# In the matter of REI Agro Limited C.P. (IB) No. 73-KB-2017 (Interim Order)

> NCLT judgment dated 2018-02-09. Citation: TCN-2018-NCLT-01856. The case involves an application filed by the Liquidator under Section 35 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 9 Feb 2018
- **Citation:** TCN-2018-NCLT-01856
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rei-agro-limited-cp-ib-no-73-kb-2017-interim-order-49725b6d

## Summary

### Background

The case involves an application filed by the Liquidator under Section 35 of the Insolvency & Bankruptcy Code, 2016, seeking directions to Jammu & Kashmir Bank to hand over control of a Current Account (Escrow Account) to the Liquidator and refund money debited after the moratorium declaration under Section 14 of the IBC, 2016. The Corporate Debtor, REI Agro Limited, underwent Corporate Insolvency Resolution Process (CIRP) initiated by Surendra Kumar Joshi. Anil Goel was appointed as the Resolution Professional and later as the Liquidator after the CIRP failed to find a promoter for revival. The bank, being a financial creditor, allegedly did not comply with the Liquidator's instructions, leading to this application.

## Facts

REI Agro Limited is the Corporate Debtor. Jammu & Kashmir Bank is a financial creditor with a branch at D-63, Basant Lok, Vasant Vihar, New Delhi. Anil Goel is the Liquidator. Surendra Kumar Joshi initiated the Corporate Insolvency Resolution Process (CIRP) against REI Agro Limited. The Corporate Debtor availed a term loan facility of Rs. 24,16,00,000 from the bank, executing a Facility Agreement dated 20-03-2014, creating a first-ranking exclusive charge on its assets. The Corporate Debtor also entered into an Escrow Agreement for depositing proceeds, revenue, and earnings. The Corporate Debtor failed to repay installments, leading the bank to recall the loan on 20-02-2015. The Resolution Professional failed to find a promoter, resulting in a liquidation order

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## Issues and analysis

### Issue 1: Whether the adjudicating authority can issue a direction to the Bank for handing over the control …

**Ratio:** Section 52(4) of the Insolvency & Bankruptcy Code, 2016, allows a secured creditor to

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**Reasoning:** The court reasoned that the bank, as a secured creditor, has the right to deal with the

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**Interpretation:** Section 52(4) provides secured creditors with the autonomy to enforce their

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**Application:** The court applied the ratio to the facts by noting that the bank had a valid

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## Parties

- **Judges:** Jinan…
- **Appellants:** Anil…
- **Respondents:** REI Agro L…; Jammu & Kashmir…
- **Advocates:** Abrojit…; Munawar N…; +2 more

## Timeline

- **2014-03-20 — Facility Ag…**: Corporate Debtor executed a Facility Agreement with Jammu & Kashmir Bank, creating a…
- **2015-02-20 — Loan Rec…**: Jammu & Kashmir Bank recalled the term loan facility due to the Corporate Debtor's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35 — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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