE)/2021 in IBA/1423/2019. The appellant, a real estate developer, had entered into a Joint Development Agreement with Respondent No.3 for constructing a housing complex. The appellant borrowed money from Respondent No.2, securing the loan by mortgaging the land. The Resolution Professional (Respondent No.1) issued a letter dated 16.06.2021 to ICICI Bank and Respondent No.2, freezing four bank accounts belonging to the appellant, believing they belonged to the Corporate Debtor. The appellant contends that the Resolution Professional lacked the authority to freeze these accounts.

## Facts

Beauty Etiole Pvt. Ltd., a real estate developer, entered into a Joint Development Agreement with Respondent No.3 for constructing a multi-storeyed housing complex on 4.23 acres of land in Perungudi, Chennai. To finance the project, the Appellant borrowed money from Respondent No.2, securing the loan by mortgaging the land to Respondent No.2. The Resolution Professional (Respondent No.1) issued a letter dated 16.06.2021 to ICICI Bank and Respondent No.2, freezing four bank accounts belonging to the Appellant, under the mistaken impression that these accounts belonged to the Corporate Debtor. The Appellant's bank accounts included an Escrow Current Account (No.777705220088), a Master Escrow Account (No.777705220066), a RERA Account (No. 777705220077), and a Current

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## Issues and analysis

### Issue 1: Whether the Resolution Professional had the authority to freeze the bank accounts belonging to the …

**Ratio:** The Resolution Professional only has the authority to exercise control over bank accounts

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**Reasoning:** The NCLAT reasoned that the Resolution Professional's authority is limited to the assets

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**Interpretation:** Section 18(1)(f) of the I&B Code, 2016, is interpreted to mean that the

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**Application:** In this case, the bank accounts were in the name of the Appellant (Beauty

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## Parties

- **Judges:** M. Venu…; KanthiNar…
- **Appellants:** Beauty Etiole…
- **Respondents:** C. SANJ…
- **Advocates:** Ramakrishnan…; Chetan…; +2 more

## Timeline

- **2021-11-01 — Impugned Order…**: The National Company Law Tribunal (NCLT), Chennai Bench, passed an order in…
- **2021-06-16 — Freezing Lette…**: The Resolution Professional (Respondent No.1) issued a letter to ICICI Bank and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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