TaxTMI 
TaxTMI 
2020 (3) TMI 705
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....d' (Corporate Debtor), the 'Liquidator' filed an application under section 60(5)(c) of the 'Insolvency and Bankruptcy Code, 2016' (for short, 'the I&B Code') seeking necessary directions of the Adjudicating Authority's decision of 'Secured Financial Creditor' - 'State Bank of India' to keep its mortgaged assets out of liquidation of the 'Corporate Debtor'. The reliefs sought in the said application are as under: i. Directions to SBI that in case they want to opt out of liquidation, no contravention of section 35(1)(f) takes place. ii. The Respondent Bank to give an undertaking to the liquidator that it shall not sell the mortgaged property to any person who is not eli....
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.... of liquidation process under section 52(1)(b) of the 'I&B Code' is barred from selling the secured assets to the 'Promoters' or its related party or the persons who are ineligible in terms of section 29A of the I&B Code? 5. Learned counsel appearing on behalf of the Appellant submitted that once a secured creditor has opted out of the liquidation process under section 52(1)(b) of the 'I&B Code' then such creditor is entitled to realize the security interest in terms of section 52(4) of the 'I&B Code'. Section 52(4) in turn states that a secured creditor may enforce, realize, settle, compromise or deal with the secured assets in accordance with such law as applicable to the security interest being realized....
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....ion if 'Secured Creditor' is allowed to sale the 'Secured Assets', after opting out of the liquidation process, to any person including a person who is disqualified under section 29A of the 'I&B Code', then the entire purpose of section 29A of the 'I&B Code' would get defeated. According to him, the objective of the restriction imposed upon the liquidator under the 'Explanation given below to section 35(1)(f) are in two-fold - (i) firstly, to ensure protection of public interest to keep the 'not eligible person' out of the process to ensure that the assets should not go back to the same management or defaulting parties, who have committed the default and (ii) secondly, to prevent the misuse and im....
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....upra) held that : "12. From the aforesaid provision, it is clear that the Promoter, if ineligible under section 29A cannot make an application for Compromise and Arrangement for taking back the immovable and movable property or actionable claims of the 'Corporate Debtor'. 13. The National Company Law Tribunal by impugned order dated 15th May, 2018, though ordered to proceed under section 230 to 232 of the Companies Act, failed to notice that such application was not maintainable at the instance of 1st Respondent-Arun Kumar Jagatramka (Promoter), who was ineligible under section 29A to be a 'Resolution Applicant'". Therefore, it is clear that a Member, Shareholder/Promoter whoever is ineligible under sect....
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.... has not been specifically prescribed, it does not make that the procedure prescribed under the 'SARFAESI Act, 2002' will be applicable to secured creditor to sale the proceeds. 14. The object of the 'I&B Code' is to maximize the assets of the 'Corporate Debtor' and then to balance the stakeholders including maximization of the assets of the 'Financial Creditor' and other creditors including secured creditors. In Arcelor Mittal India (P.) Ltd. v. Satish Kumar Gupta [2019] 2 SCC 1, the Hon'ble Supreme Court while interpreting section 29A has reiterated that the person not eligible under section 29A cannot be permitted to submit the 'Resolution Plan' if default still exists. The Hon'ble Supre....