# In the matter of Visa Power Ltd., C.A. (IB) No. 792/KB/2019, C.A. (IB) No. 684/KB/2019 in C.P. (IB) No. 574/KB/2017

> NCLT judgment dated 2019-12-13. Citation: TCN-2019-NCLT-00204. The case involves an appeal under Section 42 and an application under Section 60(5) of the…

- **Court:** NCLT
- **Order date:** 13 Dec 2019
- **Citation:** TCN-2019-NCLT-00204
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/visa-power-ltd-ca-ib-no-792kb2019-ca-ib-no-684kb2019-in-cp-ib-no-574kb2017-68b38a48

## Summary

### Background

The case involves an appeal under Section 42 and an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Bharat Heavy Electricals Ltd. (BHEL) filed a claim as an operational creditor against Visa Power Ltd., which was undergoing liquidation after a failed CIRP. BHEL claimed a statutory charge/lien on the plant and machinery it erected at Visa Power's project site. The liquidator initially admitted part of BHEL's claim as an unsecured debt, leading BHEL to challenge this decision. The Adjudicating Authority set aside the liquidator's order and directed a fresh verification of claims. Subsequently, the liquidator issued a sale certificate for the assets, prompting further objections from BHEL regarding the valuation and auction process.

## Facts

Bharat Heavy Electricals Ltd. (BHEL) entered into a Letter of Award (LOA) with Visa Power Ltd. on 2010-06-28 for the supply and erection of plant and machinery. BHEL made supplies and provided services, but Visa Power defaulted on payments, leading BHEL to put the project on hold from 2012-04-27. BHEL initiated arbitration proceedings in May 2016 to recover its dues. Visa Power was admitted into CIRP on 2017-12-22 under Section 7 of the IBC. Due to the failure of CIRP, liquidation proceedings were initiated, and a liquidator was appointed. BHEL submitted its claim in Form-B and Form-C, claiming a statutory charge/lien on the plant and machinery. The liquidator provisionally admitted part of BHEL's claim as an unsecured creditor, citing pending arbitration and lack of

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## Issues and analysis

### Issue 1: Whether the appellant is a secured …

**Ratio:** The court held that the provisions of the Sale of Goods Act, 1930, and the Transfer of

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**Reasoning:** The court reasoned that the definition of 'security interest' under the IBC requires a

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**Interpretation:** The court interpreted the provisions of the IBC, 2016, regarding security

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**Application:** The court applied the legal principles to the specific facts of the case,

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bharat Heavy…
- **Respondents:** Visa Powe…; Anil…

## Timeline

- **2010-06-28 — Letter of…**: Letter of Award signed between BHEL and Visa Power Ltd. for supply and erection of plant…
- **2012-04-27 — Project o…**: BHEL put the project on hold due to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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