The period of 180 days prescribed under Regulation 21A(2)(b) of IBBI (Liquidation Process) 2016 to is mandatory and cannot be extended – The Federal Bank Ltd. Vs. Ruben George Joseph, Liquidator, M/s. Platino Classic Motors (India) Pvt. Ltd. – NCLT Kochi Bench
The applicant being a secured creditor opted to realize its security interest but he could not realize the amount within 180 days from the date of commencement of liquidation.
The Adjudicating Authority held that in our case the word “shall” has been used in Regulation 21A(2), apart from this Regulation 21A(3) provides the consequences of non-compliance of direction provided in Regulation 21A(2)(b), accordingly on the expiry of 180 days if the secured creditor failed to realize the amount and paid to the liquidator the secured asset automatically shall vests with the liquidator as part of liquidation estate. Here also the word “shall” have been used. In the scenario it is evident that the period mentioned in Regulation 21A(2)(b) is mandatory, hence the period of 180 days prescribed under Regulation 21A(2)(b) of IBBI (Liquidation Process)2016 cannot be extended.
