[Cites 2, Cited by 0]
Bombay High Court
Vasai Vikas Sahakari Bank Limited vs The Joint Registrar, National Company ... on 23 March, 2026
Author: Manish Pitale
Bench: Manish Pitale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 10149 OF 2026
IN
WRIT PETITION NO. 475 OF 2026
Vasai Vikas Sahakari Bank Limited ... Petitioner
In the matter between :
Vasai Vikas Sahakari Bank Limited ... Petitioner
Versus
The Joint Registrar, National Company Law
Tribunal, Mumbai Bench & Anr. ... Respondents
WITH
INTERIM APPLICATION (L) NO. 9725 OF 2026
AND
INTERIM APPLICATION (L) NO. 504 OF 2026
IN
WRIT PETITION NO. 475 OF 2026
******
Mr. Manoj Kumar Mishra a/w Zulfiq Multani i/by Mishra Legal
for Petitioner and for Applicant in IAL/10149/2026.
Mr. Shreeyash Lalit (through V.C.) a/w Ms. Shweta R. Rathod i/by
Elixir Legal Services for Respondent Nos.3 to 5 and for Applicant
in IAL/9725/2026.
******
CORAM : MANISH PITALE AND
SHREERAM V. SHIRSAT, JJ.
DATE : 23rd MARCH 2026
P.C. :
. Heard learned counsel for the parties.
2. These two applications have been taken on production
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board, due to urgency projected on behalf of the petitioner-bank
(secured creditor), as also the original respondent No.3 in the writ
petition i.e. a personal guarantor of the original borrower
(respondent No.6).
3. The applications have been filed in the backdrop of interim
order dated 5th March 2026 passed by this Court, whereby the
contentions raised in the writ petition were considered in detail
and upon finding that a strong prima facie case was made out, an
interim order was granted. Accordingly, orders passed by the
Debts Recovery Tribunal-III, Mumbai (DRT-III) in Securitisation
Application No. 195 of 2025 were stayed.
4. The consequence thereof was that the petitioner-bank issued
notice dated 7th March 2026 for sale of the secured asset under the
provisions of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002
(Securitisation Act). The notice specified that the auction would be
conducted on 24th March 2026 at 2:00 p.m. i.e. tomorrow.
5. In the interim order it was also recorded that respondent
Nos.3, 4 and 5 had chosen not to appear before this Court,
despite service of notice. This Court further directed the writ
petition to be taken up for consideration on 6th April 2026.
6. It is in this backdrop that the respondent No.3 filed Interim
Application (Lodging) No. 9725 of 2026 for recall and setting
aside of the interim order dated 5th March 2026 passed in the writ
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petition and consequently, for vacating the interim stay. The
petitioner-bank filed Interim Application (Lodging) No. 10149 of
2026 for a direction that the petitioner be allowed to continue
with the action being undertaken as per the provisions of the
Securitisation Act.
7. The learned counsel appearing for respondent Nos.3 i.e. the
applicant in Interim Application (Lodging) No. 9725 of 2026
submitted that the nature of the interim order dated 5 th March
2026 passed by this Court is such that it amounts to granting final
relief at interim stage to the petitioner-bank and the proceeding
pending before the DRT-III would be rendered meaningless, if the
interim order granted by this Court continues to operate. It was
further submitted that the interim order was passed without
hearing the affected party and that the order seriously prejudices
the applicant (respondent No.3).
8. The learned counsel for the applicant (respondent No.3)
further submitted that in the reply affidavit to the writ petition,
which was prepared but was yet to be filed, it was indicated by the
said respondent that he intended to file a fresh application under
Section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC)
before the National Company Law Tribunal (NCLT). It was
brought to the notice of this Court, as is also evident from the
contents of the application filed on behalf of the petitioner-bank,
that on 19th March 2026, the said applicant (respondent No.3)
actually went ahead and filed such an application before the
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NCLT. It was submitted that the interim order dated 5 th March
2026 passed by this Court, was inter alia on the basis that earlier
applications filed before the NCLT were lying in defect and they
were not actually registered. Therefore the applicant (respondent
No.3) was under an impression that if a fresh application is filed
and registered, the interim moratorium would operate under
Section 96 of the IBC and the same would not be affected by the
interim order dated 5th March 2026 passed by this Court. It was
further submitted that the moratorium operates as a consequence
of the specific provisions of law and therefore, the subsequent
event of filing of the application under Section 94 of the IBC on
the part of the applicant (respondent No.3) on 19 th March 2026
ought to be taken into consideration by this Court, while passing
any order on the application for recall of the interim order dated
5th March 2026. It was submitted that there was no question of the
applicant (respondent No.3) overreaching this Court, in any
manner, and therefore, this Court may consider allowing the
application. It was further submitted that if the interim order
dated 5th March 2026 continues to operate, the proposed auction
for tomorrow will be conducted and it would render infructuous
the application filed by respondent No.3.
9. On the other hand, the learned counsel appearing for the
applicant (petitioner-bank) in Interim Application (Lodging) No.
10149 of 2026 submitted that the apprehension expressed by the
petitioner-bank before this Court when the interim order dated 5 th
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March 2026 was passed, has come true as the respondent No.3
has again filed the aforesaid application on 19 th March 2026
before the NCLT under Section 94 of the IBC. It was submitted
that the respondent No.3 has clearly sought to overreach the
interim order dated 5th March 2026 passed by this Court and also
has shown scant regard for the authority of the writ Court. It was
submitted that the whole design and purpose behind filing of the
application on 19th March 2026 is to somehow bring to a halt the
proceedings even before this Court and to nullify the effect of the
interim order dated 5th March 2026.
10. It was further submitted that the said application filed by the
respondent No.3 on 19th March 2026 was listed today before the
NCLT, wherein the petitioner-bank appeared through counsel and
vehemently opposed the same, pointing out that even a copy of
the deed of guarantee was not placed on record. This Court was
informed that after hearing the counsel, the NCLT dismissed the
application, but the order is yet to be uploaded. In this backdrop,
it is submitted that this Court may dismiss the application filed by
the respondent No.3 and on the other hand, allow the aforesaid
interim application filed on behalf of the petitioner-bank.
11. We have considered the rival submissions. It is necessary to
note the chronology of events in the present case. On 5 th March
2026, this Court passed the interim order after taking into account
the submissions made on behalf of the petitioner-bank, which is a
secured creditor, that the respondents are indulging in filing
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proceeding after proceeding under the provisions of the IBC
before the NCLT, only with the intention of frustrating the action
undertaken by the petitioner-bank as per the provisions of the
Securitisation Act. This Court took note of the fact that the
proceedings initiated on behalf of the respondents before the
NCLT continued to lie in defects and that the respondents were
seeking to take benefit of merely filing such proceedings before the
NCLT under the provisions of the IBC. After referring to the
judgment of Division Bench of this Court in the case of Bank of
Baroda vs. Union of India, 2024 SCC OnLine Bom 3964, it was
found that the petitioner-bank had indeed made out a strong
prima facie case in its favour. Thereupon, interim order in
aforementioned terms was passed on 5 th March 2026. the relevant
portion of the said order reads as follows :
"12. We indeed find that the documents placed on record
show that while the Registry of the NCLT i.e. respondent
No.1 issued defects on the application filed by the respondent
No.6 and the application is stated to have been refiled, there
is nothing to show that the application filed by respondent
No.6 was registered. There is also nothing to show that the
timelines specifically laid down in the above-quoted
paragraph 13 of the judgement of this Court in the case of
Bank of Baroda Vs. Union of India (supra) were adhered to
and therefore, the consequence must follow.
13. We find that a number of defaulting debtors are now
taking the shelter of Sections 94, 95 and 96 of the IBC. In
fact, we find that in cases where such defaulting debtors are
unable to make out their case on merits before the DRT, they
either themselves or in connivance with willing parties and in
a collusive manner initiate proceedings under the said
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provisions of the IBC before the NCLT, claiming that the
moment such a proceeding is initiated, interim moratorium is
triggered and the lawful actions being undertaken by secured
creditors cannot be proceeded with. The said provisions of
the IBC are being misused by such defaulting chronic debtors
and the writ court cannot be oblivious of the consequences. In
any case, in the present matter, the respondent Nos.3, 4 and 5
have chosen not to appear before this Court despite service.
The documents placed on record do make out a strong prima
facie case for the petitioner to contend that in the absence of
the mandate of law as laid down by this Court in the case of
Bank of Baroda Vs. Union of India (supra) being followed and
there being nothing to show that the application filed by
respondent No.6 before the NCLT has been duly registered, it
cannot be said that interim moratorium has been triggered.
14. In the light of the fact that the petitioner has made out
such a strong prima facie case, we are inclined to grant
interim relief. We also find that since the petitioner bank, as a
secured creditor, is seeking to proceed in a lawful manner for
recovery of its debt, the balance of convenience clearly is in
favour of the petitioner and it will indeed suffer grave and
irreparable loss unless interim relief is granted.
15. In view of the above, list this petition for further
consideration on 06.04.2026, High on Board. In the
meanwhile, the orders dated 06.06.2025 and 09.06.2025
passed by the DRT-III, Mumbai in Securitisation Application
No.195 of 2025 are stayed. The consequence thereof is that
the proceedings in the said pending securitisation application
shall continue until further orders."
12. The respondent No.3 appears to have prepared the
application for recall of the aforesaid order of this Court, by
swearing an affidavit in support thereof on 16 th March 2026. The
grounds taken in the said application have been referred to
hereinabove. On 18th March 2026, the said application filed on
behalf of respondent No.3 was mentioned before this Court for
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urgent listing. It was submitted that after the interim order dated
5th March 2026 was passed by this Court, on 7 th March 2026, the
petitioner-bank had issued notice for sale of the secured asset and
the auction was fixed for 24th March 2026.
13. It was submitted that therefore, there was urgency in the
matter and instead of taking the petition for further consideration
on 6th April 2026, which was the returnable date, an earlier date
may be granted. On this basis, this Court directed the aforesaid
application filed by respondent No.3 to be listed today.
14. Thereafter, on 19th March 2026, the respondent No.3 filed
the aforementioned application under Section 94 of the IBC. The
said application was found to be defect free and it was registered
on 20th March 2026. As noted hereinabove, the respondent No.3
now claims that since a fresh application under Section 94 of the
IBC has been filed and moratorium has been triggered upon
registration of the said application, the said factor ought to be
taken into consideration while passing any order on the
application for recall of the interim order dated 5 th March 2026.
15. We find the conduct of respondent No.3, prima facie,
nothing short of an attempt to overreach this Court exercising
writ jurisdiction. The very fact that the aforesaid application was
filed by the respondent No.3 on 19 th March 2026, shows that this
was nothing but another attempt on the part of the respondents to
somehow evade the inevitable. The application seeking recall of
the interim order dated 5th March 2026 obviously could not have
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referred to the said application filed under Section 94 of the IBC,
as it was subsequently filed on 19 th March 2026. But, today, when
the application is pressed for orders, reliance is being placed on
the said subsequent event. We find this to be an attempt to
somehow seek recall of the interim order dated 5 th March 2026 on
the basis of events triggered by the respondent No.3 i.e. the
applicant himself, after the said order was passed.
16. Apart from this, as a writ Court, we are entitled to verify
and examine the bonafide of the application filed on 19 th March
2026 before NCLT under Section 94 of the IBC. A copy of the
said application is annexed at Exhibit 'F' to Interim Application
(Lodging) No. 10149 of 2026 filed by the petitioner-bank. We
find that while the applicant i.e. the respondent No.3 herein
claims to be a personal guarantor, but even a copy of the deed of
guarantee is not annexed to the application. There is nothing to
show as to whether such a deed of guarantee at all exists and as to
whether it is even a registered document. The documents filed
along with the said application and the manner in which it has
been filed on 19th March 2026, gives a prima facie impression to
this Court that the same has been filed only with the object of
frustrating and defeating even the proceedings before this Court
filed by the petitioner-bank, invoking our writ jurisdiction. In a
recent order dated 18th March 2026 passed in Writ Petition
(Lodging) No.5157 of 2026 in the case of Rozina Firoz Hajiani &
Ors. vs. Union of India & Ors., we had an occasion to consider
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the disturbing trend on the part of chronic defaulters to take
resort to the provisions of the IBC in a desperate attempt to
somehow subvert the actions lawfully undertaken by the secured
creditors against borrowers and guarantors. In the said order, we
took note of the fact that such actions are completely antithetical
to the object of the IBC.
17. The object of the IBC is to ensure that insolvency resolution
of corporates and individuals is undertaken in a time bound
manner for maximization of value of assets of such persons, to
promote entrepreneurship, availability of credit and balance the
interest of all stake holders. The IBC emphasizes upon an effective
legal frame work for timely resolution of insolvency and
bankruptcy, so that an opportunity is made available for revival of
the debtor to support development of credit markets and to
encourage entrepreneurship, with liquidation being the last resort
The whole purpose of enactment of IBC is for improving the ease
of doing business, facilitating more investments, leading to higher
economic growth and development in the country.
18. We find that the petitioner has made out a strong prima facie
case before this Court to demonstrate that the respondent No.3 by
undertaking the aforesaid action is not only seeking to overreach
this writ Court, but the actions undertaken are in the teeth of the
very object of enactment of the IBC.
19. The writ Court cannot remain a mute spectator to such
activities undertaken by the respondent No.3 and therefore, we
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find much substance in the contentions raised on behalf of the
petitioner-bank.
20. Although, the order passed today by the NCLT, purportedly
dismissing the application filed by respondent No.3, is not
available, but it is not disputed before us on behalf of the
respondent No.3 that the said application has been indeed
dismissed. Hence, there is no basis for respondent No.3 to claim
that moratorium is operating by filing of the said application on
19th March 2026 before the NCLT.
21. In the face of such facts, we do not find it necessary to pass
any order today in the application for recall filed on behalf of the
respondent No.3. On the contrary, we find that interdicting the
process now undertaken by the petitioner i.e. the secured creditor
by issuing the public notice for auction, would be counter
productive and not in the interest of justice.
22. In view of the above, we direct the petitioner-bank to
proceed in accordance with law in terms of the protection granted
by the interim order dated 5th March 2026.
23. The petitioner-bank is permitted to file reply affidavit in
Interim Application (Lodging) No. 9725 of 2026 filed on behalf of
respondent No.3, within a period of two weeks from today.
Similarly, the respondent No.3 is granted time of two weeks to file
reply affidavit in Interim Application (Lodging) No. 10149 of
2026 filed by the petitioner-bank.
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24. In the light of the adjournment of the proceedings for filing
of reply affidavits in the interim applications, the writ petition
along with pending applications, shall be taken up for further
consideration on 8th April 2026 (High on Board).
25. In the meanwhile, the respondents are also at liberty to file
their reply affidavits in the writ petition.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
