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TMI Blog2022 (9) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator, nor the IRP was in a position to maintain the property and carry out repairs on the fallen boundary wall due to lack of funds. Further, the IRP has categorically averred before the NCLT, that the creditors of SRUIL had refused to infuse any funds to carry out the CIRP. In this context, the Rs.75,30,00,000/- that is to be received by SRUIL in terms of the orders passed by the Bombay High Court and upheld by the Hon ble Supreme Court, are crucial to ensure that the CIRP of the corporate debtor in the present matter happens in a meaningful manner. Further, once we have observed that the property itself is not an asset of SRUIL, maximisation of assets of the corporate debtor can be achieved, only by the IRP moving to secure the Rs. 75,30,00,000/-, which surely is a receivable of SRUIL. Looking into the facts pertaining to the case of the Review Petitioner, the Impugned Order did not appreciate the need to balance the considerations of Section 18 of the Code viz-a-viz the moratorium under Section 14 of the Code. The Impugned Order is therefore modified to the extent that it shall not effect the rights of the Review Petitioner to the subject property that has been upheld upt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include the words decree holder as existing in Section 3(10) to be at par with financial creditors under Regulation 9(a), to save them from unconstitutionality; 2. Issue an appropriate Writ, Order or Direction more particularly in the nature of WRIT OF CERTIORARI or any other appropriate writ declaring that claims filed under a CIRP by decree holder under Regulation 9(a) of the CIRP Regulations, be considered at par with claims filed by financial creditors and be amenable to all consequential rights available to financial creditors; and/or .. 3.2 When the PIL was heard, the PIL Petitioner had argued that he is a shareholder of public listed companies, who are either creditors and/or corporate debtors in terms Insolvency and Bankruptcy Code, 2016 ( IBC ) and he was therefore interested in the petition to that extent. It was further his contention that the issues raised had a wide ranging effect as they would be germane to almost all corporate insolvency resolutions under the IBC. Principally, the issues raised in the PIL dealt with the treatment of decree holders who hold decrees against a Corporate Debtor under the insolvency resolution process. To sum it up th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Before proceeding to the same, however, it would be trite to understand the rights of a decree holder per se, i.e. dehors the contours of IBC. The right of a decree holder, in the context of a decree, is at best a right to execute the decree in accordance with law. Even in a case where the decree passed in a suit is subject to the appellate process and attains finality, the only recourse available to the decree-holder is to execute the decree in accordance with the relevant provisions of the Civil Procedure Code, 1908. Suffice it to say, that the provisions contained in Order 21 provides for the manner of execution of decrees in various situations. The said provisions also provide for the rights available to judgment debtors, claimant objectors, third parties etc., to ensure that all stake holders are protected. The provisions of the CPC, therefore subjects the rights of a decree-holder to checks and balances that an executing court must follow before the fruits of such decree can be exercised. Given the same, the rights of a decree-holder, subject to execution in accordance with law, remain inchoate in the context of the IBC. This is principally because, the IBC, by express man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor. 14. The aforesaid conclusion also finds force in a conjoint reading of the Section 14(1)(b) and Section 28 of the IBC. Section 14(1)(b) provides, inter alia, that the NCLT, on the insolvency commencement date shall declare a moratorium on transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; In the context of an unexecuted decree, the subject matter of the decree, be it money, moveable property, immoveable property, or of any other nature, remains on the books of the corporate debtor. The moratorium envisaged by Section 14(1)(b) therefore, expressly bars transfer, encumbering, alienation or disposal of such assets. Seen in the context of the Statement of Objects and Reasons and the Preamble of the IBC, this provision ensures that its stated purpose of achieving preservation and maximization of the assets of a corporate debtor is not defeated. In fact, to ensure that such assets remain protected, even whilst in the hands of an Interim Resolution Professional or a Resolution Professional, as the case may be, Section 28(1)(d), creates a further fetter and provides that a resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner to approach the High Court to seek appropriate relief. The special leave petition is dismissed with the aforesaid liberty. 4. The present review petition has been filed in the aforesaid background in terms of the liberty granted by the Hon ble Supreme Court. Review of the Impugned Judgment is sought by the Review Petitioner. 5. The Learned Counsel for the Review Petitioner submitted that the PIL matter was moved by the Respondent No.1, who is an Advocate with a standing of two years, raising commercial issues of substantial importance. Further, the Review Petitioner, who is contesting similar issues in proceedings pending before the National Company Law Appellate Tribunal ( NCLAT ) is seriously prejudiced by the determination of such issues in the Impugned Order which was passed in vacuum and without any notice being issued to the members of the public, who would otherwise be interested in such issues. 6. The Learned Counsel for the Review Petitioner drew our attention to an arbitration pertaining to an MOU dated 28.06.2004 and Addendum dated 10.12.2004 between the Review Petitioner and one Shree Ram Urban Infrastructure Limited ( SRUIL ). Suffice it to say, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r specific performance had to be resorted to in 2005 as the Review Petitioner was ready and willing to perform its part, however SRUIL tried to resile from the deal. Various protective orders were also placed by the Bombay High Court, from 2005 onwards from time to time and continue to remain operative till date. In this regard the following dates mentioned in the Review Petition are of some importance: 29.08.2016 Award was passed by the Arbitral Tribunal in favour of the Review Petitioner herein. SRUIL and VIT were directed to specifically perform their agreement and convey the property in question to the Review Petitioner. 14/17.07.2017 Section 34 Petitions filed by SRUIL and VIT against the Arbitration Award were dismissed by the Bombay High Court. 14.11.2017 Review Petitioner filed Commercial Execution Application No. 134 of 2017 before the Bombay High Court for execution of the Award. No objections have been filed to this application by SRUIL till date. 02.02.2018 Leave under Section 446 of the Companies Act, 1956 was granted in favour of the Review Petitioner permitting execution of the decree. 11.10.2018 Appeals filed by SRUIL (prosecuted through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the incapacity of the liquidator and the IRP to pay for repairs, the High Court, inter alia directed the Review Petitioner to bear the expenses towards repairs of the collapsed wall on the subject property. 8. Based on the aforesaid facts, the NCLT, in its order dated 08.10.2021, passed in IA No. 1921 of 2021, considered the application of Section 14 on the said property. The question, framed by the NCLT, and in our considered opinion, rightly so, was In order to examine that whether such bar is applicable in the present case or not, it is necessary to examine whether the property in question is the asset of the Corporate Debtor? From the sequence of events, it appears to us that the rights of the Review Petitioner with regard to the said property had already fructified and crystallised. This is borne out by the fact that the Hon ble Supreme Court, even after being apprised of the Section 7 proceedings, dismissed the SLP (C) No. 012495 of 2020, wherein the IRP of SRUIL itself had been transposed as the petitioner. The other two SLPs were also dismissed. Further, the property had already been sequestered from the assets of SRUIL by virtue of the orders passed by the Bombay H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso borne out by the orders passed by the Bombay High Court, that acknowledge that neither the Provisional Liquidator, nor the IRP was in a position to maintain the property and carry out repairs on the fallen boundary wall due to lack of funds. Further, the IRP has categorically averred before the NCLT, that the creditors of SRUIL had refused to infuse any funds to carry out the CIRP. In this context, the Rs.75,30,00,000/- that is to be received by SRUIL in terms of the orders passed by the Bombay High Court and upheld by the Hon ble Supreme Court, are crucial to ensure that the CIRP of the corporate debtor in the present matter happens in a meaningful manner. Further, once we have observed that the property itself is not an asset of SRUIL, maximisation of assets of the corporate debtor can be achieved, only by the IRP moving to secure the Rs. 75,30,00,000/-, which surely is a receivable of SRUIL. The Hon ble Supreme Court in P. Mohanraj Ors. V. Shah Brothers Ispat Pvt. Ltd., (2021) SCC Online SC 152 emphasised the need to consider Section 14 as a shield to protect a corporate debtor as a going concern. To interpret the section as a fetter to the corporate debtor having acce ..... 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