In this case, the Adjudicating Authority has rejected the I.A. filed by the Appellant substantially on two grounds:(i) The Application was barred by time since as per Section 42 of the Code, a creditor may appeal before the Adjudicating Authority against the decision of Liquidator within 14 days on receipt of such decision, whereas the Application was filed after 551 days. (ii) The charge being not duly registered under Section 77 sub-section (3) of the Companies Act, 2013, the Liquidator did not commit any error in not taking into consideration and classifying the Appellant as ‘unsecured creditor’.
NCLAT held that the present was not a case where the claim of the Appellant of dues was rejected by the Liquidator altogether. The claim of the Appellant claiming an amount was accepted, but the Appellant was classified as unsecured creditor. Section 60(5) empowers the Adjudicating Authority to entertain or dispose of any Application by or against the corporate debtor or corporate person; any claim made by or against the corporate debtor or corporate person; and any question of proprieties in relation to liquidation proceedings. It is not the finding of the Adjudicating Authority that the I.A. filed by the Appellant was not entertainable under Section 60 sub- section (5). When the Application was maintainable and entertainable under Section 60(5), there is no occasion to treat the Application as an Appeal under Section 42 of the Code and reject the Application on the ground that it is not filed within 14 days as is provided by Section 42 of the Code.
Further, it held that In the present, the order passed by the Debt Recovery Tribunal dated 26th April, 2017 is an order adjudicating the dispute between the Appellant and the Corporate Debtor and after adjudication, the order passed by the Tribunal is akin to a Decree. The order dated 26th April, 2017 indicates that 30 days’ time was allowed to the defendants (one of which was Corporate Debtor) to make the payment, failing which the amount was to be recovered from the sale of mortgaged and hypothecated properties. When the sale of mortgaged and hypothecated was directed as per judgment of the Debt Recovery Tribunal, the mortgage and hypothecation no longer remained the matter of contract, rather it was the part of the judgment of the Tribunal and the non-registration of charge as required by Section 77 of Companies Act, 2013 does not in any manner affect enforceability of the order dated 26th April, 2017.
