Secured creditors must notify their decision to relinquish security interest within the stipulated time; failure to do so results in assets being included in the liquidation estate.

ORDER

1. This is an Application filed by the Applicant under Section 52 (5) read with 60 (5) of the Insolvency and Bankruptcy Code, 2016 Read with Rule 11 of National Company Law Tribunal Rules, 2016 seeking to:

a. Restrain the Respondent from taking the following assets of the Corporate Debtor on which the Applicant has security interest (and has exercised its right not to relinquish the security interest under Section 52 of the Code) to form a part of the liquidation estate:

i. Leasehold rights held by Aster Private Limited (hereinafter referred to as the “Corporate Debtor”) Plot No.2 to 7/1, RS No 497/P, 498/P499/P and 500 part, Savli (Alindra), GIDC Industrial Estate, District Vadodara, Gujarat;

ii. Leasehold rights in the lands situated at Bhootpur Village and Gram Panchayat, Bhootpur Mandal, Mahbubnagar District, Telangana with the following Survey Nos. (hereinafter referred to as “Bhootpur Property”)

Hereinafter collectively referred to as the “Said Properties”.

b. Direct the Respondent to provide its estimates to the Applicant as per First Proviso to Regulation 21A(2) of the Liquidation Regulations in respect of the said Properties, extend the time period to comply with the Regulation 21A rea with first Proviso of Regulation 21A(2) of the Liquidation Regulations by a further period of 180 days from the date of providing of estimates by the Liquidator; and/or c. During the pendency of the captioned application, pass an ad- interim ex-parte direction restraining the Respondent from taking any steps whatsoever in respect of the said properties.

2. Gist of the application:

a. It is averred that while the directions for commencement of liquidation process were passed by this Tribunal vide its order dated 22.09.2021 passed in IA No 259 of 2021. The said order was directed not to be implemented by the Hon’ble National Company Law Appellate Tribunal vide its order dated 22.11.2021. However, the same stood vacated in the light of the dismissal of the appeal by the Hon’ble NCLAT vide its Final Order dated 23.02.2023. For completeness, it is stated that the Applicant has filed its claim on 22.10.2022. However, the liquidator admitted the claim of the Applicant only on 16.04.2023 and intimated his decision in this regard.

b. It is averred that the applicant has thereafter requested the Respondent to permit the applicant to proceed with the realization of its security interest as required to be communicated by a liquidator as per Section 52 of the Code. However, only vide his email dated 26.04.2023 the Respondent stated as follows:

“ Dear Sir/Madam, We have accepted your claim and the communication regarding the same was already communicated to you on 16^th April, 2023. We reiterate that and as previously stated in our email, valuation of the assets is under progress, once it is available with us we will share the same. Kindly co-operate.

Further we have noted your request that you are not relinquished the security interest. In this connection we would like to bring your attention to the following provisions of IBC Code.

Under Liquidation Regulation 37 of the IBC Code

(1) A secured Creditor who seeks to realize its security interest under section 52 shall intimate the liquidator of the price at which he proposes to realize its secured asset

(2) The liquidator shall inform the secured creditor within twenty one days of receipt of the intimation