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TMI Blog2022 (4) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... harge was not registered and sent a mail communication to the applicant on 03.07.2021. From the facts provided it is evident that the liquidator was not provided with the proof of registration of security interests during the period stipulated as per Regulation 30 and the liquidator classified the applicant as unsecured creditor based on the information as provided by the applicant. Thus with regard to the vehicle loans the liquidator has acted correctly by classifying applicant as unsecured and not allowing to realise their security interest. Amount advanced by the applicant to the group companies of the corporate debtor on the security of FDRs based on a letter of authorisation granted by the corporate debtor - HELD THAT:- Based on the documents placed on records the letters granted by the corporate debtor to the applicant bank are mere authorisations to extend loans to the borrowing companies and no guarantee extended by the corporate debtor and to that extent there exists no payment obligation on the corporate debtor - In the present case, the applicant bank had disbursed money to borrowing companies and no guarantee deed was executed by the corporate debtor and as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited against the security of the FDR. 5. The Ld. Counsel appearing for the applicant submitted that the advances were duly secured by security interest over the FDRs and were also registered with CERSAI under SARFAESI Act. The Ld. Counsel further stated that the corporate debtor and its group companies have failed to service the loans and the Corporate Debtor became jointly and severally liable to repay the sums extended to its group companies. Unfortunately the Corporate Debtor had failed to make good the outstanding amount of ₹ 2,02,94,416. 6. It is submitted that the Applicant enforced its security interest over the FDRs, without being aware of the subsisting moratorium and against which the respondent initiated action for restoration of FDRs. After contest, this Tribunal directed the applicant to restore the FDRs. Aggrieved by this the applicant preferred an appeal before the Appellate Tribunal and the appeal was also dismissed. Thereafter on 17.12.2020, as directed by the Appellate Tribunal the applicant restored the FDRs. 7. It is averred in the application that on 04.03.2020 the respondent passed an order wherein: i) He accepted the claim of ₹ 12,33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan availed by you and accordingly your claim of INR 14,66,538 has been admitted as that of an unsecured financial creditor. The balance claim of INR. 2,22,76,950 w.r.t. demand loans availed by the group companies of Corporate Debtor against security of FDR is not a financial debt of the Corporate Debtor as it is a settled position of law that mere security interest over the assets of corporate debtor (like third party securities), would not grant the status of a financial creditor under as per definitions contained in sub-sections (7) and (8) of section 5 of the Code. Further, since the claim of UCO Bank is also pending adjudication before the Hon'ble NCLT the same will only be crystallized only upon receiving the final order and is presently a contingent claim. Accordingly, the claim of INR. 2,22,76,950 is rejected for the time in accordance with powers vested under section 40(2) of the Code read with Regulation 30 of Liquidation Regulations. Kindly note that the claim admitted shall be dealt in accordance with section 53 of the Code. 12. It is further averred in the application that on 08.07.2021, MA No. 14 of 2021 came up for hearing before this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to rejection of the 02nd claim, the applicant has submitted that the respondent has gone beyond its jurisdiction in holding that when the applicant is not a financial creditor it cannot be a secured creditor and such a view is erroneous and does not stem from the provisions of the Code. Reply by the Liquidator/Respondent 15. The respondent submits that pursuant, to the commencement of the Liquidation Process on 27.04.2021, the Applicant submitted its proof of claim on 26.05.2021, for an amount of ₹ 2,37,43,488/-. During verification of the claim documents submitted by the applicant, it was observed that part of the claim i.e., ₹ 14,66,538/- was in relation to a vehicle loan availed by the Corporate Debtor. However, the applicant bank did not enclose any documents evidencing registration of security interest. The respondent submitted that as per section 52(3) of the Code read with Regulation 21 of Liquidation Regulations, a secured creditor is required to prove the security interest by providing registration certificates from Registrar of Companies, CERSAI or any information utility, failing which it may deemed that there is no security interest. The law require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was provided as collateral to secure the loans availed by the group Companies viz. the borrowing companies. The loan was not availed by the corporate debtor. b. It is submitted that the communications dated 02.03.2018 and 31.03.2018 which have been relied on by the applicant in support of its contention that the Corporate Debtor had provided corporate guarantee are mere authorisation from the Corporate Debtor to hold the fixed deposits as security for the loans granted to borrowing companies. The Corporate Debtor has not executed any guarantee deed. Further, The Hon'ble Supreme Court in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited v. Axis Bank and others, held that a person having only security interest over the assets of the Corporate Debtor, will not be classified as financial creditor of the Corporate Debtor. It has to be shown that the Corporate Debtor owes financial debt to such person. Findings of this Tribunal 20. Heard both the parties. The main issue under consideration is whether the liquidator was justified in rejecting the application filed by the applicant on the following grounds: a. The applicant was not a 'Secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity interest is ascertained from records available with the 'Information Utility' as per the Code, through Certificate of Registration of 'Charge' issued by the ROC under section 77 of the Companies Act, 2013 or if there is any proof of Registration of 'Charge' with CERSAI. 24. In the present case, it is observed from the documents on records that the applicant had mentioned about realising the security interest in claim Form D filed on 26.05.2021. The proofs of security interest was not available when the applicant submitted its claim form which is mandated by Regulation 21 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The liquidator after verification of the claim Form D and other documents annexed therein had observed that the charge was not registered and sent a mail communication to the applicant on 03.07.2021. 25. In so far as informing the liquidator of its decision to realise its security interest in Form D of Schedule II, the applicant had acted correctly, however on the aspect of proofing the security interest the creditor could not submit any documents as stipulated by Regulation 21, so as to allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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