The NCLAT, New Delhi opined that Form D unequivocally stipulates that the claim includes interest “as at the liquidation commencement date”. The liquidation commencement date is when the NCLT passes the order for liquidation. Therefore, it was ruled by the Bench that an additional amount cannot be claimed when Form D fixes the claim on a particular date.
It was further expounded that no claimant can be allowed to increase his claim as the same contravenes the scheme of the liquidation process.
Brief Facts:
The present appeal has been preferred against the order of the NCLT vide which the Appellant was directed to make the payment to the liquidation estate along with interest.
Brief Background:
The Appellant had sanctioned an overdraft facility and various loans to the Corporate Debtor against whom a liquidation order was passed by the NCLT. The Appellant informed the Liquidator about its decision to realize the security interest by remaining outside the liquidation process and that the realization would happen at a rate of Rs. 14.44 crore. The Liquidator had agreed to transfer possession of assets to the Appellant.
Thereafter, the sale proceeds were received by the Appellant. The Liquidator inquired about the calculation of the amount realized from the sale proceeds.
During the meeting of the stakeholder’s committee, the Appellant submitted that it can retain the interest amount till the date of distribution to recover the debt. Hence, an interim application was preferred by the Liquidator before NCLT, seeking direction that the Respondent pay the excess realized money.
Contentions of the Appellant:
It was contended that the Appellant was entitled to realize the entire amount up to date along with the interest and not just the claim as submitted on the date when liquidation commenced.
Contentions of the Liquidator:
It was argued that only the amount as claimed in Form D could have been realized by the Appellant.
Observations of the Tribunal:
The primary issue to be adjudicated upon was whether the secured creditor’s claim has to be confined to the principal amount and interest as claimed in Form D or can the additional amount also be claimed.
It was noted that Form D unequivocally stipulates that the claim includes interest “ as at the liquidation commencement date”. The liquidation commencement date is when the NCLT passed the order for liquidation. Therefore, it was opined by the Bench that an additional amount cannot be claimed when Form D fixes the claim on a particular date.
It was further expounded that no claimant can be allowed to increase his claim as the same contravenes the scheme of the liquidation process.
The decision of the Tribunal:
Based on the above-mentioned findings, the Appellate Authority concurred with the order of NCLT to ask the Appellant to hand over the additional amount to the Liquidator and accordingly, dismissed the appeal.
Case Title: DBS Bank India Limited v. Kuldeep Verma
Coram: Justice Ashok Bhushan, Mr. Barun Mitra (Technical Member)
Case No: Company Appeal (AT)(Insolvency) No. 1048 of 2022
Advocates for Appellant: Advs. Mr. Krishnendu Datta, Mr. Utsav Mukherjee, Mr. Jaiveer Kant, Mr. Rajat Sinha
Advocates for Respondent: Advs. Mr. Vivek Sibal, Mr. Rahul Audy
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