State Bank of India Vs IDBI Bank Ltd. (NCLAT Delhi)
NCLAT Delhi held that distribution of liquidation proceeds has to be in proportion to the admitted claim of secured creditors as per section 53(1) of the Insolvency and Bankruptcy Code and the same cannot be on the basis of security interest of different secured creditors.
Facts- On an Application u/s. 7 filed by the State Bank of India (SBI), the Corporate Debtor, ESS DEE Aluminium Limited was admitted to Corporate Insolvency Resolution Process (CIRP) by Order dated 14.02.2020 passed by the NCLT, Kolkata Bench. No Resolution Plan having been approved in the CIRP, Adjudicating Authority vide Order dated 08.10.2021 directed for Liquidation of the Corporate Debtor.
IDBI Bank submitted its claim in ‘Form-D’ for an amount of ₹1,46,12,18,998/-. IDBI sent an email to the Liquidator, requesting to share the methodology adopted qua the distribution of assets. Liquidator informed the IDBI that in reference to the list of stakeholders as on 07.12.2021, the share of IDBI is considered as 10%. Liquidator proposed to distribution of sale proceeds as per security interest which was opposed by the IDBI Bank. IDBI Bank sent objection that proceeds be distributed in proportion to their admitted claim in pro-rata basis.
