Non-Registration of Charge Under Section 77 Cannot Invalidate Secured Creditor Status in Corporate Insolvency Resolution Process

NCLAT reversed NCLT's decision regarding creditor classification in corporate insolvency proceedings. The appellant, initially categorized as unsecured creditor, challenged rejection based on non-registration of charge under Section 77 of Companies Act, 2013. NCLAT held that non-registration of charge does not invalidate secured creditor status during resolution process. Section 77(3) obligations apply specifically to liquidators, not Resolution Professionals. The tribunal emphasized that mortgagee rights under Transfer of Property Act remain valid despite non-registration under Companies Act. Reading Sections 3(4) and 3(31) of IBC with Section 77 of Companies Act confirms that charge registration requirement binds only liquidators. Appeal allowed, directing reclassification of appellant as secured financial creditor. .....

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