DILEEP KP-Resolution Professional Vs YES Bank Limited (NCLT Kochi)
The National Company Law Tribunal (NCLT), Kochi Bench, allowed an application filed by the Resolution Professional of M/s. Roofco Trading Company Private Limited seeking reclassification of Yes Bank Ltd.’s claim of Rs.4,92,59,683 from secured financial debt to unsecured financial debt during the Corporate Insolvency Resolution Process (CIRP).
Yes Bank had submitted a total financial creditor claim of Rs.13,92,95,998, comprising Rs.4,92,59,683 towards a loan granted to the Corporate Debtor and Rs.9,00,36,315 towards loans granted to the promoters, for which the Corporate Debtor had provided a corporate guarantee. Initially, the Resolution Professional classified the Rs.4,92,59,683 as secured financial debt and the remaining amount as unsecured financial debt based on the available documents.
Subsequently, State Bank of India, a member of the Committee of Creditors (CoC), objected to the classification of the Rs.4,92,59,683 as secured financial debt, contending that the alleged security consisted of mortgages over the promoters’ properties and not the assets of the Corporate Debtor. After obtaining a legal opinion, the Resolution Professional approached the Tribunal, stating that he lacked adjudicatory powers to conclusively determine the classification dispute.
Yes Bank opposed the application, contending that the Corporate Debtor had availed financial assistance under valid loan documents, that the charges were registered with CERSAI, and that the loans were secured through mortgages over movable and immovable properties belonging to the promoters/directors who acted as guarantors. It also argued that the Corporate Debtor remained primarily liable for repayment and that the existence of an enforceable security interest entitled it to be treated as a secured financial creditor.
