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TMI Blog2022 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... cess regulation the asset, which is subject to security interest, shall become the part of the liquidation estate. In the present case, the respondent has failed to comply with the sub-regulation (2), therefore, as per sub-regulation 3 of regulation 21 A, the asset shall become the part of the liquidation estate. Hence, the respondent is directed to immediately handover the possession of the aforesaid asset to the liquidator - Application allowed. - IA-3278/2021 in IB-2976/ND/2019 - - - Dated:- 21-12-2021 - Bachu Venkat Balaram Das, Member (J) And Narender Kumar Bhola, Member (T) For the Appellant : Abhishek Naik, Advocate For the Respondents : Sanjeev Sagar and Nazia Parveen, Advocates ORDER Bachu Venkat Balaram D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to pay 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. Clause (a) of sub-section (1) of section 53 states the insolvency process costs and the liquidation costs be paid in full. Accordingly, the Applicant vide email dated 17.05.2021 requested the Respondent to pay an amount of ₹ 22,08,058/- towards CIRP cost and estimated Liquidation cost in compliance of Regulation 21A(2) of Liquidation Process Regulations. The Respondent was also informed that as per provisions contained in Regulation 21A(3) of Liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidation proceedings may- (a) relinquish its security interest to the liquidation estate and receive proceeds from the sale of assets by the liquidator in the manner specified in section 53; or (b) realise its security interest in the manner specified in this section. (2) Where the secured creditor realises security interest under clause (b) of sub-section (1), he shall inform the liquidator of such security interest and identify the asset subject to such security interest to be realised. (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 realize only such security interest, the existence of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) The amount of insolvency resolution process costs, due from secured creditors who realise their security interests in the manner provided in this section, shall be deducted from the proceeds of any realisation by such secured creditors, and they shall transfer such amounts to the liquidator to be included in the liquidation estate. (9) Where the proceeds of the realisation of the secured assets are not adequate to repay debts owed to the secured creditor, the unpaid debts of such secured creditor shall be paid by the liquidator in the manner specified in clause (e) of sub-section (1) of section 53. Before coming to any conclusion, it is also relevant to go through the 21A of Liquidation Regulation, which is as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor 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. From the reading of the provisions contained in regulation 21A(2) of Liquidation Process Regulations, it is very clear that the secured Creditor is required to realize the security interest within stipulated time as prescribed in the regulation and in case, the secured creditor fails to comply with the sub-regulation (2) then as per sub-regulation (3) of 21A of liquidation process regulation the asset, which is subject to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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