Neither the IBC, 2016 nor CIRP Regulations, 2016 provides for disposal of security held by a secured creditor, after admission of CIRP – HDFC Bank Ltd. Vs. Manish Agarwal RP of Worlds Window Infrastructure & Logistics Pvt. Ltd. – NCLT New Delhi Bench Court-II
The Adjudicating Authority held that in terms of the provisions of Section 14 of IBC, 2016, in the wake of the order dated 07.03.2022, passed by this Adjudicating Authority, the enforcement of any security interest created by the CD in respect of the aforementioned shares stood prohibited. Neither the IBC, 2016 nor IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 provides for disposal of security held by a secured creditor, after admission of CD to CIRP and declaration of the moratorium, during CIRP, though Regulation 21A of IBBI (Liquidation Process) provides for an option to secured creditor to take a decision either to relinquish its security interest to the Liquidation estate or to realize the same as the case may be.
