IN

CP(IB) No. 1055 of 2017

Under Section 60(5) of the Insolvency and

Bankruptcy Code, 2016

IA No. 2674 of 2021 In the Application of

Jammu and Kashmir Bank Limited

…Applicant

Versus

Jitender Kumar Jain

…Respondent

Liquidator

In the matter of

Roofit Industries Limited

…Corporate Debtor

Order Delivered on : 21.03.2024

Coram

Hon’ble Member (Judicial) : SH. Justice Virendrasingh G. Bisht (Retd.)

Hon’ble Member (Technical) : SH. Prabhat Kumar

Appearances:

For the Applicant : Mr. Dharmesh S Jan, Advocate For the Respondent : Mr. Prakhar Tandon, Advocate

ORDER

Per: Prabhat Kumar, Member (Technical)

1. This Application bearing IA No. 2674/2021 is filed by Jammu and Kashmir Bank Limited (“Applicant”) in the Liquidation process of Roofit Industries Limited (“Corporate Debtor”) under the provisions of the Insolvency and Bankruptcy Code, 2016 (“Code”)

seeking the following reliefs :

a) Direct the Respondent to distribute the proceeds of sale of all the assets of the Corporate Debtor between the secured creditors, relinquishing security pursuant to Section 52 of the Code, equally in accordance with Section 53 of the Code without regard to holding of previous charge on a particular asset that was the subject matter of sale, or any ranking created or conferred in favour of such secured creditors.

b) Direct the Respondent to call upon the secured creditors to bring back the amounts already received by them under Section 53(1)(b)(ii) of the Code on the basis of unequal distribution made by the Respondent having regard to their charge, ranking, contrary to the mandate of Section 53 of the Code and re-distribute such amount under Section 53(1)(b)(ii) of the Code equally amongst the secured creditors without having any regard to their respective rankings or charge on particular assets.

Brief Facts

2. The Applicant is a Financial Creditor of the Corporate Debtor and a member of the Stakeholders Consultation Committee (“SCC”) of the Corporate Debtor holding 1.15% share as per the amount admitted by the Liquidator. The Applicant held first ranking pari passu charge on the stocks of raw material, semi-finished and finished goods, other consumables and book debts of the Corporate Debtor as well as second pari passu charge on certain fixed assets of the Corporate Debtor.

3. The Corporate Debtor was ordered to be liquidated by this Tribunal on 22.01.2018 and the Respondent herein was appointed as the Liquidator.

4. The Applicant filed its claim of Rs. 41,32,01,951.63 in Form D dated

14.02.2018 due as on 22.01.2018.

5. The Respondent proceeded to sell and liquidate various assets of the Corporate Debtor.

6. The Applicant relinquished its security interest to the liquidation estate to receive proceeds from sale of assets by the Respondent in the manner prescribed in Section 53 of the Code.

Submissions made by the Ld. Counsel on behalf of the Applicant

7. The Applicant has relied on the decision of the Hon’ble National Company Law Appellate Tribunal (“NCLAT”) in the case of Technology Development Board vs. Mr. Anil Goel and Ors. to submit that except recognizing the status as secured creditors for the purposes of Section 53 of the Code, all other inter se priority rights, contractual or otherwise, amongst such secured creditors are required to be ignored. However, the above-mentioned Order of the NCLAT has been stayed by the Hon’ble Supreme Court.

8. The Respondent informed the Applicant that 8 out of the 9 immovable properties of the Corporate Debtor had been sold and provided the details of distribution vide e-mail dated 26.08.2021. The Applicant was distributed an amount of Rs. 77,339 as its share in the Silvassa property.

9. It is the Applicant’s case that according to the details of distribution provided, the Respondent distributed the proceeds selectively only to the secured creditors holding charge on specific assets and further sought to create a class within the class under Section 53 of the Code proposing that the first charge holders relinquishing security interest should be pa