Anuj Bajpai v. State Bank of India

INSOLVENCY AND BANKRUPTCY CODE, 2016

--Liquidation estate--Application by liquidator for direction to bank to defreeze the bank account of corporate debtorExclusive charge of bank on the properties of corporate debtor--Whether all encumbrances, incomes and claims belonging to bank--Where the property was under exclusive charge of the bank, all encumbrances thereon and all incomes and claims including the insurance claim, therefrom would be related to bank.--A fire broke out at the factory premises of Corporate Debtor (CD), which were mortgaged with the respondent-bank against the loan facilities taken by CD. The properties were insured and the amount of insurance claim was transferred into the bank account maintained with respondent bank. Bank initiated CIRP under section 7 against CD. However, CD could not be revived and liquidation order was passed against CD. The Liquidator so appointed filed an application under section 35(1)(n) for direction to bank to defreeze the bank account in order to meet out liquidation expenses. However, bank denied to do so. Held: The documents on record established that the damaged premises were mortgaged with the bank and the insurance claim was the property of the bank. Since, the bank wished to opt out of the liquidation estate under section 52 and to realise its security interest on its own and the property was under the exclusive charge of the bank, therefore, all encumbrances thereon and all incomes and claims including the insurance claim, therefrom related to bank.