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TMI Blog2022 (12) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Company Law Tribunal', Hyderabad Bench - I, Hyderabad). 2. The 'Adjudicating Authority', ('National Company Law Tribunal', Hyderabad Bench - I, Hyderabad), while passing the 'impugned order' dated 23.12.2021 in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019, among other things, at Paragraphs 27 to 36, had observed the following: 27. 'Therefore, when once the violation being unequivocal and apparent, the Respondents cannot be allowed to escape from the legal consequences of violation of order of moratorium, more so on a plea that the respondents merely performed a consequential act of registration of sale certificate issued in favour of the 2nd Respondent... 28. Be that as it may, we are also unable to appreciate the submission of Ld. Senior Counsel for R-1 that registration of sale certificate in this case is only formality and not mandatory legal requirement, In fact, the ruling in re, B. Arvind Kumar vs Govt. of India & Ors in Civil Appeal No. 3540 of 2002 reported in (2007) 5 SCC 745, relied upon by the respondents it is held that, "When a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as GPA sales." 30. That apart a full Bench of High Court of Madras in re, R. Thiagarajan Vs The Inspector General of Registration, Santhome and Ors., held that, 13. "Section 17 (1) of the Registration Act, 1908, speaks about the documents of which the registration is compulsory. Section 17(2) of the Registration Act, speaks about the exemption for registering the document. As per Section 17(2)(xii) of the Act, any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer is exempted from registration. 14. The Sale Certificate is not a compulsorily registrable document, if the property is sold by public auction by a Civil or Revenue Officer. In the judgment reported in 2007 (5) SCC 745 [cited supra] the Hon'ble Supreme Court held that a certificate of sale granted to any purchaser of any property sold by public auction by a Civil or Revenue Officer does not fall under the category of non-testamentary documents which require registration under sub-Sections (b) and (c) of Section 17(1) of the said Act. 15. In the judgement reported in 2013(5) CTC 337 [P.M. Associates, Udhagamandalam v. IFCI Limited, Chennai and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate. The Hon'ble Supreme Court in the judgment reported in 2007 (5) SCC 745 [cited supra] and the Division Bench of this Court in the judgment reported in 2013(5) CTC 337 [cited supra] held that the Authorized Officer of the bank cannot be equated with the Civil or Revenue Officer. Therefore, the sale made by the Authorized Officer is liable for stamp duty under Article 23 and not under Article 18 of the Stamp Act. 22. The Sale Certificate issued by the Authorised Officer of the bank cannot be agnated with the Sale Certificate issued by a Civil or Revenue Court. The nomenclature given to the document issued by the Authorized Officer would be irrelevant for exemption from payment of stamp duty and the same will not be covered under Article 18-C Schedule 1 of the Stamp Act. 23. If proper stamp duty is not paid for the said Sale Certificate and registered as required under law, then it is only a still born child and does not confer any right to the petitioner whatsoever. When the Sale Certificate is not properly stamped and registered, it is a void document and no right would vest upon the petitioner based on the same. As per Section 47-A of the Stamp Act, if the Register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33. When the respondents consciously violated the moratorium order and thereby crippled the corporate insolvency resolution process the plea that the 2nd Respondent derived interest in good faith lacks bona fides hence unacceptable. That apart, except placing reliance on the Section, no material worth has been placed before us in support of the plea of the good faith. We therefore, reject the said plea of the 2nd respondent. 34. We, therefore, having held that the sale certificate has been registered in clear violation of the order of moratorium and on registration of the same only the sale certificate has attained legal enforceability, we hereby declare that the said sale certificate is void and unenforceable under law, consequently, the 2nd Respondent cannot claim / derive any right, title or interest in respect of the property covered by the said sale certificate. 35. In so far as the possession of the subject property is concerned, though 1st Respondent claimed that it had obtained possession of the subject property by invoking the provisions of SARFAESI Act, the 1st Respondent under its letter dated 11.01.2021, requested the Corporate Debtor to deliver the possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be examined in the light of provisions of IB Code and not under the SARFAESI Act. We therefore hold that the plea of the Learned Senior Counsel for 1st Respondent that the Applicant has alternative remedy before the Debt Recovery Tribunal, as such this Application is not maintainable before this Tribunal, is devoid of any force. We therefore, accordingly reject the same." and 'disposed of' the 'Interlocutory Application', by allowing it. Factual scenario: 3. According to the Learned Counsel for the Appellant / 1st Respondent ('M/s. Omkara Assets Reconstruction Private Limited'), the 'Original Lender' ('United Bank of India'), had filed OA No. 598 of 2018, before the 'Debt Recovery Tribunal - I, Hyderabad, against the 1st Respondent, and on 22.11.2018, prior to the 'Moratorium', the 'United Bank of India' ('Original Lender'), had assigned the 'Debt', payable by the '1st Respondent', in favour of the 'Appellant', along with the 'Underlying Securities', including exclusive charge on all the 'Fixed Assets' and the 'Current Assets' of the '1st Respondent'. Pursuant to the said 'Assignment', the 'Appellant', stepped into the shoes of 'UBI' (the 'Original Lender') and became entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, the 'Appellant', had issued a 'Demand Notice', as per 'Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022' ('SARFAESI Act') to the '1st Respondent' and the 'Mortgagor', and 'Guarantors', calling upon the '1st Respondent', to discharge its liabilities, within 60 days from the date of notice. 8. It comes to be known that on 01.08.2019, the 'Appellant', had issued a 'Possession Notice', intimating the '1st Respondent' and the 'Public' in general, in regard to the 'Possession of the Properties' of the '1st Respondent' was taken. Added further, the 'Appellant', based on the 'Assignment Agreement', got itself impleaded, an 'Applicant; in OA No.598 of 2018 and that the 'Debts Recovery Tribunal', was pleased to 'allow' the OA and passed a 'Judgment' and 'Decree', in favour of the 'Appellant', on 05.02.2020. Therefore, the 'Order' of the 'Debts Recovery Tribunal', has become 'Final', and no one can 'Assail', the 'Secured Assets' of the 'Appellant' (including the '1st Respondent'). 9. According to the Appellant, the '1st Respondent', had not filed an 'Appeal', against the 'Order' of the 'Debts Recovery Tribunal', an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Secured Financial Creditors', had undertaken the 'Transaction' in 'Good Faith'. Moreover, the 'maximizing the Value of the Assets of the 1st Respondent', will not apply to the facts of the instant case, when the 'Appellant', is the 'exclusive Charge Holder of the Assets', that were sold in terms of the provisions of the SARFAESI Act. That apart, the '1st Respondent', has a remedy under Section 17 of the SARFAESI Act, 2002, only to 'Assail' the 'Auction'. Appellant's Submissions: 15. The Learned Counsel for the Appellant contends that the 'Adjudicating Authority', ('National Company Law Tribunal', Hyderabad Bench - I, Hyderabad) in the 'impugned order' dated 23.12.2021, in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019, had declared that the 'Sale Certificate', is 'Void' and 'Unenforceable', under 'Law', and consequently, the '2nd Respondent', cannot 'Claim' / 'Derive', any 'Right', 'Title' or 'Interest', in respect of the 'Property', covered by the said 'Sale Certificate', and therefore, the 'impugned order' is an 'incorrect' one, which needs to be set aside, in the instant 'Appeal', by this 'Tribunal'. 16. The Learned Counsel for the Appellant points out that the 'Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 'ECI Engineering & Construction Company Ltd.', and that the 1st Respondent / M/s. ECI Infra Towers Company Pvt. Ltd., does not own even a sq. inch in the 'Properties mortgaged with the United Bank of India', which was later assigned to the 'Appellant'. 23. The Learned Counsel for the Appellant contends that the 'Bank of India', had filed OA No. 236 of 2019, (a) for 'recovery' of a sum Rs.213,14,25,167.86, before the 'Debt Recovery Tribunal', and (b) even if this Original Application is allowed, the 'Bank of India', cannot touch the 'Immovable Properties', mortgaged with the 'United Bank of India' by Mr. Vijay Kaza and Mr. Kaza Venkata Phani, who are 'Guarantors' of the M/s. ECI Infra Towers Company Private Limited. 24. The Learned Counsel for the Appellant, brings it to the notice of this 'Tribunal', there is no 'Second Charge' at all, to and in favour of 'Bank of India', and that the 'Bank of India', has no 'Locus standi', to question the same. 25. Moreover, it is contended on behalf of the Appellant, if the 'Value' is 'Low', the 'Aggrieved Persons', are the 'Guarantors' of 'M/s. ECI Infra Towers Company Private Limited', Viz. 'Mr. Vijay Kaza and Mr. Kaza Venkata Phani', an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the 'Confirmation of Sale', on 30.11.2020, and that the 'Issue of Sale Certificate', is only a 'Formality', as per 'Order' dated 23.08.2013 in WP Nos. 1937 and 4088 of 2012, passed by the Hon'ble Division Bench of Madras High Court. 30. Proceeding further, the Learned Counsel for the Appellant points out that an 'Auction Purchaser', derives 'Title', on 'Confirmation of Sale', in its favour, and that the 'Issuance of Sale Certificate', is only an 'evidence', to 'establish', that the 'Sale' was 'affirmed', in its favour, conveying the 'Title'. 31. The Learned Counsel for the Appellant, in regard to 'Movable Properties' i.e. 'Plant and Machinery', along with 'Immovable Properties', were delivered to the 'Purchaser', on 11.01.2021 itself. 32. The Learned Counsel for the Appellant cites the 'Judgment' of this 'Tribunal' dated 26.03.2021 in Comp. App (AT) (INS) No. 736 of 2020, wherein, at Paragraph 25, it is observed as under: 25. "Other contention of the Appellant is that the sale of the assets of the Corporate Applicant sold through e-auction on 12.12.2019 and the sale was confirmed on 13.12.2018 and 25% of the sale proceeds was paid by the Auction Purchaser. Therefore, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'Sale Certificate', was issued on 20.01.2021, followed up with the 'Registration' of the same on 04.03.2021, the 'Interim Resolution Professional', cannot question the same, as the 'Bank of India', is not the 'Mortgagee', and the '1st Respondent / 'M/s. ECI Infra Towers Company Pvt. Ltd.', is not the 'Owner' of the 'Properties' in question and both of them, do not have 'Semblance of Right', in the 'Properties'. 36. The other stand of the Appellant is that, even presuming without admitting that they have the 'Right' in the 'Properties' (which is not) even then, they cannot 'challenge' the same, as the 'Sale' was completed on 07.01.2021 itself, based on the 'Sale Confirmation', made on 30.11.2020 and further that the 'Issue of Sale Certificate', on 20.01.2021 and the 'Registration' of the same on 04.03.2021, are mere 'formalities'. 37. While summing up, the Learned Counsel for the Appellant submits that with an 'ulterior motive', the 'Resolution Professional', had filed IA No. 124 of 2021 in CP (IB) No. 673 / 7 / HDB / 2019, seeking to set aside the 'Sale Certificate' dated 20.01.2021, issued by the 'Appellant' / '1st Respondent' ('Financial Creditor') to the '2nd Respondent' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand of the 1st Respondent that a 'Sale', by an 'Authorised Officer', attracts 'Stamp Duty', under 'Article 23 of the Indian Stamp Act, 1899 and added further, if proper 'Stamp Duty', is not paid on the 'Sale Certificate' and the same is 'Registered', it is considered as a 'still born child' and does not 'Confer' any 'Right', on the 'Buyer', whatsoever. 43. It is projected by the Learned Practising Company Secretary for the 1st Respondent that in the instant case, the 'Property' was under the control of the 'Corporate Debtor' on 18.01.2021, and the 2nd Respondent, on 11.01.2021, had addressed a letter, on the subject of 'Handover of Possession of Property', to 'Srinivasa Edifice Private Limited', wherein it was mentioned as under: "We would like to bring to your notice that we have sold the below-mentioned properties to Srinivasa Edifice Private Limited. Property No. 1 : All that piece of land admeasuring 11 acres and 37 guntas (57,717 sq. yds.) in Sy. No. 334 / A, 3 / 1A, 3 / 1B, 5 at Vill & GP : Kaveli, Kohir (Mandal), Medak District. Property No. 2 : All that piece of land admeasuring 10 acres and 27 guntas (49,247 sq. yds.) in Sy. No. 332 / A, 333 / A, 7, 8B, 8A at Vil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated under SARFAESI Act, is not a Civil or Revenue Court, Collector or Revenue Officer and he is an officer of the bank, which lend money to the borrowers, acts as an Authorized Officer, only for the purpose of bringing the property for sale. In other words, such officers merely replace the secured creditors. The Division Bench further observed that at best the Authorized Officer can not be termed as Civil or Revenue Court, Collector or Revenue Officer. Observing so, the Division Bench held that notice issued under Section 47-A of the Indian Stamp Act, claiming stamp duty on the market value of the property is proper. 22. The Sale Certificate issued by the Authorised Officer of the bank cannot be agnated with the Sale Certificate issued by a Civil or Revenue Court. The nomenclature given to the document issued by the Authorized Officer would be irrelevant for exemption from payment of stamp duty and the same will not be covered under Article 18-C Schedule 1 of the Stamp Act. Therefore, the Sale Certificate issued by one who is neither Civil or Revenue Officer would not fall under Section 17(2)(xii) of the Registration Act and the Sale Certificate issued by the Authorized Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of sale in their favour and the Sale Certificate was issued evidencing such sale and title. In respect of the registration of the Sale Certificate issued by the second respondent, since the second respondent is not a Civil or Revenue Officer, the registration of the Sale Certificate is not exempted under Section 17(2)(xii) of the Registration Act. Therefore, we are of the view that though the auction purchaser derived title on confirmation of sale in their favour and a Sale Certificate was issued by the Authorised Officer, evidencing such sale and title, no further deed of transfer is required. In view of the judgment reported in (2007) 5 Supreme Court Cases 745 and the provisions of 17(2)(xii) of the Registration Act, the Sale Certificate issued by the second respondent/Authorised Officer requires registration." 17. As per Article 18 of the Stamp Act, the purchaser of any property sold by a public auction by a Civil or Revenue Officer or Collector or other Revenue Officer, is liable to pay the stamp duty on the consideration mentioned in the Sale Certificate. The Hon'ble Supreme Court in the judgment reported in 2007 (5) SCC 745 [cited supra] and the Division Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the application of any equitable doctrine including res judicata. Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false. Suppression of a material document would also amount to a fraud on the court. (Vide S.P. Changalvaraya Naidu V. Jagannath, (1994) 1 SCC 1; Gowrishankar V. Joshi Amba Shankar Family Trust, (1996) 3 SCC 310:AIR 1996 SC 2202; Ram Chandra Singh V. Savitri Devi, (2003) 8 SCC 319; Roshan Deen V. Preeti Lal, (2002) 1 SCC 100:2002 SC (L&S) 97:AIR 2002 SC 33; Ram Preeti Yadav V. U.P. Board of High School & Intermediate Education, (2003) 8 SCC 311:AIR 2003 SC 4628; and Ashok Leyland Ltd. Vs. State of Tamil Nadu, (2004) 3 SCC 1 : AIR 2004 SC 2836). " 49. The Learned PCS for the 1st Respondents seeks in aid of the decision of the Hon'ble Supreme Court of India in Suraj Lamp And Industries Pvt. Ltd. v. State of Haryana (2012 1 SCC - 656), wherein at Paragraph 24, it is observed as under: 24. "We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadburn [1985 (1) All.E.R. 211], Sir Robert Megarry V-C observed: "I need not cite authority for the proposition that it is of high importance that orders of the court should be obeyed. Willful disobedience to an order of the court is punishable as a contempt of court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some charge in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties for contempt of court for doing what they did, nevertheless those acts were validly done. Of course, if an act is done, it is not undone merely by pointing out that it was done in breach in law. If a meeting is held in breach of an injunction, it cannot be said that the meeting has not been held. But the legal consequences of what has been done in breach of the law may plainly be very much affected by the illegality. It seems to me on principle that those who defy a prohibition ought not to be able to claim that the fruits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Court of law, confers no right, title or interest in the transferee, as it is no transfer at all. The transferee cannot be allowed to reap advantage or benefit from such transfer merely because he is not party to the proceedings in which order of injunction or other prohibitory direction or restraint came to be issued. It is enough that the transferor is a party and the order was in force. These two conditions being satisfied, the transfer must not be upheld. If this course is not adopted then the tendency to flout orders of Courts which is increasing day by day can never be curbed. The Court exercises its powers on the foundation of respect and regard for its authority by litigating public. People would loose faith and respect completely if the Court does not curb and prevent this tendency. The note of caution of the Supreme Court must be consistently at the back of everybody's mind. Therefore, Shri Naphade is not right in the distinction which he is trying to make. (Emphasis Supplied) 27. Equally untenable is the contention of Shri Naphade that an order of injunction will bind only the transferor in this case. It is his submission that the said order does not bind th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed) 55. The Learned PCS for the 1st Respondent falls back upon the decision of the Hon'ble Supreme Court of India in Sujit Pal v. Prabir Kumar Sun & Ors. (1995) 6 SCC at Page 50, wherein, at Paragraphs 9 and 11, it is observed as under: 9. "In a case like the present one where the 'restoring things to their former condition is the only remedy' the Court, in our opinion, has to take steps for the purpose in the exercise of its inherent power. In Bhagat Singh v. Dewan Jagbir Sawhney, AIR 1941 Cal 670, it has been observed by Lord Williams J. that the Code is not exhaustive; there are cases which are not provided for in it, and the High Court must not fold its hands and allow injustice to be done. Further, it has been observed by his Lordship that the law cannot make express provisions against all inconveniences, and that the Court had, therefore, in many cases where the circumstances warranted it, and the necessities of the case required it, acted upon the assumption of the possession of an inherent power to act ex debito justitiae and to do that real and substantial justice for the administration of which ii alone exists. (Emphasis supplied) 11. Thus it is apparent fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: Re : Point (ii) 10. "The plaintiff has produced the original registered sale certificate dated 29.8.1941 executed by the Official Receiver, Civil Station, Bangalore. The said deed certifies that Bhowrilal (father of plaintiff) was the highest bidder at an auction sale held on 22.8.1941, in respect of the right, title, interest of the insolvent Anraj Sankla, namely the leasehold right in the property described in the schedule to the certificate (suit property), that his bid of Rs.8,350 was accepted and the sale was confirmed by the District Judge, Civil and Military Station, Bangalore on 25.8.1941. The sale certificate declared Bhowrilal to be the owner of the leasehold right in respect of the suit property. When a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well settled that when an auction purchaser derives title on confirmation of sale in his f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferring the suit property, was operating against him after the decision of the Division Bench of High Court. In fact, the impugned judgment was not even carried in appeal before this Court by the appellants until then. The special leave petitions came to be filed only on 13th October, 2007 and order of status quo was passed by this Court on 23rd November, 2007. In other words, there has been a paradigm shift in the rights of the parties upon registration of the sale certificate on 18th September, 2007 and also because of the registered sale deed in favour of third party on 5th October, 2007. The contention pursued before the High Court by the appellants, therefore, has now become unavailable. 26. Be it noted that the appellants had allowed the action taken by the respondent bank under Section 13(4) of the 2002 Act, to become final consequent to the order of the DRT rejecting challenge thereto due to non−compliance of the conditional order. Even the subsequent application for restoration of the DRT proceedings came to be rejected. The appellants then filed the subject Writ Petition (C) Nos.634−635 of 2006 on 19th January, 2006, by which date the auction had already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept the cheque(s), not being a valid tender. Even the third attempt made by the appellants was to offer demand drafts drawn in favour of or in the name of the Authorised Officer of the respondent bank and not in the name of the bank or authorising the bank to appropriate it towards the subject loan accounts. Hence, these demand drafts were rightly not accepted as a valid tender. 28. Notably, the appellants took no steps, whatsoever, to pay the outstanding dues to the respondent bank by way of a valid tender nor moved any formal application before the High Court after filing of the writ petitions on 19 January, 2006, to permit them to deposit the requisite amount either in the concerned loan accounts or in the court. That was not done even until the disposal of the writ petitions by the Single Judge or during the pendency of the writ appeals before the Division Bench and until the disposal thereof vide the impugned judgment. We must also notice the stand taken by the respondent bank that even the legal notice sent by the appellants to the respondent bank, in no way expresses unambiguous commitment of the appellants to exercise their right of redemption. Suffice it to observe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t deem it necessary to dilate further on the argument that registration of the sale certificate in relation to the auction conducted under the 2002 Act is essential. Similarly, it is not necessary to examine other grounds urged by the appellants, in light of our conclusion that the appellants have failed to make a valid and legal tender to the respondent bank before the issue of sale certificate on 6th January, 2006, muchless registration thereof on 18th September, 2007." 59. In the Judgment of the Hon'ble Supreme Court of India in Kanaiyalal Lalchand Sachdev & Ors. V. State of Maharashtra & Ors. dated 07.02.2011, wherein, at Paragraphs 18 to 20, it is observed as under: 18. "The 2002 Rules, enacted under sub-section (1) and clause (b) of subsection (2) of Section 38 read with sub-sections (4), (10) and (12) of Section 13 of the Act, set down the procedure for enforcing a security interest. Rule 4 of the 2002 Rules deals with the possession of movable assets, whereas Rule 8 deals with the possession of immoveable assets. It is manifest that Rule 4 has no application to the facts of the instant case, as contended by the learned counsel for the State. 19. In Authorised Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT." 60. In the decision of the Hon'ble Supreme Court of India in Transcore v. Union of India, reported in (2008) I SCC at Page 125, wherein, at Paragraphs 73 and 74, it is observed as under: "The word possession is a relative concept. It is not an absolute concept. The dichotomy between symbolic and physical possession does not find place in the Act. As stated above, there is a conceptual distinction between securities by which the creditor obtains ownership of or interest in the property concerned (mortgages) and securities where the creditor obtains neither an interest in nor possession of the property but the property is appropriated to the satisfaction of the debt (charges). Basically, the NPA Act deals with the former type of securities under which the secured creditor, namely, the bank/FI obtains interest in the property concerned. It is for this reason that the NPA Act ousts the intervention of the courts/ tribunals. Keeping the above conceptual aspect in mind, we find that Section 13(4) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e possession to the borrower and can also restore management of the business of the borrower. Therefore, the scheme of Section 13(4) read with Section 17(3) shows that if the borrower is dispossessed, not in accordance with the provisions of the Act, then the DRT is entitled to put the clock back by restoring the status quo ante. Therefore, it cannot be said that if possession is taken before confirmation of sale, the rights of the borrower to get the dispute adjudicated upon is defeated by the authorised officer taking possession. As stated above, the NPA Act provides for recovery of possession by non-adjudicatory process, therefore, to say that the rights of the borrower would be defeated without adjudication would be erroneous. Rule 8, undoubtedly, refers to sale of immovable secured asset. However, Rule 8(4) indicates that where possession is taken by the authorised officer before issuance of sale certificate under Rule 9, the authorised officer shall take steps for preservation and protection of secured assets till they are sold or otherwise disposed of. Under Section 13(8), if the dues of the secured creditor together with all costs, charges and expenses incurred by him are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its sweep, in that it speaks about any question of law or fact, arising out of or in relation to insolvency resolution. But a decision taken by the government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase "arising out of or in relation to the insolvency resolution" appearing in Clause (c) of Sub−section (5). Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of IBC is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260A of the Income Tax Act, 1961. Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. (It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he powers of judicial review stated that, the doctrine of full faith and credit applies to the acts done by officers in the hierarchy of the State. They have to faithfully discharge their duties to elongate public purpose." Hon'ble High Court's Decisions: 63. In the decision of the Hon'ble High Court of Madras in Re, The Official Liquidator, High Court of Madras, 2010 (2) CTC 113, whereby and whereunder, at Paragraphs 56 to 59, it is observed as under: 56. "There is one more crucial issue. Section 17 (2) (xii) refers only a Certificate of Sale granted to the purchaser of a property in public auction by a Civil or Revenue Officer. Section 89 (4) uses the term "Revenue Officer" alone. The question as to who is a Civil or Revenue Officer, did not fall for consideration either in the decision of the Division Bench in K. Chidambara Manickam or in any other decision. The only case where this question was considered, was in Shanti Devi L. Singh. But in that case, the Supreme Court was concerned with a sale made by the Tax Recovery Officer of the Income Tax Department. Since the Tax Recovery Officer was collecting the revenue due to the Government, by selling the property of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Officer also liable to stamp duty. The term "Revenue Officer" appearing both in Article 18 under Schedule-I of the Indian Stamp Act and also in sections 17(2)(xii) and 89(4) of the Registration Act, are to be given the same meaning and to be construed to indicate the same person. 59. Therefore, the only conclusion that one can draw by a combined reading of the provisions of the Transfer of Property Act, 1882, the Indian Stamp Act, 1899 and the Registration Act, 1908 is that by whatever name the instrument is called (whether certificate of sale or Sale Deed), the instrument is chargeable with stamp duty, under Article 18 read with Article 23 of Schedule I to the Stamp Act. While the Official Liquidator can leave the choice to the auction purchaser to choose the title to or the nomenclature of the document, neither he nor the purchaser has any choice with regard to the liability to pay stamp duty." 64. In the decision of Hon'ble High Court of Madras in Cenney Hotels Pvt. Ltd., through its Managing Director v. State of Tamilnadu, represented by Inspector General of Registration, reported in (2010) 4, Current Tamilnadu Cases, at Page 802, wherein at Paragraph 14, it is obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the 'Plaintiff' - 'Agreement Holder', any 'Right', defeating the 'Rule of Lis Pendens', which is founded upon 'Public Policy', as per decision in 'P. Lakshmi Ammal v. S. Lakshmi & Ors., AIR 1991 Mad. 137. 68. When the 'Doctrine of Lis Pendens', is attracted, the 'Transferee', cannot take the 'Plea' of 'Good Faith', to avoid 'applicability of rule', as per decision Balwinderjit Kaur v. Financial Commissioner, AIR 1987 P & H 189. 69. Section 52 of Transfer of Property Act, 1882, creates only a 'right', to be 'enforced', to be 'avoid', a 'Transfer', made 'pendente lite'. Section 54 of the Transfer of Property Act, 1882 : 70. It is pointed out that 'No Sale', can be 'effected', without a 'registered instrument', where the 'Consideration', is more than Rs. 100/-, as per decision in Jyotish Deka & Ors. v. On the death of Gajendra Deka, his Legal Heirs, AIR 2015 Gau. 142. 71. It is to be remembered that a 'Sale' of a 'tangible immovable property' of 'value' of 'more than Rs. 100/- and upwards' or 'intangible thing', requires 'Registration', as per decision M.E. Moolla & Sons Ltd., v Official Assignee', Rangoon, AIR 1936, Privy Council 230. The Registration Act, 1908: 72. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of another's Property', for 'satisfaction of a Debt due', which may be through an 'Agreement of Law', as opined by this 'Tribunal'. Confirmation of Sale: 82. A 'Confirmation of Sale', by a 'Secured Creditor', under subrule 6 of Rule 9 of 'Security Interest Enforcement Rules, 2002', is necessary for 'Finalising a Sale'. Moratorium: 83. The 'Moratorium', comes into 'operative play', when an 'Application' / 'Petition', under Section, 7, 9 and 10 of the I & B Code, 2016, gets 'Accepted', and continues, till the end of 'Insolvency and Resolution Process'. As a result of the 'start of Process of Insolvency', a 'Moratorium' is imposed, it has an effect of protecting the 'Assets' of a 'Debtor', who is under 'Insolvency'. 84. Under the I & B Code, 2016, the 'Proceedings' under 'SARFAESI Act, 2002', may come within the ambit of 'Moratorium' only, if the 'relief' sought, is in respect of the 'Properties' of the 'Corporate Debtor', in the considered opinion of this 'Tribunal'. 85. Once, the 'Moratorium', is set in 'motion', the 'Petitioner's Right', shall get 'protected'. As a 'logical corollary', the 'Assets' of a 'Corporate Financial Debtor', is ought not to be 'Liquidated', u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Professional, before the 'Adjudicating Authority', in IA No. 124 of 2021 in CP (IB) No. 673 / 7 / HDB /2019, is that he had made a request to the 'Financial Creditor' ('Appellant'), to furnish the Private Treaty Agreement Copy, but, was not provided, but was given, only the 'Offer Letter', furnished by the 2nd Respondent, for 'Purchase', under Private Treaty' dated 18.11.2020. 91. Added further, the 'Appellant' / 'Financial Creditor', without issuing the 'Sale Notice', even once and not called for the 'Bids', in an 'Open Auction', but entered into a 'Private Treaty', and limited the purview of maximising the 'Value of the Assets of the Corporate Debtor', thereby 'deprived' the other 'Creditors' of the 'Corporate Debtor', to recover their 'Dues'. 92. According to the 1st Respondent / Resolution Professional, the 'Appellant' / 'Financial Creditor', was well aware of the 'Insolvency Petition', filed before the 'Adjudicating Authority', against the 'Corporate Debtor', and in a very clandestine manner, without obtaining a 'No Objection Certificate', from the subservient (2nd Charge Holder i.e., Bank of India) for the reasons best know to him, sold the 'Assets' of the 'Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 of 2018 (before the Debts Recovery Tribunal, Hyderabad, against the '1st Respondent' / 'M/s. ECI India Towers Company Pvt. Ltd.', Hyderabad, and three Ors. (as 'Defendants'), seeking 'Recovery of Sum of Rs.20,97,66,801.41 from the 'Defendants', with costs and future interest at 24% per annum with monthly rests from 20.08.2018, till the 'Date of Full Payment / Realisation', and for passing of an 'Order', in respect of the 'Sale' of the application 'Schedule Properties'. Later, the 'Bank', had assigned the 'Debt' of the 'Defendants', in favour of the 'Appellant', with 'Underlying Securities', and that the said 'ARC', was substituted as an 'Applicant', in the Original Application, to recover the 'Debt', from the 'Defendants'. 98. It is evident that the 'Debts Recovery Tribunal - I', Hyderabad, in OA No. 598 of 2018 on 05.02.2020, had allowed the Original Application with costs, by directing the 'Defendant Nos. 1 to 4', jointly and severally liable to pay the 'Appellant' / '1st Respondent' / 'Applicant', to pay a 'Sum' of Rs.20,97,66,801.41 with future 'Interest' at the rate of 14.85% 'Simple' from 20.08.2018, till the 'Date of Full Payment / Realisation'. 99. Also, in the 'Order' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent'. 104. In this connection, this 'Tribunal', points out that based on the three 'Expression of Interest', received on 25.09.2020, for the 'Sale of Property', under 'Private Treaty', the '2nd Respondent' selected as 'H1 Bidder', who submitted an 'Offer' of 'Rs.9.00 Crores', and on 30.11.2020, the 'Confirmation of Sale', with a 'Revised Final Offer' of 'Rs.9.75 Crores, to pay within 30 days', was made and the entire Amount', as per the 'extension of time', was paid by the 2nd Respondent, on 07.01.2021 (the 'Balance Sum of Rs.6.75 Crores was paid by the 2nd Respondent). It is brought to the fore on 20.01.2021, the 'Appellant'/'1st Respondent', issued a 'Sale Certificate', in favour of the '2nd Respondent'. 105. The 'Interim Resolution Professional' (appointed by the 'Adjudicating Authority', in CP (IB) No. 673 / 7 / HDB / 2019, on 18.01.2021), had issued a 'Public Notice of Moratorium', on 22.01.2021 and that the 'Appellant' / '1st Respondent', Registered the 'Sale Certificate' dated 20.01.2021, in favour of the '2nd Respondent'. 106. There is no second opinion of the fact that the 'Moratorium', declared by the 'Adjudicating Authority', ('National Company Law Tribunal', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, considering Section 238 of the IBC, which is a subsequent Act to the Tea Act, 1953, shall be applicable and the provisions of the IBC shall have an overriding effect over the Tea Act, 1953. Any other view would frustrate the object and purpose of the IBC. If the submission on behalf of the appellant that before initiation of proceedings under Section 9 of the IBC, the consent of the Central Government as provided under Section 16G(1)(c) of the Tea Act is to be obtained, in that case, the main object and purpose of the IBC, namely, to complete the "corporate insolvency resolution process" in a timebound manner, shall be frustrated. The sum and substance of the above discussion would be that the provisions of the IBC would have an overriding effect over the Tea Act, 1953 and that no prior consent of the Central Government before initiation of the proceedings under Section 7 or Section 9 of the IBC would be required and even without such consent of the Central Government, the insolvency proceedings under Section 7 or Section 9 of the IBC initiated by the operational creditor shall be maintainable." 110. One cannot remain in 'Oblivion', as to the crystalline fact, that the 'A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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