Restructuring of credit facilities did not erase secured status where original charges survived and Regulation 21 allowed alternative proof of security.

Restructuring of credit facilities did not extinguish secured creditor status where the original consortium charge was already registered and the restructuring merely re-packaged the same exposure into different loan heads without altering the underlying security. In liquidation, security interest could also be established through the alternative statutory modes recognised under Regulation 21, including CERSAI or other prescribed records, and proof was not confined to ROC registration alone. The consent decree and DRT order did not create a fresh superior charge in favour of the appellant because they acknowledged existing pari passu and prior charges. The secured classification of the respondent lenders was therefore sustained.

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Issues: (i) Whether restructuring of the credit facilities required fresh registration of charge and, in the absence of such registration, the lenders could still be treated as secured creditors; (ii) Whether security interest could be established in liquidation on the basis of Regulation 21 through CERSAI or other prescribed records, and whether the consent decree/DRT order created a fresh security in favour of the appellant.

Issue (i): Whether restructuring of the credit facilities required fresh registration of charge and, in the absence of such registration, the lenders could still be treated as secured creditors.

Analysis: The original consortium charges were already registered, and the later restructuring only re-packaged the existing exposure into different loan heads such as WCTL and FITL without changing the underlying securities. The restructured amounts arose out of the same original debt and securities, and the lenders had prior knowledge of the existing charge structure. In these circumstances, the restructuring was not treated as a fresh charge requiring separate registration in strict sense, and the existing registered security continued to protect the lenders' claims.

Conclusion: The absence of fresh ROC registration after restructuring did not destroy the lenders' secured status.

Issue (ii): Whether security interest could be established in liquidation on the basis of Regulation 21 through CERSAI or other prescribed records, and whether the consent decree/DRT order created a fresh security in favour of the appellant.

Analysis: Regulation 21 permits proof of security interest through any of the specified modes, including ROC registration and CERSAI registration. The Tribunal accepted that security could be proved by the alternative statutory modes and that the liquidation framework did not confine proof only to ROC records. The consent terms and DRT order were also held not to create a fresh first charge in favour of the appellant, since the documents themselves acknowledged the existing pari passu and prior charges in favour of other lenders. Any claim of fresh security based on the consent decree remained subordinate to the pre-existing secured interests.

Conclusion: Security interest could be proved through the alternative modes under Regulation 21, and the DRT consent decree did not create a fresh superior security in favour of the appellant.

Final Conclusion: The impugned orders sustaining the secured classification of the respondent lenders and rejecting the appellant's challenge were upheld, and all appeals failed.

Ratio Decidendi: In liquidation, where the original charge is duly registered and later restructuring merely alters the form of repayment without altering the underlying security, the secured creditor status is not lost merely because the restructuring was not separately registered; security interest may also be proved by the alternative statutory modes prescribed in Regulation 21.

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