Federal Bank Wins NCLAT Appeal Against Liquidator's VAT Treatment

NCLAT overturns NCLT order, directing liquidator to distribute Rs. 1.05 crore withheld sale proceeds to Federal Bank.
Tribunal rules Haryana VAT Department is not a secured creditor under IBC, rejecting reliance on Rainbow Papers judgment.
Appeal centered on interpretation of Section 53 waterfall mechanism during liquidation of Dugal Associates Pvt Ltd.
Liquidator's request for an indemnity undertaking from Federal Bank was rejected as untenable in law.