Non-registration of charge with RoC does not defeat secured creditor status under IBC if charge validly created and registered with Sub-Registrar pursuant to court consent decree subordinating it to first charge.

J U D G M E N T

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal, filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 09.01.2026 (hereinafter referred to as the ‘Impugned Order’ passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court – I) in I.A No. 2397 of 2025 filed under Section 60(5) of the IBC in CP (IB) No. 571(MB) of 2019. By the said impugned order, the Adjudicating Authority has dismissed I.A No. 2397 of 2025. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant.

2. Coming to the brief factual matrix of the case which are relevant to be noticed for consideration of the matter at hand, we find that the Corporate Debtor-Mirage Ceramics Pvt. Ltd. was admitted into Corporate Insolvency Resolution Process (in short ‘CIRP’) on 14.02.2020. The resolution process having failed, the Corporate Debtor went into liquidation on 15.06.2023. The Corporate Debtor prior to the initiation into CIRP had availed credit facilities from Abhyudaya Co-operative Bank (‘Abhyudaya’ in short) and had created mortgage and hypothecation over its movable and immovable assets including land at Pune besides plant and machinery, stocks and receivables which led to the signing of a Hypothecation of Stock and Book-Debts Agreement on 17.09.2018 (hereinafter referred to as ‘Hypothecation Agreement’). Subsequently, Abhyudaya as the assignor executed an Assignment Deed dated 26.08.2020 with the Appellant as assignee. Abhyudaya had assigned its loan exposure alongwith all underlying security interest of the Corporate Debtor to the Appellant-M/s ASREC (India) Ltd. After the Appellant stepped into the shoes of Abhyudaya, it enjoyed the status of a secured financial creditor of the Corporate Debtor. The claim of Respondent No. 2 had been admitted as an unsecured financial creditor during the CIRP process by the Resolution Professional (“RP” in short). The RP was subsequently appointed as the Liquidator to conduct the liquidation process of the Corporate Debtor in accordance with law. During the liquidation process, the Liquidator classified the Respondent No. 2 as a secured financial creditor by adjudicating that the claim of Respondent No. 2 was that of a secured debt which was based on the creation of second charge on the property of the Corporate Debtor in pursuance to an order dated 04.10.2018 passed by the Bombay High Court in Commercial Arbitration Petition No. 1074 of 2018. Pursuant to the order of the Bombay High Court dated 04.10.2018, the Corporate Debtor had executed a Deed of Charge–cum-Hypothecation dated 20.02.2019 (‘Deed of Charge’ in short) with the Respondent No. 2 creating a second charge. The said hypothecation deed was registered with the Sub-Registrar, Pune Gramin. The Liquidator filed I.A No. 508 of 2025 before the Adjudicating Authority claiming that the interest of Respondent No. 2 was secured interest as per order and decree dated 04.10.2018 passed by the Bombay High Court. The Appellant however filed I.A No. 2397 of 2025 before the Adjudicating Authority challenging the validity and maintainability of classifying Respondent No. 2 as a secured financial creditor and inter alia urged the Adjudicating Authority to issue directions to the Respondent No. 1–Liquidator to declare the claim of Respondent No. 2 as an unsecured creditor of the Corporate Debtor. However, I.A No. 2397 of 2025 w