Dhanlaxmi Bank Ltd vs Hrisikesh Das Gupta

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National Company Law Appellate Tribunal, New Delhi Principal Bench Company Appeal (AT) (Ins) No. 777 of 2021 IN THE MATTER OF: Dhanlaxmi Bank Ltd. ... Appellant Vs. Techno Fab Manufacturing Ltd. & Ors. ...Respondents Present: For Appellant: - Mr. AN Tiwari, Advocate For Respondents: Mr. Rishav Banerjee, Advocate for R1. ORDER

(Virtual Mode)

28.09.2021: Heard Ld. Counsel for the Appellant. He submits that the

Appellant being a secured creditor in the liquidation process of the Corporate

Debtor has intimated to the Liquidator to realize its asset over which it has

exclusive first charge under Section 52(1) (b) of the IBC and in physical

possession of the asset. The Liquidator has asked the Appellant to vacate its

physical possession and to return back asset to the liquidation estate.

However, the Appellant intends to put further efforts to realize its security

and accordingly, need a further time period of 6 months. But Ld.

Adjudicating Authority has dismissed the Application. Therefore, this Appeal

is filed.

2. Ld. Counsel appearing on behalf of the Liquidator vehemently opposes

the prayer and submits that the order of liquidation was passed on

05.09.2018 and the physical possession of the secured asset was handed

over to the Appellant by the liquidator on 03.09.2019. The first auction of the

secured asset was made on 03.09.2019 and second on 06.01.2021, this

clearly shows that no steps were taken by the Appellant for auction for about

15 months. Thereafter, about 8 months have been lapsed but, no steps have

been taken by the Appellant to realize its security interest. Company Appeal (AT) (Ins) No. 777 of 2021 2

3. It is further submits that Sub Regulation (2) of Regulation 21-A of the

Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations,

2016 provides that a secured creditor has to realize its security interest in

time bound manner and has to relinquish the security interest to the

liquidator within 90 days from the liquidation commencement date and the

secured creditor shall pay the excess of the realized value of the asset, which

is subject to security interest, over the amount of his claims admitted, to the

liquidator within one hundred and eighty days from the liquidation

commencement date. Sub Regulation (3) of Regulation 21 provides that where

a secured creditor fails to comply with sub-regulation (2), the asset, which is

subject to security interest, shall become part of the liquidation estate.

4. In the present case, the order of liquidation was passed on 05.09.2018,

three years has been lapsed and the liquidation proceeding could not be

completed and after granting ample opportunity the Appellant has failed to

realize its security interest. Therefore, Ld. Adjudicating Authority has rightly

directed the Appellant to handover the asset in possession back to the

liquidator within 7 days.

5. We have gone through the impugned order and relevant provisions. We

find no legal flaw in the impugned order. Thus, the Appeal is dismissed

summarily.

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical) sc

Company Appeal (AT) (Ins) No. 777 of 2021