IRP nod must for recovering money from defaulter's bank account: NCLAT

Issue was raised in a hearing related to Indian Overseas Bank's plea against Amtek Auto

The NCLAT has said financial creditors cannot recover any amount from a defaulter's bank account without the nod of the Interim Resolution Professional (IRP) during the corporate insolvency resolution process.

Declining relief to the Indian Overseas Bank (IOB) against Amtek Auto's IRP Dinnkar T Venkatsubramaniam, the National Company Law Appellate Tribunal (NCLAT) said that once moratorium is declared, financial institutions have to act "on the instructions of IRP" with respect to the corporate debtor's account.

"Once moratorium has been declared it is not open to any person including 'Financial Creditors' and the appellant bank (IOB) to recover any amount from the account