# Morgan Securities & Credits Pvt. Ltd. v. Videocon Industries Ltd. [CP (IB) 02/MB/C-II/2018]

> NCLT judgment dated 2021-09-29. Citation: TCN-2021-NCLT-00950. Morgan Securities & Credits Pvt. Ltd. filed an application seeking clarification from the NCLT…

- **Court:** NCLT
- **Order date:** 29 Sept 2021
- **Citation:** TCN-2021-NCLT-00950
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/morgan-securities-credits-pvt-ltd-v-videocon-industries-ltd-cp-ib-02mbc-ii2018-97fc2a07

## Summary

### Background

Morgan Securities & Credits Pvt. Ltd. filed an application seeking clarification from the NCLT that it should be treated as a secured financial creditor of Videocon Industries Ltd., the corporate debtor. The applicant based its claim on an undertaking allegedly made by the corporate debtor before the Delhi High Court to offer its assets as security to cover an awarded amount. The Resolution Professional classified the applicant as an unsecured creditor. The applicant claimed that a charge or security interest was created in its favor to the extent of Rs. 20 Crores in the assets of the Corporate Debtor, by operation of law and virtue of undertakings given by the Corporate Debtor before the Delhi High Court. The NCLT is considering whether the applicant should be

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## Facts

Morgan Securities & Credits Pvt. Ltd. (Applicant) filed a claim of Rs. 325.81 Crores against Videocon Industries Ltd. (Corporate Debtor), of which Rs. 76.45 crores was admitted by the Resolution Professional. An arbitral award was passed in favor of the Applicant on 29.04.2013 against the Corporate Debtor for non-payment of loaned/discounted amounts. The Applicant served an addendum on 27.08.2020 claiming a charge or security interest of Rs. 20 Crores in the Corporate Debtor's assets. The Applicant alleges that a categorical undertaking was given by the Corporate Debtor before the Delhi High Court to offer Rs. 20 Crore as security. The Delhi High Court passed orders on 14.08.2013 and 01.10.2013. The NCLAT, in an order dated 22.01.2020, held that Rs. 20 crores lying

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## Issues and analysis

### Issue 1: Whether the Applicant, Morgan Securities & Credits Pvt. Ltd., should be treated as a 'Secured …

**Ratio:** The IBC defines a 'security interest' under Section 3(31) as a right, title, or interest

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**Reasoning:** The NCLT found that the Corporate Debtor had not given any undertaking to create security

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**Interpretation:** The court interpreted the relevant orders of the Delhi High Court and the

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**Application:** The NCLT applied the definition of 'security interest' under Section 3(31) of

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## Parties

- **Judges:** Ashok Kumar…; Shyam Babu…
- **Appellants:** Morgan Securities…
- **Respondents:** Videocon Industrie…
- **Other parties:** Arbitral Award,…

## Timeline

- **2013-04-29 — Arbitral…**: An arbitral Award was passed in favour of the…
- **2013-08-14 — Delhi High Cou…**: Order passed by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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