Hdfc Bank Ltd vs Mr. Shailendra Ajmera

IN THE MATTER OF: HDFC Bank Ltd. ...Appellant

Versus

Shailendra Ajmera ...Respondents

Present:

For Appellant : Mr. Dhruv Gupta, Mr Rishabh Tehlan, Advocates. For Respondents : Mr. Sanjay Bhatt and Ms. Apoorva Chowdhary, Advocates.

ORDER

(Hybrid Mode)

12.11.2025 Heard Learned Counsel for the Appellant as well as

Learned Counsel appearing for Respondent. This appeal has been filed

against an order dated 20.02.2025 passed by the Learned National Company

Law Tribunal, New Delhi, Bench Court 3 by which order of C.A. No. 20/2021

filed by the HDFC Bank has been rejected. Brief facts of the case are: The

CIRP against the Corporate Debtor, M/s Quality Limited commenced on

11.12.2018. Order of liquidation was passed on 11.01.2021, Appellant filed

its claim in form B for total sum of Rs. 1,07,06,706/- claiming security

interest in four vehicles with four loan accounts, the liquidator declined to

recognise the Appellant's claim as secured relying on the judgment of this

Tribunal Volkswagen Finance Private Limited Vs. Shree Balaji Printopack Pvt.

Ltd. 2020 SCC Online NCLAT 729. Challenging the decision of the liquidator

C.A. IB No. 20/2021 was filed by the Appellant which came to be dismissed

1|Page by the impugned order, aggrieved by the order 20.02.2025 this appeal has

been filed.

2. Learned Counsel for the Appellant submits that the vehicles with regard

to which claim was filed has been registered in the Vahan Portal e- Services

which registration was made reflecting the HDFC Bank as Financer. It is

submitted that the Registration in Vahan Portal has to be treated Registration

under SARFAESI Act 2002 by virtue of integration of Registration system in

Vahan Portal consequent to the notification issued by Central Govt. dated

03.05.2019 which was issued in excercise of power under sub- Section 2 of

Section 20 of the SARFAESI Act, 03.05.2019 was fixed as date of integration

system of the registration system of Central Registry with the Vahan National

Register. He submits that her clarification has also been issued by Reserve

Bank of India on 04.10.2019 with regard to the registration of vehicles shall

be treated to be registration under SARFAESI Act and the liquidator

committed error in rejecting the claim of secured creditor.

3. Shri. Sanjay Bhatt, Learned Counsel appearing for the Respondent

Liquidator rejecting the submissions submitted that the clarification which

has been relied by the Appellant dated 04.10 .2019 at best provide that Vahan

Registry shall be deemed to be registered with the Central Registry with the

purposes of SARFAESI Act 2002 but said Registration cannot be relied in the

IBC. It is submitted that the registration was required to be made under

Section 77of the Companies Act 2013 as has been held by Adjudicating

Authority. It is further submitted that the judgment of this Tribunal in

Volkswagen Finance Private Limited has rightly been relied by Adjudicating

Authority in rejecting the claim of Secured Creditor.

2|Page

4. We have considered the submission of the Counsel for the parties and

perused the record, from the submissions of the parties and record following

facts are undisputed:-

1. The Registration of Security interest with regard to four vehicles for

which claim was filed in form B where registered on Vahan e- Portal.

2. The claim was filed by the Appellant in form B Relying in Registration

of Vahan e-portal of the vehicle claiming security interest.

3. The adjudicating authority rejected the claim of the Appellant relying

on the judgment of Volkswagen Finance Pvt. Ltd.

5. The question which has cropped for consideration in this appeal is as

to whether Registration of vehicle in Vahan e-portal shall be treated to be

registration within meaning of SARFAESI Act 2002. Learned Counsel for the

Appellant has relied on section 52 of the IBC, which provides as follows:

"52. Secured creditor in liquidation proceedings.

-

(3) Before any security interest is realised by the secured creditor under this section, the liquidator shall verify such security interest and permit the secured creditor to realise only such security interest, the existence of which may be proved either--

(a) by the records of such security interest maintained by an information utility; or

(b) by such other means as may be specified by the Board."

6. The Regulation has been relied namely Liquidation Regulation 2016

and reliance has been placed by Appellant on Regulation 21 which provides

as follows:

"21. Proving security interest- The existence of a security interest may be proved by a secured creditor on the basis of-

3|Page

(a) the records available in an information utility, if any;

(b) certificate of registration of charge issued by the Registrar of Companies; or

(c) proof of registration of charge with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India."

7. The board has provided provision for proving security interest under

Regulation 21 and one of the mode under sub clause (C) is the proof of

Registration of charge with Central Registry and Assets Reconstruction

Security India is one of the accepted board of probing the charge. The

submissions advance by both the parties are divergent in so far as nature of

Registration and consequence of Registration on the e-Vahan Portal is

concerned.

8. Section 20A provides for integration of Registration System with Central

Registry Section 20A is as follows:

1

[20A. (1) The Central Government may, for the purpose of providing a Central database, in consultation with State Governments or other authorities operating registration system for recording rights over any property or creation, modification or satisfaction of any security interest on such property, integrate the registration records of such registration systems with the records of Central Registry established under section 20, in such manner as may be prescribed.

Explanation.--For the purpose of this sub-section, the registration records includes records of registration under the Companies Act, 2013 (18 of 2013), the Registration Act, 1908 (16 of 1908), the Merchant Shipping Act, 1958 (44 of 1958), the Motor Vehicles Act, 1988 (59 of 1988), the Patents Act, 1970 (39 of 1970), the Designs Act, 2000 (16 of 2000) or other such records under any other law for the time being in force.

(2) The Central Government shall after integration of records of various registration systems referred to in sub-section (1) with the Central Registry, by notification, declare the date of integration of registration systems and the date from which such integrated records shall be available; and with effect from such date, security interests over properties which are registered under any registration system referred to in sub-section (1) shall be deemed to be registered with the Central Registry for the purposes of this Act.]

4|Page

9. Under Section 20 A sub Section 2 the notification has been issued by

the Central Government dated 03.05.2019 notification dated 03.05.2019

reads as follows:

"S.O. 1695(E)- In exercise of the powers conferred by

sub-section (2) of section 20A of the Securitisation

and Reconstruction of financial Assets and

Enforcement of Security Interest Act, 2002 (54 of

2002), the Central Government hereby declare the

day of 3rd May, 2019 as the date of integration of the

registration system of Central Registry with the

VAHAN National Register, the registration system of

the Motor Vehicles Act, 1988, and the date from

which such integrated records in so far as it relates

to registration of vehicle shall be available."

10. The above notification clearly provides that, 03.05.2019 is the

integration of the Registration System of Central Registry with the Vahan

National Register. The clarification issued by RBI dated 04.10.2019 has also

been brought on record where clarification the Government of India provided

in Item No.1 which is as follows:

Sl. No. Issues pertaining to Clarification by GOI

registration of

charges under

SARFAESI Act, 2001

1. Registration of As per the notification

Vehicles on CERSAI. issued by DFS on

5|Page 03.05.2019 about

integration of the

VAHAN motor vehicles

registry with CERSAI,

registration of charges

relating to motor

vehicles is to be made

only on the VAHAN

registry and not on the

Central Registry

(CERSAI). Any Vehicle

registered with the

VAHAN registry shall

be deemed to be

registered with the

Central Registry for

the purposes of the

SARFAESI Act, 2002.

11. The submission Counsel for the Liquidator has been that

the Registration as per the clarification issued by the Government of India

is that the Registration is for the purposes of SARFAESI Act and cannot

be relied in the Liquidation Proceedings.

12. As noted above, Regulation 21 of Sub Clause C provides proving

of Security interest by Registration under the SARFAESI Act when

6|Page integration of Registry under Vhan e-Portal has been provided by

notification dated 03.05.2019 and is contemplated by Section 20 A, we see

no reason to not accept the registration under e-Vahan Portal as a

registration within the meaning of SARFAESI Act 2002. When the Section

20 A, sub section 2 uses the expression "shall be deemed to be registered"

with the Central Registry of the Tribunal, the effect shall be deemed to be

registered with the Central Registry for the Corporate Asset. When

03.05.2019 declared the date for integration and law provides deeming

clause we fail to see why the Registration under the Vahan Portal cannot

be accepted Registration under the SARFAESI Act 2002 and that is the

clarification issued by the Government of India. When the statues itself

provides for deeming class the Registration under the e- Vahan Portal has

to be treated covered by Regulation 21 (Sub Clause C). Coming to the

judgment of the 'Volkswagen Finance Private Limited' on which reliance

has been placed by the Counsel for the Respondent as well as adjudicating

authority, in the said judgment, there was no claim of any registration

under the SARFAESI Act which fact has been noticed in Paragraph 29

where the court has held that "It is also an admitted fact that charge was

not registered under Central Registry of Asset Reconstruction and Security

Interest of India Para 29 is as follows:

"29. From the documentary evidence on record it is

clear that no 'Charge' has been registered under the

provisions of Section 77(1) of the Companies Act, 2013,

in relation to the Subject Property. The Liquidator has

rightly referred to Regulation 21 of IBBI (Liquidation

7|Page Process) Regulation, 2016 and observed that the

Appellants 'Claim' was not supported by any evidence

as prescribed under the said Regulation. It is also an

admitted fact that the 'Charge' was not registered

under Central Registry of Securitization Asset

Reconstruction and Security Interest of India. We are

keeping the ratio of the aforenoted Judgements of the

Hon'ble Supreme Court and Section 52(3) of the Code

read with Regulation 21(c) of the (Liquidation Process),

Regulations, 2016, in view. We are of the considered

opinion that the contentions of the Learned Counsel

appearing for the Appellant that Registration with

Motor Vehicle Authority under Section 51 of the Motor

Vehicles Act, 1988 would suffice, cannot be sustained.

Section 51(1) of the MV Act, 1988 only provides for

"entry" in the Certificate of Registration regarding the

agreement. The Section provides how to deal with the

entry. To reiterate, in the instant case, as the 'Security

Interest' was neither registered with the Information

Utility'; nor under Section 125 of the Companies Act,

1956/Section 77 of the Companies Act, 2013; no

Application was preferred under Section 87 of the

Companies Act, 2013; 'Charge' was not registered in

the Securitisation Asset Reconstruction and Security

Interest of India, we are of the opinion that Section

8|Page 52(3) (b) of the Code and Regulation 21(b) of the

(Liquidation Process), Regulation, 2016 are not

complied with and the ratio laid down by the Hon'ble

Apex Court in Kerala State Financial Enterprises Ltd.

(Supra) and this Tribunal in India Bulls Finance Ltd.

(Supra) is squarely applicable to the facts of this case.

Hence, we hold that when in present matter 'Charge'

was not registered as per the provisions of Section

77(1) of the Companies Act, 2013 and as envisaged

under the Code, the Creditor cannot be treated as a

'Secured Creditor"

13. Thus, in the Volkswagen Finance Private Limited Case there was

no claim for registration under SARFAESI Act hence the said judgment

does not lead to any assistance in the present case with the case of the

Respondent more so this Tribunal in Volkswagen Finance Private Limited

was not considering the Registration under SARFAESI Act 2002, specially

integration of Registry to the Vahan Portal. Counsel for the Appellant has

also relied on another judgment of this Tribunal in Company Appeal Ins.

210 of 2024 in Bizloan Pvt. Ltd. Vs. Mr. Amit Chandrashekhar Poddar

[Liquidator For Autocop (India) Private Limited] decided on 03.07.2025

where this Tribunal has occasion to consider the Registration under

SARFAESI Act and has considered Regulation 21 and in Para 29 of the

judgment followed has been laid down:

"29. From above, we note that the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) was set up under section

9|Page 20 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). CERSAI is a centralised online platform created by the Reserve Bank of India (RBI) to maintain records of all types of securities interests created over any type of property, including movable and immovable properties and it acts as a comprehensive database that stores details of all securitisations, reconstructions, and security interests created by banks and other financial institutions. We understand that CERSAI helps lenders to check whether a property has already been used as collateral before granting loans to borrowers, thus CERSAI helps in reducing fraudulent activities such as multiple financing, benami transactions, and others and provides transparency and efficiency in the loan processing system, making it easier for lenders to track and manage their assets."

14. The above judgments do support the submissions of the

Appellant. In view of the above reasons and conclusions, we are of the view

that the impugned order cannot be sustained. Appellant is held to have

security interest in the vehicles and claim of the Appellant was required to

be accepted as Secured Creditor. We set aside the impugned order. We

allow the appeal and set aside the impugned order 20.02.2025 and allow

CA 20/2021 declaring the Appellant as Secured Creditor.

[Justice Ashok Bhusan] (Chairperson)

[Barun Mitra] Member (Technical) MT/MD

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