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TMI Blog2019 (4) TMI 1886X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that whether the raw material in possession of the Corporate Debtor, should not be allowed to be returned on commencement of Moratorium ? On one hand the Ld. RP has taken the shelter of the provisions of section 14(1)(d) of the IBC, but on the other hand the Applicant has placed reliance on the Explanation under section 18(1)(f) of IBC. At the outset, at this juncture, in our opinion the facts and circumstances of the case lead us to hold that the provisions of section 18 are more appropriate to address the legal issue in hand. The statute has mandated vide section 18(1)(f) that the Interim Resolution Professional shall perform several duties such as take control and custody of any asset over which the Corporate Debtor has ownership rights as recorded in the Balance Sheet of the Corporate Debtor . Tangible assets whether movable or immovable is within the category of Assets as defined in this section vide insertion of an Explanation. Through this explanation an exception is carved out that for the purpose of this section i.e. section 18(1)(f) the followings shall not constitute an Asset and therefore, an Asset owned by a third party, however, in possession of the Corporate Debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disposed off according to the directions of the person delivering them - Since, the raw material was supplied under a contractual arrangement, terms already reproduced above therefore, the provisions of Explanation to Sec. 18 are squarely applicable. The applicant is entitled to take back the property from the possession of the RP. Application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from RANBAXY during the preceding calendar month; (b) Quantities of raw materials actually used by PARABOLIC during the preceding calendar month; (c) Quantities of raw materials and finished products in stock at the beginning and end of each English calendar month; (d) Quantities of in-process raw materials at the beginning and end of each English calendar month; (e) Quantities of finished Products manufactured and supplied to RANBAXY during the preceding calendar month. 3.18 The property and ownership in the raw materials, packaging or other materials and the finished Products or stock in-process of manufacture shall at all times remain and shall be deemed to be vested in RANBAXY." (emphasis supplied) 4. In this Application it is mentioned that the Applicant has placed a manufacturing order on the Corporate Debtor to manufacture the said Drug, hence supplied a raw material stated to be to the tune of ₹14.01 crores. The Applicant kept on supplying the said raw material and for the period January 2016 to October 2018 further supplied for a sum of ₹20.10 crores. Evidences of supply of the raw material are annexed with the Application. 5. The grievance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pleaded that an exception has been carved out by defining the term "assets" in the explanation annexed to section 18(1)(f) of the Code, for reference reproduced below: "Explanation- For the purposes of this [section], the terms "assets" shall not include the following, namely:- (a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment; (b) assets of any Indian or foreign subsidiary of the corporate debtor, and (c) such other assets as may be notified by the Central Government in consultation with any financial sector regulatory." 7.2 Therefore, the argument is that an asset owned by a third party but in possession of the Corporate Debtor which is held under a trust or under a contractual arrangement shall be out of the clutches of the provisions of 18(1)(f) as well as section 14 of IBC. 8. On the other hand, Ld. Representatives appeared on behalf of the CoC and the Resolution Professional, have vehemently opposed this application. It is pleaded that once the Moratorium u/s 14 of IBC is in operation, then the recovery of any property by any owner which is in possession of the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty is occupied by or in possession of the Corporate Debtor. In this section the reference is in respect of a "Property" which is duly defined u/s 3(27) of IBC, means money, goods, land, actionable claim, etc. As far as the CoC is concerned, it was resolved by 100% voting not to release the goods belonging to Sun Pharmaceutical Industries Ltd. The said decision of CoC was declared in a routine manner although the question was that whether it was a case of "Recovery" by an owner of the property. In strict sense, the claim of the Applicant is not for recovery of money/goods. 10. The statute has mandated vide section 18(1)(f) that the Interim Resolution Professional shall perform several duties such as 'take control and custody of any asset over which the Corporate Debtor has ownership rights as recorded in the Balance Sheet of the Corporate Debtor'. Tangible assets whether movable or immovable is within the category of "Assets" as defined in this section vide insertion of an Explanation. Through this explanation an exception is carved out that for the purpose of this section i.e. section 18(1)(f) the followings shall not constitute an Asset and therefore, an Asset owned by a thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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