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2019 (8) TMI 529 - AT - Insolvency and BankruptcyPreferential rights of secured creditors - Handing over the possession of the mortgaged property - restraint on ‘Interim Resolution Professional’ from demanding the custody of the property - loan became bad and declared Non-performing asset - HELD THAT:- Section 18 of the ‘I&B Code’ deals with ‘Duties of Interim Resolution Professional’. As per which, it is the duty of the ‘Interim Resolution Professional’ to take over the control and custody of any assets over which the ‘Corporate Debtor’ has ‘ownership rights’ as recorded in the balance sheet of the ‘Corporate Debtor’ which includes the assets that may or may not be in possession of the ‘Corporate Debtor’ as apparent from clause (f) (ii) of Section 18 - from Section 18, it is clear that the term “assets” do not include the assets owned by a third party in possession of the ‘Corporate Debtor’. It is not the case of the Appellant that the title of the assets has already been transferred or they have sold the assets in terms of Section 13(4) of the ‘SARFAESI Act, 2002’. It is also not the case of the Appellant that the assets owned by a third party is in possession of the ‘Corporate Debtor’ in terms of Section 18, as it is the duty of the ‘Interim Resolution Professional’ to take control and custody of any asset over which the ‘Corporate Debtor’ has “ownership rights” as recorded in the balance sheet of the ‘Corporate Debtor’. Even if it is not in possession of the ‘Corporate Debtor’, a person who is in possession of the same, including the ‘Dena Bank’ or ‘Encore Asset Reconstruction Company Pvt. Ltd.’ is bound to hand over the same to the ‘Resolution Professional’, when title still vests with ‘Corporate Debtor’. ‘SARFAESI Act, 2002’ being an existing law, Section 238 of the ‘I&B Code’ will prevail over any of the provisions of the ‘SARFAESI Act, 2002’ if it is inconsistent with any of the provisions of the ‘I&B Code’. Thus, Section 18 of the ‘I&B Code’ will prevail over Section 13(4) of the ‘SARFAESI Act, 2002’ and the ‘Dena Bank’ cannot retain the possession of the property in question of which the ‘Corporate Debtor’ is the owner - appeal dismissed.
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