Assignee bank's SARFAESI enforcement rights survive liquidation, while assignment objections and restructuring do not defeat the security interest.

An assignee bank holding a valid security interest may enforce the secured assets under the SARFAESI framework even after liquidation has commenced, because it steps into the shoes of the original lender as secured creditor. Objections based on alleged defects in the assignment deed, stamp duty, registration, or non-registration of charge did not defeat that substantive right where the underlying charge was already registered and the assignment had been duly recorded. Delay, waiver, or earlier restructuring also did not bar enforcement once default continued. The right to proceed was preserved, subject to the statutory protection of workmen's dues in liquidation.

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Issues: (i) whether the applicant-bank, as assignee of the original lender, was a secured creditor entitled to enforce the security under the SARFAESI Act despite the company being in liquidation and the Official Liquidator having taken possession; (ii) whether objections based on alleged defect in the deed of assignment, including stamp duty, registration and non-registration of charge with the Registrar of Companies, defeated the applicant's right to proceed against the secured assets; (iii) whether the measures initiated under the SARFAESI Act were barred by delay or by the earlier restructuring of the loan account.

Issue (i): whether the applicant-bank, as assignee of the original lender, was a secured creditor entitled to enforce the security under the SARFAESI Act despite the company being in liquidation and the Official Liquidator having taken possession.

Analysis: The applicant had stepped into the shoes of the original lender by virtue of the assignment deed and the account had already been subjected to SARFAESI measures before the Official Liquidator took physical possession. The provisions defining a secured creditor and security interest were applied to hold that a bank assignee could enforce the security interest. The decision further treated the later SARFAESI regime as enabling the secured creditor to proceed without court intervention, while preserving the workmen's dues under the statutory scheme.

Conclusion: The applicant-bank was held entitled to proceed as a secured creditor and the Official Liquidator could not retain the secured assets against that right, subject to compliance with the statutory protection of workmen's dues.

Issue (ii): whether objections based on alleged defect in the deed of assignment, including stamp duty, registration and non-registration of charge with the Registrar of Companies, defeated the applicant's right to proceed against the secured assets.

Analysis: The Court accepted that the original lender's charge had been registered and held that an assignee's failure to register the assignment anew did not extinguish the underlying security interest. It also noted that the deed of assignment had been registered and the stamp duty adjudicated, and that the objections could not be reopened in these proceedings. The challenge based on the Registration Act and Companies Act was therefore rejected as not defeating the applicant's substantive right under the assignment and the security documents.

Conclusion: The objections relating to stamp duty, registration and charge registration were rejected and did not prevent the applicant from enforcing the secured assets.

Issue (iii): whether the measures initiated under the SARFAESI Act were barred by delay or by the earlier restructuring of the loan account.

Analysis: The account had turned non-performing, the lender later restructured the facilities, and upon further default the lender and then the assignee pursued recovery. The Court held that the sequence of events showed continuing enforcement steps rather than abandonment of rights, and that no waiver or unreasonable delay was made out. The restructuring did not nullify the creditor's right to proceed once default persisted under the revised arrangement.

Conclusion: The challenge based on delay, waiver, or restructuring was rejected.

Final Conclusion: The applicant was permitted to proceed against the secured assets under the SARFAESI framework, while the distribution of sale proceeds remained subject to the statutory protections applicable in liquidation.

Ratio Decidendi: An assignee bank holding a valid security interest may enforce it under the SARFAESI Act even after liquidation has commenced, and ancillary objections as to assignment formalities do not defeat that right where the underlying charge and statutory framework support enforcement subject to workmen's dues.

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