# In the matter of UCO Bank Vs. Mr. G. Ramachandran IBBI  
Resolution Professional, M/s. Sai Regency Power Corporation Pvt. Ltd CA(AT)(Ins)No. 761 of 2020 With I.A. No. 2038 of 2020

> NCLAT judgment dated 2020-11-03. Citation: TCN-2020-NCLAT-00059. UCO Bank filed an appeal against an order by the Adjudicating Authority (NCLT, Special Bench,…

- **Court:** NCLAT
- **Order date:** 3 Nov 2020
- **Citation:** TCN-2020-NCLAT-00059
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/uco-bank-vs-mr-g-ramachandran-ibbi-resolution-professional-ms-sai-regency-power-a8018db9

## Summary

### Background

UCO Bank filed an appeal against an order by the Adjudicating Authority (NCLT, Special Bench, Chennai) directing the bank to refund Rs. 2,27,94,706/- which was adjusted during the Corporate Insolvency Resolution Process (CIRP) from fixed deposits of the Corporate Debtor, M/s. Sai Regency Power Corporation Pvt. Ltd., against outstanding vehicle loans and loans taken by group companies. The CIRP was initiated based on an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), admitted on March 27, 2019. The bank claimed it was unaware of the CIRP admission.

## Facts

UCO Bank (Appellant) filed an appeal against an order by the Adjudicating Authority (NCLT, Chennai). The Adjudicating Authority directed UCO Bank to refund Rs. 2,27,94,706/- to M/s. Sai Regency Power Corporation Pvt. Ltd. (Corporate Debtor). This amount was adjusted by UCO Bank from the Corporate Debtor's fixed deposits during the CIRP. The CIRP was initiated based on an application under Section 7 of the IBC, admitted on March 27, 2019. UCO Bank claimed it was unaware of the CIRP admission. The Corporate Debtor had opened two FDRs with UCO Bank and had approached the bank for sanction of two car loans. UCO Bank sanctioned the vehicle loans, and the company was regularly paying monthly installments. Group companies of the Corporate Debtor, M/s. Kamang Dam Hydro Power

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## Issues and analysis

### Issue 1: Whether the Appellant Bank was justified in adjusting amounts from the Corporate Debtor's fixed …

**Ratio:** Once a moratorium is declared under Section 14 of the IBC, it is not open to any person,

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**Reasoning:** The court relied on the principle established in Indian Overseas Bank Vs. Mr. Dinkar T.

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**Interpretation:** Section 14 of the IBC imposes a moratorium to prevent actions that could

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**Application:** In this case, the Appellant Bank adjusted amounts from the Corporate Debtor's

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## Parties

- **Judges:** A.I.S. C…; V. P. S…
- **Appellants:** UCO B…
- **Respondents:** M/s. Sai Regency…; G. Ramach…

## Timeline

- **2019-03-27 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Sai Regency…
- **2019-03-30 — Public N…**: A public notice regarding the initiation of CIRP was published in the Business Standard…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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