TMI Blog2022 (12) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... s, which include Plant and Machinery, on the lease hold land admeasuring Plant and Machinery on the lease hold land admeasuring Ac. 11.37 guntas in Sy. No. 334 / A, 3 / 1A, 3 / 1B, 5 and Ac. 10.27 guntas in Sy. No. 332 / A, 333/A, 7, 8B, 8A, are situated at Kaveli Village, Kohir Mandal, Sangareddy District (erstwhile Medak District) and (d) to pass an Order, in directing the Commissioner of Police, Sangareddy at Office of the Superintendent of Police, Sangareddy to provide necessary assistance to him and his team, to takeover the Control and Custody of the Properties of the Corporate Debtor etc. The subject Asset, over which the Security Interest, was created to and in favour of United Bank of India (under SARFAESI Act, 2002), by the Borrower, was purportedly assigned, in favour of the Appellant / 1st Respondent, through Assignment Deed, dated 04.04.2019 - The Appellant / 1st Respondent, had caused a Notice, as per Section 13 (1) of the SARFAESI Act, 2022, requiring the Borrower, to wipe out the Liability, within the time prescribed therein and owing to the failure of the Borrower, in fulfilling the conditions of the Demand Notice, the Secured Asset, was taken possession by mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021, in IA No. 124 of 2021 in CP (IB) No. 673 / 7 / HDB / 2019, passed by the Adjudicating Authority, (National Company Law Tribunal, Hyderabad Bench I, Hyderabad), comes to a clear cut conclusion that the same is free from legal infirmities - Appeal dismissed. - [Justice M. Venugopal] Member (Judicial) And [Naresh Salecha] Member (Technical) For the Appellant : Mr. Joseph Augustine, Advocate For the Respondent No.1 : Mr. S. Chidambaram and Ms. G. Kalpana, Advocates JUDGMENT ( Virtual Mode ) Justice M. Venugopal, Member (Judicial): Preliminary: Company Appeal (AT) (CH) (INS.) No. 35 of 2022: The Appellant / 1st Respondent ( M/s. Omkara Assets Reconstruction Private Limited ), has focussed the instant Comp. App (AT) (CH) (INS.) No. 35 of 2022, before this Tribunal , as an Aggrieved Person , on being dissatisfied with the impugned order dated 23.12.2021, in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019, (Filed under Sections 18, 23, 25 60 (5) of the Insolvency and Bankruptcy Code, 2016, passed by the Adjudicating Authority , ( National Company Law Tribunal , Hyderabad Bench I, Hyderabad). 2. The Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in re, Suraj Lamp and Industries Private Ltd vs State of Haryana Anr. Reported in (2012) 1 SCC 656, supra, held, immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of GPA sales' or SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. 30. That apart a full Bench of High Court of Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That being the case, the auction purchaser derives title on confirmation of sale in their favour and the Sale Certificate was issued evidencing such sale and title. In respect of the registration of the Sale Certificate issued by the second respondent, since the second respondent is not a Civil or Revenue Officer, the registration of the Sale Certificate is not exempted under Section 17(2)(xii) of the Registration Act. Therefore, we are of the view that though the auction purchaser derived title on confirmation of sale in their favour and a Sale Certificate was issued by the Authorised Officer, evidencing such sale and title, no further deed of transfer is required. In view of the judgment reported in (2007) 5 Supreme Court Cases 745 and the provisions of 17(2)(xii) of the Registration Act, the Sale Certificate issued by the second respondent/Authorised Officer requires registration. 17. As per Article 18 of the Stamp Act, the purchaser of any property sold by a public auction by a Civil or Revenue Officer or Collector or other Revenue Officer, is liable to pay the stamp duty on the consideration mentioned in the Sale Certificate. The Hon'ble Supreme Court in the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein it was held that immovable property can be legally and lawfully transferred / conveyed only by a registered deed of conveyance. Therefore, non-registration of the sale certificate in this case renders the transfer of title in favour of the 2nd Respondent null and void. 32. Now adverting to the plea of the Respondents that the property has been acquired in good faith by the 2nd Respondent as such the 2nd respondent is protected under Section 44 of the I B Code, which is as follows:- 44: Provided that an order under this section shall not - (a) affect any interest in property which was acquired from a person other than the corporate debtor or any interest derived from such interest and was acquired in good faith and for value; (b) require a person, who received a benefit from the preferential transaction in good faith and for value to pay a sum to the liquidator or the resolution professional. Explanation-II. - A person shall be deemed to have sufficient information or opportunity to avail such information if a public announcement regarding the corporate insolvency resolution process has been made under section 13 . 33. When the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy Tribunal in terms of Section 17 (1) of SARFAESI Act, as such the Application before this Tribunal is not maintainable. This plea is strongly resisted by the Learned Counsel for the Applicant contending, inter-alia, that since Respondents proceeded in violation of the order of moratorium granted by this Tribunal, the remedy lies for the Applicant only before this Tribunal and not before the Debt Recovery Tribunal. Having examined the rival submissions it is to be stated that , no doubt Section 17 (1) of the SARFAESI Act provides for a remedy to any person who is aggrieved by the measure initiated by the Authorized Officer to challenge the same before the Debt Recovery Tribunal having jurisdiction. In so far as the case on hand is concerned , it is not the case of the Applicant that in violation of the provisions of the SARFAESI Act the Respondents have registered the sale certificate. In fact, precisely it is the case of the Applicant that in violation of order of moratorium granted by this Tribunal in terms of Section 14 (1) of IBC, the Respondent No.1 registered the sale certificate in favour of Respondent No.2. Therefore, sustainability of the said plea can only be examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 14th November, 2007, leased out the property to M/s. ECI Infra Tower Company Pvt. Ltd., Corporate Debtor for a period of 15 years. The Lease Agreements specifically includes an assurances from the Lessee / Corporate Debtor by clause No.7, that the premises shall be used for the purpose of Company s manufacturing unit only. Further, the Lease Period , was coming to a close on 31.10.2022. 5. It is represented on behalf of the Appellant, that the aforesaid properties, were mortgaged , in favour of the United Bank of India (together with the Debt and Underlying Securities, since assigned to Omkara, ARC ) by Mr. K. Vijay and Mr. K. Venkatphani in their individual capacity. 6. The Learned Counsel for the Appellant point out that the aforesaid properties, were leased out to the Corporate Debtor , by an Unregistered Lease Agreements , that too, for the specific purpose of Company s Manufacturing Unit only, and was expired on 31.10.2022 and these Unregistered Lease Agreements , do not convey any Right , Title to the Corporate Debtor , to sell or alienate the same. 7. On behalf of the Appellant, it is brought to the notice of this Tribunal , that on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sale of the Properties , in favour of the 2nd Respondent , and a request was made to the 2nd Respondent, to pay the purchase consideration , within 30 days. 12. It transpires that the 2nd Respondent on 31.12.2020 (in response to the Confirmation of Sale , by the Appellant ), had deposited a sum of Rs.3 Crores only and requested the Appellant , to give 15 days, for paying the Outstanding Sum of Rs.6.75 Crores, which was agreed by the Appellant , as per provisions of the SARFAESI Act, 2002 , and the Rules , made thereunder. 13. The 2nd Respondent had paid the remaining amount of Rs.6.75 Crores only on 07.01.2021 and the Appellant , had issued a Sale Certificate on 20.01.2021. In fact, the Registration of the Property , was carried out in the name of the 2nd Respondent on 04.03.2021 and the Title , in respect of the Property , stood transferred and vested with the Purchaser / 2nd Respondent , before the Admission of the Corporate Insolvency Resolution Process on 18.01.2021. Also that, the Registration of Sale Certificate , is mere procedural aspect, which further evidences the recording of documents , with the Recognised Officer . 14. In fact, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Loan Account of the Corporate Debtor , was declared as Non Performing Asset , on 30.06.2016, and the Demand Notice , was issued on 20.07.2016 and again classified as Non Performing Asset on 31.12.2016. Besides these, the Balance Confirmation Letters dated 20.02.2016 and 02.01.2017, were duly acknowledged by the Corporate Debtor , and in short, none of the proceedings, took place during the Moratorium Period . 20. The Learned Counsel for the Appellant, advances an argument that the Company Petition , was filed by the Bank of India , for its Recovery against the Corporate Debtor , only in the Year 2019, but, the Original Application was filed by the Appellant in the Year 2018, and both are separate Proceedings , no one had the knowledge about their respective Proceedings . 21. The Learned Counsel for the Appellant submits that the Finding of the Adjudicating Authority that the Issuance of Sale Certificate , is in Violation of its Order , is incorrect , invalid and suffers from non application of mind . 22. The Learned Counsel for the Appellant brings it to the notice of this Tribunal that the 1st Respondent / M/s. ECI Infra Towers Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r private treaty. Wherein, 2nd Respondent was selected as the H1 Bidder who submitted offer for Rs.9.00 Crores 25.09.2020 Confirmation of sale with a revised final offer of Rs.9.75 Crores to pay within 30 days 30.11.2020 As per the time extension, entire amount was paid by the 2nd Respondent 07.01.2021 Handing over possession of the asset 11.01.2021 Order was passed by this Hon ble NCLT for the admission of Corporate Debtor into CIRP 18.01.2021 Issuance of Sale Certificate with bonafide intention to Respondent no. 2 20.01.2021 Public announcement issued by IRP for the submission of Claim (as clearly admitted by IRP in para no. 4 of the counter) 22.01.2021 Registration of sale certificate issued with respect to the property 04.03.2021 28. The Learned Counsel for the Appellant urges before this Tribunal , the Appellant was not a Party , in the Proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of CIRP, the sale was not complete and the total sale price was not paid to the Auction Purchaser. Further, it is also on record that the Appellant filed its total claim before the IRP on 21.01.2019 after commencement of CIRP. Thus, it explicitly shows that the sale was not concluded. and contends that the Sale will be concluded, once the entire Sum , is paid by an Auction Purchaser , and in this case, the Whole Sum of Rs.9.75 Crores was paid on 30.11.2020. 33. The Learned Counsel for the Appellant forcefully contends that the Bank of India , has no Locus , to Stake a Claim of any Iota of Right in the Properties of Mr. Vijay Kaza and Mr. Kaza Venkata Phani , who were the Guarantors of the 1st Respondent / M/s. ECI Infra Towers Company Pvt. Ltd. i.e. Bank of India , is neither a Mortgagee nor having any Charge , on these Properties . 34. It is represented on behalf of the Appellant that the 1st Respondent / M/s. ECI Infra Towers Company Pvt. Ltd. , for whom the Guarantee , was given has no Right in the Properties , in question, which were sold in Auction , to the 2nd Respondent , therefore, a contention is advanced on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal , in Comp. (AT) INS 549 of 2018 dated 17.09.2018, between Babulal Vardhariraj Gujar v. Veer Gujar Aluminium Industries Pvt. Ltd., wherein, at Para No. 3, it is held as under: 3. However, the initiation of Corporate Insolvency Resolution Process cannot be annulled merely on the ground of pendency of a Petition under Section 19 of The Recovery of Debts due to Banks and Financial Institutions Act, 1993 . In fact in terms of Section 14 of I B Code all such pending proceedings cannot proceed during the period of Moratorium. 39. It is the version of the 1st Respondent that in the instant case on hand, the Sale , is by a Private Treaty , and not by Public Auction , and further that the Sale , by an Authorised Officer , based on a Private Treaty , between the Appellant and the 2nd Respondent , needs Compulsory Registration , as well as Payment of Stamp Duty , under Article 18-C, read with Article 23 of the Schedule I of the Stamp Act, 1899. 40. According to the 1st Respondent, only Sale under Section 17 (2) (xii) of the Registration Act, a Sale Certificate , issued by the Civil or Revenue Officer , does not fall under the category of non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Officer , is not the same. Moreover, there was a correction, duly initialled in the Description of the Property , which was not to be found in all the three, and that, handwritten correction of 51227 sq. yds. was seen, only in two of the Sale Agreements and not all the three . Also that, the Appellant s Seal in all the three are placed in different places and is different with each other, and this proves , that the Sale Certificate is fabricated . Therefore, the Plea of the 1st Respondent is that, the Appellant , along with Ex-Promoters are in Conspiracy , Collusion , Deception and Defrauded the other Stakeholders , in the Corporate Insolvency Resolution Process Proceedings . 45. On behalf of the 1st Respondent, it is submitted that as per Rule 7 (2) of the SARFAESI Act, 2022, unless, Certificate of Sale is issued, the Sale , shall not become absolute , in the instant case, for the Plant and Machinery , under Rule 7 (2) of Security Interest (Enforcement) Rules, 2022, Sale Certificate in Appendix III, has to be issued, which is not done. Citations: 46. On behalf of the 1st Respondent, a reliance is placed on the Order dated 05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the same to the Collector for determination of the market value of the said property and the proper duty payable thereon. 47. Further, on behalf of the 1st Respondent, the Order of the Hon ble Division Bench of the High Court of Madras dated 23.08.2013, between P.M. Associates, Udhagamandalam v. IFCI Limited, Chennai two Ors., wherein, at Paragraph 30, it is observed as under: ..... 30. In the judgment reported in (2007) 5 Supreme Court Cases 745 [B.Arvind Kumar Vs. Govt. of India and others], it is clear that when a property is sold by public auction in pursuance of an order of the Court and bid is accepted and the sale is confirmed by the Court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. The Sale Certificate is issued to the purchaser only when the sale becomes absolute, further, it is clear that the Sale Certificate is merely an evidence of such title. It is also well settled that when an auction purchaser derives title on confirmation of sale in his favour, the Sale Certificate is issued evidencing such sale and title, no further deed of transfer from the Court is contemplated or required. So far as the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate and registered as required under law, then it is only a still born child and does not confer any right to the petitioner whatsoever. When the Sale Certificate is not properly stamped and registered, it is a void document and no right would vest upon the petitioner based on the same. As per Section 47-A of the Stamp Act, if the Registering Authority has reason to believe that the market value of the property, which is the subject matter of conveyance, has not been truly set-forth in the instrument, he may, after registering such instrument, refer the same to the Collector for determination of the market value of the said property and the proper duty payable thereon. 24. As already stated, the Sale Certificate issued by the Authorized Officer of the bank requires registration as well as stamp duty under Article 18-C read with Article 23 of Schedule 1 of the Stamp Act. 48. The Learned PCS for the 1st Respondent, adverts to the decision in P.M. Associates v. IFCI Limited, reported in (2014) 2 Law Weekly at Page 323, wherein, at Paragraph 8, it is observed as under: (iv) (2010) 8 Supreme Court Cases 383 [Meghmala and others Vs. G.Narasimha Reddy and others] wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. (Emphasis Supplied) 50. It is represented on behalf of the 1st Respondent that Wilful Violation of the Court order is a nullity and illegal one and in this connection, the Learned PCS, refers to the decision of the Hon ble Supreme Court of India in Delhi Development Authority v. Skipper Construction Company (P) Ltd. (1996) 4 SCC at Page 622, wherein, it is observed as follows: 17. The principle that a contemnor ought not to be permitted to enjoy and/or keep the fruits of his contempt is well-settled. In Mohd.Idris v. R.J. Babuji [1985 (1) S.C.R.598], this Court held clearly that undergoing the punishment for contempt does not mean that the Court is not entitled to give appropriate directions for remedying and rectifying the things done in violation of its Orders. The petitioners therein had given an undertaking to the Bombay High Court. They acted in breach of it. A learned Single Judge held them guilty of contempt and imposed a sentence of one month's imprisonment. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon ble Supreme Court of India in Styabrata Biswas v. Kalyan Kumar Kisku (1994) 2 SCC at Page 266, wherein, at Paragraph 23, it is observed as under: 23. .. Any act done in the teeth of the order of status quo is clearly illegal. All actions including the grant of sublease are clearly illegal. (Emphasis Supplied) 53. On behalf of the 1st Respondent, a reference is made to the decision of the Hon ble Supreme Court of India in Keshrimal Jivji Shah Anr. V. Bank of Maharashtra, reported in 2004 SCC Online Bom 368, wherein at Paragraphs 26 and 27, it is observed as under: 26. We cannot accept Shri Naphade's contention that observations of the Supreme Court in the case of Surjeet Singh should be read as restricted to proceedings under Order 22, Rule 10 of Civil Procedure Code and the same cannot be extended to defiance of injunction order issued under Order 39, Rule 1 of Civil Procedure Code. Once the issue is placed on the pedestal of public policy and the very faith of litigants in Rule of law and administration of justice, then it is not possible to make the distinction or bifurcation suggested by Shri Naphade. It would mean that consequences of null ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch orders. It is in that context that the Supreme Court observed that the order of stay is qua a Court, whereas an order of injunction reaches and touches a party to the lis. These observations cannot be applied when it is noticed that during the pendency of an order of injunction, immovable property, which is subject matter of restraint or injunction, is transferred. When this course is admittedly adopted, then there is no choice but to declare the transaction as illegal. There is no question of then deciding the nature and effect of the order of injunction. 54. The Learned PCS for the 1st Respondent relies on the Full Bench Decision of the Hon ble High Court of Madras in Century Flour Mills Limited v. S. Suppiah Ors. 1975 SCC Online Mad. at Page 73, wherein at Paragraph 8, it is observed as under: 8. In our opinion, the inherent powers of this court under Section 151 C.P.C. are wide and are not subject to any limitation. Where in violation of a stay order or injunction against a party, something has been done in disobedience, it will be the duty of the court as a policy to set the wrong right and not allow the perpetuation of the wrong doing. In our view, the inhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of its inherent power. The very object for which Order 39, Rule 2A has been enacted will be fulfilled by the grant of a temporary mandatory injunction and restoration of possession of the aggrieved party. The inherent power of the Court as recognised in Section 151 of the Code is in addition to the power conferred on the Court under the provisions of the Code. All that the Court is concerned is to prevent abuse of the process of Court and to do justice by immediately intervening under circumstances which require such intervention by the Court. 56. While rounding up, the Learned PCS, appearing for the 1st Respondent, submits that the Application , filed under I B Code, 2016, came to be admitted on 18.01.2021, and that the Sale Certificate , was issued on 20.01.2021, and that the Land , was Registered only on 04.03.2021, which cannot be effected, due to an Imposition of Moratorium , as per Section 14 of the I B Code, 2016, which clearly prohibits any action to Foreclose , Recover or Enforce , as detailed vide Paragraph 5.1 of the Order dated 18.01.2021 in CP No. 673 / 7 / HDB/2019, passed by the Adjudicating Authority ( NCLT , Bench I, Hyderabad), betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 17(1) of the said Act. We therefore hold that the High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer. 58. This Tribunal, aptly points out the Judgment of the Hon ble Supreme Court of India dated 20.08.2019 in Shakeena Anr. V. Bank of India Ors. (vide Civil Appeal Nos. 8097 8098 of 2009), wherein, at paragraphs 24 to 30, it is observed as under: 24. After cogitating over the factual matrix and perusing the relevant records, it is seen that the ground of challenge considered by the High Court at the behest of the appellants in the impugned judgment, in our opinion, has become unavailable. In that, the matter proceeded before the High Court for setting aside the entire auction process on the premise that the sale certificate was yet to be registered in favour of the highest bidder (respondent No.3); and the appellants had made (unsuccessful) attempts to exercise their right of redemption by offering the outstanding dues to the respondent bank. It was argued by the appellants that only upon registration of the sale certificate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts cannot be permitted to assail the auction process on any other count. 27. Reverting to the stand taken by the appellants that they had attempted to exercise their right of redemption by depositing an aggregate sum of Rupees Twenty Five Lacs on 30th December, 2005 and 4th January, 2006, in the account of the father of appellant No.2 followed by issuing cheque(s) in the aggregate sum of Rs.25,21,446/ (Rupees Twenty Five Lacs Twenty One Thousand Four Hundred Forty Six Only), on 2nd January, 2006; and once again offering the amount by demand drafts in the sum of Rs.25,06,250/ (Rupees Twenty Five Lacs Six Thousand Two Hundred Fifty Only), on 18th January, 2006. This stand though attractive at the first blush, will have to be stated to be rejected. On the other hand, we find substance in the stand taken by the respondent bank that none of the above was a valid tender so as to extricate or discharge the appellants from their obligation to deposit the outstanding dues payable by them before the specified date. In that, the amount was allegedly deposited by them in the account of the father of appellant No.2 and not in their loan accounts as such. Unless the amount was transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29. A fortiorari, it must follow that the appellants have failed to exercise their right of redemption in the manner known to law, muchless until the registration of the sale certificate on 18th September, 2007. In that view of the matter no relief can be granted to the appellants, assuming that the appellants are right in contending that as per the applicable provision at the relevant time (unamended Section 13(8) of the 2002 Act), they could have exercised their right of redemption until the registration of the sale certificate which, indisputably, has already happened on 18th September, 2007. Therefore, it is not possible to countenance the plea of the appellants to reopen the entire auction process. This is moreso because, the narrative of the appellants that they had made a valid tender towards the subject loan accounts before registration of the sale certificate, has been found to be tenuous. Thus understood, their right of redemption in any case stood obliterated on 18th September, 2007. Further, the amended Section 13(8) of the 2002 Act which has come into force w.e.f. 1st September, 2016, will now stare at the face of the appellants. As per the amended provision, stri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in sub-section (3) thereof. 36. The intention of the legislature is, therefore, clear that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. ...................................................................................... 39. We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under Section 13(4) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession notice prepared as nearly as possible in Appendix IV to the 2002 Rules. That notice is required to be affixed on the property. Rule 8 deals with sale of immovable secured assets. Appendix IV prescribes the form of possession notice. It inter alia states that notice is given to the borrower who has failed to repay the amount informing him and the public that the bank/FI has taken possession of the property under Section 13(4) read with Rule 9 of the 2002 Rules. Rule 9 relates to time of sale, issue of sale certificate and delivery of possession. Rule 9(6) states that on confirmation of sale, if the terms of payment are complied with, the authorised officer shall issue a sale certificate in favour of the purchaser in the form given in Appendix V to the 2002 Rules. Rule 9(9) states that the authorised officer shall deliver the property to the buyer free from all encumbrances known to the secured creditor or not known to the secured creditor. (emphasis supplied). Section 14 of the NPA Act states that where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred, the secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session and in appropriate cases where the court receiver finds that a third party interest is likely to be created overnight, he can take actual possession even prior to the decree. The authorized officer under Rule 8 has greater powers than even a court receiver as security interest in the property is already created in favour of the Banks/FIs. That interest needs to be protected. Therefore, Rule 8 provides that till issuance of the sale certificate under Rule 9, the authorized officer shall take such steps as he deems fit to preserve the secured asset. It is well settled that third party interests are created overnight and in very many cases those third parties take up the defence of being a bona fide purchaser for value without notice. It is these types of disputes which are sought to be avoided by Rule 8 read with Rule 9 of the 2002 Rules. In the circumstances, the drawing of dichotomy between symbolic and actual possession does not find place in the scheme of the NPA Act read with the 2002 Rules. 61. In the decision of the Hon ble Supreme Court of India in Embassy Property v. State of Karnataka (2019) SCC Online SC 1542, wherein, at Paragraph 37, it is observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 to 78, it is observed as under: 76. The legislative object of expeditious recovery of all public dues and due protection of security available with the Bank to ensure pre-payments of debts cannot be achieved when the officers/officials of the Bank act in such a callous manner. There is a public duty upon all such officers/officials to act fairly, transparently and with sense of responsibility to ensure recovery of public dues. Even, an inaction on the part of the public servant can lead to a failure of public duty and can jeopardize the interest of the State or its instrumentality. 77. In our considered opinion, the scheme of the Recovery Act and language of its various provisions imposes an obligation upon the Banks to ensure a proper and expeditious recovery of its dues. In the present case, there is certainly ex facie failure of statutory obligation on the part of the Bank and its officers/officials. In the entire record before us, there is no explanation much less any reasonable explanation as to why effective steps were not taken and why the interest of the Bank was permitted to be jeopardized. 78. The concept of public accountability and performance is applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence Act, 1872. In Sheopatsingh vs. Harishchandra {AIR 1958 Rajasthan 324}, it was held that the term Revenue Officer will include such Officers of the Income Tax, Sales Tax and Irrigation Department. Again in Gopi Parshad vs. State of Punjab {AIR 1957 Pun. 45}, it was held that the expression revenues means the income of the nation derived from its taxes, duties or other sources, for the payment of the nations expenses . It is a term generally used in referring to income of a Government or governmental sub division and as so used means all the public moneys which the State collects and receives from whatever source and in whatever manner. In Kishore Chandra Deo Bhanj vs. Raghunath Misra {AIR 1959 SC 589}, the Village Accountants were also held to be Revenue Officers. 58. Similarly, the term Civil Officer is defined in Advanced Law Lexicon by P.Ramanatha Iyer as any Officer holding appointment under the Government except in the Military or Naval Service, whether the duties are Executive or Judicial or in the highest or the lowest departments . The term Civil Officer has to be understood only in the context of civilians as opposed to persons in Military Service. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the nomenclature given to the document issued by the Authorised Officer may not be relevant for giving exemption from paying the stamp duty since the Sale Certificate issued by the Authorised Officer will not be covered by Article 18 of Schedule I of the Stamp Act. In my considered opinion, the judgment delivered by this Court in In Re, The Official Liquidator, High Court, Madras, 2010 (2) CTC 113 by considering the earlier judgments, has set forth the correct position of law. In view of the above, I do not find any infirmity in the order passed by the 1st Respondent. 65. In the decision of the Hon ble High Court of Madras in M/s. Kathikkal Tea Plantations, rep. by its Managing Director N. Thiruneelakandan, Melur, Nilgiris v. State Bank of India, rep. by its Chief Manager, V.M. Palaniswamy, Nilgiris Anr., reported in 2009 (4) Law Weekly at Page 395, wherein, it is observed and held that once the Sale Certificate , was issued and the Money , was Recovered , the purpose is over, and therefore, it cannot be termed as a Secured Creditor , and the Property , cannot be Secured Debt . Further, it was observed that, the Banks , are entitled, to take Possession , under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision AIR 2014 SC 1356 . 74. For an efficient , facile and a smooth functioning of the system , Registration Act, 1908 , imposes, certain Duties and Obligations , upon a State Government . Civil Post : 75. A Civil Post , means a Post , not connected with Defence , outside the regular Civil Services , as per decision of the Hon ble Supreme Court of India, in State of Assam Ors. v Shri Kanak Chandra Dutta , AIR 1967 SC 884, 886. Civil Officer: 76. According to Ramanatha Aiyar, The Law Lexicon 5th Edition, a Civil Officer , is defined as Any Officer, holding under the Government , except in Military of Naval Service , whether the Duties , are Executive or Judicial or in the Highest or Lowest Departments . Revenue Officer: 77. In the decision in Sheopat Singh v Harish Chandra Anr., AIR 1958 Raj., it is observed and held that the term, Revenue Officer , will include such Offices of Income Tax . 78. In Gopi Parshad v State of Punjab, AIR 1957 P H 45, it is held that the expression, the Revenue , means the Income of Nation , derived from its Taxes , Duties or the other Sources , for the payment of Nation s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor , Viz. United Bank of India). The 2nd Respondent , was mentioned as the Purchaser of the Properties of the Corporate Debtor , in a Private Treaty , from the Appellant / 1st Respondent . 87. According to the 1st Respondent / Resolution Professional , in the course of discharging the Duties , as an Interim Resolution Professional , to take into custody and control of the Assets of the Corporate Debtor , had visited the Plant location of the Corporate Debtor , situated at Kaveli Village, Sangareddy District ( Formerly Medak ), and found the Boards , displaying the name of M/s. Srinivasa Edifice Private Limited (2nd Respondent) and the Security Person, deployed over there, had not allowed the Interim Resolution Professional , to visit the Plant and asked him to speak with the concerned Authority over Phone and furnish the Contact Number. 88. It comes to be known that the Interim Resolution Professional , had contacted the concerned authority, over Phone, i.e., Mr. Shitanshu, from the Appellant / the Financial Creditor , and he informed the Interim Resolution Professional , that the Plant , was already sold to the 2nd Respondent / M/s. Sriniva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.11.2021 and the Sale Certificate , issued on 20.01.2021, are invalid in the eye of Law . 95. The categorical plea of the 1st Respondent / Petitioner / Resolution Professional is that, he is obligated to take custody and control of the Assets of the Corporate Debtor and further that the Adjudicating Authority ( Tribunal ), can direct the Local Administration , to assist him, to take Control and Custody of the Assets of the Corporate Debtor , considering the fact that the subject Assets , stand in the name of Corporate Debtor , as per Encumbrance Statement , issued by the Registration Department of Telangana . 96. In view of the above, before the Adjudicating Authority , the 1st Respondent / Resolution Professional, had prayed for, (a) passing of an Order in Setting aside , the Sale Certificate , issued by the Appellant / Financial Creditor , to and in favour of the 2nd Respondent , (b) to pass an Order , in directing the Respondents in Interlocutory Application No. 124 of 2021 therein, to handover the Properties of the Corporate Debtor , including Company s entire fixed and current assets, including stocks and receivables, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties of the Defendants , to Recover , the Debt . 100. Before the Adjudicating Authority , ( National Company Law Tribunal , Hyderabad Bench I, Hyderabad), the Bank of India , Mumbai, had filed CP (IB) No. 673 / 7 / HDB / 2019 (under Section 7 of the I B Code read with Rule 4 of the I B (AAA) Rules 2016, against the 1st Respondent / Corporate Guarantor , and the Adjudicating Authority , Admitted , the Application on 18.01.2021 and Declared Moratorium , with effect from 18.01.2021, till the completion of Corporate Insolvency Resolution Process , or till the Resolution Plan , was approved under Sub-section 1 of Section 31 or till the passing of an Order , for Liquidation of Corporate Debtor , under Section 33, whichever was earlier. Also, the Interim Resolution Professional , was appointed , by the Adjudicating Authority . 101. To be noted that the subject Asset , over which the Security Interest , was created to and in favour of United Bank of India (under SARFAESI Act, 2002), by the Borrower , was purportedly assigned , in favour of the Appellant / 1st Respondent , through Assignment Deed , dated 04.04.2019. 102. The Appellant / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecially, the Registration of Sale Certificate , was made in breach of the Order of Moratorium , declared by the Adjudicating Authority , in the main Company Petition, on 18.01.2021. 107. As far as the present case is concerned, the Sale , by an Authorised Officer , pursuant to a Private Treaty , between the Appellant / 1st Respondent and the 2nd Respondent , is to be Compulsorily Registered , and also the Requisite Stamp Duty , is to be paid, in terms of Article 18C, read with Article 23 of Schedule I of the Stamp Act, 1899 , as held by this Tribunal . As such, the contra plea taken on behalf of the Appellant / 1st Respondent , is unworthy of acceptance . 108. In this connection, this Tribunal , relevantly points out that the Plea of Good Faith , as per Section 44 of the I B Code, 2016, is not available to the 2nd Respondent (pertaining to the Acquiring of Property in question), because of the fact that, the Sale Certificate , in the instant case was Registered , violating the clear Order of Moratorium in force (vide Order dated 18.01.2021, passed by the Adjudicating Authority , National Company Law Tribunal , Hyderabad Bench I, Hyd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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