Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2018 (8) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1951 - Tri - Insolvency and BankruptcyRefund of interest deducted by the respondent - charge of interest during the moratorium period - release of lien on the fixed deposit - control and custody of the fixed deposit. Whether the respondent, viz., Axis Bank Ltd., is legally entitled to interest deducted during the period of moratorium? - section 14(1)(c) of SARFAESI Act - HELD THAT:- The intention of the Legislature appears to be that during the CIR pro-cess no action for recovery should be taken in respect of the properties of the corporate debtor so that the IRP/RP could receive the claims, work out information memorandum and get the properties valued and issue the "expression of interest" to receive resolution plans from the resolution applicants so that the corporate debtor may get its business/commercial activities revived and revenue could be generated to pay the outstanding debt. In case no "resolution plan" is received, then, the corporate debtor inescapably would go for liquidation. Thus, under the process of liquidation, the claimants (secured creditors are to be dealt under section 52) could be satisfied as per the waterfall given under section 53 of the I and B Code, 2016 - there appears to be a complete prohibition of the activities as are emanated under section 14 of the I and B Code, 2016, during the period of moratorium. Whether the fixed deposit worth ₹ 50,00,000 is to be treated as security charge on the corporate debtor? - HELD THAT:- The case on hand is that the corporate debtor has obtained overdraft facilities with regard to the fixed deposit of ₹ 50,00,000 which the respondent-bank claims to be the security for extending the facilities to the corporate debtor. But, there is no compliance with the provisions of section 77 of the Companies Act, 2013. Therefore, the respondent-bank cannot be treated as secured creditor in respect of the fixed deposit of ₹ 50 lakhs deposited with the respondent-bank by the corporate debtor. Since a charge has not been created in relation to the fixed deposit worth of ₹ 50 lakhs, therefore, the respondent-bank is not a secured creditor as claimed by it. Thus, the application of the resolution professional is allowed and the respondent-bank is directed to refund the amount of ₹ 3,95,567 being the interest, deducted on the overdraft accounts that were maintained by it and to release the lien on the fixed deposit worth of ₹ 50 lakhs and allow the resolution professional to take control and custody of the fixed deposit and to account the "interest deducted and fixed deposit" as part of the assets of the corporate debtor. Application allowed.
|