IBC Approval Does Not Auto-Delete ROC Charges, Companies Act Procedure Must Be Followed: NCLT Jaipur

The Jaipur Bench of the National Company Law Tribunal on 22 June ruled that approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016 does not automatically delete pre-CIRP charge entries from the records maintained by the Registrar of Companies.

Judicial Member Reeta Kohli and Technical Member Kavita Bhatnagar held that parties must still follow the statutory procedure under the Companies Act, 2013 for satisfaction or modification of such charges and partly allowed the application filed by Vaaso Infrastructure Private Limited. The Bench stated:

“…this Adjudicating Authority is also of the considered view that direct judicial deletion/removal of charge IDs from MCA-21 records, as prayed for by the Applicant, may not be appropriate in exercise of jurisdiction under Section 60(5) of the IBC, particularly when the Companies Act provides a specific statutory framework governing satisfaction and modification of charges.”

Vaaso Infrastructure, the successful resolution applicant, asked the Tribunal to direct the Registrar of Companies, Jaipur, to remove pre-CIRP charge entries relating to Modern Syntex (India) Ltd from MCA records.

The corporate debtor entered CIRP in March 2022, and the Tribunal approved the resolution plan in March 2024. The applicant argued that the approved plan extinguished all pre-CIRP liabilities and required secured creditors to issue discharge certificates, no-claim certificates, and release charge entries.

It also submitted that it completed payments of approximately Rs. 175 crore under the resolution plan, yet charge entries in favour of ICICI Bank, IFCI Limited, and Rajasthan Financial Corporation continued to reflect on the MCA-21 portal despite repeated requests for removal. The applicant contended that these continuing entries obstructed implementation of the resolution plan and hindered revival of the corporate debtor as a going concern.

The Administrator of the Specified Undertaking of Unit Trust of India opposed the application. It argued that the register of charges maintained by the Registrar of Companies functions as a statutory record under the Companies Act and that parties must follow the prescribed statutory process for satisfaction of charges, which cannot be bypassed through directions under Section 60(5) of the IBC.

The Tribunal reiterated that the “clean slate” principle under the IBC extinguishes claims not included in an approved resolution plan, but it does not override separate statutory mechanisms governing corporate records. It stated:

“The register of charges maintained by the Registrar of Companies under Sections 77 to 87 of the Companies Act, 2013 is a statutory register intended to provide public notice regarding encumbrances and security interests over assets of a company. Satisfaction or modification of such charges is governed by the statutory mechanism prescribed under Section 82 of the Companies Act, 2013 read with the applicable Rules.”

The Bench further observed that approval and implementation of a resolution plan does not eliminate the requirement to comply with statutory procedures under other laws governing charge records. It added that once authorities approve and implement a resolution plan, secured creditors cannot indefinitely refuse cooperation needed to give effect to the plan, unless law or the plan itself preserves their rights.

Accordingly, the NCLT directed secured creditors to issue discharge, no-dues, and satisfaction documents, and also directed the Registrar of Companies to process the filings without delay.

For Applicant: Allen Massey, Adv., Kamini Lau, Adv. R-3, Poonam Lau, Adv., Jyoti Vashisth, Adv.

For Respondent: Ritika Gaur, Adv