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TMI Blog2022 (3) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... decided the Appeal. No observation has been made by the Hon ble Supreme Court with regard to Section 7 Application of the Code, nor it can be held that judgment of Hon ble Supreme Court even impliedly interdicts the Application under Section 7 filed by the Respondent against the Appellant. The Appellant has made a prayer for staying the proceedings under Section 7 of the Code or keeping in abeyance the hearing of Section 7 Application until the final disposal of the Application filed by it before the DRT Chennai - Adjudicating Authority did not commit any error in rejecting the application - appeal dismissed. - Company Appeal (AT) (Insolvency) No. 159 of 2022 - - - Dated:- 9-3-2022 - [Justice Ashok Bhushan] Chairperson And [Dr. Alok Srivastava] Member (Technical) For the Appellant : Mr. Kapil Sibal, Sr. Advocate with Mr. Ramji Srinivasan, Sr. Advocate Mr. Shantanu Awasthi, Ms. Samridhi Sharma, Mr. Hemans Kothari, Mr. Arvind Varma, Advocates For the Respondent : Mr. Huzefa Ahmadi, Sr. Advocate with Mr. Krishnendu Datta, Sr. Advocate, Mr. Dhruv Dewan, Harshita Choubey, Ms. Chandni Ghatak, Advocates JUDGMENT ASHOK BHUSHAN, J. This Appeal has been filed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt vide its judgment dated 13th September, 2019, against which order, the Appellant filed an Appeal being O.S.A. No.292 of 2019, which too was dismissed by the Division Bench of the Madras High Court vide judgment dated 13th August, 2021. (v) When the Appeal before the Madras High Court filed by the Appellant was pending, the Respondent has filed Application under Section 7 being CP(IB)No.16/CB/2021 on 20th April, 2021 before the Adjudicating Authority. On 12th August, 2021 the Appellant filed its affidavit in reply to Section 7 Application. (vi) Against judgment dated 13th August, 2021, the Appellant filed a Civil Appeal No.6669 of 2021 before the Hon ble Supreme Court (converted from Special Leave petition being SLP (C) No.13138/2021). The Hon ble Supreme Court vide its judgment dated 26th November, 2021 dismissed the Civil Appeal No.6669 of 2021. The Hon ble Supreme Court also granted the liberty to the Appellant to file an Application under Section 17 within two weeks before the DRT Chennai. (vii) On 4th December, 2021, the Appellant filed S.A. No.434 of 2021 under Section 17 of the SARFAESI Act before the DRT Chennai. On 16th December, 2021, the Appellant filed an IA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is a valid debt payable by the Appellant to the Respondent or not. The proceeding before the DRT Chennai is prior in time, it should be allowed to continue. The Adjudicating Authority has erroneously observed that the Application filed by the Appellant before DRT Chennai is of no bearing without appreciating the very status of the Respondent as Financial Creditor of the Appellant is being adjudicated by the DRT Chennai. 5. Shri Huzefa Ahmadi, learned senior Counsel for the Respondent refuting the submissions of learned senior Counsel for the Appellant contends that the Adjudicating Authority has not committed any error in rejecting the Application filed by the Appellant for staying of Section 7 proceedings. It is submitted that the judgment of Hon ble Supreme Court dated 26th November, 2021 is being misinterpreted by the Appellant. The Hon ble Supreme Court dismissed the Appeal filed by the Appellant, which arose out of judgment of the Madras High Court dismissing the Application to leave filed by the Appellant as barred by Section 34 of the SARFAESI Act. It is on the request of the Appellant that Hon ble Supreme Court had granted liberty to initiate proceedings under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Madras High Court, by which Division Bench of the High Court dismissed the Appeal preferred by the original plaintiff rejecting the plaint/ suit filed by the Appellant on the ground that suit is barred by Section 34 of the SARFAESI Act. During the hearing of the Appeal before the Hon ble Supreme Court, Appellant has also raised the submission that Assignment Deed was fraudulent. The Hon ble Supreme Court did not accept the submission, which was made to get away from the bar of Section 34 of the SARFAESI Act. The Hon ble Supreme Court has affirmed the judgment of the Madras High Court that suit was barred by Section 34 of the SARFAESI Act. In paragraph 8 of the judgment, Hon ble Supreme Court made the following observation: 8. Having considered the pleadings and averments in the suit more particularly the use of word fraud even considering the case on behalf of the plaintiff, we find that the allegations of fraud are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SARFAESI Act and all the contentions including that assignment agreement is null and void; that assignee cannot be said to be the secured creditor under the assignment agreement dated 30.06.2018; and that there are no dues so far as the appellant plaintiff is concerned may be kept open. He has stated that in that case the appellant shall file appropriate proceedings before the DRT within a period of two weeks from today. 10. Ultimately, in paragraph 9 of the judgment, the Hon ble Supreme Court dismissed the Appeal filed by the Appellant, however, the Hon ble Supreme Court observed that it shall be open for the Appellant to initiate appropriate proceedings before the DRT under Section 17. Paragraph 9 of the judgment is as follows: 9. In view of the above and for the reasons stated above, the present appeal fails and the same deserves to be dismissed and is accordingly dismissed. However, it will be open for the appellant herein to initiate appropriate proceedings before the DRT under Section 17 of the SARFAESI Act against the initiation of the proceedings by the assignee respondent No.1 herein under Section 13 of the SARFAESI Act inter alia on the ground:(1) that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission is that there being no debt of ESL pending, Application under Section 7 of the Code by Assignee of SREI cannot be allowed to proceed. We have already noticed that Appellant has filed its reply to Section 7 Application, where all the issues including the contention that there is no debt in existence has already been raised. The Adjudicating Authority has yet to consider the said submission of the parties and take a decision. 13. In the IA No.139 of 2021, the Appellant has made a prayer for staying the proceedings under Section 7 of the Code or keeping in abeyance the hearing of Section 7 Application until the final disposal of the Application filed by it before the DRT Chennai. The IA No.139 of 2021 having been heard by the Adjudicating Authority on merit and rejected, we are of the view that no further issue need to be considered and decided in this Appeal. The issues, which have been raised by the Appellant before the Adjudicating Authority, have to be gone into by the Adjudicating Authority and the said issues need not be gone in this Appeal, which arises out of an order rejecting the prayer of the Appellant to stay the Section 7 proceedings. The Appellant is at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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