TaxTMI 
TaxTMI 
2024 (12) TMI 537
X X X X Extracts X X X X
X X X X Extracts X X X X
....eved by the order has come up in this Appeal. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are : - 2.1. In the CIRP process of the Corporate Debtor- Bharat NRE Coke Limited, there being no resolution, order of liquidation was passed by the Adjudicating Authority on 11.12.2019. On 10.01.2020, the Appellant- Suraksha Asset Reconstruction Ltd. informed the liquidator of its intention to realise its security interest under SARFAESI Act, 2002. On 22.02.2020, Appellant issued notice under Section 13(2) of the SARFAESI Act for total claim of Rs.141 Crores. IA No.40/KB/2021 was filed by the Appellant seeking direction to liquidator to handover the possession of 47.07 acres of land mortgaged with Suraksha Asset Reconstruction Ltd. Adjudicating Authority vide order dated 07.01.2021 directed the Block and Land Development Officer of Dharwad to carry out a survey to demarcate the land hypothecated to Appellant, and upon such demarcation, the Liquidator of BNCL had to hand over the land to Appellant. Demarcation report was filed on 07.08.2021, thereafter the Appellant issued notice under Section 13(4) of the SARFAESI Act, 2002 on 20.08.2021. The Respondent- V....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs.20 lakhs towards the CIRP and liquidation costs. Appellant requested for a formal invoice to enable disbursal of payment which was never provided by the liquidator. On 18.02.2023, liquidator sent some unrelated sample bills. Appellant has taken symbolic possession by issuing notice under Section 13(4) which was shared with liquidator on 04.04.2024. The possession notice was objected by liquidator and by e-mail dated 29.05.2023, Appellant's security interest was sought to be relinquished under Regulation 21A due to non-payment of costs. Even though liquidator failed to raise any invoice for the same, Appellant was already ready and willing to pay liquidation cost. Appellant having already intimated intention to realise its security interest vide letter dated 10.01.2020, there is no question of relinquishment of security interest of the Appellant. Appellant has right under Section 52 of the IBC to realise its security interest. Appellant having never refused to pay CIRP/Liquidation costs, there is no question of relinquishment of its security interest. Appellant could not proceed to realise its security interest because both the erstwhile liquidator and current liquidator never....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... It is submitted that the premises were in possession of 'Jeju Metals Pvt. Ltd.' and it was liquidator of Bharat NRE Coke Ltd. who filed application IA No.1073 of 2021 praying for eviction of Jeju Metals Pvt. Ltd. which was finally allowed on 20.03.2024 and Jeju Metals Pvt. Ltd. has handed over possession of factory to the liquidator on 29.05.2024. Suraksha did not take any steps to evict Jeju Metals Pvt. Ltd. It is submitted that the security interest of the Appellant has been subsumed in the liquidation estate under Regulation 21A (2) and 21A (3) and present is not a case of applicability of Regulation 21A(1). It is submitted that the Appellant has intimated that he will realise its security interest on 10.01.2020. It is further submitted that in the Joint Lenders' Meeting dated 17.11.2023, Suraksha agreed to obtain valuation for joint sale of the property by the two liquidators. Further, in the Joint Lenders' Meeting held on 22.03.2024, Suraksha agreed for joint sale of the assets of Bharat NRE Coke Ltd. and Gujarat NRE Coke Ltd. by two liquidators. Again on 12.04.2024 in the Joint Lenders Meeting, Suraksha agreed for joint sale. In view of the aforesaid, when steps for joint sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion vide the order passed by Hon'ble NCLT on 11/12/2019. Pursuant to the order of the learned Adjudicating Authority, various public announcements were made whereon Suraksha Asset Reconstruction Limited (SARL) submitted their claim on 09/01/2020 through an email and later by registered post stating that SARL would not relinquish their security interest. 2. In reply the erstwhile liquidator through an email dated 30/01/2020 enquired about certain matters including the proportionate cost of CIRP & Liquidation cost. Subsequently, the relevant provisions of IBC were also specifically intimated and pointed out to SARL and SARL was repeatedly informed of its obligations with regard to and towards bearing the proportionate cost of CIRP & Liquidation cost (including estimates) through several mails on 30/06/2020 and 27/10/2020 sent by erstwhile liquidator. 3. The demands, requests and representations contained in the aforesaid emails were ignored and not even responded to by you and as such you failed to pay any heed towards any of these mails. Finally, the undersigned, being the present liquidator, had demanded an immediate payment of Rs. 20,00,000/- (Rupees Twenty L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble and liable for all costs and consequences arising there from. Regards, Varsha Bagri Bharat NRE Coke Limited Liquidator Insolvency Professional FCA, CS, CMA P-273 Maniktala Main Road, Kolkata-700054 (M) 9339239644" 8. It was after issuance of the aforesaid e-mail, Appellant filed the application challenging the said e-mail. Prayers made in the IA No.1069 of 2023 are as follows:- "i. Allow the present application and quash the emails dated 29.05.2023 sent by the Liquidator for being unlawful; ii. Direct that no coercive action pursuant to such emails dated 29.05.2023 and/or any emails thereafter should be taken by the Liquidator of BNCL which may be prejudicial to the interest of the Applicant as a secured financial creditor; and iii. Pass any such other order(s) and further order(s) as this Hon'ble Tribunal deems fit and proper in the facts and circumstances of the present case." 9. Section 52 of the IBC empowers secured creditors to relinquish its security interest to the liquidation estates or to realise its security interest in the manner as specified in Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on (2), the asset, which is subject to security interest, shall become part of the liquidation estate. [Explanation.- It is hereby clarified that the requirements of this regulation shall apply to the liquidation processes commencing on or after the date of the commencement of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019.]" 11. In the present case, there are ample materials to indicate that Appellant has informed the liquidator of its decision to relinquish its security interest. Letter dated 10.01.2020 relied by the Appellant is referred, thus, there is no applicability of Section 21A(1) in the present case. Reliance which has been placed by the liquidator is on sub-regulations (2) and (3) of Regulation 21A. In the present case, the Appellant after informing the liquidator on 10.01.2020 proceeded to realise its security interest by issuing notice under Section 13(2) on 20.08.2021 which was already intimated to the liquidator on 10.01.2020. Present is a case where liquidator has communicated the Appellant twice for payment of proportionate share of the liquidation costs on 16.02.2023 and 29.05.2023 although communicati....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of both the Corporate Debtors at Dharwad, a joint sale for the purpose of value maximization is inevitable. Upon further enquiry by SARC, the liquidator of BNCL clarified that the distribution of the proceeds of the joint sale of assets as aforesaid shall be carried out in accordance with the provisions of Section 53 of the Code." 14. In the above meeting, all the stakeholders agreed to the suggestion of the liquidator towards joint sale of the assets. Another Joint Lenders Meeting relied by the Counsel for the Respondent is the Joint Lenders Meeting dated 12.04.2024 where again two representatives of Suraksha were present which is reflected from Annexure R-6 of the reply. In the minutes, it was noted that Suraksha although having agreed in the Joint Lenders Meeting held on 12.04.2024 for joint sale has filed the appeal against the order passed in IA No.1069 of 2023. The representatives of Appellant intimated that they have no instructions from the apposite parties so they are unable to comment on the matter. In the said meeting, even the modalities of the joint sale and appropriation of proceeds to the liquidation estates was mentioned. Suraksha has pleaded in the meeting that....