The NCLAT, Principal Bench New Delhi opined that once the interim moratorium has come into play on account of the insolvency proceedings against the petitioner under the IBC, 2016, the respondent-bank cannot proceed any further in the proceedings under the SARFAESI Act with respect to the property mortgaged by the petitioner with the bank, in his capacity as a personal guarantor.
Further, moratorium under Section 96 IBC, 2016, under Part III of the said Act, is a separate moratorium, applicable separately in the case of personal guarantors against whom insolvency resolution processes may be initiated under Part III.
Brief Facts:
The present appeal has been filed against against order of the NCLT vide which the possession of subject property belonging to the Respondent and which had been taken over by the appellant was directed to be restored with the IRP.
Contentions of the Appellants:
It was submitted that prior to the proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) , the Appellant had filed proceedings under Section 13 (4) of the SARFAESI Act, 2002 and in 2019 had taken symbolic possession of the subject mortgaged property. The Court passed order of possession.
It was argued that the appellant had gotten a vested right in the subject property upon taking its symbolic possession and thus had become a de-facto owner of such property and thus had a vested right to dispose of such mortgaged property to its intending purchaser.
Further, principles laid down in Section 14 of IBC shall be applicable to proceedings under Section 95 of the IBC and as the subject property is a mortgaged property, whose symbolic possession had already been taken over by the appellant herein, such property would not fall within the ambit of Section 95.
Observations of the Tribunal:
It was opined that once the interim moratorium has come into play on account of the insolvency proceedings against the petitioner under the IBC, 2016, the respondent-bank cannot proceed any further in the proceedings under the SARFAESI Act with respect to the property mortgaged by the petitioner with the bank, in his capacity as a personal guarantor.
Further, moratorium under Section 96 IBC, 2016, under Part III of the said Act, is a separate moratorium, applicable separately in the case of personal guarantors against whom insolvency resolution processes may be initiated under Part III.
The Bench directed the Appellant to not proceed further under the SARFAESI Act qua the subject property till the moratorium is lifted.
The decision of the Tribunal:
Based on aforementioned facts and findings, appeal was dismissed.
Case Title: Indiabulls Asset Reconstruction Company Ltd v. Pawan Kapoor
Case No.: COMPANY APPEAL (AT)(Insolvency) No.192/2021
Coram: Justice Yogesh Khanna, Mr. Ajai Das Mehrotra (Technical Member)
Advocates for Appellants: Advs.Mr Sumesh Dhawan, Ms Vatsala Kak, Mr. Raghav Dembla, Mr Kholi Rakuzhuro, Mr. Chirag Sharma, Ms Manmilan Sidhu, Mr. ravi Tyagi, Ms Saksha Jha
Advocates for Respondents: Advs. Ms Ranjana Roy Gawai, Mr Pervinder, Ms Vasudha Sen, Mr Shikher Upadhyay
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