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2023 (7) TMI 210 - AT - Insolvency and BankruptcyOverriding effect of IBC on all proceedings after initiation of Section 7 Application - SEBI can auction the property of the Corporate Debtor or not - HELD THAT:- Section 7 Application has been filed by Respondent Nos 3 to 102 who are investors in the Corporate Debtor who have not been refunded their money in spite of Order dated 29.02.2016 passed by SEBI. The sequence of events as noted above indicates that Appellant-SEBI after the Order dated 29.02.2016, has issued a recovery certificate and has attached the properties of the Corporate Debtor, its directors, its associate Companies and has also conducted auction of 15 properties by which amount of Rs. 104 Crores have been received. It is well settled that proceedings by Financial Creditors under Section 7 can be initiated despite pendency of any other proceedings relating to the Corporate Debtor. Right given to a Financial Creditor under IBC can be invoked by Financial Creditor despite any proceeding pending with regard to Corporate Debtor in any other forum. The present is a case where Creditors of the Corporate Debtor have initiated Section 7 Application since the amount invested by them was not being refunded by the Corporate Debtor in spite of order passed by the SEBI Dated 29.02.2016. The Hon’ble Supreme Court in Indian Overseas Bank Vs. RCM Infrastructure Limited [2022 (5) TMI 926 - SUPREME COURT] have categorically held that after moratorium under Section 14(1)(c) comes into operation, no proceeding to recover against the Corporate Debtor can be continued. Law is well settled that when moratorium comes into operation, no other proceedings for recovery against the Corporate Debtor can be continued. The Resolution Professional has also appeared before the High Court in the Writ Petition where Interim Order was passed on 09.01.2019 before the initiation of proceedings under Section 7 - there are no doubt that RP shall obtain necessary clarification and modification from the High Court to proceed further in the CIRP Process before finalisation of CIRP Process. There are no grounds have been made out in this Appeal to interfere with the Impugned Order passed by the Adjudicating Authority admitting Section 7 Application. Present is a case where debt and default has been admitted and does not even a case of the Appellant that there is no debt and default at the instance of the corporate debtor. Appellant itself has initiated proceeding against the Corporate Debtor for recovery. Resolution Professional has also appeared in Writ Petition where appropriate clarification/modification has been sought for. There are no error in the order of the Adjudicating Authority warranting any interference in this Appeal, there is no merit in the Appeal, the Appeal is dismissed.
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