Kotak Mahindra Bank Limited Vs Anil Kashi Drolia (NCLT Mumbai)
The National Company Law Tribunal (NCLT), Mumbai Bench, allowed the application filed by Kotak Mahindra Bank Limited and dismissed the application filed by the Company Liquidator, holding that the Bank had not relinquished or surrendered its security interest merely by participating in the first meeting of creditors during the winding-up proceedings.
The company was ordered to be wound up on 12 January 2026, and a Company Liquidator was appointed on 2 February 2026. Pursuant to the winding-up order, the Liquidator invited proof of debts, and Kotak Mahindra Bank submitted its proof of debt in Form WIN-44 for ₹3.58 crore while disclosing the particulars and estimated value of its security. The Bank had already initiated recovery proceedings under the SARFAESI Act, 2002, after classifying the company’s account as a non-performing asset, issuing notices under Sections 13(2) and 13(4), obtaining physical possession of the secured assets through proceedings under Section 14 of the SARFAESI Act, and issuing e-auction notices before the winding-up order was passed.
The Bank filed an application seeking directions restraining the Liquidator from interfering with its possession and realization of the secured assets under the SARFAESI Act. The Liquidator, on the other hand, sought directions requiring the Bank to hand over the secured assets, contending that by proving its entire debt in Form WIN-44 and participating in the first meeting of creditors, the Bank had relinquished its security interest and could no longer enforce it independently. According to the Liquidator, the Bank had voted on agenda items relating to the Liquidator’s remuneration, winding-up costs, and the Advisory Committee, thereby attracting the deeming provision contained in Rule 61 of the Companies (Winding Up) Rules, 2020.
