Suspended Management Cannot Disburse Funds Of Corporate Debtor Post-CIRP Commencement Without Authorisation Of IRP: NCLAT New Delhi

The NCLAT, New Delhi, has ruled that suspended management cannot disburse funds of a corporate debtor post-CIRP commencement without authorization from the Interim Resolution Professional (IRP). This decision reinforces the strict financial control of the IRP once the Corporate Insolvency Resolution Process (CIRP) begins, preventing unauthorized transactions. The tribunal emphasized that any disbursements made by the suspended management after CIRP commencement are unauthorized and can be clawed back. This ruling is crucial for maintaining the integrity of the insolvency process, safeguarding the corporate debtor's assets, and ensuring that the IRP has complete oversight and control over financial matters during the resolution period.