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2021 (4) TMI 1143 - Tri - Insolvency and BankruptcyRecovery proceedings for recovery of loan - Corporate Debtor failed to make repayment of its dues and has been declared as Non Performing Asset - It was submitted by the Learned Senior Counsel for the Applicant that the Applicant being a secured creditor has expressed his willingness to stand outside the purview of liquidation proceedings under Section 52 of IBC, 2016 - Effect of amended Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016 which came into force on 06.01.2020, retrospective or prospective - possession of the entire Unit VII comprising of 164.05 acre, when they purportedly have security interest over only 85 acre of land. Whether the amended Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016 which came into force on 06.01.2020 can be given retrospective effect? - HELD THAT:- The IBBI vide its Circular No. IBBI/LIQ/024/2019 dated 26.08.2019, upon saddled with queries from the stakeholders with respect to the applicability of the amended regulations to the Liquidation process, has clarified that the Amended Regulations are not applicable to the Liquidation Processes, which had commenced before coming into force of the said Amended Regulations and that they are applicable only to the Liquidation processes, which commenced on or after the said Amended Regulations came into force. Thus, this circular amply clarifies the issues as to the prospective applicability of the Amended Regulations to the Liquidation process of the Corporate Debtor - since the Liquidation process in relation to the Corporate Debtor has commenced on 25.04.2018, the IBBI (Liquidation Process) Regulations, 2016, which was prevalent at that point of time only will apply to the facts and circumstances of the present case. Whether the Applicant is entitled to claim the possession of the entire Unit VII comprising of 164.05 acre, when they purportedly have security interest over only 85 acre of land? - HELD THAT:- Once the Secured Creditor has expressed his willingness to stand outside the liquidation process, the Liquidator cannot have any hold over the said property and as such the property over which the secured creditor exercises his security interest would not form part of the 'Liquidation Estate' and the Liquidator is duty bound to hand over the physical possession of the said property to the Secured Creditor. However, it is to be noted here that to enforce the 'security interest' under Section 52(1)(b), the Creditor must either have 'exclusive charge' or 'sole first charge', which would enable it to enforce its 'security interest' - in view of the documents not being placed on record in order to substantiate the fact as to which property the Applicant is having 'exclusive charge' and 'sole first charge', this Tribunal hereby directs the Liquidator to identify the properties over which the Applicant is having 'exclusive charge' or 'sole first charge' and to hand over the physical possession of the same to the Applicant in order to exercise their security interest. It is also made clear that the properties over which the Applicant is having 'second charge' or 'pari passu' charge is to be held within the possession of the Liquidator and necessarily the said property forms part of the 'Liquidation Estate'. Application disposed off.
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