Appellant is unsecured Financial Creditor as creation of security interest on assets of Corporate Debtor not proved: NCLAT Delhi

Unity Small Finance Bank Ltd. Vs Sripatham Venkatasubramanian Ramkumar (NCLAT Delhi)

NCLAT Delhi held that as creation of security interest on the assets of Corporate Debtor not proved by any documents, Resolution Professional duly declared Appellant as unsecured Financial Creditor.

Facts- Punjab & Maharashtra Co-operative Bank Ltd. sanctioned mortgage overdraft facility to the Corporate Debtor. Various documents creating security interest in favour of the PMC Bank was executed including mortgage of immovable property and mortgage of land. The Corporate Debtor being unable to repay the overdraft amount, the account was declared as Non-Performing Asset.

Later PMC Bank was amalgamated with the Appellant. The Adjudicating Authority initiated Corporate Insolvency Resolution Process against the Corporate Debtor. Thus, Appellant field its claim. In the List of Creditors published by IRP, the Appellant’s claim only to the extent of Rs.2.53 crores was admitted as secured claim. Thereafter as per the final list of creditors, Appellant’s claim for Rs.139,57,65,086/- was admitted as unsecured claim.

The Appellant aggrieved by the order approving the Resolution Plan, in which he has been distributed the amount as an unsecured creditor of the Corporate Debtor has come up in this Appeal.

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