Supreme Court Directs Disbursal of Deposited Amount to IRP, Prioritizes Corporate Insolvency Over Criminal Complaint Claims

Case Snapshot

Case Name: Rakhiben W/o Sanjaykumar Agrawal v. State of Gujarat & Anr.

Citation: 2026 INSC 800

Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran

Date of Judgment: July 31, 2026

Area of Law: Insolvency and Bankruptcy Code, Criminal Law, Moratorium, Anticipatory Bail

The Judgment in One Line

Amounts transferred from a corporate debtor's account to comply with anticipatory bail conditions must be disbursed to the Interim Resolution Professional, not the complainant.

Why This Judgment Matters

This judgment resolves a conflict between criminal proceedings and the Insolvency and Bankruptcy Code, 2016. The Supreme Court held that where a corporate debtor is under a moratorium, any amount deposited in court that originated from the corporate debtor's account must be treated as an asset of the corporate debtor, not as a recovery for the complainant in a criminal case. The Court prioritized the IBC's objective of preserving the corporate debtor's assets for equitable distribution to all creditors, rejecting the complainant's claim to the entire deposit. The judgment clarifies that criminal proceedings cannot be used as a recovery mechanism during the CIRP.

Background

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