# In the matter of Karvy Data Management Services Limited

> NCLT judgment dated 2023-09-29. Citation: TCN-2023-NCLT-01433. The case involves an application filed by the resolution professional seeking to declare…

- **Court:** NCLT
- **Order date:** 29 Sept 2023
- **Citation:** TCN-2023-NCLT-01433
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karvy-data-management-services-limited-2d85000b

## Summary

### Background

The case involves an application filed by the resolution professional seeking to declare certain actions of the respondent (IDBI Bank) as illegal and arbitrary. The Corporate Debtor, Karvy Data Management Services Limited, was admitted into CIRP, and a moratorium was imposed under Section 14 of the IBC. The IRP argues that IDBI Bank, despite being aware of the moratorium, debited a sum of Rs. 1,17,37,911.74/- from the Corporate Debtor's account between 19.09.2023 and 26.09.2023. The IRP contends that this action violates the moratorium and jeopardizes the Corporate Debtor's ability to provide services under an agreement with Protean eGov Technologies Limited.

## Facts

Karvy Data Management Services Limited is undergoing CIRP, having been admitted by the NCLT. An Interim Resolution Professional (IRP) has been appointed. A moratorium under Section 14 of the IBC is in effect. IDBI Bank, despite knowledge of the moratorium, debited Rs. 1,17,37,911.74/- from Karvy's account between 19.09.2023 and 26.09.2023. This debit impacts Karvy's agreement with Protean eGov Technologies Limited, where Karvy acts as a facilitating center for 'Tax Information Network'. The IRP filed an application seeking the restoration of the debited amount. The Corporate Debtor was admitted into CIRP vide order dated 15.09.2023 in CP No. 25/2022. The present IRP has been appointed vide order of this Tribunal dated 20.09.2023. The amount lying in the current account

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## Issues and analysis

### Issue 1: Whether the actions of IDBI Bank in debiting the amount from the Corporate Debtor's account during …

**Ratio:** Section 14 of the IBC imposes a moratorium that prohibits any action to foreclose,

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**Reasoning:** The court reasoned that IDBI Bank was duly informed about the imposition of the

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**Interpretation:** Section 14(c) of the IBC is interpreted to mean that any action by a creditor

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**Application:** The court applied the ratio of Section 14 to the facts of the case, finding

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Allied Hi-tech…
- **Respondents:** Karvy Data…

## Timeline

- **2023-09-15 — Admission in…**: Corporate Debtor admitted into…
- **2023-09-20 — IRP Appoi…**: Interim Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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