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IBC : Where property of corporate debtor was under exclusive charge of bank, all encumbrances thereon and all incomes and claims, including insurance claim therefrom would relate to bank
• The Corporate Insolvency Resolution Process of the corporate debtor began pursuant to admission of section 7 application filed by a bank 'SBI'. The corporate debtor could not be revived and liquidation order was passed. Consequently, Liquidator was appointed.
• The applicant/Liquidator states that the bank has taken custody of the immovable mortgaged assets of corporate debtor by locking the premises of 2 units of factory.
• It is further stated that the bank has even freezed the liquidation account of the corporate debtor opened in the branch of the bank.
• The present application has been preferred under section 35(1)(n) by the liquidator, seeking order of the Tribunal to direct the bank to defreeze the bank account of corporate debtor and enable the Liquidator to perform his duties towards Liquidation of the corporate debtor.
• The corporate debtor submits that a fire broke out in the factory premises which were mortgaged with the bank against the loan facilities taken by the corporate debtor. The property was insured with Future General Insurance India Ltd. After the occurrence of fire, process of claim was initiated by the insurance company. Meanwhile, SARFAESI proceedings were initiated by the bank against the corporate debtor. Order was passed by the District Magistrate directing the corporate debtor to handover the possession of the property so mortgaged with the bank for selling the aforesaid properties by following the due process of law.
• It is further stated that the Insurance Company processed the claim for a sum of Rs. 1.17 crores towards adjustment of loss/damage caused due to fire in the premises. The claim amount was transferred into the bank account of the bank as the same was the asset of the corporate debtor being the insurance proceeds of the secured assets mortgaged to the Bank.
• The bank denies that the account has ever been freezed as regular payments have been made from the said account. The bank wishes to opt out of the liquidation estate under section 52 and realise its security interest on its own.
• It is clear that the damaged premises were mortgaged with the bank and the insurance claim is the property of the bank. Moreover, since the bank wishes to opt out of the liquidation estate under section 52 and to realise its security interest on its own, therefore, it can be held that since the property is under the exclusive charge of the bank, therefore, all encumbrances thereon and all incomes and claims, including the insurance claim, therefrom relate to the bank.