NCLAT | Aggrieved with the categorisation as ‘unsecured creditor’, Tribunal secures ‘secured creditor’, having relinquished the security interest

National Company Law Appellate Tribunal, New Delhi: The Coram of Ashok Bhushan J, (Chairperson), and Dr Alok Srivastava (Technical Member) while accepting the appeal and rejecting the claim of the respondent, the Tribunal was of the opinion that the Adjudicating Authority committed an error in rejecting the claim of the appellant to be ‘secured creditor’.

In the instant case, the appellant challenged the impugned order of the National Company Law Tribunal, Ahemdabad Bench (Adjudicating Authority), where it has rejected the application. The Appellant had provided a loan which the debtor was unable to pay back, therefore the Financial Creditor of the Debtor filed an Application demanding proof of claim before the IRP. List of stakeholders and Financial Creditors was prepared by the Liquidator, regarding relinquishment of security interest in accordance with Section 52(1)(a) of the IB code in which the claim of the Appellant was put under the head of “amount unsecured”. The Appellant filed an application against it. The Adjudicating Authority rejected the application.

The Appellant submitted that the Adjudicating Authority committed an error in rejecting the application of the Appellant filed under Section 60 sub-section (5) of the IB Code and not under Section 42; hence limitation provided for filing an Appeal was not applicable.

The respondent contented that the Appellant’s claim claiming an amount was accepted, but the Appellant was classified as ‘unsecured creditor’ under Section 77 subsection(3) of the Companies Act, 2013.

The Tribunal concluded that the Adjudicating Authority had erred in rejecting the claim of the Appellant. The Tribunal while accepting the appeal directed the Respondent to correct the classification of claim of the Appellant as ‘secured’. It was of the opinion, “By virtue of judgment and order of the Debt Recovery Tribunal, the Appellants were entitled to recover their dues from the secured assets and they having

relinquished the security interest according to Section 52 of the IB Code, as was requested by the Liquidator, in the liquidation proceedings, they have to be treated as ‘secured creditor’.[SICOM Ltd. v Sundaresh  Bhat, 2022 SCC OnLine NCLAT 5, decided on 06-01-2022]


Agatha Shukla, Editorial Assistant has reported this brief.


Counsel for the Parties:

 For Appellant:

Arun Kathpalia, Sr. Advocate,

Pranaya Goyal, Dharav Shah,

Diksha Gupta, Advocates

For Respondent:

Nakul Dewan, Sr. Advocate with

Abhishek Sharma, Ashly Cherian,

Kamlendra Singh, Adv

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