Security Deposit is part of Liquidation Estate in accordance with Section 36 of IBC and it will be distributed as per the provisions outlined in Section 53 and it cannot be adjusted against dues/arrears of electricity in claim – Sandeep Goel Liquidator for Chaudhary Ingots Pvt. Ltd. Vs. Paschimanchal Vidyut Vitran Nigam Ltd. (PVVNL) – NCLT Allahabad Bench
Hon’ble NCLT Allahabad Bench held that:
(i) The rationale that the Hon’ble Supreme Court in Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat Private Ltd. and Ors. (2023) ibclaw.in 81 SC reaffirmed in the aforesaid case that the IBC, 2016 is a special statute that accounts for the dues of all creditors to be disbursed as per the waterfall mechanism during CIRP.
(ii) Recently, the Hon’ble Supreme Court in Bharti Airtel Ltd. and Another Vs. Vijaykumar V. Iyer and Others (2024) ibclaw.in 02 SC has dealt with the issue of right of set-off by the creditor in the insolvency proceedings.
(iii) The PVVNL has adjusted the sum of Rs. 1,15,33,600/-. The amount already set off by the PVVNL against anticipated claim cannot be permitted. In view of the fact that entire amount becomes part of the Corporate Debtor, security deposit being an integral part of the payment made by the erstwhile Corporate Debtor would therefore be part of the liquidation estate.
