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2022 (1) TMI 214 - AT - Insolvency and BankruptcyCIRP - Rejection of claim as secured creditor - Non-registration of charge - security interest - failure to to furnish any document pertaining to ROC charge/ registration certificate in support of its security interest as required by Section 77 of Companies Act, 2013 - HELD THAT:- The Application filed by the Appellant under Section 60 sub-section (5) was fully entertainable and it could not have been rejected on the ground that it has not been filed within 14 days as provided under Section 42. Section 42 was clearly inapplicable, since no Appeal was filed by the Appellant. The Adjudicating Authority thus, committed error in rejecting the Application as barred by time. Non-registration of charge under Section 77 of the Companies Act, 2013 - HELD THAT:- The order passed by the Debt Recovery Tribunal dated 26th April, 2017 is an order adjudicating the dispute between the Appellant and the Corporate Debtor and after adjudication, the order passed by the Tribunal is akin to a Decree. The order dated 26th April, 2017 indicates that 30 days’ time was allowed to the defendants (one of which was Corporate Debtor) to make the payment, failing which the amount was to be recovered from the sale of mortgaged and hypothecated properties - When the sale of mortgaged and hypothecated was directed as per judgment of the Debt Recovery Tribunal, the mortgage and hypothecation no longer remained the matter of contract, rather it was the part of the judgment of the Tribunal and the non-registration of charge as required by Section 77 of Companies Act, 2013 does not in any manner affect enforceability of the order dated 26th April, 2017. There being adjudicatory order of the Debt Recovery Tribunal in favour of the Appellant, the mortgage and hypothecation was created in favour of the Appellant by the Corporate Debtor, hence, non-registration of mortgage and hypothecation under Section 77 of the Companies Act cannot be a ground to held that Appellant was not a ‘secured creditor’ - Under the order of the Debt Recovery Tribunal, the Corporate Debtor having not deposited the amount within 30 days’ time period, the Appellant was at liberty to realise the amount from mortagaged and hypothecated assets. Adjudicating Authority committed error in rejecting the claim of the Appellant to be of ‘secured creditor’ - the Appellants were entitled to recover their dues from the secured assets and they having relinquished the security interest according to Section 52 of the IB Code, as was requested by the Liquidator, in the liquidation proceedings - Appeal allowed.
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