AI Drafter 
TaxTMI 
TaxTMI 
2019 (5) TMI 1749
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....ency and Bankruptcy Code, 2016 and regulation 37 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, against Mr. Ravi Shankar Devarakonda, liquidator of Reid and Taylor India Ltd. (hereinafter called "respondent") seeking the following reliefs : (a) That this hon'ble Tribunal be pleased to permit the applicant to sell/dispose of the secured assets of the corporate debtor (RTIL Ltd.) as more particularly described in annexures 1 and 2 hereto to realize its security interest in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 read with regulation 37 of the IBBI (Liquidation Process) Regulations, 2016 ; (b) That this hon'ble Tribunal be pleased to direct the respondent to forthwith furnish to the applicant a copy of the valuation report/s in his possession in respect of the secured assets of the corporate debtor ; (c) Pending the completion of the sale of the secured assets of the corporate debtor (RTIL Ltd.) as more particularly described in annexures 1 and 2 hereto, the secured assets of the Mysore Unit of the corporate debtor should be directed to be under the possession, overall contr....
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.... first charge in favour of India Debt Management Private Limited (IDM) and second charge basis to the Bank of India, State Bank of Indore, IDBI Bank, Jammu and Kashmir Bank Limited, Indian Bank, Exim Bank and State Bank of India. Annexure 4 : Assignment deed dated August 31, 2016 The assignment deed was executed between IDM (assignor) and Fin quest Financial Solutions Private Limited (assignee). The assignor has assigned SKNL sale debentures and benefits of all its rights, titles and interests thereto. This includes first charge on the immovable property of the corporate debtor at Mysore. Annexure 5 : Index of charges of the corporate debtor as per the records of the MCA website At serial No. 16 the name of the applicant, i. e., Finquest Financial Solutions P. Ltd., is shown as a charge holder and the same has been cre ated on September 17, 2009 and modified on October 10, 2016 for the loan granted for the amount of Rs. 275 crores. At serial No. 24, the name of the applicant, i. e., Finquest Financial Solutions P. Ltd., is shown as a charge holder and the same has been cre ated on July 31, 2008 and modified on August 31, 2016....
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...., through Form D (proof of claim by financial creditor) claimed an amount of Rs. 364,57,25,419 (towards assignment of debt from ICICI Bank Ltd.) and an amount of Rs. 816,19,76,033 (towards assignment of debt from IDM). The applicant has referred to the respective assignment agreements in respect of the details of security held. Annexure 11 : E-mail dated April 1, 2019 sent by the applicant to the liquidator The applicant by way of this e-mail had requested the liquidator to share the liquidation value report of the assets of the corporate debtor. Reply of Edelweiss 3. Edelweiss Asset Reconstruction Co. Ltd. (Edelweiss) is one of the financial creditors of the corporate debtor who has objected to the application filed by Finquest Financial Solutions P. Ltd. In their objection they have stated that section 52 of the IBC does not empower a secured creditor to stand outside the liquidation process to enforce its security to the exclusion of other secured creditors having same ranking pari-passu charge over the same security interest, more particularly when the issue of priority of charges has not been adjudicated by the hon'ble Court of Civil ....
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....he immovable property of the corporate debtor at Mysore. Exhibit F-Copy of Form 8 filed by EXIM Bank on September 20, 2006 with the Registrar of Companies By way of this Form, SKNL (holding company of the corporate debtor) had created a second pari passu charge on immovable properties of SKNL in favour of EXIM Bank. These properties include the immovable property at Mysore as it was prior to the demerger of the corporate debtor from SKNL in 2008. Exhibit G-Memorandum of entry dated June 16, 2012 This memorandum of entry mentions the charge created in favour Laxmi Vilas Bank and EXIM Bank (both assigned to Edelweiss). However it does not state whether it is the first or second charge over the immovable property at Mysore. Exhibit H-Assignment agreement dated March 28, 2014 executed between EXIM Bank and Edelweiss Basis the agreement, EXIM Bank has assigned its loans along with its rights, title and interest to Edelweiss. EXIM Bank has referred to memorandum of entry dated September 30, 2009 which clearly ascertains that EXIM Bank has second pari passu charge over the immovable and movable fixed assets of the corporate debtor. ....
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....isions of law. The documents on record as filed by the applicant particularly annexure 2 to annexure 11, in fact, supports the claim of the applicant that he is the first charge holder to all the immovable/fixed assets of the company as contained in annexure 1 of the application. Even the MCA portal which depicts the register of charges clearly shows that the charges have been created in favour of the original lender way back on September 17, 2009 and subsequently modified on October 10, 2016 in favour of the assignee, i. e., the applicant. Of course the other lenders/ assignees, i. e., Edelweiss Asset Reconstruction Company, which is also claiming the first charge over the fixed assets of the corporate debtor, has got the charge subject to the NOC being granted by the IDM who is the prior charge holder but the said NOC was never obtained by the Edelweiss. The entire pleadings and the supportive documents filed by the Edelweiss does not substantiate their claim that they are the first charge holders. Apart from that on a plain reading of the table furnished by the liquidator with regard to the charges clearly and beyond any doubt show that the first charge holder is none other than....
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....ther Edelweiss has any case in their favour to substantiate that they are the first charge holders, the simple answer as per the documents, which speaks for itself is that the Edelweiss does not have the first charge and all the lenders including Edelweiss only stand at the second place as the next pari passu charge holders after the applicant. In addition to the above, the most important aspect of the realization of security interest by the secured creditor who is having the first charge is to be verified and vetted by the liquidator who in this particular case had verified the same in terms of section 52(3) of the Insolvency and Bankruptcy Code, 2016 and in all categorical terms ascertained that the applicant is the first charge holder of the fixed assets of the corporate debtor. In view of the above uncontradictable documentation in favour of the applicant, the supportive documents and the reply filed by the liquidator after duly scrutinizing the documents, we hold that the applicant is entitled to realize their security interest under section 52(1)(b) read with regulation 37 of the IBBI (Liquidation Process) Regulations, 2016. Hence issue No. 1 is decided in favour of the appli....