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TMI Blog2022 (12) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... les, which include Plant and Machinery, on the lease hold land admeasuring Plant and Machinery on the lease hold land admeasuring Ac. 11.37 guntas in Sy. No. 334 / A, 3 / 1A, 3 / 1B, 5 and Ac. 10.27 guntas in Sy. No. 332 / A, 333/A, 7, 8B, 8A, are situated at Kaveli Village, Kohir Mandal, Sangareddy District (erstwhile Medak District) and (d) to pass an Order, in directing the Commissioner of Police, Sangareddy at Office of the Superintendent of Police, Sangareddy to provide necessary assistance to him and his team, to takeover the Control and Custody of the Properties of the Corporate Debtor etc. The subject Asset, over which the Security Interest, was created to and in favour of United Bank of India (under SARFAESI Act, 2002), by the Borrower, was purportedly assigned, in favour of the Appellant / 1st Respondent, through Assignment Deed, dated 04.04.2019 - The Appellant / 1st Respondent, had caused a Notice, as per Section 13 (1) of the SARFAESI Act, 2022, requiring the Borrower, to wipe out the Liability, within the time prescribed therein and owing to the failure of the Borrower, in fulfilling the conditions of the Demand Notice, the Secured Asset, was taken possession by means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2021 in CP (IB) No. 673 / 7 / HDB / 2019, passed by the Adjudicating Authority, (National Company Law Tribunal, Hyderabad Bench I, Hyderabad), comes to a clear cut conclusion that the same is free from legal infirmities - Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... nr. Reported in (2012) 1 SCC 656, supra, held, "immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales." 30. That apart a full Bench of High Court of Madras in re, R. Thiagarajan Vs The Inspector General of Registration, Santhome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their favour and the Sale Certificate was issued evidencing such sale and title. In respect of the registration of the Sale Certificate issued by the second respondent, since the second respondent is not a Civil or Revenue Officer, the registration of the Sale Certificate is not exempted under Section 17(2)(xii) of the Registration Act. Therefore, we are of the view that though the auction purchaser derived title on confirmation of sale in their favour and a Sale Certificate was issued by the Authorised Officer, evidencing such sale and title, no further deed of transfer is required. In view of the judgment reported in (2007) 5 Supreme Court Cases 745 and the provisions of 17(2)(xii) of the Registration Act, the Sale Certificate issued by the second respondent/Authorised Officer requires registration." 17. As per Article 18 of the Stamp Act, the purchaser of any property sold by a public auction by a Civil or Revenue Officer or Collector or other Revenue Officer, is liable to pay the stamp duty on the consideration mentioned in the Sale Certificate. The Hon'ble Supreme Court in the judgment reported in 2007 (5) SCC 745 [cited supra] and the Division Bench of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onveyed only by a registered deed of conveyance. Therefore, non-registration of the sale certificate in this case renders the transfer of title in favour of the 2nd Respondent null and void. 32. Now adverting to the plea of the Respondents that the property has been acquired in good faith by the 2nd Respondent as such the 2nd respondent is protected under Section 44 of the I & B Code, which is as follows:- 44: Provided that an order under this section shall not - (a) affect any interest in property which was acquired from a person other than the corporate debtor or any interest derived from such interest and was acquired in good faith and for value; (b) require a person, who received a benefit from the preferential transaction in good faith and for value to pay a sum to the liquidator or the resolution professional. Explanation-II. - A person shall be deemed to have sufficient information or opportunity to avail such information if a public announcement regarding the corporate insolvency resolution process has been made under section 13". 33. When the respondents consciously violated the moratorium order and thereby crippled the corporate insolvency resolution process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. This plea is strongly resisted by the Learned Counsel for the Applicant contending, inter-alia, that since Respondents proceeded in violation of the order of moratorium granted by this Tribunal, the remedy lies for the Applicant only before this Tribunal and not before the Debt Recovery Tribunal. Having examined the rival submissions it is to be stated that , no doubt Section 17 (1) of the SARFAESI Act provides for a remedy to any person who is aggrieved by the measure initiated by the Authorized Officer to challenge the same before the Debt Recovery Tribunal having jurisdiction. In so far as the case on hand is concerned , it is not the case of the Applicant that in violation of the provisions of the SARFAESI Act the Respondents have registered the sale certificate. In fact, precisely it is the case of the Applicant that in violation of order of moratorium granted by this Tribunal in terms of Section 14 (1) of IBC, the Respondent No.1 registered the sale certificate in favour of Respondent No.2. Therefore, sustainability of the said plea can only be examined in the light of provisions of IB Code and not under the SARFAESI Act. We therefore hold that the plea of the Learned Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears. The Lease Agreements specifically includes an assurances from the Lessee / Corporate Debtor by clause No.7, that the premises shall be used for the purpose of Company's manufacturing unit only. Further, the 'Lease Period', was coming to a close on 31.10.2022. 5. It is represented on behalf of the Appellant, that the aforesaid properties, were 'mortgaged', in favour of the 'United Bank of India' (together with the 'Debt' and 'Underlying Securities, since assigned to 'Omkara, ARC') by Mr. K. Vijay and Mr. K. Venkatphani in their individual capacity. 6. The Learned Counsel for the Appellant point out that the aforesaid properties, were leased out to the 'Corporate Debtor', by an 'Unregistered Lease Agreements', that too, for the specific purpose of 'Company's Manufacturing Unit' only, and was expired on 31.10.2022 and these 'Unregistered Lease Agreements', do not convey any 'Right', 'Title' to the 'Corporate Debtor', to 'sell' or 'alienate' the same. 7. On behalf of the Appellant, it is brought to the notice of this 'Tribunal', that on 04.04.2019, the 'Appellant', had issued a 'Demand Notice', as per 'Section 13 (2) of the Securitisation and Reconstruction of Financial Assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 days. 12. It transpires that the 2nd Respondent on 31.12.2020 (in response to the 'Confirmation of Sale', by the 'Appellant'), had deposited a sum of Rs.3 Crores only and requested the 'Appellant', to give 15 days, for paying the 'Outstanding Sum' of Rs.6.75 Crores, which was agreed by the 'Appellant', as per provisions of the 'SARFAESI Act, 2002', and the 'Rules', made thereunder. 13. The 2nd Respondent had paid the remaining amount of Rs.6.75 Crores only on 07.01.2021 and the 'Appellant', had issued a 'Sale Certificate' on 20.01.2021. In fact, the 'Registration' of the 'Property', was carried out in the name of the 2nd Respondent on 04.03.2021 and the 'Title', in respect of the 'Property', stood transferred and vested with the 'Purchaser' / '2nd Respondent', before the 'Admission of the Corporate Insolvency Resolution Process' on 18.01.2021. Also that, the 'Registration of Sale Certificate', is mere procedural aspect, which further evidences the 'recording of documents', with the 'Recognised Officer'. 14. In fact, the 'Appellant' / 'One of the Secured Financial Creditors', had undertaken the 'Transaction' in 'Good Faith'. Moreover, the 'maximizing the Value of the Assets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'Non Performing Asset' on 31.12.2016. Besides these, the 'Balance Confirmation Letters' dated 20.02.2016 and 02.01.2017, were duly acknowledged by the 'Corporate Debtor', and in short, none of the proceedings, took place during the 'Moratorium Period'. 20. The Learned Counsel for the Appellant, advances an argument that the 'Company Petition', was filed by the 'Bank of India', for its Recovery' against the 'Corporate Debtor', only in the Year 2019, but, the Original Application was filed by the 'Appellant' in the Year 2018, and both are separate 'Proceedings', no one had the knowledge about their respective Proceedings'. 21. The Learned Counsel for the Appellant submits that the 'Finding' of the 'Adjudicating Authority' that the 'Issuance of Sale Certificate', is in 'Violation' of its 'Order', is 'incorrect', 'invalid' and 'suffers from non application' of 'mind'. 22. The Learned Counsel for the Appellant brings it to the notice of this 'Tribunal' that the '1st Respondent' / 'M/s. ECI Infra Towers Company Pvt. Ltd.', is the 'Corporate Guarantor' of 'ECI Engineering & Construction Company Ltd.', and that the 1st Respondent / M/s. ECI Infra Towers Company Pvt. Ltd., does not ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days 30.11.2020 As per the time extension, entire amount was paid by the 2nd Respondent 07.01.2021 Handing over possession of the asset 11.01.2021 Order was passed by this Hon'ble NCLT for the admission of Corporate Debtor into CIRP 18.01.2021 Issuance of Sale Certificate with bonafide intention to Respondent no. 2 20.01.2021 Public announcement issued by IRP for the submission of Claim (as clearly admitted by IRP in para no. 4 of the counter) 22.01.2021 Registration of sale certificate issued with respect to the property 04.03.2021 28. The Learned Counsel for the Appellant urges before this 'Tribunal', the 'Appellant' was not a 'Party', in the 'Proceedings', initiated by the 'Bank of India', against the '1st Respondent' / M/s. ECI Infra Towers Company Private Limited' in CP (IB) No. 673 / 7 / HDB / 2019 and further that the 'knowledge', can be imputed by the 'Resolution Professional', only on 22.01.2021. 29. According to the 'Appellant', in the instant case, the possession was handed over to the 2nd Respondent on 11.01.2021 itself, as per the 'Confirmation of Sale', on 30.11.2020, and that the 'Issue of Sale Certificate', is only a 'Formality', as per 'Order' dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contends that the 'Bank of India', has no 'Locus', to 'Stake' a 'Claim' of 'any Iota of Right' in the 'Properties' of 'Mr. Vijay Kaza and Mr. Kaza Venkata Phani', who were the 'Guarantors' of the '1st Respondent / 'M/s. ECI Infra Towers Company Pvt. Ltd.' i.e. 'Bank of India', is neither a 'Mortgagee' nor having any 'Charge', on these 'Properties'. 34. It is represented on behalf of the 'Appellant' that the '1st Respondent' / 'M/s. ECI Infra Towers Company Pvt. Ltd.', for whom the 'Guarantee', was given has no 'Right' in the 'Properties', in question, which were sold in 'Auction', to the '2nd Respondent', therefore, a contention is advanced on behalf of the 'Appellant', that the 'Interim Resolution Professional', appointed by the 'National Company Law Tribunal', cannot have 'any right' to 'assail' the 'assignment', made by the 'United Bank of India', in favour of the 'Appellant', whose sold the property in 'Auction', to the '2nd Respondent', by adhering to the 'Procedures', meticulously. 35. Yet another submission of the 'Appellant' is that, even if the 'Sale Certificate', was issued on 20.01.2021, followed up with the 'Registration' of the same on 04.03.2021, the 'Interim Resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 39. It is the version of the 1st Respondent that in the instant case on hand, the 'Sale', is by a 'Private Treaty', and not by 'Public Auction', and further that the 'Sale', by an 'Authorised Officer', based on a 'Private Treaty', between the 'Appellant' and the '2nd Respondent', needs 'Compulsory Registration', as well as 'Payment of Stamp Duty', under Article 18-C, read with Article 23 of the Schedule I of the Stamp Act, 1899. 40. According to the 1st Respondent, only 'Sale' under Section 17 (2) (xii) of the Registration Act, a 'Sale Certificate', issued by the 'Civil' or 'Revenue Officer', does not fall under the category of non-testamentary documents which requires registration and that in the present case, 'Sale Certificate', is issued by an 'Authorised Officer'. 41. Besides the above, as per 'Article 18 of the Indian Stamp Act, 1899', a 'Property', sold by a 'Public Auction', by a 'Civil Servant' or a 'Collector' or a 'Revenue Officer', is liable to pay a 'Stamp Duty', on the consideration mentioned in the 'Sale Certificate'. 42. It is the stand of the 1st Respondent that a 'Sale', by an 'Authorised Officer', attracts 'Stamp Duty', under 'Article 23 of the Indian Stamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 'Conspiracy', 'Collusion', 'Deception' and 'Defrauded' the other 'Stakeholders', in the 'Corporate Insolvency Resolution Process Proceedings'. 45. On behalf of the 1st Respondent, it is submitted that as per Rule 7 (2) of the SARFAESI Act, 2022, unless, 'Certificate of Sale' is issued, the 'Sale', shall not become 'absolute', in the instant case, for the 'Plant and Machinery', under Rule 7 (2) of 'Security Interest' (Enforcement) Rules, 2022, 'Sale Certificate' in 'Appendix - III, has to be issued, which is not done. Citations: 46. On behalf of the 1st Respondent, a reliance is placed on the Order dated 05.08.2019 of the Full Bench of the Hon'ble High Court of Madras, in Dr. R. Thiagarajan v. Inspector General of Registration & two Ors., reported in (2019) SCC Online Mad. 9085, wherein at Paragraphs 21 to 23, it is observed as under: 21. "In the unreported judgment of this Court dated 21.08.2017 made in W.A.(MD) No.3 of 2017 [cited supra], the Division Bench of this Court held that the Authorised Officer appointed by the bank in the proceedings initiated under SARFAESI Act, is not a Civil or Revenue Court, Collector or Revenue Officer and he is an officer of the bank, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order of the Court and bid is accepted and the sale is confirmed by the Court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. The Sale Certificate is issued to the purchaser only when the sale becomes absolute, further, it is clear that the Sale Certificate is merely an evidence of such title. It is also well settled that when an auction purchaser derives title on confirmation of sale in his favour, the Sale Certificate is issued evidencing such sale and title, no further deed of transfer from the Court is contemplated or required. So far as the registration of the Sale Certificate is concerned, under Section 17(2)(xii) of the Registration Act, the Sale Certificate issued by a Civil or Revenue Officer does not fall under the category of non-testamentary documents which requires registration under sub-Section 17(1)(b) and (c) of the said Act. In the case on hand, the Sale Certificate was issued by the Authorised Officer, the second respondent. That being the case, the auction purchaser derives title on confirmation of sale in their favour and the Sale Certificate was issued evidencing such sale and title. In respect of the registration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the market value of the said property and the proper duty payable thereon. 24. As already stated, the Sale Certificate issued by the Authorized Officer of the bank requires registration as well as stamp duty under Article 18-C read with Article 23 of Schedule 1 of the Stamp Act." 48. The Learned PCS for the 1st Respondent, adverts to the decision in P.M. Associates v. IFCI Limited, reported in (2014) 2 Law Weekly at Page 323, wherein, at Paragraph 8, it is observed as under: "(iv) (2010) 8 Supreme Court Cases 383 [Meghmala and others Vs. G.Narasimha Reddy and others] wherein the Hon'ble Supreme Court held as follows in Paragraph No. 34: 34. "An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. Fraud is proved when it is shown that a false repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a contemnor ought not to be permitted to enjoy and/or keep the fruits of his contempt is well-settled. In Mohd.Idris v. R.J. Babuji [1985 (1) S.C.R.598], this Court held clearly that undergoing the punishment for contempt does not mean that the Court is not entitled to give appropriate directions for remedying and rectifying the things done in violation of its Orders. The petitioners therein had given an undertaking to the Bombay High Court. They acted in breach of it. A learned Single Judge held them guilty of contempt and imposed a sentence of one month's imprisonment. In addition thereto, the learned Single Judge made appropriate directions to remedy the breach of undertaking. It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions to in addition to punishing the petitioners for contempt of court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach [of undertaking]". (Emphasis supplied) 18. The above principle has been applied even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadburn [1985 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We cannot accept Shri Naphade's contention that observations of the Supreme Court in the case of Surjeet Singh should be read as restricted to proceedings under Order 22, Rule 10 of Civil Procedure Code and the same cannot be extended to defiance of injunction order issued under Order 39, Rule 1 of Civil Procedure Code. Once the issue is placed on the pedestal of public policy and the very faith of litigants in Rule of law and administration of justice, then it is not possible to make the distinction or bifurcation suggested by Shri Naphade. It would mean that consequences of nullifying such transaction not being provided by the Statute, it would not lose its legal efficacy even if it is in utter disregard to or in violation of or breach of prohibitory order or order of injunction issued by a Court of law. It would mean that parties can breach and violate Court orders openly and with impunity and neither they nor the beneficiaries suffer any consequences. It is time that we recognise the principle that transfer of immovable property in violation of an order of injunction or prohibition issued by Court of law, confers no right, title or interest in the transferee, as it is no tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on the Full Bench Decision of the Hon'ble High Court of Madras in Century Flour Mills Limited v. S. Suppiah & Ors. 1975 SCC Online Mad. at Page 73, wherein at Paragraph 8, it is observed as under: 8. " In our opinion, the inherent powers of this court under Section 151 C.P.C. are wide and are not subject to any limitation. Where in violation of a stay order or injunction against a party, something has been done in disobedience, it will be the duty of the court as a policy to set the wrong right and not allow the perpetuation of the wrong doing. In our view, the inherent power will not only be available in such a case, but it is bound to be exercised in that manner in the interests of justice. Even apart from Section 151, we should observe that as a matter of judicial policy, the court should guard against itself being stultified in circumstances like this by holding that it is powerless to undo a wrong done in disobedience of the court's orders. But in this case it is not necessary to so to that extent as we hold that the power is available under Section 151. C.P.C." (Emphasis Supplied) 55. The Learned PCS for the 1st Respondent falls back upon the decision of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the 'Application', filed under I & B Code, 2016, came to be admitted on 18.01.2021, and that the 'Sale Certificate', was issued on 20.01.2021, and that the 'Land', was 'Registered' only on 04.03.2021, which cannot be effected, due to an 'Imposition of Moratorium', as per Section 14 of the I & B Code, 2016, which clearly prohibits 'any action to 'Foreclose', 'Recover' or 'Enforce', as detailed vide Paragraph 5.1 of the 'Order' dated 18.01.2021 in CP No. 673 / 7 / HDB/2019, passed by the 'Adjudicating Authority'('NCLT', Bench - I, Hyderabad), between Bank of India, Mumbai (Branch Office at : Hyderabad Large Corporate Branch, Hyderabad) v. M/s. ECI Infra Towers Company Pvt. Ltd., Hyderabad, Telangana (vide Page 159 of the Appellant's Appeal Paper Book - Diary No. 35 dated 13.01.2022). Hon'ble Supreme Court's Decisions: 57. This 'Tribunal', points out the decision of the Hon'ble Supreme Court of India in B. Arvind Kumar v. Government of India & Ors., dated 28.05.2007 (vide Civil Appeal No. 3540 of 2002), reported in (2007) 5 SCC at Page 745, wherein at Paragraph 10, it is observed as under: Re : Point (ii) 10. "The plaintiff has produced the original registered sale c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the behest of the appellants in the impugned judgment, in our opinion, has become unavailable. In that, the matter proceeded before the High Court for setting aside the entire auction process on the premise that the sale certificate was yet to be registered in favour of the highest bidder (respondent No.3); and the appellants had made (unsuccessful) attempts to exercise their right of redemption by offering the outstanding dues to the respondent bank. It was argued by the appellants that only upon registration of the sale certificate, the right of the borrower to redeem the mortgage would get extinguished and obliterated. 25. Indisputably, after the disposal of the writ appeals by the Division Bench of the High Court vide impugned judgment on 10th August, 2007, the auction purchaser (respondent No.3) got the sale certificate registered on 18th September, 2007 and then transferred the property by a registered sale deed on 5th October, 2007 to third party. It is not the case of the appellants that some interim injunction prohibiting respondent No.3 from registering the sale certificate or transferring the suit property, was operating against him after the decision of the Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Thousand Two Hundred Fifty Only), on 18th January, 2006. This stand though attractive at the first blush, will have to be stated to be rejected. On the other hand, we find substance in the stand taken by the respondent bank that none of the above was a valid tender so as to extricate or discharge the appellants from their obligation − to deposit the outstanding dues payable by them before the specified date. In that, the amount was allegedly deposited by them in the account of the father of appellant No.2 and not in their loan accounts as such. Unless the amount was transferred/deposited in the loan accounts of the appellants in relation to which the mortgage operated, it would not be a valid tender for paying the outstanding dues. Similarly, on the second occasion the appellants attempted to pay in the form of cheque(s) issued on 2nd January, 2006. However, as per the terms and conditions for grant of loan payment by cheque(s) was not permissible. Thus, the respondent bank was not obliged to accept the amount in the form of cheque(s). The respondent bank, therefore, justly declined to accept the cheque(s), not being a valid tender. Even the third attempt made by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is not possible to countenance the plea of the appellants to reopen the entire auction process. This is moreso because, the narrative of the appellants that they had made a valid tender towards the subject loan accounts before registration of the sale certificate, has been found to be tenuous. Thus understood, their right of redemption in any case stood obliterated on 18th September, 2007. Further, the amended Section 13(8) of the 2002 Act which has come into force w.e.f. 1st September, 2016, will now stare at the face of the appellants. As per the amended provision, stringent condition has been stipulated that the tender of dues to the secured creditor together with all costs, charges and expenses incurred by him shall be at any time before the "date of publication of notice" for public auction or inviting quotations or tender from public or private deed for transfer by way of lease assessment or sale of the secured assets. That event happened before the institution of the subject writ petitions by the appellants. 30. Having said thus, in the peculiar facts of the present case, we do not deem it necessary to dilate further on the argument that registration of the sale cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. ...................................................................................... 39. We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT." (Emphasis supplied by us) 20. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment are complied with, the authorised officer shall issue a sale certificate in favour of the purchaser in the form given in Appendix V to the 2002 Rules. Rule 9(9) states that the authorised officer shall deliver the property to the buyer free from all encumbrances known to the secured creditor or not known to the secured creditor. (emphasis supplied). Section 14 of the NPA Act states that where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred, the secured creditor may, for the purpose of taking possession, request in writing to the District Magistrate to take possession thereof. Section 17(1) of NPA Act refers to right of appeal. Section 17(3) states that if the DRT as an appellate authority after examining the facts and circumstances of the case comes to the conclusion that any of the measures under Section 13(4) taken by the secured creditor are not in accordance with the provisions of the Act, it may by order declare that the recourse taken to any one or more measures is invalid, and consequently, restore possession to the borrower and can also restore management of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in very many cases those third parties take up the defence of being a bona fide purchaser for value without notice. It is these types of disputes which are sought to be avoided by Rule 8 read with Rule 9 of the 2002 Rules. In the circumstances, the drawing of dichotomy between symbolic and actual possession does not find place in the scheme of the NPA Act read with the 2002 Rules." 61. In the decision of the Hon'ble Supreme Court of India in Embassy Property v. State of Karnataka (2019) SCC Online SC 1542, wherein, at Paragraph 37, it is observed as under: 37. "From a combined reading of Sub−section (4) and Sub− section (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the government under the provisions of MMDR Act, 1957 and the Rules issued there−under. The only provision which can probably throw light on this question would be Sub−section (5) of Section 60, as it speaks about the jurisdiction of the NCLT. Clause (c) of Sub−section (5) of Section 60 is very broad in its sweep, in that it speaks about any question of law or fact, ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our considered opinion, the scheme of the Recovery Act and language of its various provisions imposes an obligation upon the Banks to ensure a proper and expeditious recovery of its dues. In the present case, there is certainly ex facie failure of statutory obligation on the part of the Bank and its officers/officials. In the entire record before us, there is no explanation much less any reasonable explanation as to why effective steps were not taken and why the interest of the Bank was permitted to be jeopardized. 78. The concept of public accountability and performance is applicable to the present case as well. These are instrumentalities of the State and thus all administrative norms and principles of fair performance are applicable to them with equal force as they are to the Government department, if not with a greater rigor. The well established precepts of public trust and public accountability are fully applicable to the functions which emerge from the public servants or even the persons holding public office. In the case of State of Bihar v. Subhash Singh [ (1997) 4 SCC 430], this Court, in exercise of the powers of judicial review stated that, the doctrine of full faith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce and in whatever manner. In Kishore Chandra Deo Bhanj vs. Raghunath Misra {AIR 1959 SC 589}, the Village Accountants were also held to be Revenue Officers. 58. Similarly, the term "Civil Officer" is defined in "Advanced Law Lexicon by P.Ramanatha Iyer" as "any Officer holding appointment under the Government except in the Military or Naval Service, whether the duties are Executive or Judicial or in the highest or the lowest departments". The term "Civil Officer" has to be understood only in the context of "civilians" as opposed to persons in Military Service. It is doubtful, if an Official Liquidator can be equated to a Civil Officer or a Revenue Officer, so as to make the certificate of sale issued by him come within the purview of Section 17(2)(xii) of the Registration Act, 1908. I do not think that an Official Liquidator can be considered to be a "Revenue Officer" within the meaning of Section 89(4) since he is not collecting revenue for the Government. Even assuming for the sake of argument that he can be equated, Article 18 under Schedule-I of the Indian Stamp Act makes a certificate of sale issued by a Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Respondent." 65. In the decision of the Hon'ble High Court of Madras in M/s. Kathikkal Tea Plantations, rep. by its Managing Director N. Thiruneelakandan, Melur, Nilgiris v. State Bank of India, rep. by its Chief Manager, V.M. Palaniswamy, Nilgiris & Anr., reported in 2009 (4) Law Weekly at Page 395, wherein, it is observed and held that 'once the Sale Certificate', was issued and the 'Money', was 'Recovered', the purpose is over, and therefore, it cannot be 'termed' as a 'Secured Creditor', and the 'Property', cannot be 'Secured Debt'. Further, it was observed that, the 'Banks', are entitled, to take 'Possession', under Section 14 (2) of the SARFAESI Act and the 'Issuance of Sale Certificate', is not a 'Bar', to take 'physical possession'. Principle of Lis Pendens: 66. The Principle of Lis Pendens under Section 52 of the Transfer of Property Act, 1882, 'applies', not only, to the 'Private Transfers inter vivos', but also to the 'Court Sales', as per decision in 'Sayar Bai v. Yashoda Bai & Ors., reported in AIR 1983 Raj. 161'. 67. It is pointed out that a subsequent 'Transferee', even though, he has obtained the 'Transfer', without 'Notice' of 'Original Contract', cannot set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment', except in 'Military' of 'Naval Service', whether the 'Duties', are 'Executive' or 'Judicial' or in the 'Highest' or 'Lowest Departments'. Revenue Officer: 77. In the decision in Sheopat Singh v Harish Chandra & Anr., AIR 1958 Raj., it is observed and held that the term, 'Revenue Officer', will include such 'Offices of Income Tax'. 78. In Gopi Parshad v State of Punjab, AIR 1957 P & H 45, it is held that the expression, 'the Revenue', means the 'Income of Nation', derived from its 'Taxes', 'Duties' or the 'other Sources', for the 'payment of Nation's Expenses'. 79. In the decision Apambi Kabuini v Chief Commissioner, AIR 1965 Mani. at Pages 3 & 8, it is held that the 'Chief Commissioner' or 'Administrator', as he is called in the 'Act', has the 'Right of Review', and he is included, within the term 'Revenue Officer', in Section 96 of the 'Act'. 80. The expression, 'Revenue Officer' in Section 89 of the 'Registration Act', includes 'Tax Revenue Officer', as per decision of the Hon'ble Supreme Court of India in Shanti Devi Lal Singh v. Tax Recovery Officer, AIR 1991 SC 1880. Charge: 81. A 'Charge', is an 'Encumbrance', a 'Right' vested in 'one Person', to 'look to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Security Person, deployed over there, had not allowed the 'Interim Resolution Professional', to visit the 'Plant' and asked him to speak with the concerned Authority over Phone and furnish the Contact Number. 88. It comes to be known that the 'Interim Resolution Professional', had contacted the concerned authority, over Phone, i.e., Mr. Shitanshu, from the 'Appellant' / the 'Financial Creditor', and he informed the 'Interim Resolution Professional', that the 'Plant', was already sold to the 2nd Respondent / M/s. Srinivasa Edifice Pvt. Ltd. However, the 'Security Persons', still gave the name and Contact Number of the 'Appellant'/'1st Respondent', as the concerned 'Authority'. 89. According to the 1st Respondent / Resolution Professional, the 'Financial Creditor' (the 'Appellant'), was requested to provide details Viz., (a) the date of 'Sale Notice' (b) 'Auction Notice' and (c) 'Name of the Successful Bidder' (d) 'Bid Amount' and also the (e) 'Valuation Reports' of the 'Independent Third Party Valuers', appointed by the 'Financial Creditor' (the 'Appellant'), etc. through an email, but, was not in receipt of the same. 90. The grievance of the 1st Respondent / Petitioner / Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority', the 1st Respondent / Resolution Professional, had prayed for, (a) passing of an 'Order' in 'Setting aside', the 'Sale Certificate', issued by the 'Appellant' / 'Financial Creditor', to and in favour of the '2nd Respondent', (b) to pass an 'Order', in directing the 'Respondents' in 'Interlocutory Application' No. 124 of 2021 therein, to handover the 'Properties' of the 'Corporate Debtor', including Company's entire fixed and current assets, including stocks and receivables, which include 'Plant and Machinery', on the lease hold land admeasuring Plant and Machinery on the lease hold land admeasuring Ac. 11.37 guntas in Sy. No. 334 / A, 3 / 1A, 3 / 1B, 5 and Ac. 10.27 guntas in Sy. No. 332 / A, 333/A, 7, 8B, 8A, are situated at Kaveli Village, Kohir Mandal, Sangareddy District (erstwhile Medak District) and (d) to pass an 'Order', in directing the 'Commissioner of Police', Sangareddy at Office of the 'Superintendent of Police', Sangareddy to provide necessary assistance to him and his team, to takeover the 'Control' and 'Custody' of the 'Properties' of the 'Corporate Debtor', etc. 97. It transpires that the 'Appellant' / '1st Respondent', had preferred OA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidation' of 'Corporate Debtor', under Section 33, whichever was earlier. Also, the 'Interim Resolution Professional', was 'appointed', by the 'Adjudicating Authority'. 101. To be noted that the 'subject Asset', over which the 'Security Interest', was created to and in favour of 'United Bank of India' (under SARFAESI Act, 2002), by the 'Borrower', was purportedly 'assigned', in favour of the 'Appellant' / '1st Respondent', through 'Assignment Deed', dated 04.04.2019. 102. The 'Appellant' / '1st Respondent', had caused a 'Notice', as per Section 13 (1) of the SARFAESI Act, 2022, requiring the 'Borrower', to wipe out the 'Liability', within the time prescribed therein and owing to the failure of the 'Borrower', in fulfilling the conditions of the 'Demand Notice', the 'Secured Asset', was taken possession by means of the 'Possession Notice' dated 27.09.2019 and subsequently, the 'Property', was sold, based on a 'Private Treaty', to the 2nd Respondent for a 'Monetary Consideration of Rs.9,75,00,000/-. 103. As a matter of fact, the 'Sale', was affirmed on 20.01.2021, and was Registered on 04.03.2021 in the Office of the Sub-Registrar, Zaheerabad, Medak District, in favour of the '2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, this 'Tribunal', relevantly points out that the 'Plea' of 'Good Faith', as per Section 44 of the I & B Code, 2016, is not available to the '2nd Respondent' (pertaining to the Acquiring of Property in question), because of the fact that, the 'Sale Certificate', in the instant case was 'Registered', 'violating' the clear 'Order' of 'Moratorium' in force (vide 'Order' dated 18.01.2021, passed by the 'Adjudicating Authority', 'National Company Law Tribunal', Hyderabad Bench - I, Hyderabad, in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019), the 'Sale Certificate' dated 20.01.2021, issued by the 'Appellant' / '1st Respondent', in favour of the '2nd Respondent' and the said 'Certificate', which got 'Registered', on 04.03.2021, are clearly 'non-est in Law' and further that the '2nd Respondent', cannot 'Stake', any 'Claim' / get any 'Advantage' / 'Title' / 'Interest' or 'Right', in regard to the Property, covered under the 'Sale Certificate' dated 20.01.2021. 109. Indeed, the Hon'ble Supreme Court of India in the Judgment in Duncans Industries Limited v A.J. Agrochem (vide Civil Appeal No.5120 of 2019) dated 04.10.2019, at Paragraph 28, had observed the following: 28. "&hellip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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