Bank consortium's unregistered charge takes priority over registered charge under Section 77 Companies Act 2013 The SC dismissed an appeal concerning priority of charges over a corporate debtor's movable assets. The case involved a dispute between a respondent who ...
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Bank consortium's unregistered charge takes priority over registered charge under Section 77 Companies Act 2013
The SC dismissed an appeal concerning priority of charges over a corporate debtor's movable assets. The case involved a dispute between a respondent who registered a charge under Section 77 of the Companies Act, 2013, and UCO Bank Consortium which held a first charge based on a Working Capital Consortium Agreement but failed to register with ROC. NCLAT had ruled that the respondent's arguments regarding holding first charge due to ROC registration were not attractive. The SC found no good reason to interfere with NCLAT's order, affirming that non-registration with ROC cannot override the bank consortium's primary charge established through the supplemental deed.
The Supreme Court, with Justices J. B. Pardiwala and R. Mahadevan presiding, condoned the delay and, after hearing counsel and reviewing the record, found "no good reason to interfere with the impugned order passed by the National Company Law Appellate Tribunal." Consequently, the appeal was dismissed, and all pending applications were disposed of.
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