# In the matter of Varam Bioenergy Private Limited

> NCLT judgment dated 2023-07-06. Citation: TCN-2023-NCLT-02640. The case involves an application (IA No. 1341/2022) filed by PTC India Financial Services…

- **Court:** NCLT
- **Order date:** 6 Jul 2023
- **Citation:** TCN-2023-NCLT-02640
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/varam-bioenergy-private-limited-6e8fade3

## Summary

### Background

The case involves an application (IA No. 1341/2022) filed by PTC India Financial Services Limited, a secured financial creditor, against the Liquidator and State Bank of India (SBI), challenging the distribution of proceeds from the sale of the corporate debtor, Varam Bioenergy Private Limited, under liquidation. The applicant contends that the liquidator wrongly distributed the sale proceeds only to SBI, the first charge holder, and not to PTC India Financial Services, despite them being a secured financial creditor with a second charge. The corporate debtor was allowed to be liquidated by the Tribunal on 08.07.2021. The liquidator invited claims from creditors, and the applicant filed their claim in Form D as a secured financial creditor for Rs. 43,46,78,538 on

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## Facts

Varam Bioenergy Private Limited underwent Corporate Insolvency Resolution Process (CIRP) and was subsequently ordered into liquidation on 08.07.2021. PTC India Financial Services Limited, a secured financial creditor, filed a claim of Rs. 43,46,78,538 on 11.08.2021 and another claim as an equity shareholder for Rs. 4,398,00,000. The liquidator initiated the sale of assets, and Nirbhaya Industries emerged as the successful bidder with a bid of Rs. 7.85 Crores. State Bank of India (SBI) had an admitted claim of Rs. 62,70,40,457. The liquidator distributed the sale proceeds of Rs. 7.85 Crores solely to SBI, the first charge holder, based on a legal opinion and a decision taken in a stakeholders meeting on 28.09.2022. PTC India Financial Services Limited, holding a second

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## Issues and analysis

### Issue 1: Whether inter se ranking of the charges among Secured Financial Creditors existing before …

**Ratio:** Section 53(1) of the Insolvency and Bankruptcy Code (IBC), 2016, does not recognize any

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**Reasoning:** The Tribunal reasoned that Section 53(1) of the IBC clearly defines the classes and order

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**Interpretation:** The interpretation of Section 53(1) of the IBC is central to this case. The

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**Application:** The Tribunal applied this interpretation to the facts of the case, finding that

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** PTC India…
- **Respondents:** Varam Bioenergy…; State Bank of…

## Timeline

- **2021-07-08 — Liquidation…**: The Hon'ble Tribunal allowed the corporate debtor, Varam Bioenergy Private Limited, to be…
- **2021-08-11 — Claim Submission by PTC…**: PTC India Financial Services Limited filed a claim as a secured financial creditor for an…

## 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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