# In the matter of Nirmal Cars Private Limited

> NCLT judgment dated 2024-05-03. Citation: TCN-2024-NCLT-01457. The case involves an application filed by the Resolution Professional/Liquidator of M/s Nirmal…

- **Court:** NCLT
- **Order date:** 3 May 2024
- **Citation:** TCN-2024-NCLT-01457
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nirmal-cars-private-limited-a5c0eb99

## Summary

### Background

The case involves an application filed by the Resolution Professional/Liquidator of M/s Nirmal Cars Private Limited ('Corporate Debtor') under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 ('IBC') read with Sections 18, 20, and 25, seeking the removal of a lien marked on the Corporate Debtor's bank accounts. The lien was placed by the Principal Commissioner, Central Excise & GST Commissionerate, Jaipur ('Respondent No. 2') and maintained by Punjab National Bank, Raja Park Branch, Jaipur ('Respondent No. 1'). An application under Section 7 of the Code was filed by M/s Fashion Suitings Pvt. Ltd. seeking initiation of the Corporate Insolvency Resolution Process ('CIRP') against the Corporate Debtor. The Adjudicating Authority initiated the CIRP on

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## Facts

M/s Fashion Suitings Private Limited initiated Corporate Insolvency Resolution Process (CIRP) against M/s Nirmal Cars Private Limited (Corporate Debtor) under Section 7 of IBC. The Adjudicating Authority initiated CIRP on 2023-06-15 and appointed an Interim Resolution Professional (IRP), who was later confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC). Subsequently, a liquidation order was passed on 2024-02-29, and the IRP was appointed as the Liquidator. The Corporate Debtor maintains various bank accounts. The Principal Commissioner, Central Excise & GST Commissionerate, Jaipur, directed the bankers of the Corporate Debtor, including Punjab National Bank, to freeze the bank accounts on 2022-12-30. The Applicant sent a letter on

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## Issues and analysis

### Issue 1: Whether the lien placed on the bank accounts of the Corporate Debtor by the GST Department can be …

**Ratio:** Section 238 of the Insolvency and Bankruptcy Code, 2016, overrides any other law that is

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**Reasoning:** The Adjudicating Authority reasoned that the CIRP and liquidation proceedings are

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**Interpretation:** Section 238 is interpreted to mean that the IBC takes precedence over other

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**Application:** In this case, the lien placed by the GST Department on the Corporate Debtor's

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** M/S FASHION…
- **Respondents:** M/S NIRMAL CARS…

## Timeline

- **2022-12-30 — Order to Freeze Bank…**: Principal Commissioner, Central Excise & GST Commissionerate, Jaipur directed the bankers…
- **2023-06-15 — CIRP Init…**: Adjudicating Authority initiated the Corporate Insolvency Resolution Process (CIRP) of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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