Security Interest Shall Stand Relinquished If Liquidation Costs Is Not Paid As Per R. 21A(3) Of Liquidation Regulations: NCLAT

NCLAT has clarified that relinquishing security interest and not paying liquidation costs in accordance with Regulation 21A(3) of the Liquidation Regulations leads to legal consequences. In this case, the liquidator failed to pay the required liquidation costs, and the security interest was relinquished, creating disputes regarding asset distribution. The NCLAT’s ruling emphasizes the need for strict adherence to liquidation processes and the timely settlement of costs to protect the interests of all stakeholders involved in insolvency proceedings.