9911796707
TMI Blog2024 (6) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in question in favour of respondent No. 9 clearly does not exist. It is a matter of record that refund of the amount in question has been ordered vide order dated 24.04.2023. It is to be noted that any money, amount or property which may be for the benefit of corporate debtor can doubtlessly not be directed to be released or dealt with by this Court at this stage in view of proceedings before NCLT. However, in the present given factual matrix, it cannot be held by any stretch of imagination that corporate debtor has any legal right or beneficial interest qua the bid amount which has been deposited by the auction purchaser (respondent No. 9) in respect to auction/sale which has admittedly been set aside with refund thereof being ordered and the said order not being challenged till date. No right over the same vests in respondent No. 9 and conversely corporate debtor or the Bank also do not have any right to claim money deposited towards bid amount, admittedly lying with Recovery Officer. Said money/amount cannot be stated to be for the benefit of corporate debtor. Once that be the position, it cannot be said that this Court would not have jurisdiction to direct release of sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of sale notice issued in pursuance to order dated 07.09.2021 passed by Recovery Officer, DRT-III, Chandigarh. 4. CWP-11117-2022 has been filed by M/s Kaur Sain Spinners Limited (corporate debtor) seeking setting aside of notice dated 11.05.2022 issued by Tehsildar-cum-Executive Magistrate, Samrala seeking possession of property pursuant to order dated 07.12.2021 passed by Additional District Magistrate, Khanna under Section 14 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act ). It is further prayed that respondent Bank should be restrained from dispossessing petitioners of property in question. There is further prayer for stay of all proceedings under SARFAESI Act pursuant to various notices as mentioned in the writ petition issued under the said Act. 5. It is brought to the notice of this Court that during pendency of these writ petitions, petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (for short IBC 2016 ) was filed by Punjab National Bank (Successor of Oriental Bank of Commerce and one of the lenders to corporate debtor). Said application was admitted by learned NCLT, Chandiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale and file auction report by 15.11.2021. 9. However, Recovery Officer vide order dated 25.10.2021, directed auction proceedings to be put on hold till further orders and petitioner Bank was directed to obtain fresh valuation from a new empanelled valuer so that proclamation of sale can be issued accordingly. Bank was also asked to file its reply to the objections raised by the objectors. Vide order dated 28.10.2021, proclamation of sale and related orders dated 07.09.2021 were cancelled and withdrawn by the Recovery Officer and petitioner Bank was directed to inform the prospective buyer as and when fresh auction notice is issued. 10. Order dated 25.10.2021 and 28.10.2021 were challenged by Central Bank of India vide CWP-22361-2021. Notice of motion was issued in this writ petition on 03.11.2021 and it was directed that auction proceedings shall go on though final order shall not be passed (sale not to be confirmed). Auction of property was held on 05.11.2021 and respondent No. 9 - M/s Nahar Spinning Mills Limited was declared highest bidder for property lot No. 2 and 4 comprising of land and machinery at Samrala unit for a sum of Rs. 37.60 crores. Respondent No. 9 deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , clarified that such directions may not be construed to be an expression of opinion of this Court, as regards maintainability of the objections. 12. Pursuant to order dated 19.01.2023, Recovery Officer heard the parties in February/March, 2023 and reserved the order. Presiding Officer, DRT-III vide order dated 17.03.2023 restrained Recovery Officer from passing any order and issued notice for 17.04.2023 in MA filed by one Pankaj Garg. Respondent No. 9 filed three separate applications before learned DRT i.e. for preponement, intervention, modification and recalling of order dated 17.03.2023. Preponement application was dismissed on 31.03.2023 and other two applications were disposed of with directions to Recovery Officer to hear all parties and comply with order dated 19.01.2023 passed by this High Court in CWP-22367-2021 in letter and in spirit. 13. Recovery Officer passed orders dated 19.04.2023 and 24.04.2023 which are attached as Annexures A16 and A18 in CM-8696-CWP-2023 filed by respondent No. 9. Vide order dated 24.04.2023, it was concluded that Proclamation of sale dated 07.09.2019 was illegal and was, accordingly, set aside. Auction in which respondent No. 9 was the succes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is more than two year old and hence, CH Bank is directed to file fresh POR. 5. The Bidder is directed to furnish the account details for refund of bid amount deposited by them. (emphasis added) The case is adjourned to 11.05.2023 14. It is recorded in order dated 03.05.2023 passed in CWP-223672021, that respondent No. 9 was informed to have filed application before Tribunal seeking refund pursuant to order dated 24.04.2023 and had expressed its inclination to pursue the matter. Keeping in view the same, it was directed by this Court that a specific affidavit be filed by respondent No. 9 as to the stand it wishes to take in present proceedings. Pursuant thereto, affidavit dated 15.05.2023 was filed with CRM-8696-CWP-2023 stating that said respondent would seek refund of entire bid amount alongwith poundage fee and interest at the rate of 12% as the said amount cannot be appropriated in any productive commercial sites. It is stated in affidavit that though claim of refund would not express subscription to the correctness of order passed by Recovery Officer but as the sale did not exist, amount should be refunded. 15. Learned counsel for respondent No. 9 submits that said respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to us, stands unchallenged as on date, sale of property in question in favour of respondent No. 9 clearly does not exist. It is a matter of record that refund of the amount in question has been ordered vide order dated 24.04.2023. 20. Section 14 (1) of IBC 2016 reads as under:- 14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d over to it. No right over the same vests in respondent No. 9 and conversely corporate debtor or the Bank also do not have any right to claim money deposited towards bid amount, admittedly lying with Recovery Officer. Said money/amount cannot be stated to be for the benefit of corporate debtor. Once that be the position, it cannot be said that this Court would not have jurisdiction to direct release of said amount. It would indeed be imminently unjust towards respondent No. 9 to insist that application should now be filed by it before learned NCLT. It is, thus, held that respondent No. 9 is entitled to release of the amount deposited by it in terms of order dated 24.04.2023. 23. Keeping in view the facts and circumstances as above, it is directed that amount deposited by respondent No. 9 be released by Recovery Officer expeditiously in terms of order dated 24.04.2023. With the said direction, both writ petitions are disposed of as infructuous at this stage, without expression of opinion on the merit of the matter or even entertainability thereof, keeping in view the passing of order dated 14.05.2024 by learned NCLT, Chandigarh Bench. Parties would be at liberty to avail remedy(ies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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