Resolution Professional Is Only Authorized To Operate Accounts Of Corporate Debtor : NCLAT Chennai
[05 July 2022] The National Company Law Appellate Tribunal, Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mr. Kanthi Narahari (Technical Member), while adjudicating an appeal filed in Beauty Etiole Pvt. Ltd. v C. Sanjeevi & Ors, has held that the Resolution Professional is only authorized in law to exercise control over Bank Accounts operated by the Corporate Debtor and not otherwise.
1. Whether Resolution Professional has any authority in law to freeze Bank Account belonging to a third party?
Decision Of The NCLAT
The NCLAT observed that the “Resolution Professional has ‘no authority’ in law to exercise his power over the Four ‘Bank Accounts’ and as a consequent thereof, he cannot freeze these ‘Bank Accounts’ in the considered opinion of this ‘Tribunal’.”
The NCLAT Bench held that the Resolution Professional, in law has only an authority to exercise control over Bank Accounts operated by the ‘Corporate Debtor’ and not otherwise. Accordingly, the order dated 01.11.2021 was set aside.