1. Introduction
The NCLAT in Technology Development Board v. Mr. Anil
Goel1 ("Technology Development
Board") has dealt with a complex issue of
applicability of inter-se priorities between secured creditors in
liquidation and first and second ranking creditors. NCLAT has,
respectfully, lost sight of the fact that its judgment will now
create confusion and chaos in banking and finance sector, which
relies heavily on intercreditor and priorities of ranking. This is
a fundamental tenant of banking law globally. This article analyses
the impact of NCLAT's judgment.
2. Brief Facts and Background
Insolvency and Bankruptcy Code, 2016
("Code") provides 2 options to creditors
to enforce their security interest. First, relinquish the security
interest to the liquidation estate and receive from sale proceeds
in accordance with the waterfall mechanism under section 53 of the
Code ("Relinquishment"). Secondly,
enforcing and realising their security interest outside
