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2026 Supreme(Online)(NCLT) 976
NATIONAL COMPANY LAW TRIBUNAL
Sunil Kumar Aggarwal, J, Radhakrishna Sreepada, Technical Member
M/s VSL Securities Pvt Ltd – Appellant
Versus
M/s Unishire Housing LLP – Respondent
I.A No. 177, 231/22 & 21/2023 in C.P (IB) No.172/BB/2019
For the Appellants/Petitioners:
For the Respondents: Ms. Niveditha, Shri Chandramouli.P, Shri Abhijit Atur, Ms. Siva Tejasini, Ms. Anuparna.B, Shri Kondishetty Kumar Dushyantha
Liquidator cannot unilaterally reclassify a creditor's status from secured to unsecured; such decisions must be adjudicated by the Tribunal, ensuring fairness and compliance with IBC principles.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7, Section 60 - Liquidation proceedings - Classification of creditor - Petitioner claimed as secured creditor while respondent Liquidator reclassified as unsecured - Court held reclassification by the Liquidator as arbitrary and without jurisdiction, emphasizing the validity of the mortgage deed registered under the relevant legal framework. (Paras 10-20)
(B) Jurisdiction - The Liquidator does not possess the authority to unilaterally review his previous decisions; any alteration must be subjected to the Tribunal's discretion and hearing, reaffirming principles of fairness in administrative actions. (Paras 6-8)
Facts of the case:
The Applicant, having entered into a loan agreement with the Corporate Debtor, secured the loan by mortgaging property. Disputes arose over the classification of the Applicant's claim as a secured creditor after a resolution by the Liquidator. (Paras 1-2, 4-6)
Findings of Court:
The Liquidator’s action to reclassify the Applicant as an unsecured creditor was determined to be improper given the established legal principles concerning secured creditor rights, specifically in light of registered security interests. (Paras 18-19)
Issues: Whether the Applicant can be classified and treated as a secured creditor in the ongoing liquidation proceedings, and the scope of the Liquidator's power to alter creditor classifications. (Para 8)
Ratio Decidendi: The failure to register a charge under the Companies Act does not automatically negate the status of a secured creditor under the IBC; the court reiterated the necessity of fair procedure and adherence to established law. (Paras 10-20)
Result: Application allowed, and the Liquidator is directed to restore Applicant's classification as secured creditor.
| Table of Content |
|---|
| 1. introduction of parties and their roles. (Para 1 , 2 , 3) |
| 2. details of the loan agreement and mortgage agreements. (Para 4 , 5) |
| 3. overview of the disputes and claims. (Para 6 , 7) |
| 4. legal basis for determining secured creditor status. (Para 8 , 9) |
| 5. judicial precedents influencing the classification of creditors. (Para 10 , 11) |
| 6. court’s reasoning on the legal standards applied to creditor classification. (Para 12 , 13 , 14 , 15) |
| 7. ruling on the ability of the liquidator to unilaterally alter creditor status. (Para 16 , 17 , 18) |
| 8. final conclusion on creditor classification reversal. (Para 19 , 20) |
O R D E R
1. This Application has been filed on 29.08.2022 with following prayers:
A. To allow the present application.
B. To declare and hold that the Resolution Professional has no power to review his own determination under Section 39 and 40 and consequently to hold that the determination made on 01.09.2020 considering the Applicant as a secured creditor is final and binding on the Resolution Professional;
C. To hold that the action of the Liquidator reviewing his own order dated 1.09.2020 and declaring the Applicant as unsecured financial creditor vide communication dated 20.11.2020 is highly arbitrary, illegal and without jurisdiction.
D. To declare the Applicant as secured financial creditor of Unishire Housing LLP for a sum of Rs. 17,80,26,032/- in terms with the FORM G dated 02.07.2020 filed by the applicant and in terms with the email dated 1.09.2020 sent by the liquidator declaring the applicant as the secured creditor.
E. To pass such orders as this Hon’ble Court deems fit in the interest of justice and equity.
2. Brief facts of the present application are given below:
i. The Corporate Debtor along with Unishire Regency Park LLP has approached the Applicant for financial assistance for the purpose of development of following projects:
a. Residential project 'Unishire Signet' to be developed by the Corporate Debtor herein on the Mortgaged Property; and
b. Residential project "Unishire Xperience' to be developed by the Unishire Regency Park LLP on property located at Hennur Road.
ii. Thereafter, the Applicant entered into a loan agreement dated 20.03.2025, for the same and vide sanction letter dated 20.03.2015, Rs.13,00,00,000/- was sanctioned.
iii. Amongst other securities created under the Loan Agreement, the Corporate Debtor had acted as security provider for the repayment of obligations under the Loan Agreement by inter-alia mortgaging its rights over property situated at Corporation No. 400/5 PID No. 056- W0092, 2nd Block, R.T. Nagar, Bangalore, admeasuring 23,591 sq. ft. within the revenue administrative jurisdiction of Bruhat Bangalore Mahangar Palike.
iv. The Corporate Debtor has rights over the Mortgaged Property in terms of the Joint Development Agreement dated 15.12.2014 ('JDA') registered with the sub-registrar of assurances vide document No. MLSD1-3023/2014-15. Further, on the same date, General Power of Attorney ('GPA) was also executed in favor of the Corporate Debtor and duly registered with sub-registrar of assurances.
v. Thereafter an Indenture of Mortgage Deed dated 27.03.2015 bearing registration no. 5781/2014-15 was executed in favor of the Applicant as security in accordance with the Loan Agreement dated 20.03.2015. The security provided by the Corporate Debtor has been perfected by way of registration of the Indenture of Mortgage with the sub-registrar of assurances;
vi. As per the terms and conditions of the loan agreement dated 20.03.2015, the repayment obligations of Unishire Regency Park LLP were to commence on 30.06.2015 and end on 31.12.2016. However, Unishire Regency Park LLP has failed to perform its obligations under the Loan Agreement dated 20.03.2015 and other transaction documents entered into with the Applicant and defaulted on its payments of the amounts which were due and payable, from the very beginning, i.e. from June 2015.
vii. Thereafter, the Applicant sent various demand notices
