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2016 (9) TMI 266 - HC - Companies LawApplication for substitution of secured creditor preferred by the applicant bank - Held that:- The learned Company Judge has considered the aspect with regard to registration of charge under Section 125 of the Companies Act, 1956 and also paras 44, 45, 46, 51 and 52 of the judgment of the Apex Court in the case of ICICI Bank Ltd. [2010 (9) TMI 236 - SUPREME COURT OF INDIA ] and definition of banking company, financial institution, reconstruction company, Securitisation company under SARFAESI Act and also that the applicant company was not a bank or a banking company or a financial institution or a securitization company or reconstruction company and, therefore, the appellant was not to be permitted to be substituted in place of IFCI as secured creditor for the purpose of SARFAESI Act. The above clear findings were in the context of submissions made and pleadings in the application and reply and considered by the learned Company Judge to which we are in agreement and in addition to other factual aspects noted and discussed by us hereinabove. That somersault was made in application filed under Rule 9 of the Rules, 1959 that no such status as a secured creditor under SARFAESI Act claimed by the appellant, was rightly rejected by the learned Company Judge. Even applicability of Section 130 of the Transfer of Properties Act in the facts of the case was considered by learned Company Judge is also based on submissions made by learned counsel for the appellant in the context of its claim as a secured creditor under SARFAESI Act. Therefore, prayer of the appellant company for substitution as a secured creditor in place of IFCI Ltd. assignor on the strength of deed of assignment of debts, is rightly rejected by learned Company Judge. In the context of Section 62 of Contract Act, 1872, a novation of contract, in the above case answered the contention raised on behalf of borrower that an assignment of a debt can never carry with it the assignment of the obligations of the assignor unless there is a novation of contract by all parties, the Apex Court [supra] held that an outstanding in the account of borrowers [customers] is debt due and payable by the borrowers to the bank. Further, the bank is the owner of such debt and such debt is an asset in the hands of the bank as a secured creditor or mortgagee or hypothecatee and, therefore, the bank can always transfer its assets. Such transfer in no manner affects the rights and interest of the borrowers [customers] and there is no prohibition in the Banking Regulation Act, 1949 in the bank transferring such assets inter se. According to the Apex Court, the obligations referred in the impugned deed of assignment are obligations, if any, of the assignor bank towards assignee bank in the matter of transfer of NPAs. In the above context, reasons assigned by learned Company Judge for arriving at a finding that no case was made out by the appellant on the strength of decision of the Apex Court in the above case of ICICI Bank Ltd. [supra] cannot be said to be incorrect and application for substitution preferred by the applicant bank is rightly rejected.
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