NCLT Directs Axis Bank Remove Citylife Liquidation Lien

NCLT orders Axis Bank to immediately remove a Rs 9.70 lakh lien placed on Citylife Retail's liquidation account at the behest of the Commercial Tax Department.
The Tribunal held that the tax department's recovery notice, issued after liquidation began, violated the IBC's moratorium and claim submission process.
The bank was restrained from creating any further encumbrances on the account without prior leave of the Tribunal, protecting the liquidation estate.
The ruling reinforces the supremacy of IBC's waterfall mechanism over parallel recovery actions by government authorities during liquidation.