Govt Cannot Maintain Attachment Of Property To Press For Recovery Outside Liquidation Framework: NCLAT Chennai

The NCLAT Chennai bench has ruled that the government cannot maintain attachment of property to press for recovery outside the liquidation framework under the IBC (Insolvency and Bankruptcy Code). This decision reinforces the supremacy of the IBC in insolvency proceedings, asserting that once a company enters liquidation, all claims and recoveries must be handled within the structured framework of the Code. It prevents government authorities from taking parallel actions that could undermine the collective insolvency process and compromise fair distribution to all creditors.