Liability to contribute towards Liquidation Process Costs - ...
Insolvency and Bankruptcy
March 21, 2024
Liability to contribute towards Liquidation Process Costs - scope of Financial Institution - The Tribunal found that the appellant, having invested a significant sum by subscribing to redeemable secured non-convertible debentures, falls within the ambit of a "financial institution" as defined by the Reserve Bank of India Act. - The Tribunal upheld the adjudicating authority's order requiring the appellant and other respondents to contribute to the liquidation process costs. - The decision reaffirms the principle that secured financial creditors, even if opting out of the liquidation estate to realize their security interest, must contribute to the liquidation process costs.
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