# In the matter of Lake View Ayurvedic Resorts and Research Centre Pvt. Ltd.

> NCLT judgment dated 2023-11-24. Citation: TCN-2023-NCLT-00575. The case involves an application filed by Canara Bank under Section 60(5) of the IBC, 2016,…

- **Court:** NCLT
- **Order date:** 24 Nov 2023
- **Citation:** TCN-2023-NCLT-00575
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lake-view-ayurvedic-resorts-and-research-centre-pvt-ltd-7aac5e31

## Summary

### Background

The case involves an application filed by Canara Bank under Section 60(5) of the IBC, 2016, seeking a directive for the Liquidator to deposit proceeds from the sale of secured assets, prioritizing Canara Bank's claim under Section 53(i)(b)(ii) of the IBC. The Corporate Debtor, Lake View Ayurvedic Resorts and Research Centre Pvt. Ltd., had a CIRP initiated against it by KSIDC, admitted on 06.11.2019. Canara Bank, holding a second charge over the Corporate Debtor's assets, filed a claim which was partially admitted. The Liquidator sold the assets, but communicated that the proceeds would fall under Section 53(e)(ii) of IBC, denying Canara Bank priority.

## Facts

Lake View Ayurvedic Resorts and Research Centre Pvt. Ltd. (Corporate Debtor) obtained facilities from Canara Bank, Punalur Branch. KSIDC initiated CIRP against the Corporate Debtor, which was admitted on 06.11.2019. Canara Bank held the second charge over the Corporate Debtor's assets, including land, buildings, and machinery. KSIDC held the first charge. Canara Bank filed a claim in Form C, which was partially admitted. The Corporate Debtor was ordered to be liquidated on 15.10.2020. Canara Bank, as a Financial Creditor, filed a claim in Form D for Rs. 2,04,46,739. The Liquidator sold the assets but informed Canara Bank that its claim would be categorized under Section 53(e)(ii) of IBC, denying priority. Canara Bank argued it never relinquished its security interest.

…

## Issues and analysis

### Issue 1: Whether the Applicant, Canara Bank, is eligible to receive proceeds from the sale of the secured …

**Ratio:** Section 53 of the IBC outlines the waterfall mechanism for the distribution of assets in

…

**Reasoning:** The NCLT reasoned that Canara Bank had not provided any proof of surrendering its

…

**Interpretation:** Section 53(i)(b)(ii) is interpreted to mean that only secured creditors who

…

**Application:** Since Canara Bank failed to provide evidence of surrendering its security

…

## Parties

- **Judges:** TMT. Justice…; Shri. Shyam Babu…
- **Appellants:** Canara…
- **Respondents:** M/s. Lake View…; R. Aravindakshan…

## Timeline

- **2019-11-06 — CIRP Init…**: CIRP initiated against M/s. Lake View Ayurvedic Resorts and Research Centre Pvt. Ltd. by…
- **2020-04-20 — Claim Fi…**: Canara Bank filed a claim in Form C…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lake-view-ayurvedic-resorts-and-research-centre-pvt-ltd-7aac5e31