# In the matter of Mr. Srikanth Dwarkanath, Liquidator of Surana Power Limited Vs. Bharat Heavy Electricals Limited CA(AT)(Ins)No. 1510 of 2019

> NCLAT judgment dated 2020-06-18. Citation: TCN-2020-NCLAT-00221. The appeal arises from an order dated 20th November 2019 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 18 Jun 2020
- **Citation:** TCN-2020-NCLAT-00221
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-srikanth-dwarkanath-liquidator-of-surana-power-limited-vs-bharat-heavy-electr-6a24ed37

## Summary

### Background

The appeal arises from an order dated 20th November 2019 passed by the Adjudicating Authority/National Company Law Tribunal, Chennai Bench, Chennai, which dismissed Miscellaneous Application No.1052 of 2019 in Company Petition (IB) No. CP/646/CB/2017. The application sought permission to sell the assets of Surana Power Limited in Liquidation under Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016. The CIRP was initiated under Section 9 of the Insolvency and Bankruptcy Code, 2016, vide order dated 20th January 2019. The Corporate Debtor was ordered to be liquidated, and the Appellant was appointed as Liquidator. The Respondent succeeded in an Arbitration proceeding against the Corporate Debtor and an ex parte award was

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## Facts

The Adjudicating Authority admitted the Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiation of CIRP vide order dated 20th January 2019. As no resolution was approved, the Corporate Debtor was ordered to be liquidated, and the Appellant was appointed as Liquidator. The Respondent succeeded in an Arbitration proceeding against the Corporate Debtor, and an ex parte award was passed in favor of the Respondent, granting them a lien over the equipment and goods lying at the site of the Corporate Debtor (Secured Assets). The Secured Assets, on which the Respondent had been granted lien or a charge, were already hypothecated to all other Secured Creditors vide Hypothecated Deed dated 24th September 2010. The Liquidator could not

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in rejecting the Liquidator's application to sell …

**Ratio:** The Liquidator cannot proceed to sell the assets of the Corporate Debtor without the

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**Reasoning:** The Adjudicating Authority rejected the application because BHEL is a Secured Creditor

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**Interpretation:** The interpretation of Regulation 32 of the Liquidation Process Regulations

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**Application:** The Respondent's refusal to relinquish its security interest prevents the

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## Parties

- **Judges:** Venugop…; V. P. S…; +1 more
- **Appellants:** Mr Srikanth…
- **Respondents:** Surana Power…; Bharat Heavy…

## Timeline

- **2019-01-20 — CIRP Init…**: CIRP initiated against the Corporate Debtor under Section 9 of the Insolvency and…
- **2019-11-20 — Impugned…**: The Adjudicating Authority passed the impugned order dismissing the Liquidator's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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