# In the matter of Oceanic Tropical Fruits Private Limited

> NCLT judgment dated 2025-07-11. Citation: TCN-2025-NCLT-01161. The case involves a dispute regarding the distribution of proceeds from the sale of assets of…

- **Court:** NCLT
- **Order date:** 11 Jul 2025
- **Citation:** TCN-2025-NCLT-01161
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chennai/oceanic-tropical-fruits-private-limited-8999d46a

## Summary

### Background

The case involves a dispute regarding the distribution of proceeds from the sale of assets of Oceanic Tropical Fruits Private Limited, a corporate debtor undergoing liquidation. ICICI Bank and Central Bank of India, as financial creditors, claim that the liquidator, Mr. V. Nagarajan, improperly distributed the sale proceeds primarily to State Bank of India (SBI), the first charge holder, without adhering to the waterfall mechanism under Section 53 of the IBC and the inter-se agreement among the consortium of lenders.

## Facts

Oceanic Tropical Fruits Private Limited underwent CIRP and subsequently liquidation.

ICICI Bank and Central Bank of India are financial creditors of Oceanic Tropical Fruits Private Limited.

State Bank of India (SBI) was the lead bank and held the first charge on certain assets of the corporate debtor.

An inter-se agreement existed among SBI, ICICI Bank, Central Bank of India, and erstwhile State Bank of Travancore.

The liquidator sold assets of the corporate debtor, including properties in Annur, Marakkanam and Kancheepuram.

ICICI Bank marked a lien on the liquidation account, which was later directed to be lifted by the tribunal.

The liquidator distributed sale proceeds primarily to SBI, leading to objections from ICICI Bank and Central Bank of India.

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## Issues and analysis

### Issue 1: Whether the liquidator was justified in distributing the sale proceeds primarily to SBI based on …

**Ratio:** The tribunal held that the liquidator should distribute the sale proceeds among the

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**Reasoning:** The tribunal reasoned that once a secured creditor relinquishes its security interest, it

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**Interpretation:** The tribunal interpreted Section 53 of the IBC to mean that secured creditors

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**Application:** The tribunal applied this interpretation by directing the liquidator to rework

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** ICICI Ban…; Central Bank of…
- **Respondents:** Oceanic Tropical…; State Bank of…
- **Other parties:** C. Ramasubr…; Venkataramanarao…; +1 more
- **Advocates:** A. Sar…; Sashik…; +3 more

## Timeline

- **2017-07-28 — Petition…**: ICICI Bank filed a petition under Section 7 of IBC with NCLT, Chennai for admission of…
- **2017-09-12 — CIRP Admi…**: NCLT allowed the petition and…

## 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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