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TMI Blog2019 (12) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess to the completion of the CIRP/ Liquidation as the case may be - Upon conjoint reading of section 60(5), section 63, section 231 and section 238, the jurisdiction of Civil Court is excluded related to the matters related to I B code. Therefore, it can be held that NCLT can order possession of the property of Corporate Applicant to facilitate the CIRP process and allow the Resolution Professional to take possession of the assets of Corporate Applicant. It is the case of Corporate Applicant that he is seeking possession in the suit, whereas the Applicant is only claiming recovery of monies in his suit. There are no restraint orders passed in both the cases. Therefore, the Resolutions Professional's claim for possession of shed before the adjudicating authority in view of CIRP order, can be entertained under the I B Code. In view of the overriding powers under section 238 of the Code and Rule 11 of NCLT Rules 2016, and it is directed that Resolution Professional/ Liquidator shall be allowed to take possession of the Shed from the Applicant - Application disposed off. - MA No. 130/2019 in C. P. (IB)-3863/MB/2018 - - - Dated:- 12-12-2019 - Suchitra Kanuparthi , Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant. It is further contended that the Applicant is an erstwhile employee of the Petitioner who was engaged in the business of manufacturing spare parts of automobiles. Applicant was an employee of the Petitioner from 1982 to January 1993, after which he started his own proprietary concern by the name of Siyaram Engineering Industry and carried on business from the Shed of job work assigned by the Petitioner in respect of Components of spare parts of Auto mobiles. 7. It is also submitted by the Applicant filed Special Suit No.23 of 2009 on the file of Court of Civil Senior Judge, senior division at Bicholim, Goa, for recovery of monies from the Corporate Applicant. 8. The applicant submits that he has replied to the IRP's letter dated 21.12.2018 vide his letter dated 29.12.2018. The Applicant further submits that in interest of justice and equity the Applicant has sought intervening from this Tribunal, seeking an opportunity to make submissions and be head in the matter of Shed. It is also prayed by the Applicant that the Tribunal may order the IRP, refraining him from acting in furtherance of its letter dated 21.12.2018. 9. The Resolution Professional has also filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession over the same. Thereby the Resolution Professional had no right to seek possession of the property which was subject to a pending suit before the Courts in Goa. 13. The counsel for the Applicant further relied on the definition subject to as per the Judicial Dictionary of Words and Phrases which states that the term subject to means conditional upon and therefore in view of section 18 (1)(f)(6) the assets subject to determination of ownership of court /Authority, possession cannot be sought for by the Resolution Professional more particularly when the Corporate Applicant as filed a suit of recovery for possession before the Court in Goa and the same is pending adjudication. 14. The counsel for the Petitioner also relied on the judgement of Hon'ble Punjab and Haryana High Court in Joint Liquidators of the City Bank of Lahore Ltd. Vs. Pandit Shiv Sharma reported in AIR, 1951 P H 144. Wherein it was held that a company in liquidation retains its corporate powers including the power to sue, although such powers must be exercised through the liquidator under the authority of court. The counsel for the Petitioner thus pointed out that the liquidator exercises h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of the SARFAESI Act, 2002'. It was also not the case of the Appellant that the assets owned by a third party is in possession of the 'Corporate Applicant' in terms of Section 18, as it is the duty of the Interim Resolution Professional to take control and custody of any asset over which the 'Corporate Applicant' has ownership rights as recorded in the balance sheet of the 'Corporate Applicant'. Even if it is not in possession of the 'Corporate Applicant', a person who is in possession of the same, including the 'Dena Bank' or 'Encore Asset Reconstruction Company Pvt. Ltd.' is bound to hand over the same to the 'Resolution Professional', when title still vests with 'Corporate Applicant . At para 16 the court held has follows; in the aforesaid background, we hold that section 18 of the I B Code will prevail over section 13(4) of the SARFAESI Act, 2002 and the Dena Bank cannot retain the possession of the property in question of which the Corporate Applicant is the owner In view of the above, the counsel for the RP claims that his right in claiming the possession of the said property belonging to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down in the above judgement clearly states that no Civil Court shall have the jurisdiction to entertain any suit or proceedings in respect of any matter on which the National Law Company Tribunal has jurisdiction under the I B Code, 2016. 19. In Innoventive Industries Ltd. Vs. ICICI bank reported in MANU/SC/1063/2017, it was held that the objective of the Code is to bring insolvency law in India within a single unified umbrella. The scheme of the Code is to make an attempt in divesting the erstwhile management of the Corporate Applicant of its power and vesting it in a professional agency to continue the business of the Corporate body as a going concern until the resolution plan in drawn up in a time bound period of 270 days is an exhaustive Code by itself. 20. In Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta reported in (2019) 2 SCC 1, the court held that speed is the essence and timelines are to be observed and the non-obstante clause in section 60(5) is designed to ensure that the NCLT along has jurisdiction when it comes to applications as and proceedings by or against a Corporate Applicant covered by the Code, making it clear that no other forum has jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conflicting order were passed by the Civil Court and the NCLT the same would be detrimental to the resolution process. The office of Resolution Professional has become functus officio, the Liquidator has been appointed, the liquidator subject to the directions of the Adjudicating Authority under section 35(1)(b) has the power to take into his custody or control all the assets, property effects an actionable claim of the Corporate Applicant. 25. There are similar provisions under the SARFAESI proceedings, wherein section 14 prescribes that a secured creditor may for the purpose of taking possession or control of any secured assets request in writing to the Chief metropolitan or District Magistrate within whose jurisdiction any such secured asset, shall make an application to take possession of such assets. The District Magistrate under section 14 (1-A) on being such request made to him, may authorise any officer subordinate to him to take possession of such assets and documents relating to thereto and to forward such assets to the secured creditors. 26. Further, the non-obstante clause as prescribed section 238 of the I B Code, 2016, provides that the provisions of the Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolutions Professional's claim for possession of shed before the adjudicating authority in view of CIRP order, can be entertained under the I B Code in view of the above discussion in para 22, 23 24 supra. 28. The applicant has also filed his claim before the Resolution Professional and has subjected himself to the jurisdiction of the CIRP. His claim was rejected by the RP. In view of the moratorium, the suit filed by the applicant was temporarily stayed, but the suit filed for recovery of possession filed by the Corporate Applicant would deemed to continue. With the given factual matrix, the CIRP period of 270 days having come to an end, the office of IRP has become functus officio. Thereafter, the resolution professional has filed an application to liquidate the company under section 31 of the Code as no resolution plan was received by him. Be that as it may, the tenure of Resolution Professional has come to an end and he has appointed as a liquidator by this Court. The Resolution Professional has not taken steps to amend his status as a liquidator. 29. Therefore, in view of the overriding powers under section 238 of the Code and Rule 11 of NCLT Rules 2016, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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