J.C. Flowers Asset Reconstruction ... vs Vivek Parti

[Arising out of Order dated 01.04.2025 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench (Court-II) in I.A. No.4469 of 2024 in C.P. No. (IB) 3042/ND/2019]

IN THE MATTER OF: J.C. FLOWERS ASSET RECONSTRUCTION PRIVATE LIMITED acting in its capacity as a Trustee of the JCF ARC Trust 2024-25/31 Registered office at: Unit No.203-206, Inspire BKC Bandra Kurla Complex, Bandra (East) Mumbai 400051

Also at: Hotel Aloft, 5B, IGI T3 Road, 1st floor, Aerocity, New Delhi 110037 Email: chitranshul.sinha@outlook.com ...Appellant

Versus

1. VIVEK PARTI Liquidator M/s Nice Projects Ltd. Office at: A-166, 2nd Floor, Defence Colony, New Delhi 110024 Email: liq.niceprojects@gmail.com.

2. M/s Dianka Industries India Pvt. Ltd. ...Respondents

Present: For Appellant: Mr. Sumesh Dhawan, Mr. Chitranshul A. Sinha, Ms. Vatsala Kak, Mr. Shaurya Shyam, Ms. Ayushi Bansal, Mr. Shivam Shorewala and Ms. Rakshita Bhargava, Advocates. For Respondents: Mr. Karan Gandhi, Mr. Sikhar Tiwari & Ms. Vidhika Kapoor, Ms. Riya Jain, Advocates for R-1 (Liquidator). Ms. Purti Gupta, Ms. Heena George, Ms. Sunidhi Sah and Ms. Pooja, Advocates for R-2.

Cont'd.../ 2

ORDER

Ashok Bhushan, J.

This Appeal has been filed challenging the order dated 01.04.2025

passed by the Adjudicating Authority (National Company Law Tribunal),

New Delhi Bench (Court II) rejecting I.A. No.4469 of 2024 filed by the RBL

Bank Ltd. from whom Appellant claims an assignment.

2. Brief facts necessary to be noticed for deciding this appeal are:

2.1 CIRP against the Corporate Debtor - M/s Nice Projects Ltd.

commenced on 12.02.2021. In CIRP of the Corporate Debtor,

Committee of Creditors (CoC) was constituted in which the RBL Bank

was assigned 9.10% vote share. No resolution plan having approved

in the CIRP, the CoC passed resolution to approve the liquidation of

the Corporate Debtor. RBL Bank, the Financial Creditor has also

voted for liquidation of the Corporate Debtor.

2.2 An I.A. was filed by the Resolution Professional for liquidation.

By order dated 30.04.2024, the liquidation order was passed by the

Adjudicating Authority appointing Mr. Vivek Parti as Liquidator

(Respondent herein). The Liquidator published the public

announcement on 18.05.2024.

Company Appeal (AT) (Insolvency) No.817 of 2025 3

2.3 RBL Bank issued a notice under Section 13(2) of the SARFAESI

Act, 2002 on 12.07.2024. Liquidator sent an email to the RBL Bank

intimating that liquidation proceeding having commenced no legal

action can be taken against the Corporate Debtor as per Section 33

Subsection (5). The RBL Bank on 24.07.2024 informed the Liquidator

that they have already issued notice dated 12.07.2024.

2.4 The RBL Bank by its email dated 25.07.2024 prayed the

Liquidator to release the interest over the secured property.

2.5 On 12.08.2024, the RBL filed IA No.4469 of 2024 praying for

condonation of delay in communicating the non-relinquishment of

Security Interest.

2.6 The Liquidator also filed an application I.A. No.4965 of 2024

seeking setting aside of demand notice under Section 13(2) dated

12.07.2024.

2.7 On 27.12.2024, the RBL Bank executed an Assignment

Agreement assigning the account of the Corporate Debtor to JC

Flowers Asset Reconstruction Pvt. Ltd.

2.8 The application filed by the RBL Bank came to be considered by

the Adjudicating Authority on 01.04.2025. The Adjudicating

Authority after noticing the prayers made in the application observed

that prayer made in the application has ramification for modification

Company Appeal (AT) (Insolvency) No.817 of 2025 4

of the proviso to Regulation 21A of the Liquidation Regulations, 2016

and there was no appearance on behalf of the Appellant. The

application was dismissed for default. Appellant aggrieved by the

order dated 01.04.2025 has filed this appeal on 26.05.2025.

2.9 An IA No.3659 of 2025 has been filed by M/s Dianka Industries

Pvt. Ltd. claiming to be the Successful Auction Purchaser of the assets

seeking impleadment in the Appeal. By order dated 03.07.2025,

impleadment has been allowed and M/s Dianka Industries Pvt. Ltd.

has been arrayed as Respondent No.2.

3. We have heard Shri Sumesh Dhawan, learned counsel for the

Appellant. Shri Karan Gandhi, learned counsel appearing for the Liquidator

and Ms. Purti Gupta, learned counsel for the Respondent No.2 - Successful

Auction Purchaser.

4. Shri Sumesh Dhawan, learned counsel for the Appellant challenging

the order contends that the RBL Bank who had security interest did not

communicate its option to not relinquish its security interest within thirty

days and had sent an email to the Liquidator on 25.07.2024 praying for

release of security and consequently I.A. No.4469 of 2024 was filed by the

RBL Bank praying for condonation of delay in communicating its intent to

not to relinquish its security interest. It is submitted that the Adjudicating

Authority has jurisdiction to condone delay. The RBL Bank had already

assigned the loan account of the Corporate Debtor to the Appellant on

Company Appeal (AT) (Insolvency) No.817 of 2025 5

27.12.2024, hence, none can appear on behalf of the RBL Bank and

application was dismissed in default. It is submitted that present is a case

where it was Liquidator's obligation to inform the Court of the assignment in

favour of the Appellant. It is submitted that in event, the Adjudicating

Authority condone the delay, as prayed in I.A. No.4469 of 2024, the

entitlement to receive amount by Appellant shall substantially affected.

5. Learned counsel for the Liquidator opposing the submission of learned

counsel for the Appellant submits that RBL Bank who was holding security

interest was statutorily obliged to inform the Liquidator of its decision not to

relinquish its security interest which having not been communicated within

thirty days from order of liquidation dated 30.04.2024, there is presumption

that asset is part of the liquidation estate. The Assignment Agreement itself

mentions about the pendency of C.P. No. (IB) 3042/ND/2019 against the

Corporate Debtor, hence, it was duty of the Appellant to take steps. The

Liquidator has already challenged the issuance of Section 13(2) notice by

filing an application before the Adjudicating Authority and was contesting

the right of the RBL Bank to issue any notice under Section 13(2). It is

submitted that the assets which were secured assets with the RBL Bank

being assets of the Corporate Debtor have already been auctioned and sold

and Sale Certificate dated 05.06.2025 has been issued in favour of the

Respondent No.2, who has already been impleaded by order of this Tribunal

dated 03.07.2025. It is submitted that RBL Bank having not informed that

it is not relinquishing its Security, assets being part of the liquidation estate

Company Appeal (AT) (Insolvency) No.817 of 2025 6

has already been dealt with by the Liquidator and application which was

filed by the RBL Bank has now become infructuous.

6. Learned counsel for the Respondent No.2 submits that the

Respondent No.2 is the Successful Auction Purchaser of the assets in which

the RBL Bank had security interest. Thirty days after liquidation

commencement date, RBL Bank having not informed its intent to not

relinquish security interest, the Liquidator has rightly auctioned the assets.

The Respondent No.2 is auction purchaser of Commercial Unit No.201, 2nd

Floor of Commercial Building, Plot No.15, Community Centre, Phase-I,

Okhla, New Delhi. There is no merit in the appeal. The Appellant has not

released the assets in respect of the property of the Corporate Debtor with

respect to the unit.

7. We have considered the submissions of learned counsel for the parties

and perused the record.

8. The liquidation order was passed by the Adjudicating Authority on

30.04.2024 relying on the resolution of the CoC held in meeting dated

16.12.2023. A copy of the liquidation order has been brought on the record

at page 89 of the appeal. The Adjudicating Authority in the order dated

30.04.2024 has quoted the resolution of the CoC, which indicate that RBL

Bank has also voted for the liquidation.

Company Appeal (AT) (Insolvency) No.817 of 2025 7

9. Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016

provides for as follows:

"[21A. Presumption of security interest. (1) A secured creditor shall inform the liquidator of its decision to relinquish its security interest to the liquidation estate or realise its security interest, as the case may be, in Form C or Form D of Schedule II:

Provided that, where a secured creditor does not intimate its decision within thirty days from the liquidation commencement date, the assets covered under the security interest shall be presumed to be part of the liquidation estate.

[(2) Where a secured creditor proceeds to realise its security interest, it shall pay -

(a) as much towards the amount payable under clause (a) and sub-clause (i) of clause (b) of sub-

section (1) of section 53, as it would have shared in case it had relinquished the security interest, to the liquidator within ninety days from the liquidation commencement date; and

(b) the excess of the realised 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:

Provided that where the amount payable under this sub-regulation is not certain by the date the

Company Appeal (AT) (Insolvency) No.817 of 2025 8

amount is payable under this sub-regulation, the secured creditor shall pay the amount, as estimated by the liquidator:

Provided further that any difference between the amount payable under this sub-regulation and the amount paid under the first proviso shall be made good by the secured creditor or the liquidator, as the case may be, as soon as the amount payable under this sub-regulation is certain and so informed by the liquidator.

(3) 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.

[Explanation.- It is hereby clarified that the requirements of this regulation shall apply to the liquidation processes commencing on or after the date of the commencement of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019.]"

10. In the present case, no information was sent by the RBL Bank, the

Secured Creditor that it does not intend to relinquish security in the assets.

The RBL Bank for the first time on 25.07.2024 sent an email to the

Liquidator requesting for release of security interest. I.A. No.4469 of 2024

was filed by the RBL Bank before the Adjudicating Authority where following

prayers were made:

Company Appeal (AT) (Insolvency) No.817 of 2025 9

"PRAYER

In view of the aforegoing, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to:

(a) Condone the delay of 56 days or otherwise in communicating Appellant's intention to not to relinquish its Secured Asset [Commercial Unit Bearing No. 201, 2nd Floor (without roof/terrace rights), having a Covered area of approximately 2800 Sq.ft or 260.10 Sq. Mtr.

i.e. 3100 Sq. Ft., super area or 288 Sq. Mtr of Super Area, a part of Freehold Commercial Building, Built on Plot No. 15, Community Centre, Phase-1, Okhla, New Delhi] in Liquidation Pool, occasioned from the stipulated period of 30 days of Liquidation Commencement Date in terms of Regulation 21A of IBBI (Liquidation Process) Regulations, 2016;

(b) Direct Liquidator to treat Secured Asset, [Commercial Unit Bearing No. 201, 2nd Floor (without roof/terrace rights), having a Covered area of approximately 2800 Sq.ft or 260.10 Sq.Mtr. i.e. 3100 Sq. Ft., super area or 288 Sq.

Mtr of Super Area, a part of Freehold Commercial Building, Built on Plot No. 15, Community Centre, Phase-I, Okhla, New Delhi) as not being relinquished and outside the Liquidation Estate;

Company Appeal (AT) (Insolvency) No.817 of 2025 10

(c) Direct Liquidator to hand-over physical possession of the Secured Asset bearing Commercial Unit Bearing No. 201, 2nd Floor (without roof/terrace rights), having a Covered area of approximately 2800 Sq.ft or 260.10 Sq.Mtr. i.e. 3100 Sq. Ft., super area or 288 Sq.

Mtr of Super Area, a part of Freehold Commercial Building, Built on Plot No. 15, Community Centre, Phase-I, Okhla, New Delhi;

(d) Pass such other and/or further order(s) as this Hon'ble Tribunal may deem fit and proper."

11. From the prayers made by the RBL Bank in I.A. No.4469 of 2024. It is

clear that the RBL Bank was praying for condonation of 56 days' delay in

communicating its intention to not to relinquish its Secured Asset i.e.

Commercial Unit Bearing No. 201, 2nd Floor and further sought for

direction to the Liquidator to handover the physical possession of the

secured asset. The above pleading indicated that the secured assets were

never in the possession of the RBL Bank whose possession was sought.

According to own case of the Appellant, Appellant received assignment from

the RBL Bank on 27.12.2024, which Assignment Agreement dated

27.12.2024 has also been brought on the record which has been registered

and certificate has been issued in April, 2025, which has been filed as

Annexure A-5. From the certificate which has been annexed along with the

Assignment Agreement it is clear that the certificate was issued by

Registering Offer on 07.05.2025, which is at page 217 of the paper book.

Company Appeal (AT) (Insolvency) No.817 of 2025 11

12. The impugned order passed by the Adjudicating Authority has

dismissed the application in default, however, after noticing the prayers

made in the application, the Adjudicating Authority has made following

observations:

"Section 52 of the Insolvency and Bankruptcy Code. 2016 provides that a secured creditor may either relinquish its security interest and receive proceeds from the liquidation process or realise the security interest in the manner specified in the section.

Further, Regulation 37 prescribes the procedure for realization of security interest by a secured creditor. Regulation 21A deals with the resumption of security interest. As per the proviso to Regulation 21A(1) of the IBBI (Liquidation Process) Regulations, 2016, if the secured creditor does not intimate its decision to either relinquish or realize the security interest within 30 days from the liquidation commencement date, the assets covered under the security interest shall be presumed to be part of the liquidation estate.

The prayer made in the application has ramification for modification of the aforesaid proviso to Regulation 21A.

In any case, there is no appearance on behalf of the Applicant. The application is accordingly dismissed for default."

Company Appeal (AT) (Insolvency) No.817 of 2025 12

13. The RBL Bank who has filed the application did not pursue the

application nor had filed any application to recall the order dated

01.04.2025. Applicant who claim to have obtained assignment on

27.12.2024, which was registered only in May, 2025, has also not taken any

steps to substitute itself in the proceeding whereas the Assignment

Agreement itself clearly noted C.P. No. (IB) 3042/ND/2019 in the list of

litigations. It is useful to notice Column 9 at page 206 of the appeal, which

is as follows:

9. Details of (A) Litigation Action Filed (B) Litigation Filed Pending By Bank By Borrower/ Litigations Guarantor/ Third Party

Sarfaesi: Date Of 13(2) 1) HC- Crl. M. C. Notice Issued On 7643/2024 30/07/2018. The Amount Mentioned In Demand Notice Is Rs.6,18,11,977.55/-

138 NIA

1. CC/387/21-JMFC Kolhapur

2. CC/3043/21- Saket District Court

NCLT Delhi: IB-

3042/ND/2019

14. The Appellant, thus, is presumed to be well aware of the proceedings

pending in the NCLT, New Delhi; the application which was filed by the RBL

Company Appeal (AT) (Insolvency) No.817 of 2025 13

Bank praying for condonation of delay in communicating its intention not to

relinquish security interest. The application has been dismissed by the

impugned order. Neither RBL Bank nor the Appellant took any steps to

pursue the application. The RBL Bank has not filed any application to recall

the order dated 01.04.2025 showing any sufficient cause for non-

appearance on 01.04.2025. It has also been submitted by learned counsel

for the Liquidator and learned counsel for the Respondent No.2 that after

dismissal of the application, the secured assets have already been sold and

Sale Certificate has been issued in favour of the Respondent No.2 on

05.06.2025 by the Liquidator.

15. We do not find any such error in the order dated 01.04.2025 which

warrant any interference in exercise of appellate jurisdiction by this

Tribunal. No relief can be granted to the Appellant in this appeal. Appeal is

dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

22nd August, 2025

Archana

Company Appeal (AT) (Insolvency) No.817 of 2025