Section 94 insolvency filing cannot undo a confirmed auction sale or retrospectively trigger moratorium over completed recovery steps.

A Section 94 insolvency application by a personal guarantor, filed after auction of secured assets had been completed and confirmed, could not retrospectively trigger the Section 96 moratorium to unsettle the concluded SARFAESI sale or restrain possession steps. The tribunal treated the moratorium as operating prospectively from the date of filing and held that it cannot be used to defeat accrued rights arising from a confirmed auction sale. Issuance of the sale certificate after confirmation likewise did not revive any right to interfere with the purchaser's title or the completed enforcement process. The filing was viewed as an impermissible attempt to obstruct recovery rather than bona fide insolvency resolution.

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Issues: (i) Whether a personal guarantor's application under Section 94 of the Insolvency and Bankruptcy Code, 2016, filed after an auction sale had been held and confirmed, could invoke moratorium under Section 96 to unsettle the concluded sale and restrain further steps for possession. (ii) Whether the subsequent issuance of a sale certificate could be interfered with on the ground that the Section 94 application had been filed before the certificate was issued.

Issue (i): Whether a personal guarantor's application under Section 94 of the Insolvency and Bankruptcy Code, 2016, filed after an auction sale had been held and confirmed, could invoke moratorium under Section 96 to unsettle the concluded sale and restrain further steps for possession.

Analysis: The appeal turned on the sequence of events. The secured creditor had issued notice under the SARFAESI Act, proceeded to auction the secured asset, and the auction was completed and confirmed before the Section 94 application was filed. The Tribunal held that the object of Section 94 is to enable genuine insolvency resolution, not to provide a device to stall recovery proceedings at a belated stage. Where the auction and its confirmation had already taken place, the filing of the insolvency application could not operate retrospectively to defeat completed enforcement steps. The moratorium under Section 96 was treated as operating prospectively from the date of filing, and the appellant's conduct was found to indicate an attempt to abuse the process and obstruct recovery rather than seek bona fide insolvency resolution.

Conclusion: The Section 94 application did not affect the completed auction or the confirmed sale, and the challenge failed.

Issue (ii): Whether the subsequent issuance of a sale certificate could be interfered with on the ground that the Section 94 application had been filed before the certificate was issued.

Analysis: The Tribunal held that issuance of the sale certificate after confirmation of the auction did not revive any right in the personal guarantor. The right to challenge the enforcement process remained available in the appropriate forum, but the filing of the insolvency application after confirmation of sale could not unsettle the auction purchaser's rights. The Tribunal also noted that the appellant had already pursued a securitisation challenge before the DRT and could continue to pursue that remedy, but Section 94 could not be used to arrest a concluded sale process.

Conclusion: No interference with the sale certificate was warranted on the facts.

Final Conclusion: The appeals were devoid of merit because the insolvency filings were made after the auction had been completed and confirmed, and the proceedings were treated as an impermissible attempt to frustrate recovery under the SARFAESI framework.

Ratio Decidendi: A Section 94 application filed after an auction sale has been completed and confirmed cannot retrospectively trigger moratorium under Section 96 so as to nullify concluded SARFAESI enforcement steps or defeat the auction purchaser's accrued rights.

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