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2020 (1) TMI 1079 - Tri - Insolvency and BankruptcyPermission to Liquidator to cause sale of assets of the Corporate Debtor under Regulation 32 of IBBI (Liquidation Process) Regulations - charge of hypothecation - pari passu nature of charge - liquidator only argument is that the charge of hypothecation is pari passu in nature, therefore, liberty shall be granted to the Liquidator to sell the asset of the Corporate Debtor so as to distribute it among the Secured Creditors of the Corporate Debtor - HELD THAT:- To say that charge is pari passu in nature, the Liquidator has to establish that the character of charge of lien created in favour of BHEL over the machinery entailed in this issue, and the character of hypothecation are of the same character. But, in the case of lien, it is deemed that the asset is lying with the lien holder, whereas in the case of hypothecation, it is construed that asset is lying with the borrower. In the case of hypothecation, the creditor has to seek possession and realisation, whereas in the case of lien, the creditor can straight away realise from the asset and can put restraint upon the asset not to deal with it unless debt is cleared. Whenever any lien is created, the person having right of lien has a right to enforce the same against the asset in preference to charge of hypothecation. As to relief under section 52 of the Code, when debt is secured, the creditor is always at liberty to proceed u/s 52 of the Code under liquidation. That right cannot be whittled down by the RP by filing an application to enable him to treat it as an asset falling under section 53 of the Code. This Bench having considered that BHEL is a secured creditor entitled to proceed under section 52 to realise its security interest over the asset, the Applicant/Liquidator cannot cause the sale of the asset falling under section 52 in the manner specified under section 53 of the Code unless charge holder relinquishes the security interest - application dismissed.
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