# In the matter of Roofit Industries Limited

> NCLT judgment dated 2024-03-21. Citation: TCN-2024-NCLT-01995. Jammu and Kashmir Bank Limited filed IA No. 2674/2021 in the liquidation process of Roofit…

- **Court:** NCLT
- **Order date:** 21 Mar 2024
- **Citation:** TCN-2024-NCLT-01995
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/roofit-industries-limited-698f776c

## Summary

### Background

Jammu and Kashmir Bank Limited filed IA No. 2674/2021 in the liquidation process of Roofit Industries Limited, seeking directions for the liquidator to distribute proceeds from the sale of the corporate debtor's assets equally among secured creditors, relinquishing security under Section 52 of the Insolvency and Bankruptcy Code (IBC), without regard to previous charges or rankings. The applicant, a financial creditor and member of the Stakeholders Consultation Committee (SCC) with a 1.15% share, sought the return of amounts already received by secured creditors under Section 53(1)(b)(ii) of the Code based on unequal distribution, and their redistribution equally among secured creditors.

## Facts

Roofit Industries Limited underwent liquidation, with Jitender Kumar Jain appointed as the liquidator. Jammu and Kashmir Bank Limited, a financial creditor with a 1.15% share and first-ranking pari passu charge on certain assets, filed IA No. 2674/2021 seeking equal distribution of proceeds among secured creditors, regardless of prior charges. The applicant relinquished its security interest to the liquidation estate. The liquidator had sold 8 out of 9 immovable properties of the corporate debtor. The applicant relied on an NCLAT decision that was stayed by the Supreme Court. The respondent argued that inter-se priorities should be respected. The NCLT considered the Insolvency Law Committee Reports and the ICICI Bank case, ultimately holding that inter-se priority of

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## Issues and analysis

### Issue 1: Whether inter se priorities between secured financial creditors are to be treated upon …

**Ratio:** Valid inter-creditor and subordination provisions are required to be respected in the

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**Reasoning:** The court reasoned that the Insolvency Law Committee's interpretation of Section 53,

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**Interpretation:** Section 53 of the IBC does not explicitly address inter-se priorities among

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**Application:** The court applied the principle that inter-se priorities should be respected,

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## Parties

- **Judges:** V.G. B…; Prabhat…
- **Appellants:** Jammu And Kashmir…
- **Respondents:** Roofit Industries…; Jitender Kumar…
- **Advocates:** Dharmesh…; Prakhar T…

## Timeline

- **2017-01-01 — CP(IB) No. 105…**: The case CP(IB) No. 1055…
- **2018-01-22 — Liquidation…**: The Corporate Debtor was ordered to…

## 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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