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TMI Blog2018 (8) TMI 1951X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 (rupees fifty lakhs only) and to allow the applicant herein to take control and custody of the fixed deposit of Rs. 50,00,000 (rupees fifty lakhs only) being the asset of M/s. Annamalai Foods P. Ltd., the corporate debtor herein." 3. The brief facts of the case are that C. P. No. 94/IB of 2018 filed by the operational creditor viz., M/s. Sree Provisions Stores under section 9 of the I and B Code, 2016 was admitted by this bench on January 25, 2018 and the applicant, viz., Ms. Deepa Venkat Ramani was appointed as interim resolution professional, the copy of the order is placed at pages 1 to 9 of the typed set filed with the application. Subsequently, the applicant had invited claims from the creditors under section 15 of the I and B Code, 2016 on February 7, 2018 the copy of the publication is placed at page 10 of the typed set filed with the application. The respondent-bank had filed its claim on February 15, 2018 with the applicant ; the copy of the claim form is placed at pages 16 to 103 of the typed set filed with the application. 4. The resolution professional has stated that subsequent to the declaration of moratorium under section 14 of the I and B Code, 2016, the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges 121 of the typed set filed with the application, which is evidencing that no charge has been created on the said fixed deposit of Rs. 50,00,000. 9. It has been submitted by the resolution professional that if a charge is not created on a loan taken by the company, then the said loan cannot be treated as security created by the creditors of the company. The resolution professional referred to sub-section (3) of section 77 of the Companies Act, 2013, which is extracted below :- "77. Duty to register charges, etc.-... (3) Notwithstanding any thing contained in any other law for the time being in force, no charge created by a company shall be taken into account by the liquidator or any other creditor unless it is duly registered under sub-sec tion (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2)." 10. In view of the provisions mentioned above, the resolution professional had sent an e-mail dated February 19, 2018 whereby he had informed that the respondent has not registered a charge with regard to the fixed deposit of Rs. 50,00,000 as per section 77 of the Companies Act, 2013. Therefore, he shall not be in a position to admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The respondent-bank has also stated that it has extended two overdraft credit facilities to the corporate debtor, viz., M/s. Annamalai Foods P. Ltd., i. e., overdraft against card receivables to the tune of Rs. 72 lakhs and over-draft against fixed deposit to the tune of Rs. 50 lakhs vide its sanction letters dated December 21, 2015 and December 24, 2015 respectively and the same was renewed on March 3, 2017. The said facilities are secured/ hypothecated as against card receivables and fixed deposit of the corporate debtor respectively, and in this regard, the corporate debtor had executed an acknowledgment of debt dated March 3, 2017 for both the facilities. 16. It is further stated by the respondent that as per the loan agreement entered into between the respondent-bank and the corporate debtor, the interest chargeable was 400 basis points above the bank's MCLR of 8.05 per cent. i. e., interest at 12.05 per cent. per annum on that date. Therefore, the respondent is entitled to levy the same, and the applicant, seeking the suspension of levy of interest during the moratorium period is not permissible. It is further stated that the reliance placed on section 14 of the I and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratorium is that during CIRP against the corporate debtor all the liabilities will remain stand still and none of the creditors will be authorised to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the SARFAESI Act, 2002. 22. 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. Therefore, there appears to be a complete prohibition of the activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 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 Rs. 50 lakhs deposited with the respondent-bank by the corporate debtor. In this connection, we may make a reference to the judgment given by the hon'ble High Court of Kerala in Kerala State Financial Enterprises v. Official Liquidator, High Court of Kerala [2006] 133 Comp Cas 912 (Ker), wherein it has been held that "if the charge had not been registered under section 125 of the Companies Act, 1956, then, undisputedly the appellant has to be considered as an unsecured creditor and has to be in queue with other creditors to receive its dues as and when assets of the company are collected by the official liquidator for distribution in accordance with law". The said judgment was upheld by the hon'ble apex court on the appeal filed as has been reported in Kerala State Financial Enterprises v. Official Liquidator, High Court of Kerala [2006] 133 Comp Cas 915 (SC). A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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