Steno NCLT Exams Dictation No. 500

It was also asserted that the Adjudicating Authority had misinterpreted the statutory provisions of IBC in holding that the adjustment of tax refund against tax dues was an exercise of the right to realize security interests by a Company Appeal (Insolvency) No. 977 of 2023 secured creditor. It was pointed out that in terms of Section 52 of the IBC, the option to realize security interest becomes available to a secured creditor only after liquidation proceedings have commenced. In the present case while the liquidation order was passed on 03.10.2022, the purported realization of security interest by way of adjustment of tax refund took place on 10.02.2021 which clearly preceded the commencement of liquidation and hence impermissible.