Post-commencement of liquidation, all assets of a corporate debtor vest in the liquidator, and creditors, including tax authorities, are prohibited from initiating recovery proceedings through liens; they must instead submit claims to the liquidator to be processed under the waterfall mechanism of Section 53 of the IBC.

Per: Rekha Kantilal Shah, Member (Technical)

1. The present application has been preferred by the Liquidator of Citylife Retail Private Limited (hereinafter referred to as “CD”)

praying for the following reliefs:-

“(A) The Hon’ble Tribunal may be pleased to direct the Respondent Bank to forthwith remove the lien of Rs. 9,70,340/- (Rupees Nine Lakhs Seventy Thousand Three Hundred and Forty only) marked on the liquidation account of the Corporate Debtor, bearing Account No. 922020050873716 maintained with Axis Bank, Sarat Bose Road Branch, Kolkata, being contrary to the provisions of the Insolvency and Bankruptcy Code, 2016;

(B)The Hon’ble Tribunal may be pleased to restrain the Respondent Bank from in any manner creating, continuing, or enforcing any lien, attachment, or encumbrance over the liquidation account of the Corporate Debtor during the pendency of the liquidation proceedings, except with prior leave of this Hon’ble Tribunal;

(C) Ad-interim orders in terms of prayers above;

(D) Such other and/or further orders as this Hon’ble Tribunal deems fit and proper;”

2. Background of the Case

2.1 The Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of the CD commenced on 31^st May, 2025 vide an order passed by this Tribunal. Subsequently, by an order dated 22^nd July, 2021 passed by this Tribunal the Applicant was appointed as the Resolution Professional (hereinafter referred to as “RP”) in respect of the CD. As no Resolution Plan was received by the RP during the CIRP, this Tribunal ordered for the CD to be liquidated and appointed the applicant as the liquidator vide an order 13^th September, 2022.

2.2 Pursuant to his appointment as a Liquidator, the applicant opened a Bank Account in name of the CD in terms of Regulation 41 of the Liquidation Process Regulations with Axis Bank, Sarat Bose Road Branch, Kolkata.

2.3 The Liquidator on the last date of submission of claim, as per the public announcement had received 524 claims from various stakeholders. As such, the applicant upon verifying the claims had prepared the list of stakeholders and submitted the list of stakeholders before this Tribunal on 26^th November, 2011. Subsequently, two claimants submitted their claims after the last date for submission of claims, and the same were rejected by the liquidator. However, pursuant to applications filed by the said claimants, this Tribunal condoned the delay in respect of the said claims vide an order dated 08^th February, 2023. Pursuant to such condonation, the applicant submitted the updated and final list of stakeholders by way of an application and the same was taken on record by an order dated 04^th July, 2023.

2.4 Subsequently, in the year 2025, the Applicant received an email from Axis Bank stating therein that a lien of Rs. 9,70,340/-

(Rupees Nine Lakhs Seventy Thousand Three Hundred and Forty) has been marked in the liquidation account of the CD pursuant to receipt of a notice dated 14^th February, 2025 issued by Commercial Tax Department, Lucknow.

2.5 It is this lien, marked by Axis Bank in favour of the Commercial Tax Department, that forms the genesis of the dispute in the present case.

3. Submissions on behalf of the Applicant/Liquidator

3.1 The Liquidator upon receipt of aforesaid email from Axis Bank, visited the Sarat Bose Road Branch of the Bank and made a formal request for removal of lien marked on the liquidation account of the CD.

3.2 It has been submitted that the said request was made to ensure that the liquidation proceeds remain available for distr