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2019 (5) TMI 249

..... red creditor under the SARFAESI Act and further to direct it to deposit the title deeds of the secured assets with the Official Assignee. The view taken that, as an equitable principle, the appellant cannot be permitted to stand outside the insolvency proceedings and realise its dues and it must deposit the title deeds with Official Assignee, cannot be sustained. The impugned order dated 4th December 2018 is quashed and set aside - appeal allowed. - APPEAL (L) NO. 570 OF 2018 NOTICE OF MOTION NOS. 37 & 1365 OF 2018 INPT NO. 2 OF 2016 - 25-2-2019 - MR NARESH H. PATIL, CJ. AND N.M. JAMDAR, J. For The Appearing Parties : Ms. Savita Nanghare, Ms. Deepali Jadhav, J.P. Sen, Sr. Adv., Ms. Kavita A. Shah, E.B. Shivkumar and Ms. Sandhya Pagedar .....

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..... y Interest Act, 2002 (for brevity 'the SARFAESI Act'). The learned Single Judge by the impugned order dated 4th December, 2018 rejected this Notice of Motion. Hence, the appellant Bank has come in appeal. 4. Ms.Nanghare, the learned Counsel appearing for appellant submits that under the Scheme of the the SARFAESI Act, the appellant is entitled to enforce the security and proceed to take steps to sell the property mortgaged for recovering the dues of the Bank. The appellant thus is entitled to opt out of the insolvency proceedings for enforcing its rights under the SARFAESI Act and accordingly the appellant had intimated the official assignee which request was turned down. In support of the submissions the Counsel has placed reliance .....

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..... th the Official Assignee. The question that is raised before us is whether the appellant could be denied its right to stand outside the insolvency proceedings and recover his dues by taking recourse to SARFAESI Act. 8. The Presidency-Towns Insolvency Act, 1909 (for brevity 'the Act of 1909') was enacted almost 110 years ago. The Act was brought in force to amend the law regarding governing insolvencies in the Presidency towns. The Act contemplates constitution of the Insolvency Court. It lays down procedure of declaration of insolvency adjudication, administration of property of the insolvents, appointment of Official Assignee and it's duties. 9. Section 48 of the Act of 1909 refers to right of proof by secured and other credito .....

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..... ity and when such security was given. 10. The appellant had issued a Demand Notice under the SARFAESI Act by calling upon the borrower, insolvent and Guarantor. The appellant had also taken symbolic possession on 8th December 2014 under Section 13(4) of the SARFAESI Act. In the Notice of Motion taken out before the learned Judge, the appellant had categorically stated that it is choosing to stand outside insolvency proceedings. Therefore, the intention of the appellant to take recourse to the provisions of SARFAESI Act as available to the appellant and to stand outside the insolvency proceedings was manifest and clear. 11. An issue arose regarding the role of secured creditor in respect of insolvency proceedings in the case of Indian Bank ( .....

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..... to deposit the title deeds of the secured assets with the Official Assignee. The view taken that, as an equitable principle, the appellant cannot be permitted to stand outside the insolvency proceedings and realise its dues and it must deposit the title deeds with Official Assignee, cannot be sustained. 13. When we heard the appeal on the earlier date, Mr.Sen had expressed an apprehension that the appellant may not take adequate steps at all in respect of the assets. He had submitted that, in law the appellant may be entitled to stand outside insolvency proceedings, but in the facts of this case there are some apprehensions. 14. In this context the appellant had taken time to file an additional affidavit. Ms. Nanghare has placed an affidavi .....

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