# In the matter of Oriental Bank of Commerce Vs. Anil Anchalia & Anr. Comp. App. (AT) (Ins.) No. 547 of 2022

> NCLAT judgment dated 2022-05-26. Citation: TCN-2022-NCLAT-00459. The Oriental Bank of Commerce (now Punjab National Bank) filed an appeal against the order…

- **Court:** NCLAT
- **Order date:** 26 May 2022
- **Citation:** TCN-2022-NCLAT-00459
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/oriental-bank-of-commerce-vs-anil-anchalia-anr-comp-app-5c85a427

## Summary

### Background

The Oriental Bank of Commerce (now Punjab National Bank) filed an appeal against the order dated 04.03.2022 passed by the National Company Law Tribunal (NCLT), Kolkata Bench, which rejected I.A (I.B.C)/101(KB)2022 filed by the Appellant. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Bala Techno Industries Ltd., was initiated on 15.10.2019. The Appellant had extended financial assistance to the Corporate Debtor in 2014 and had an exclusive charge over the factory land, building, and plots at Ramnagar, West Bengal. The liquidation order was passed on 15.02.2021. The Appellant relinquished its security with regard to secured assets in the liquidation proceedings. The liquidator sold the assets for Rs.1,68,00,000/-. The Appellant claimed

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## Facts

The Oriental Bank of Commerce (now Punjab National Bank) extended financial assistance to Bala Techno Industries Ltd. in 2014 and held an exclusive charge over the company's assets. CIRP was initiated against Bala Techno Industries Ltd. on 15.10.2019. A liquidation order was passed on 15.02.2021. The bank relinquished its security interest in the liquidation proceedings. The liquidator sold the assets for Rs. 1,68,00,000. The bank claimed the entire amount as the first charge holder, but the liquidator distributed the proceeds pro-rata under Section 53 of the IBC. The bank filed I.A (I.B.C)/101(KB)2022, which was rejected by the NCLT. The bank then filed an appeal against this rejection, arguing that it was entitled to the entire amount realized from the secured assets

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## Issues and analysis

### Issue 1: Whether the Appellant, having relinquished its security interest, is entitled to receive the entire …

**Ratio:** When a secured creditor relinquishes its security interest, it becomes subject to the

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**Reasoning:** The court relied on the judgment of the Hon'ble Supreme Court in 'India Resurgence ARC

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**Interpretation:** The interpretation of Section 52 and 53 of the IBC, along with the precedents

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**Application:** Since the Appellant relinquished its security interest, it cannot claim

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## Parties

- **Judges:** Ashok Bh…; Shreesha…; +1 more
- **Appellants:** Oriental Bank of…
- **Respondents:** Bala Techno…; Anil Anc…

## Timeline

- **2014-01-01 — Financial Assistance…**: Oriental Bank of Commerce extended financial…
- **2019-10-15 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against Bala Techno Industries…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52 — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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