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2018 (3) TMI 1911 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCHInitiation of liquidation proceedings on property belonging to Smt. Saroj Singhania, which was also ‘mortgaged’ to the Bank under the same Loan Agreement on the basis of which the Financial Debt in question - Insolvency Proceedings commenced against the Corporate Debtor - HELD THAT:- There was no confusion for initiation of Liquidation Proceedings for IRP who is now to be termed as “Liquidator”. However, a question was raised that whether the process of Liquidation can also be initiated against a property belonging to Smt. Saroj Singhania. On enquiry it was affirmed by the RP and the Bank Authorities that the property belonging to Smt. Saroj Singhania was also ‘mortgaged’ to the Bank under the same Loan Agreement on the basis of which the Financial Debt in question was sanctioned. It is, therefore, explained that since the property belonging to Smt. Singhania had already been mortgaged, therefore, to realize the Debt amount the said property is also to be liquidated. One more reason is that the total realizable value is about ₹ 4,68,15,000/- + ₹ 12,90,00,000/- totalling to ₹ 17,58,15,000/- if both the properties are liquidated. Otherwise, the realizable value of the Corporate Debtor is only ₹ 4,68,15,000/- against the Debt of ₹ 41,38,06,010/-. If the amount of ₹ 4,68,15,000/- is to be received then the Banks shall have a very high haircut by sacrificing about 89% of the Debt in question and the recovered amount shall be only 11% of the total Debt. Therefore, to avoid such high percentage of sacrifice, it is necessary to take a decision in favour of the Financial Creditor to initiate Liquidation Proceedings against a Guarantor as well who had mortgaged the property and on that Guarantee the Loan in question was granted. The Debt in question is intricately linked with the property mortgaged hence cannot be segregated in the process of Liquidation proceedings. Therefore, it is hereby authorized that the Liquidator shall take necessary steps to liquidate the asset of Smt. Saroj Singhania, for which a Valuation Report is already on record. This decision is taken on the basis of one of the Sections as prescribed under the I&B Code i.e. Section 60(2) which prescribes that where a Corporate Insolvency Resolution Process or Liquidation Process of a Corporate Debtor is pending before NLCT, an Application relating to the Insolvency Resolution or Bankruptcy of a “Personal Guarantor” of such “Corporate Debtor” shall be filed before such NCLT. A clarification can also be inserted at this juncture that the Resolution Process is distinct from Liquidation Process. The Resolution Professional is hereby appointed as a “Liquidator” to proceed with the Liquidation Process - Application disposed off.
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