2017 (7) TMI 1060

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....r referred to as "I & B Code") for initiation of corporate insolvency resolution process in so far it relates to Corporate Debtor with the Adjudicating Authority. 2. Ld. Adjudicating Authority (National Company Law Tribunal) Mumbai Bench, Mumbai, after notice to the 'Financial Creditor' and others passed impugned order dated 10th July, 2017 in T.C.P. No. 1117/I&BP/NCLT/MB/MAH/2017, admitting the application subject to qualification, as quoted below: "4.8. Nevertheless, the decision on "Admission" as pronounced hereinabove is subject to a qualification. The I&BP Code, 2016 has prescribed certain limitations which are inbuilt and must not be overlooked. The 'Moratorium' indeed is an effective tool, sometimes being ....

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....g 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 Securitisation and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 2 3 4 6. On careful reading I have noticed that the term "its" is significant. The plain language of the Section is that on the commencement of the Insolvency process the &#....

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....atorium shall prohibit the action* against the properties reflected in the Balance Sheet of the Corporate Debtor. The Moratorium has no application on the properties beyond the ownership of the Corporate Debtor. For the sake of completeness, it is worth to refer that the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (the SARFAESI Act) may be having different criteria for enforcement of recovery of outstanding debt, which is not the subject matter of this Bench. Before I past with it is necessary to clarify my humble view that the SARFAESI Act may come within the ambits of Moratorium if an action is to foreclose or to recover or to create any interest in respect of th....