TMI Blog2021 (1) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.09.2021 has been continued till the next date of hearing. We have been informed by the Learned Counsel for the parties that the matter both on I.A. 4516 of 2021 as well as the main CP (IB) No. 472/2021 has been fixed for 15th February, 2022. The Order dated 30.09.2021 is now continuing for last more than three months and now 15th February, 2022 is the next date fixed in the matter, we are of the view that at this stage it is not necessary for us to express any final opinion regarding the various issues raised by the parties regarding title and ownership of the immovable properties whether it is still in ownership of the Corporate Debtor or stand transferred to Yes Bank Limited. What is nature of claim of the Financial Creditor-Dewan Housing Finance Corporate Limited quo the immovable property which is also mortgaged to Yes Bank Limited, all these issues have to be considered and decided by the Adjudicating Authority finally. Appeal disposed off. - Company Appeal (AT) Insolvency No. 77 of 2022 Company Appeal (AT)Insolvency No. 76 of 2022 - - - Dated:- 31-1-2021 - [Justice Ashok Bhushan] Chairperson, [Dr. Ashok Kumar Mishra] (Member (Technical) And [Dr. Alok Srivasta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter referred to as CIRP ) against the Corporate Debtor. The case of the Financial Creditor in Application under Section 7 of the Code was that in August, 2018, the Corporate Debtor was sanctioned a loan for INR 144 Crores and an additional loan of ₹ 43 Crores was also disbursed. The Loan was recalled by Notice dated 08th November, 2019 and there are dues of amounting ₹ 2,40,47,935/- which having not been paid, an Application under Section 7 of the Code to initiate CIRP was filed. 4. Application under Section 7 of the Code filed by the Financial Creditor was listed before the Court on 03.08.2021 and the matter was fixed for 23.08.2021 and on 29.08.2021 the Adjudicating Authority directed the Appellant to serve the Learned Counsel for the Corporate Debtor who has appeared before the Adjudicating Authority on 29.08.2021. In consequence to the Notice dated 30th July, 2021 under Section 13(2) of the SARFAESI Act, 2002, the Yes Bank Limited issued a Possession Notice dated 10.09.2021 under Section 13(4) of the SARFAESI Act, 2002 under Rule 8 of the Security Interest (Enforcement) Rules, 2002. The possession is claimed to have been taken by Yes Bank Limited on 10t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals. 7. We have heard Mr. Shyam Divan, Mr. Gopal Jain, Sr. Advocates for the Appellant and Mr. Ramji Srinivasan, Sr. Advocate for Respondent No. 1 in Company Appeal (AT) Ins. No. 77 of 2022. Mr. Giriraj Subrmanium, Advocate for the Appellant and Mr. Ramji Srinivasan, Sr. Advocate for the Respondent No. 1 in Company Appeal (AT) Ins. 76 of 2022. 8. Mr. Shyam Divan, Sr. Advocate for the Appellant submits that Yes Bank Limited is a Secured Creditor of Corporate Debtor who is Registered Mortgagee and for enforcing security, proceedings under SARFAESI Act, 2002 were initiated by Notice issued on 30th July, 2021. The possession of the immovable asset of the Corporate Debtor mortgaged to the Bank has been taken possession on 10th September, 2021 by resorting measures under Section 13(4) of the Act. The Corporate Debtor has waived 60 days notice hence the possession was taken on 10th September, 2021 before the expiry of 60 days. It is submitted that possession having been taken by the Corporate Debtor on 10.09.2021 there was no occasion for Adjudicating Authority passing an Order maintaining Status-Quo. It is submitted that wrong statement was made on behalf of Corporate Debtor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Learned Sr. Counsels for the Appellant submits that the Adjudicating Authority had every jurisdiction to pass any order for protecting the property of the Corporate Debtor even before admission of the Section 7 Application. It is submitted that whole intent and purpose of the CIRP is to protect and maximize the property of the Corporate Debtor. Learned Sr. Counsel disputed the claim of Yes Bank having taken possession on 10.09.2021. It is submitted that the possession was taken by the Yes Bank Ltd. even before expiry of 60 days. It is undue hurry on the part of the Yes Bank which has been noticed by the Adjudicating Authority also. It is submitted that by mere taking possession of assets of immovable property by Yes Bank the Corporate Debtor is not divested with its title and ownership. The assets are still of the Corporate Debtor. It is submitted that Financial Creditor-Dewan Housing Finance Corporate Limited has extended the Financial Facility to the Corporate Debtor before loan given by the Yes Bank Limited. The Financial Creditor has right to realise its dues which cannot be defeated by permitting the Yes Bank Limited to alienate the Property. It is submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perational Creditor brought to the notice of the Adjudicating Authority (National Company Law Tribunal) that there is an apprehension that the Corporate Debtor may abuse the process of the I B Code to deny the creditors from its legitimate rights if admission of the application under Section 9. 12. The Appellant having not given any undertaking or made any specific reply and refused to say that they have no such intention, we are of the view that it is always open to the Adjudicating Authority to pass ad-interim order before admitting any application under Sections 7 or 9 or 10 of the I B Code . However, on reply, once the application is admitted, then the order of Moratorium under Section 14 will follow, taking away the right of the Board of Directors of the Corporate Debtor to take any decision on behalf of the Corporate Debtor prohibiting others from taking any action against the Corporate Debtor which is different from interim order. On the other hand, if application under Sections 7 or 9 or 10 is rejected, the interim order will automatically stands vacated. 14. Learned Sr. Counsel-Mr. Ramji Srinivasan submits that against the said Judgment dated 17.07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that the authorised officer shall take or cause to be taken possession. The expression cause to be taken only means that the authorised officer need not himself take possession, but may, for example, appoint an agent to do so. What is important is that such taking of possession is effected under sub-rule (1) of rule 8 by delivering a possession notice prepared in accordance with Appendix IV of the 2002 Rules, and by affixing such notice on the outer door or other conspicuous place of the property concerned. Under sub-rule (2), such notice shall also be published within 7 days from the date of such taking of possession in two leading newspapers, one in the vernacular language having sufficient circulation in the locality. This is for the reason that when we come to Appendix IV, the borrower in particular, and the public in general is cautioned by the said possession notice not to deal with the property as possession of the said property has been taken. This is for the reason that, from this stage on, the secured asset is liable to be sold to realise the debt owed, and title in the asset divested from the borrower and complete title given to the purchaser, as is mentioned in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor, while taking any of the measures under section 13(4), does not follow the provisions of the Act in so doing. Take for example a case in which a secured creditor takes possession under rule 8(1) and 8(2) before the 60 days period prescribed under section 13(2) is over. The borrower does not have to wait until actual physical possession is taken (this may never happen as after possession is taken under rule 8(1) and 8(2), the secured creditor may go ahead and sell the asset). The object of providing a remedy against the wrongful action of a secured creditor to a borrower will be stultified if the borrower has to wait until a sale notice is issued, or worse still, until a sale actually takes place. It is clear, therefore, that one of the objects of the Act, as carried out by rule 8(1) and 8(2) must also be subserved, namely, to provide the borrower with instant recourse to a quasi-judicial body in case of wrongful action taken by the secured creditor. Referring to above Judgement of Hon ble Supreme Court, Learned Counsel for Respondent submits that on 10.09.2021 possession taken by the Appellant in exercise of power under Section 13(4) of the SARFAESI Act, 2002 is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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