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2018 (2) TMI 1503 - HC - Companies LawInsolvency process - delay in getting back the money - sale of the machinery attached by the order of this Court - Held that:- As learned Senior Counsel appearing for the respondent/defendant in the suit that the respondent/defendant has obeyed all the orders of this Court and therefore he cannot be penalized for obeying the orders of this Court. The sum and substance of the contentions of Mr.APS.Ahluwalia, learned Senior Counsel is that having obeyed the orders under the firm belief that it would get back the money spent by it, the respondent cannot be made to wait till the conclusion of the Insolvency Resolution process. All that this Court can do in the present situation is only to sympathize with the 1st respondent/defendant. A bare perusal of the earlier orders passed by this Court would show that the plaintiff in the suit M/s.Falcon Tyres Ltd., is a consistent and willful defaulter. But, in view of Section 14 of the Code, this Court is denuded of the power to proceed against the properties of a consistent defaulter also. Even proceedings initiated by a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act 2002, have been included under Sub Cause (c) of Sub Section (1) of Section 14. Therefore, unable to accept the submission of the learned Senior Counsel Mr.APS.Ahluwalia, that the present proceedings cannot be termed as proceedings within the meaning of Sub Clauses a, b, c and d of Sub Section (1) of Section 14. Mr.APS.Ahluwalia, learned Senior Counsel would also contend that by virtue of the lien created under the Order dated 21.04.2011, the property becomes answerable to the claims of the 1st respondent. Therefore the 1st respondent would be in the position of the secured creditor and hence these proceedings cannot be prohibited by the order of NCLT. A lien created over the property would not divest the ownership of the corporate debtor over the said property. Even claims of secured creditors are barred under Sub Clause (c) of Sub Section (1) of Section 14. Clause (d) of Sub Section (1) of Section 14 includes even proceedings of recovery of any property in possession of a corporate debtor by its owner or lessor. Apart from the wide language of Section 14, Section 238 of the Code gives an overriding effect to the provisions of the Act for any statute or any instrument having the force of the statute. Stay all further proceedings pursuant to the earlier orders in the suit and adjourn the suit till 16th April 2018. Also all further proceedings for sale of the machinery attached by the order of this Court dated 13.08.2012 will stand stayed, till the expiry of 180 days from 30.08.2017, or till such extended period as may be granted by the Adjudicating Authority, viz. The National Company Law Tribunal, Bengaluru.
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