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2026 Supreme(Online)(NCLT) 238
NATIONAL COMPANY LAW TRIBUNAL
Prabhat Kumar, Technical Member, Sushil Mahadeorao Kochey, Judicial Member
Jammu & Kashmir Bank Limited – Appellant
Versus
Ajay Agrawal – Respondent
APPEAL(IBC)/32/2024|IVN.P (IBC)/55(MB) 2025|IN C.P. (IB)/2815(MB)2019|IA No. 1282 of 2019|IA No. 944/2021|Company Appeal (AT) (INS) No. 1414 of 2023|IA No. 6010 of 2023
For the Appellants/Petitioners:Mr. Chetan Kapadia, Ld. Sr. Advocate, Adv. Rohan Agrawal, Adv. Yahya Batatawala, Mr. Prateek Seksaria, Ld. Sr. Advocate, Adv. Aditya Tolani
For the Respondents:Adv. Aditya Tolani, Adv. Rishabh Khemuka, Mr. Chetan Kapadia, Ld. Sr. Advocate, Adv. Rohan Agrawal, Adv. Yahya Batatawala
Non-registration of charge with RoC does not defeat secured creditor status if mortgage deed registered with public authority; security interests transfer via approved demerger/amalgamation schemes binding successors under liquidation process.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 42 - Companies Act, 2013 - Sections 77, 79 - IBBI (Liquidation Process) Regulations, 2016 - Regulation 21 - Transfer of Property Act, 1882 - SARFAESI Act, 2002 - Section 20 - Secured financial creditor status in liquidation - Bank claimed secured status based on mortgage over land transferred via court-approved demerger and amalgamation schemes - Mortgage deed registered with Sub-Registrar prior to CERSAI mandate but charge not registered with RoC - Liquidator classified as unsecured - Held, security interest continues post schemes as contracts/deeds relating to transferred undertaking bind successor entities - Non-registration with RoC does not defeat mortgagee's rights under Transfer of Property Act; proved via registered mortgage deed despite lack of RoC/CERSAI registration - Regulation 21 allows alternatives including proof of registration with public authority - Corporate guarantee obligations not transferred as lender took contrary stand in prior proceedings upholding original guarantor's liability. (Paras 20, 22-30)
(B) Corporate restructuring - Scheme of arrangement - Demerger and amalgamation - Clause transferring contracts, deeds, bonds, agreements relating to demerged undertaking continues them in force against/in favour of resulting company as if it were original party - Mortgage charge on land transferred binds successor. (Paras 19-20)
Facts of the case:
Appeal against liquidator's decision classifying bank as unsecured financial creditor - Bank advanced loans secured by mortgage on land owned by group entity, later demerged to intermediary and amalgamated into corporate debtor - Claims submitted in CIRP and liquidation; intervention by another creditor challenging transfer of security.
Findings of Court:
Security interest via mortgage deed registered with Sub-Registrar binds corporate debtor post schemes; rights not lost for non-RoC registration - Covenant in mortgage deed constitutes enforceable guarantee transferred via schemes - Separate corporate guarantee not transferred due to prior contrary position.
Issues: (i) Whether security interest in mortgaged land securing third-party loan continues post demerger/amalgamation schemes; (ii) Whether corporate guarantee binds corporate debtor via schemes; (iii) Whether non-RoC charge registration defeats secured status under liquidation regulations.
Ratio Decidendi: Mortgagee's rights under Transfer of Property Act prevail over non-registration under Companies Act s.77; Regulation 21 permits proof via registered mortgage deed with public authority - Schemes transfer encumbrances on demerged assets to successors - Estoppel prevents inconsistent claims on guarantee transfer.
Result: Appeal allowed; appellant declared secured financial creditor; intervention dismissed.
| Table of Content |
|---|
| 1. appeal against liquidator's classification as unsecured creditor (Para 1 , 2 , 10 , 11 , 12 , 17) |
| 2. loan facilities secured by gorai land mortgage (Para 3 , 4 , 5 , 6 , 7) |
| 3. demerger and merger transfer mortgage to corporate debtor (Para 8 , 9 , 19 , 20) |
| 4. corporate guarantee not transferred to corporate debtor (Para 13 , 21) |
| 5. mortgage registration proves secured creditor status (Para 14 , 15 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29) |
| 6. appellant admitted as secured financial creditor (Para 18 , 30 , 31) |
ORDER
1. The instant appeal is being preferred under Section 42 of the Insolvency & Bankruptcy Code, 2016 ("IBC") by Jammu and Kashmir Bank Limited ("Appellant") against the decision of the Liquidator communicated vide Email dated 04.12.2023 to the Appellant whereby the Liquidator declared the Appellant as Unsecured Financial Creditor in the liquidation process of Pan India Infraprojects Pvt. Ltd. (“Corporate Debtor”) The Appellant has made following prayers :
a. Allow the present Appeal by declaring the Appellant Bank as secured financial creditor by setting aside the impugned Decision/Communication dated 04.12.2023 issued by the Liquidator;
and
b. Pass such other and further reliefs that this Hon'ble Tribunal may deem fit in the facts and circumstances of this case
2. The Respondent is the Liquidator appointed in respect of the Corporate Debtor vide order dated 04.10.2023, passed by this Adjudicating Authority in IA No. 1282 of 2019, commencing the liquidation of Corporate Debtor. Initially, the said Company Petition (IB) 2815/MB/2019 was filed by Garg Enterprises, under Section 9 of the Code for initiation of the Corporate Insolvency Resolution Process ("CIRP") in respect of PIIPL i.e., the Corporate Debtor and the Corporate Insolvency Resolution Process (“CIRP”) for resolution of Corporate Debtor under IBC commenced on 16.7.2020.
3. On 17.06.2010, the Appellant sanctioned a Corporate Loan of Rs. 200 Crores and a Bank Guarantee Facility of Rs.30 Crores in favor of one Pan India Network Private Limited (“PINPL”) and a loan agreement dated 07.07.2010 and later on a supplementary loan agreement dated 18.08.2011 were executed by PINPL and the Appellant. The said loan was secured by collateral securities in form of shares of group companies.
4. On 13.1.2012, the existing collateral securities were replaced by pari-passu charge on non agricultural land situated in Bhayander in terms of mortgage of said property created by its owner Essel Infraprojects Limited (“EIL”). On 1.6.2012, the existing pari-passu charge on Bhayander property was replaced by Pari- passu charge on land measuring 196.16 acres located at Gorai Village, Survey No. 268, Borivali (W), Mumbai - 400091 ("Mortgaged Property"), in terms of mortgage of said property created by its owner viz. EIL.
5. The Appellant sanctioned two Term Loan of Rs. 100 Crores to the Corporate Debtor in terms of sanction letter dated 30.1.2012 and sanction letter dated 15.3.2022. A common loan agreement was executed on 20.3.2012 between the Corporate Debtor and Appellant in relation to both sanctions. Both of these facilities were secured by a charge by way of 1.5 times cover over land at Gorai Village, Survey No. 268, Borivali (W), Mumbai - 400091 ("Mortgaged Property") as well as Corporate Guarantee of EIL. The sanction letter(s) also stipulated registration of charge with RoC within the prescribed time.
6. Thereafter, in the year 2013, Appellant sanctioned Rs.100 Crores to EIL vide Sanction Letter dated 14.01.2013 for which the formal sanction was accorded on 17.01.2013 and for securing the said facility, EIL offered to extend charge on the Mortgaged Property which was accepted by the Appellant vide a Sanction letter/communication dated 16.03.2013.
7. Thereafter, in the year 2013, another group concern of Essel Group, Pan India Utilities Distribution Company Limited ("PIUDCL") availed Secured Overdraft Credit Facility to the tune of Rs. 200 Crores ("SOD"), vide a sanction letter
