# In the matter of Annamalai Foods Pvt. Ltd. (Deepa Venkat Ramani Vs. Axis Bank Ltd.) MA-154-2018 in CP-94-IB-2018

> NCLT judgment dated 2018-08-10. Citation: TCN-2018-NCLT-00949. The case involves a Miscellaneous Application filed by the Resolution Professional under Rule…

- **Court:** NCLT
- **Order date:** 10 Aug 2018
- **Citation:** TCN-2018-NCLT-00949
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/annamalai-foods-pvt-ltd-deepa-venkat-ramani-vs-axis-bank-ltd-ma-154-2018-in-cp-9-625993e2

## Summary

### Background

The case involves a Miscellaneous Application filed by the Resolution Professional under Rule 11 of the National Company Law Tribunal Rules, 2016, seeking directions against Axis Bank Limited (the Respondent) regarding the refund of deducted interest and the release of a lien on a fixed deposit belonging to the Corporate Debtor, M/s. Annamalai Foods Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated based on an application filed by an Operational Creditor, M/s. Sree Provisions Stores, which was admitted on 25.01.2018. Ms. Deepa Venkat Ramani was appointed as the Interim Resolution Professional. The Respondent Bank had continued to deduct monthly interest on overdraft accounts after the moratorium was declared, which the Resolution

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Annamalai Foods Private Limited based on an application filed by M/s. Sree Provisions Stores. Ms. Deepa Venkat Ramani was appointed as the Interim Resolution Professional. Axis Bank Limited (the Respondent) had extended overdraft facilities to the Corporate Debtor, secured by a fixed deposit of Rs.50,00,000/-. After the moratorium was declared, the Respondent Bank continued to deduct monthly interest on the overdraft accounts. The Resolution Professional requested the bank to refund the deducted interest and release the lien on the fixed deposit. The Respondent Bank refused, claiming to be a secured creditor with a valid charge on the fixed deposit. The Resolution Professional argued that the

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## Issues and analysis

### Issue 1: Whether the Respondent, viz., Axis Bank Limited, is legally entitled to interest deducted during …

**Ratio:** Section 14(1)(c) of the Insolvency and Bankruptcy Code (IBC), 2016, prohibits any action

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**Reasoning:** The court reasoned that the purpose of the moratorium is to allow the CIRP to proceed

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**Interpretation:** The interpretation of Section 14(1)(c) is that it creates a complete

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**Application:** In this case, the Respondent Bank's action of deducting interest during the

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Deepa Venkat…
- **Respondents:** M/s. Annamalai…; M/s. Axis Bank…

## Timeline

- **2018-01-25 — Admission of CIRP…**: CP/94/IB/2018 filed by M/s. Sree Provisions Stores under Section 9 of the I&B Code, 2016…
- **2018-01-25 — Appointment…**: Ms. Deepa Venkat Ramani was appointed…

## 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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