2.5.21:Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

21. Proving security interest.

The existence of a security interest may be proved by a secured creditor on the basis of-

(a) the records available in an information utility, if any;

(b) certificate of registration of charge issued by the Registrar of Companies; or

(c) proof of registration of charge with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India.

21A. Presumption of security interest.Inserted vide IBBI (Liquidation Process) (Amendment) Regulations, 2019 dated 25.07.2019 applicable only to liquidation processes, which commenced on or after 25th July, 2019. To view the notification,Click Here
21A Relinquishment of security interestSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here

(1) A secured creditor within fourteen daysInserted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here  shall inform the liquidator of its decision to relinquish its security interest to the liquidation estate or realise its security interest, as the case may be, in Form C or Form D of Schedule II  such format as notified by the BoardSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here:

Provided that, where a secured creditor does not intimate its decision within thirty days fourteen daysSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here from the liquidation commencement date, the assets covered under the security interest shall be presumed deemed to be relinquishedSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here to be part ofOmitted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here the liquidation estate.

(2)Substituted vide the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2020 dated 06.01.2020. To view the Notification, Click Here. Where a secured creditor proceeds to realise its security interest, it shall pay –

(a) as much towards the amount payable under clause (a) and sub-clause (i) of clause (b) of sub-section (1) of section 53, as it would have shared in case it had relinquished the security interest, to the liquidator within ninety forty-fiveSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here days from the liquidation commencement date; and

(b) the excess of the realised value of the asset, which is subject to security interest, over the amount of his claims admitted, to the liquidator within one hundred and eighty days ninety daysSubstituted vide Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2026 dated 01.06.2026. To view the notification, Click Here from the liquidation commencement date:

Provided that where the amount payable under this sub-regulation is not certain by the date the amount is payable under this sub-regulation, the secured creditor shall pay the amount, as estimated by the liquidator:

Provided further that any difference between the amount payable under this sub-regulation and the amount paid under the first proviso shall be made good by the secured creditor or the liquidator, as the case may be, as soon as the amount payable under this sub-regulation is certain and so informed by the liquidator.

(3) Where a secured creditor fails to comply with sub-regulation (2), the asset, which is subject to security interest, shall become part of the liquidation estate.

(2) Where a secured creditor proceeds to realise its security interest, it shall pay as much towards the amount payable under clause (a) and sub-clause (i) of clause (b) of sub-section (1) of section 53, as it would have shared in case it had relinquished the security interest

Explanation.-Inserted vide IBBI (Liquidation Process) (Amendment) Regulations, 2022 dated 28.04.2022. To view the notification, Click HereIt is hereby clarified that the requirements of this regulation shall apply to the liquidation processes commencing on or after the date of the commencement of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019.