Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: 24th August, 2026

Case Overview

This appeal arose from the order dated 22.08.2024 passed by the National Company Law Tribunal (NCLT), Mumbai Bench-I in I.A. No. 5303 of 2023. The Resolution Professional (RP) of NDS Art World Pvt. Ltd. (Corporate Debtor) had filed an application under Section 60(5) read with Section 14(1)(b) of the Insolvency and Bankruptcy Code, 2016, seeking directions against Moving Pixels Pvt. Ltd. (Appellant) and others to return money wrongfully received during the corporate insolvency resolution process (CIRP) moratorium period.

The Corporate Debtor was admitted into CIRP vide order dated 25.07.2023, with Mr. Jitendra Kothari appointed as Resolution Professional. The moratorium under Section 14 of the Code was declared effective from this date. The order was uploaded on the NCLT website on 27.07.2023 and published in Mumbai local dailies on 28.07.2023 as required under Sections 13(2) and 15 of the Code.

The RP discovered that a sum of ₹1,01,04,908/- was wrongfully transferred from the Corporate Debtor's IDBI Bank account (Karjat Branch, Raigad) to various respondents including the Appellant after the moratorium was imposed. Specifically, the Appellant received ₹80 lakhs pertaining to work executed in the pre-CIRP period but paid during the moratorium. The RP issued notices on 18.09.2023 and 04.10.2023 demanding return of the amount with interest at 18% under the Interest Act, 1978.

The NCLT found that the transactions occurred during the moratorium period without the RP's knowledge and constituted a violation of Section 14(1)(b) of the Code. The tribunal directed refund of the amount with interest.

Final Outcome

The NCLAT dismissed the appeal and upheld the NCLT's order. The tribunal held that:

  • The monetary transactions completed during the moratorium period violated Section 14(1)(b) of the IBC
  • The appellant's claim of ignorance about CIRP initiation was not acceptable as the order was in public domain through website publication and newspaper announcements
  • The defense that the amount was held in trust by the Corporate Debtor was not established with evidence
  • The argument regarding availability of remedy under Section 74 of the Code was not tenable as this provision was deleted by the Insolvency and Bankruptcy Code (Amendment) Act, 2026 effective 06.04.2026
  • The RP was justified in seeking recourse under Section 60(5) read with Section 14(1)(b) for violation of moratorium provisions

The Appellant was directed to refund ₹80 lakhs with interest at 18% per annum as ordered by the NCLT.

Topics: IBC Moratorium Violation, CIRP Fund Recovery, NCLAT Judgment