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TMI Blog2022 (1) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... r law for the time being in force or any instrument having effect by virtue of any such law. Thus, what is overridden by the I B Code is both inconsistency with any other law or any instrument having effect. The mortgage is an instrument. The terms and conditions of the mortgage thus cannot claim any superior status and proceedings under Section 7 can be availed irrespective of any contrary or inconsistent condition in mortgage - the mortgage entered between the parties in the present case does not have any inconsistent condition rather the mortgage itself reserves and protects other remedies which are available to the Financial Creditor in any other law. Doctrine of stare decisis means to stand by decided cases. The principle behind the doctrine is that men who are governed by law should be fixed definite and known and when a law is declared by Court of Competent Jurisdiction in absence of any palpable mistake or error, it is required to be followed. Doctrine of stare decisis is wholesome doctrine which gives certainty to law and guide the people to mould their affairs in future. The doctrine is fully attracted on the statutory Tribunal which is well settled - There can be no doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.03.2017 bearing Registration No.3102 of 2017 and other security documents. Similarly, the second agreement was also secured by Deed of Mortgage and other security documents. As per the terms of the First Deposit Agreement, the first loan was repayable on the expiry of three months from the date of first loan. The date for payment was extended till 31.03.2018. By 31.03.2018, the Corporate Debtor was liable to repay the outstanding principal amount of ₹ 217,60,00,000/- and interest of ₹ 23,70,19,226/-. An Application under Section 7 of the 'I&B Code' was filed by the Financial Creditor claiming default of debt of ₹ 258,36,32,228/-. After issuance of notice by the Adjudicating Authority, the Corporate Debtor appeared and opposed the Application. The Corporate Debtor objected to the petition on the ground that (i) Financial Creditor has committed breach of contract in not fully making the payment of advance amount of Second Deposit Agreement (ii) amounts under the First Deposit are secured and amounts under the Second Deposit are also secured. The Adjudicating Authority by impugned judgment admitted the Application. 2. Shri Arun Kathpalia, Learned Senior Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt or default committed by the Corporate Debtor. In paragraph 29 of the judgment, Adjudicating Authority has noticed this in following words: - "29. It is important to mention here that the Corporate Debtor is neither disputing the debt nor the default committed by them in this case. The only contention of the Corporate Debtor is that the remedy of the Financial Creditor is to proceed against the mortgage securities as per the order of Beacon Trusteeship Limited Vs. Neptune Ventures and Developers Private Limited." 6. Shri Arun Kathpalia, Learned Senior Counsel referred to the terms and conditions of the Mortgage Deed specially clause 6 and clause 11.3. Referring to clause 6 of the Mortgage Deed, it is submitted that there was provision for 'covenant for re-conveyance' and by the mortgage, the properties were already covenant to the mortgagee. Hence, there was no default and mortgagee could have realised his dues from the secured assets. He has also placed reliance on clause 11.3 which require that in event default occur, the Mortgagee shall, sell, call in, collect, convert into money or otherwise deal with or dispose of the Mortgaged Properties. Clause 11.3 and 11.3.1 is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 'I&B Code' has been given overriding effect from any other law or instrument. Section 238 of the 'I&B Code' provides:- "238. Provisions of this Code to override other laws. - The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 11. A reading of Section 238 indicates that provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Thus, what is overridden by the 'I&B Code' is both inconsistency with any other law or any instrument having effect. The mortgage is an instrument. The terms and conditions of the mortgage thus cannot claim any superior status and proceedings under Section 7 can be availed irrespective of any contrary or inconsistent condition in mortgage. However, as noticed above, the mortgage entered between the parties in the present case does not have any inconsistent condition rather the mortgage itself reserves and protects other remedies which are available to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doctrine which gives certainty to law and guide the people to mould their affairs in future. The doctrine is fully attracted on the statutory Tribunal which is well settled. We may refer to judgment of the Hon'ble Supreme Court in "Sub-Inspector Rooplal and Anr. Vs. Lt. Governor Through Chief Secretary, Delhi and Others- (2000) 1 SCC 644" where in paragraph 12 the Hon'ble Supreme Court held that in context of Central Administrative Tribunal, the Tribunal was bound by co-ordinate Bench. In paragraph 12, following has been laid down:- "12. At the outset, we must express our serious dissatisfaction in regard to the manner in which a coordinate Bench of the tribunal has overruled, in effect, an earlier judgment of another coordinate Bench of the same tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the tribunal was of the opinion that the earlier view taken by the coordinate Bench of the same tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded on healthy principles of judicial decorum and propriety." 16. The same principle has been reiterated by the Hon'ble Supreme Court in "Collector of Central Excise, Kanpur vs. Matador Foam and Others.- (2005) 2 SCC 59". 17. There can be no doubt that the principle of stare decisis is fully applicable on judgments delivered by the NCLT as well as this Appellate Tribunal. Both NCLT and this Tribunal are bound by doctrine of stare decisis. At this juncture, we may clarify that what is binding as a precedent on Company Law Tribunal is the judgment of jurisdictional Tribunal. Judgment delivered by NCLT in other jurisdiction have only persuasive value. The present is a case where judgment of the co-ordinate Bench of jurisdictional Tribunal was cited. We have gone into the reasons given by the Adjudicating Authority as given in paragraph 28 for not following the judgment of "Beacon Trusteeship Limited" but due to one reason we do not propose to deal the same in any further. The reason is that the judgment of Tribunal in "Beacon Trusteeship Limited" wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing drawn from the definition in other statutes. The PPA is approved by the GERC and has the force of law under the Electricity Act. The PPA sets out the rights and liabilities of the parties and is an instrument for the purposes of Section 238. Being an ―instrument, which is inconsistent with the provisions of the IBC, the latter would have overriding effect over the former, in view of Section 238 of the IBC. Therefore, the right to terminate would only arise in case the third respondent fails to cure the default, i.e., resolve itself in accordance with the IBC" 20. There can be no doubt that registered mortgage is instrument which shall also be overridden by Section 238 which specifically provides for overriding of provisions of 'I&B Code' to a contrary provisions of law as well as an instrument made under any other law. The Tribunal while deciding "Beacon Trusteeship Limited" did not advert to Section 238 of the 'I&B Code' which had overriding effect on any clause of any Debenture of Trust Deed cum Indenture of Mortgage. In paragraphs 26 and 27 of "Beacon Trusteeship Limited", following was observed:- "26. Therefore, in terms of the English Mortgage, the Mortgagor has a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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