Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2018 (1) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 1581 - Tri - Insolvency and BankruptcyDirection to the Financial Creditor - State Bank of India to extend full cooperation to the applicant - permission to manage and operate the affairs of the corporate debtor as a going concern - HELD THAT:- Section 14(3) of I&B Code would show that the prohibition has been imposed on the non-applicability of Section 14(1) to such transactions as may be notified by the Central Government in consultation with any Financial Sector Regulator. It is well know that the Insolvency & Bankruptcy Code was enforced with effect from 01.12.2016 and the circular on which reliance have been placed pertain to the year 2004 and 2015. On repeated quarries made by us Ld. Counsel for the non applicant could not produce any circular issued under Section 14(3) by the Central Government notifying transaction to which the provision of Section 14(1) are not to apply. The circulars of RBI therefore, cannot override the effect of provisions of the Code as such circulars are only subordinate / legislation. Once the moratorium is in force the financial creditor including the bank has to prefer its claim before the RP, which would be considered alongwith other claims as per law - there is direct violation of Section 14(I)(c) which creates a bar prohibiting any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation Act is also prohibited. Besides there is violations of order of moratorium passed by this Tribunal on 01.06.2017. As there is a direct statutory violation we find that it is a fit case for imposing cost. Accordingly, a cost of ₹ 25,000/- is imposed on the non applicant / respondent. The cost be deposited in the Prime Minister Welfare Fund. Application allowed.
|