Whether Revenue/Profit earned from Secured Assets from the date of communication by Secured Creditor to Liquidator to realize Secured Assets asset under Section 52 of IBC till date of possession of Secured Assets by Financial/Secured Creditor will be part of Liquidation Estate? – KRS Erectors Pvt. Ltd. Vs. J.C. Flowers Asset Reconstruction Pvt. Ltd. – NCLT Hyderabad Bench
In this important judgment, Hon’ble NCLT Hyderabad Bench held that:
(i) From carefully peruse to Regulation 21A(1) of the Liquidation Regulations, 2016, it is very much clear that secured assets shall be presumed to be part of the liquidation estate only when secured creditor fail to inform the liquidator of its decision to relinquish its security interest to the liquidation estate or realize its security interest, as the case may be, in Form C or Form D of the Schedule II within 30 days, which admittedly is not applicable in this case on hand.
(ii) If secured creditor intimate its decision in time as prescribed in regulation, the secured assets do not form part of liquidation estate at any point of time.
(iii) If assets cannot be treated as part of liquidation estate, the income derived from these assets also cannot be part of liquidation estate.