TMI Blog2023 (7) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... ending 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing collective investment schemes and refund through Bank Demand Draft or pay order, the money collected by the said company under the schemes. It was further directed that in event Pancard Clubs Limited not complied with the directions, SEBI shall initiate attachment and recovery proceedings under SEBI Act, Rules and Regulations framed thereunder. ii. Recovery Officer of the SEBI vide its Certificate Number 1020/2016 initiated recovery proceedings against the Pancard Clubs Limited and its directors for having failed to repay sum of Rs. 7035,00,01.000/- along with returns to investors. SEBI attached the Bank Accounts of the Corporate Debtor as well as of movable and immovable properties of the Defaulters. Security Appellate Tribunal vide Order dated 12.05.2017 upheld the Order dated 29.02.2016 in furtherance of recovery initiated against the defaulters. E-auction notices were issued for sale of various properties. Some of the investors filed a Writ Petition No. 12998 of 2018 before the High Court of Judicature at Bombay challenging the e-auction notices alleging that Appellant is conducting e-auction of the properties. Allegations in the Writ Petition were made that propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that the properties has been attached under MPID Court where proceedings are pending in Special Case No. 98 of 2017. It is submitted that the Application under Section 7 filed by the Investors ought not to have been admitted and the Adjudicating Authority ought not to have proceeded with the Insolvency Resolution Process since the Special Court of MPID is already seized of the matter where Appellant has already filed an Application to render all assistance to the Special Court under MPID Act. It is submitted that Bombay High Court having already passed an Interim Order that further auctions could only be taken in pursuance of the Order of Bombay High Court the Appellant has already appeared in the Bombay High Court and has requested for constitution of committee to supervise the auction of the properties of the Corporate Debtor. Learned Counsel for the Appellant submits that in view of the Judgment of the Hon ble Supreme Court in Vidarbha Industries Power Limited Vs. Axis Bank Limited, (2022) 8 SCC 352, Adjudicating Authority ought to have exercised its discretion in not admitting Section 7 Application there being good reasons for not admitting the Application. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (CIRP in short). Resolution Professional has requested the Appellant to submit its claim and to hand over all assets, properties, records and data of the Corporate Debtor to the IRP. Resolution Professional has also appeared in the Writ Petition No. 12998 of 2018 filed in the Bombay High Court and informed the High Court about initiation of CIRP. High Court has granted leave to amend the proceedings bringing on record the RP of the Corporate Debtor. Committee of Creditors has been constituted comprising of Financial Creditors in a class. IRP also filed an application before the Special Court of MPID Act seeking for cancellation of properties attached by the Government of Maharashtra through EoW which application is pending consideration. The Appellant having filed an application before the Special Court of MPID Act they shall not be proceeding with the auction of the properties and they shall assist the Special Court there is no occasion for Appellant to object the proceedings under Section 7 initiated against the Corporate Debtor. 7. We have considered the submissions of Learned Counsel for the parties and have perused the record. 8. Section 7 Application has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o amend granted. 3. At the request of learned counsel for petitioners place the matter on 6th December, 2022. 10. We also need to notice the Application filed by the Appellant dated 25th March, 2022 before the MPID Court, Mumbai. In the Application filed by the Appellant, the Appellant has referred to steps taken by the Appellant towards details of recovery certificate. The Application was filed by the Appellant as Intervener in paragraph 14 of the Application, following has been stated: 14. In view of the same, the following is submitted by the Intervener/Applicant: (i) Since this Hon ble Court is seized of the matter, SEBI shall not proceed independently in this matter under the SEBI Act/SCRA/Depositories Act (whichever applicable) and would assist this Hon ble Court as and when directed in this regard; (ii) SEBI shall handover the amount recovered after adjusting the cost/expenses incurred in SEBI recovery proceedings as noted at para 10 above, to this Hon ble Court or to any other appropriate agency as may be directed by this Hon ble Court. 11. The application clearly mentioned about the decision taken by the SEBI quo stating that MPID Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nullified by any order passed by SEBI nor can be a ground to reject an application under Section 9 of the I B Code but as there is an existence of dispute with regard to the invoices raised by the Appellant- Operational Creditor , we hold that the application under Section 9 of the I B Code was not maintainable. 15. This Tribunal thus has clearly held that initiation of proceeding under IBC can not be nullified by any order passed by SEBI. Thus, the proceedings initiated by SEBI by order dated 29.02.2016 and the Recovery Certificate issued thereunder and steps taken by the SEBI can not be a ground to oppose the initiation of proceedings under Section 7 of IBC. 16. 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 2020 8 SCC 516, Indian Overseas Bank Vs. RCM Infrastructure Limited 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. Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors under Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 was also with object to protect the interest of the Investors. Resolution Professional as well as Appellant has already appeared before the Court in Special Case No. 98 of 2017. We are however of the opinion that pendency of such proceedings in no manner preclude initiation of Section 7 Application under IBC by Respondent Nos. 3 to 102 before the Adjudicating Authority. 19. Learned Counsel for the Appellant has also submitted that multiple proceedings for recovering the dues of the Corporate Debtor are not warranted and the High Court having entertained the Writ Petition on behalf of some of the Investors and passed an Interim Order it was not appropriate for Adjudicating Authority to admit Section 7 Application and to relegate the Financial Creditors to seek their remedy before the High Court. It is noted that writ petition in the High Court was by some of the Investors with the allegation that Appellant is auctioning the assets of the Corporate Debtor under grossly undervalued consideration. The Writ Petition was also to protect the interest of the Investors. Initiation of CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X
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