# In the matter of Aarvanss Infrastructure Pvt. Ltd. IA-1446-2019 Appeal-11-2021 in (IB)-669(ND)2019

> NCLT judgment dated 2021-08-27. Citation: TCN-2021-NCLT-01264. The case involves an appeal against an order dated 4th February 2021, passed by the Liquidator,…

- **Court:** NCLT
- **Order date:** 27 Aug 2021
- **Citation:** TCN-2021-NCLT-01264
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aarvanss-infrastructure-pvt-ltd-ia-1446-2019-appeal-11-2021-in-ib-669nd2019-c962633d

## Summary

### Background

The case involves an appeal against an order dated 4th February 2021, passed by the Liquidator, rejecting the claim of the Appellant Bank. The Liquidator contended that the Appellant failed to produce necessary documents to prove the existence of a security interest as required by Regulation 21 of the IBBI (Liquidation Process) Regulation 2016 read with Section 52(3) of the IBC, 2016. The Liquidator referred to a judgment by the NCLAT in a similar matter, Volkswagen Finance Private Limited VS. Shree Balaji Printopack Pvt. Ltd., where it was held that mere registration with the Motor Vehicle Authority under Section 51 of the Motor Vehicle Act, 1988, is insufficient for proving the existence of a security interest under Section 52 of IBC, 2016.

## Facts

Volkswagen Finance Pvt. Ltd. filed an application under Section 7 of the IBC, 2016 against Aarvanss Infrastructure Pvt. Ltd. The erstwhile IRP sought directions for the suspended directors to cooperate and provide necessary information and custody of assets. The liquidator sought prosecution under Chapter VII, specifically Section 70 of the IBC, 2016, due to the non-furnishing of required information by the suspended board of directors. The Liquidator rejected the claim of the Appellant Bank based on the interpretation of security interest registration. The Appellant Bank appealed the Liquidator's decision. The Ministry of Finance issued a notification on 03.05.2019, and the RBI issued a clarification on 04/10/2019, stating that vehicles registered with the VAHAN

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## Issues and analysis

### Issue 1: Whether the Liquidator's rejection of the Appellant Bank's claim was justified based on the …

**Ratio:** The ratio is that the Liquidator's view was contrary to the notification dt.03.05.2019

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**Reasoning:** The court reasoned that the notification and clarification issued by the Ministry of

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**Interpretation:** The interpretation revolves around the interplay between the IBBI (Liquidation

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**Application:** The court applied this reasoning to the specific facts by stating that the

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; L. N. G…
- **Appellants:** Volkswagen…
- **Respondents:** Aarvanss Infrastru…

## Timeline

- **2019-10-29 — Application…**: The initial application…
- **2019-05-03 — Ministry of Finance…**: The Ministry of Finance issued a notification stating that the registration system of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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