9911796707
TMI Blog2018 (1) TMI 1581X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the Insolvency Bankruptcy Code was enforced with effect from 01.12.2016 and the circular on which reliance have been placed pertain to the year 2004 and 2015. On repeated quarries made by us Ld. Counsel for the non applicant could not produce any circular issued under Section 14(3) by the Central Government notifying transaction to which the provision of Section 14(1) are not to apply. The circulars of RBI therefore, cannot override the effect of provisions of the Code as such circulars are only subordinate / legislation. Once the moratorium is in force the financial creditor including the bank has to prefer its claim before the RP, which would be considered alongwith other claims as per law - there is direct violation of Section 14( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the aforesaid financial creditor. Brief facts of the case are that CP - 1236/2016 was admitted on 01.06.2017 and moratorium in terms of Section 14 was imposed. The IRP was appointed on 21.07.2017 and started functioning. He has later been confirmed as Resolution Professional. In the application it has been pointed out that the financial creditor - State Bank of India has not cooperated in the smooth processing of the resolution by doing various acts of indiscretion. The allegation is that after 01.06.2017 a large number of entries from the account of the Corporate Debtor have been debited which has resulted in converting the account as Non Performing Assets (NPA). All the details have been given in para 26 (a) to (f). According, to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the application is nothing else but seeking directions to enforce refinancing / reconstructing of the corporate debtor regardless of the approval of the Committee of Creditors, which is contrary to Section 25 of the Code. The State Bank of India is stated to be a sole member of Committee of Creditors and has also filed its claim before the Resolution Professional. It has been brought to the notice of the Resolution Professional during the various meetings. It is claimed that the application is liable to be dismissed. With regard to the Bank guarantee it is submitted that it is a contract between the bank and the beneficiary and both the parties are bound by the terms of the contract and that the Bank guarantee is always conditional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the application of the circular issued by the Reserve Bank of India. The emphasis has been laid on the master circular dated 01.07.2015 which deals with the declaration of an account as NPA. Ld. Counsel has also placed reliance on a circular in respect of the Bank Guarantee issued on 23.072004 concerning the guarantee and its invocation. Having heard learned Counsel and perusal of the paper book, we find that the stand taken by the non applicant financial creditor - State Bank of India is wholly unsustainable. Reliance on Section 14(3) attempted by counsel for the Financial Creditor State Bank of India / non applicant is wholly misplaced and a brazen attempt has been made to derail the CIRP process. The provisions of Section 14(3) ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue of repugnancy in respect of the provision of the Maharashtra Relief undertakings (Special Provisions) Act, 1958 with that of the Code. It has been held that in view of non-obstante clause the provisions of state enacted law has to give way to process of the code. The pertinent observations are as under:- 55....... "It is clear that the later non-obstante clause of the Parliamentary enactment will also prevail over the limited nonobstante clause contained in Section 4 of the Maharashtra Act. For these reasons, we are of the view that the Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code. 56…….. It is precisely for this reason that the non-obstante clause, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under the Securitisation Act is also prohibited. Besides there is violations of order of moratorium passed by this Tribunal on 01.06.2017. As there is a direct statutory violation we find that it is a fit case for imposing cost. Accordingly, a cost of ₹ 25,000/- is imposed on the non applicant / respondent. The cost be deposited in the Prime Minister Welfare Fund. Keeping aforesaid facts in view the application filed by the Resolution Professional is allowed. The non applicant - State Bank of India / Financial Creditor is directed to roll back all debit entries adjusted in the account of the Corporate Debtor after 01.06.2017 and accordingly restore the account in the same state as it was on 01.062017. The needful be done without a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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