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TMI Blog2024 (8) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall not proceed further under the SARFAESI Act qua the subject property till the moratorium is lifted - appeal dismissed. - ( Justice Yogesh Khanna ) Member ( Judicial ) And ( Mr. Ajai Das Mehrotra ) Member ( Technical ) For the Appellant : Mr Sumesh Dhawan, Ms Vatsala Kak, Mr. Raghav Dembla, Mr Kholi Rakuzhuro, Mr. Chirag Sharma, Ms Manmilan Sidhu, Mr. ravi Tyagi, Ms Saksha Jha, Advocates For the Respondent : Ms Ranjana Roy Gawai, Mr Pervinder, Ms Vasudha Sen, Mr Shikher Upadhyay, Advocates JUDGEMENT JUSTICE YOGESH KHANNA , MEMBER ( JUDICIAL ) This appeal is against an impugned order dated 25.02.2021 passed by the Ld.National Company Law Tribunal, New Delhi, Court-IV, in IA No. 1009 of 2021 in CP (IB) No. 25/ND/2021 whereby the possession of subject property belonging to the Respondent and which has been taken over by the appellant was directed to be restored with the IRP forthwith. 2. It is the submission of the Ld. Counsel for the Appellant prior to the proceedings under Section 95 of the Code, the Appellant had filed proceedings under Section 13 (4) of the SARFAESI Act, 2002 and on 20.06.2019 had taken symbolic possession of the subject mortgaged property. 3. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, the bank had invoked its right under Section 13(2) of the SARFAESI Act on 27th September, 2018, thereby putting the petitioner to notice that the bank reserves its right to proceed against the properties in question. The Notice of Possession under Section 13(4) of SARFAESI Act, was issued on 02nd July, 2019. Therefore, on 02nd July, 2019, in terms of the judgment of Supreme Court in the case of Transcore Versus Union of India, (2008) 1 SCC 125, all rights vested in the bank. 9.7 The actual physical possession of the property has already been taken by the bank on 17th October, 2020. The proceedings under the IBC, 2016, against the petitioner, commenced only in June, 2021. Therefore, all the actions qua the property in question, have been taken, prior to the initiation of proceedings under the IBC, 2016. Thus, no debt is being enforced against the petitioner, since the rights in the property, already stand transferred to the bank upon issuance of the notice under Section 13(4) of the SARFAESI Act. 9.8 Invocation of personal guarantee against the petitioner has nothing to do with the impugned orders, in which the bank has only proceeded in terms of the mortgage. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These words indicate that the interim-moratorium which is intended to operate by the Legislature is primarily in respect of a debt as opposed to a debtor. Clause (b) of sub-section (1) indicates that the purpose of the interim-moratorium is to restrain the initiation or the continuation of legal action or proceedings against the debt. 58. This must be contra-distinguished from the provisions for moratorium which are contained in section 14 in relation to the corporate insolvency resolution process under Part II. Section 14(1)(a) provides that on the insolvency commencement date, the institution of suits or continuation of pending suits or proceedings against the corporate debtor, including proceedings in execution shall stand prohibited by an order of the Adjudicating Authority. Clause (b) of sub-section (1) of section 14 empowers the Adjudicating Authority to declare a moratorium restraining the transfer, encumbrance, alienation or disposal by the corporate debtor of any of its assets or any legal right or beneficial interest therein. Significantly, the moratorium under section 14 operates on the order passed by an Adjudicating Authority. The purpose of the 2023 SCC OnLine SC 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of the part-payment, and the sale could be said to be completed only upon receipt of the balance payment, which was received after the commencement of the proceedings under the IBC, 2016. Thus, the Supreme Court held that after the moratorium had come into place, the bank could not have continued with the proceedings under the SARFAESI Act and could not have accepted the balance payment after the commencement of the moratorium. Therefore, even in a case where the bank had already commenced the sale process, prior to the commencement of the proceedings under the IBC, 2016, the Supreme Court categorically held that in the absence of completion of sale prior to the moratorium, the bank could 2022 SCC OnLine SC 634 not have continued any further proceedings under the terms of the SARFAESI Act. 20. In the present case, no sale process has commenced with respect to the property that had been mortgaged by the petitioner with the respondent- bank, as a personal guarantor. Therefore, in view of the law laid down by the Supreme Court, it is apparent that the bank cannot proceed any further under the SARFAESI Act, after the commencement of the moratorium in the present case. 22. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e debtor. xxx xxx xxx (Emphasis Supplied) 31. Considering the detailed discussion as above, it is held as follows: 31.1 The respondent-bank cannot proceed further under the SARFAESI Act, in view of the interim moratorium, operating on account of the Insolvency Proceedings pending against the petitioner, the personal guarantor. 31.2 As and when the interim moratorium is lifted, and the respondent bank proceeds under the SARFAESI Act, the petitioner shall be at liberty to approach the learned DRT and raise all issues, including issue regarding authority and jurisdiction of the respondent-bank to proceed under the SARFAESI Act, in view of the loan having been sanctioned and disbursed in Dubai, by the respondent no.-2 bank, which is also situated in Dubai. 31.3 It is clarified that this Court has not given any finding on the merits of the issues, as raised by the petitioner, which shall be raised before the learned DRT, and decided on its own merits. All the rights and contentions of both the parties are left open. 8. Considering the above settled law, we are not inclined to interfere with the impugned order dated 25.02.2021 and direct that the appellant shall not proceed further under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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