9911796707
TMI Blog2024 (8) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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, on 16.03.2020 the Ld. District Magistrate, Gautam Budh Nagar, Uttar Pradesh had allowed an application filed by the appellant and had passed an order of possession of the said property. On 27.01.2021 the actual physical possession of the mortgaged property was taken over by Tehsildar, Dadri, Gautam Budh Nagar, Uttar Pradesh in lieu of the order dated 16.03.2020 passed by the District Magistrate. However, subsequent to 16.03.2020, i.e. on 07.01.2021, an application under Section 95 of the Code was filed to initiate insolvency proceedings against the Personal Guarantor. On 03.02.2021, the Ld. NCLT had initiated personal insolvency against the Respondent and held the moratorium had commenced in relation to all debts of the appellant upon filing of the Company Petition w.e.f. 07.01.2021. 4. The issue raised before this court is if the proceedings under the SARFAESI Act, 2002 were complete on 20.06.2019 when symbolic possession of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. Enforcement of security interest is not prohibited under Section 96 of IBC, 2016. 14. Section 96(1) provides that when an application is filed under Section 95, interim moratorium shall commence on the date of the application in relation to all the debts. Section 96(1)(b) provides that during the interim moratorium period, any legal action or proceedings pending in respect of any debt, shall be deemed to have been stayed. It is pertinent to mention here that the word used in Section 96 of the IBC, 2016, is „in relation to all the debts‟, meaning thereby, that the interim moratorium shall apply to all the debts of the petitioner, including the mortgage of the property in question, that had been mortgaged by the petitioner with the respondent- bank, as a personal guarantor, which are subject matter of the SARFAESI proceedings initiated by the respondent-bank. Thus, in terms of the law of the land, any legal ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1530 moratorium under section 96 is protective. The object of the moratorium is to insulate the corporate debtor from the institution of legal actions or the continuation of legal actions or proceedings in respect of the debt. xxx xxx xxx" ( Emphasis Supplied ) 16. Thus, in view of the aforesaid, it is manifest that the moratorium imposed under Section 96 of IBC, 2016, would apply to the security interest created by an individual, under the personal guarantee. Therefore, after commencement of the insolvency proceedings under the IBC, 2016, against the petitioner, in his capacity as a personal guarantor with respect to default of a loan account, the interim moratorium shall be applicable to all the debts, including the debt owed by the petitioner to the respondent-bank, in his capacity as a personal guarantor, for which property in question was mortgaged by the petitioner, against which SARFAESI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 view of the aforesaid, it is clear that once the interim moratorium has come into play on account of the insolvency proceedings against the petitioner under the IBC, 2016, the respondent-bank cannot proceed any further in the proceedings under the SARFAESI Act with respect to the property mortgaged by the petitioner with the bank, in his capacity as a personal guarantor. 24. Besides, it is to be noted that Supreme Court in the case of State Bank of India Versus V. Ramakrishnan and Another (supra), itself has stated that the moratorium under Section 96 IBC, 2016, under Part III of the said Act, is a separate moratorium, applicable separately in the case of personal guarantors against whom insolvency resolution processes may be initiated under Part III. Thus, Supreme Court has held as follows: "xxx xxx xxx 26. We are also of the opinion that Sections 96 and 101, when contrasted wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
