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2022 (12) TMI 1055
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...., passed by the 'Adjudicating Authority', ('National Company Law Tribunal', Hyderabad Bench - I, Hyderabad). 2. The 'Adjudicating Authority', ('National Company Law Tribunal', Hyderabad Bench - I, Hyderabad), while passing the 'impugned order' dated 23.12.2021 in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019, among other things, at Paragraphs 27 to 36, had observed the following: 27. 'Therefore, when once the violation being unequivocal and apparent, the Respondents cannot be allowed to escape from the legal consequences of violation of order of moratorium, more so on a plea that the respondents merely performed a consequential act of registration of sale certificate issued in favour of the 2nd Respondent... 28. Be that as it may, we are also unable to appreciate the submission of Ld. Senior Counsel for R-1 that registration of sale certificate in this case is only formality and not mandatory legal requirement, In fact, the ruling in re, B. Arvind Kumar vs Govt. of India & Ors in Civil Appeal No. 3540 of 2002 reported in (2007) 5 SCC 745, relied upon by the respondents it is held that, "When a property is sold by public auction in pursuance of ....
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....hat an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales." 30. That apart a full Bench of High Court of Madras in re, R. Thiagarajan Vs The Inspector General of Registration, Santhome and Ors., held that, 13. "Section 17 (1) of the Registration Act, 1908, speaks about the documents of which the registration is compulsory. Section 17(2) of the Registration Act, speaks about the exemption for registering the document. As per Section 17(2)(xii) of the Act, any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer is exempted from registration. 14. The Sale Certificate is not a compulsorily registrable document, if the property is sold by public auction by a Civil or Revenue Officer. In the judgment reported in 2007 (5) SCC 745 [cited supra] the Hon'ble Supreme Court held that a certificate of sale granted to any purchaser of any property sold by public auction by a Civil or Revenue Officer does not fall under the category of non-testamentary documents which require registration under sub-Sections (b) and (c) of Section 17(1) of the said Act. 15. In the....
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....er or Collector or other Revenue Officer, is liable to pay the stamp duty on the consideration mentioned in the Sale Certificate. The Hon'ble Supreme Court in the judgment reported in 2007 (5) SCC 745 [cited supra] and the Division Bench of this Court in the judgment reported in 2013(5) CTC 337 [cited supra] held that the Authorized Officer of the bank cannot be equated with the Civil or Revenue Officer. Therefore, the sale made by the Authorized Officer is liable for stamp duty under Article 23 and not under Article 18 of the Stamp Act. 22. The Sale Certificate issued by the Authorised Officer of the bank cannot be agnated with the Sale Certificate issued by a Civil or Revenue Court. The nomenclature given to the document issued by the Authorized Officer would be irrelevant for exemption from payment of stamp duty and the same will not be covered under Article 18-C Schedule 1 of the Stamp Act. 23. If proper stamp duty is not paid for the said Sale Certificate and registered as required under law, then it is only a still born child and does not confer any right to the petitioner whatsoever. When the Sale Certificate is not properly stamped and registered, it i....
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....eemed to have sufficient information or opportunity to avail such information if a public announcement regarding the corporate insolvency resolution process has been made under section 13". 33. When the respondents consciously violated the moratorium order and thereby crippled the corporate insolvency resolution process the plea that the 2nd Respondent derived interest in good faith lacks bona fides hence unacceptable. That apart, except placing reliance on the Section, no material worth has been placed before us in support of the plea of the good faith. We therefore, reject the said plea of the 2nd respondent. 34. We, therefore, having held that the sale certificate has been registered in clear violation of the order of moratorium and on registration of the same only the sale certificate has attained legal enforceability, we hereby declare that the said sale certificate is void and unenforceable under law, consequently, the 2nd Respondent cannot claim / derive any right, title or interest in respect of the property covered by the said sale certificate. 35. In so far as the possession of the subject property is concerned, though 1st Respondent claimed tha....
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....on of order of moratorium granted by this Tribunal in terms of Section 14 (1) of IBC, the Respondent No.1 registered the sale certificate in favour of Respondent No.2. Therefore, sustainability of the said plea can only be examined in the light of provisions of IB Code and not under the SARFAESI Act. We therefore hold that the plea of the Learned Senior Counsel for 1st Respondent that the Applicant has alternative remedy before the Debt Recovery Tribunal, as such this Application is not maintainable before this Tribunal, is devoid of any force. We therefore, accordingly reject the same." and 'disposed of' the 'Interlocutory Application', by allowing it. Factual scenario: 3. According to the Learned Counsel for the Appellant / 1st Respondent ('M/s. Omkara Assets Reconstruction Private Limited'), the 'Original Lender' ('United Bank of India'), had filed OA No. 598 of 2018, before the 'Debt Recovery Tribunal - I, Hyderabad, against the 1st Respondent, and on 22.11.2018, prior to the 'Moratorium', the 'United Bank of India' ('Original Lender'), had assigned the 'Debt', payable by the '1st Respondent', in favour of the 'Appellant', along with the 'Underlying Securities', includ....
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....10.2022 and these 'Unregistered Lease Agreements', do not convey any 'Right', 'Title' to the 'Corporate Debtor', to 'sell' or 'alienate' the same. 7. On behalf of the Appellant, it is brought to the notice of this 'Tribunal', that on 04.04.2019, the 'Appellant', had issued a 'Demand Notice', as per 'Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022' ('SARFAESI Act') to the '1st Respondent' and the 'Mortgagor', and 'Guarantors', calling upon the '1st Respondent', to discharge its liabilities, within 60 days from the date of notice. 8. It comes to be known that on 01.08.2019, the 'Appellant', had issued a 'Possession Notice', intimating the '1st Respondent' and the 'Public' in general, in regard to the 'Possession of the Properties' of the '1st Respondent' was taken. Added further, the 'Appellant', based on the 'Assignment Agreement', got itself impleaded, an 'Applicant; in OA No.598 of 2018 and that the 'Debts Recovery Tribunal', was pleased to 'allow' the OA and passed a 'Judgment' and 'Decree', in favour of the 'Appellant', on 05.02.2020. Therefore, the 'Order' of the 'Debts Recovery Tribunal', has beco....
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....porate Insolvency Resolution Process' on 18.01.2021. Also that, the 'Registration of Sale Certificate', is mere procedural aspect, which further evidences the 'recording of documents', with the 'Recognised Officer'. 14. In fact, the 'Appellant' / 'One of the Secured Financial Creditors', had undertaken the 'Transaction' in 'Good Faith'. Moreover, the 'maximizing the Value of the Assets of the 1st Respondent', will not apply to the facts of the instant case, when the 'Appellant', is the 'exclusive Charge Holder of the Assets', that were sold in terms of the provisions of the SARFAESI Act. That apart, the '1st Respondent', has a remedy under Section 17 of the SARFAESI Act, 2002, only to 'Assail' the 'Auction'. Appellant's Submissions: 15. The Learned Counsel for the Appellant contends that the 'Adjudicating Authority', ('National Company Law Tribunal', Hyderabad Bench - I, Hyderabad) in the 'impugned order' dated 23.12.2021, in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019, had declared that the 'Sale Certificate', is 'Void' and 'Unenforceable', under 'Law', and consequently, the '2nd Respondent', cannot 'Claim' / 'Derive', any 'Right', 'Title' or 'Interest', in resp....
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....n' of its 'Order', is 'incorrect', 'invalid' and 'suffers from non application' of 'mind'. 22. The Learned Counsel for the Appellant brings it to the notice of this 'Tribunal' that the '1st Respondent' / 'M/s. ECI Infra Towers Company Pvt. Ltd.', is the 'Corporate Guarantor' of 'ECI Engineering & Construction Company Ltd.', and that the 1st Respondent / M/s. ECI Infra Towers Company Pvt. Ltd., does not own even a sq. inch in the 'Properties mortgaged with the United Bank of India', which was later assigned to the 'Appellant'. 23. The Learned Counsel for the Appellant contends that the 'Bank of India', had filed OA No. 236 of 2019, (a) for 'recovery' of a sum Rs.213,14,25,167.86, before the 'Debt Recovery Tribunal', and (b) even if this Original Application is allowed, the 'Bank of India', cannot touch the 'Immovable Properties', mortgaged with the 'United Bank of India' by Mr. Vijay Kaza and Mr. Kaza Venkata Phani, who are 'Guarantors' of the M/s. ECI Infra Towers Company Private Limited. 24. The Learned Counsel for the Appellant, brings it to the notice of this 'Tribunal', there is no 'Second Charge' at all, to and in favour of 'Bank of India', and that the 'Bank of India....
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..../ M/s. ECI Infra Towers Company Private Limited' in CP (IB) No. 673 / 7 / HDB / 2019 and further that the 'knowledge', can be imputed by the 'Resolution Professional', only on 22.01.2021. 29. According to the 'Appellant', in the instant case, the possession was handed over to the 2nd Respondent on 11.01.2021 itself, as per the 'Confirmation of Sale', on 30.11.2020, and that the 'Issue of Sale Certificate', is only a 'Formality', as per 'Order' dated 23.08.2013 in WP Nos. 1937 and 4088 of 2012, passed by the Hon'ble Division Bench of Madras High Court. 30. Proceeding further, the Learned Counsel for the Appellant points out that an 'Auction Purchaser', derives 'Title', on 'Confirmation of Sale', in its favour, and that the 'Issuance of Sale Certificate', is only an 'evidence', to 'establish', that the 'Sale' was 'affirmed', in its favour, conveying the 'Title'. 31. The Learned Counsel for the Appellant, in regard to 'Movable Properties' i.e. 'Plant and Machinery', along with 'Immovable Properties', were delivered to the 'Purchaser', on 11.01.2021 itself. 32. The Learned Counsel for the Appellant cites the 'Judgment' of this 'Tribunal' dated 26.03.2021 in Comp. App (AT) (INS....
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....pointed by the 'National Company Law Tribunal', cannot have 'any right' to 'assail' the 'assignment', made by the 'United Bank of India', in favour of the 'Appellant', whose sold the property in 'Auction', to the '2nd Respondent', by adhering to the 'Procedures', meticulously. 35. Yet another submission of the 'Appellant' is that, even if the 'Sale Certificate', was issued on 20.01.2021, followed up with the 'Registration' of the same on 04.03.2021, the 'Interim Resolution Professional', cannot question the same, as the 'Bank of India', is not the 'Mortgagee', and the '1st Respondent / 'M/s. ECI Infra Towers Company Pvt. Ltd.', is not the 'Owner' of the 'Properties' in question and both of them, do not have 'Semblance of Right', in the 'Properties'. 36. The other stand of the Appellant is that, even presuming without admitting that they have the 'Right' in the 'Properties' (which is not) even then, they cannot 'challenge' the same, as the 'Sale' was completed on 07.01.2021 itself, based on the 'Sale Confirmation', made on 30.11.2020 and further that the 'Issue of Sale Certificate', on 20.01.2021 and the 'Registration' of the same on 04.03.2021, are mere 'formalities'. 37. ....
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....n the present case, 'Sale Certificate', is issued by an 'Authorised Officer'. 41. Besides the above, as per 'Article 18 of the Indian Stamp Act, 1899', a 'Property', sold by a 'Public Auction', by a 'Civil Servant' or a 'Collector' or a 'Revenue Officer', is liable to pay a 'Stamp Duty', on the consideration mentioned in the 'Sale Certificate'. 42. It is the stand of the 1st Respondent that a 'Sale', by an 'Authorised Officer', attracts 'Stamp Duty', under 'Article 23 of the Indian Stamp Act, 1899 and added further, if proper 'Stamp Duty', is not paid on the 'Sale Certificate' and the same is 'Registered', it is considered as a 'still born child' and does not 'Confer' any 'Right', on the 'Buyer', whatsoever. 43. It is projected by the Learned Practising Company Secretary for the 1st Respondent that in the instant case, the 'Property' was under the control of the 'Corporate Debtor' on 18.01.2021, and the 2nd Respondent, on 11.01.2021, had addressed a letter, on the subject of 'Handover of Possession of Property', to 'Srinivasa Edifice Private Limited', wherein it was mentioned as under: "We would like to bring to your notice that we have sold the below-mentioned pr....
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....ble High Court of Madras, in Dr. R. Thiagarajan v. Inspector General of Registration & two Ors., reported in (2019) SCC Online Mad. 9085, wherein at Paragraphs 21 to 23, it is observed as under: 21. "In the unreported judgment of this Court dated 21.08.2017 made in W.A.(MD) No.3 of 2017 [cited supra], the Division Bench of this Court held that the Authorised Officer appointed by the bank in the proceedings initiated under SARFAESI Act, is not a Civil or Revenue Court, Collector or Revenue Officer and he is an officer of the bank, which lend money to the borrowers, acts as an Authorized Officer, only for the purpose of bringing the property for sale. In other words, such officers merely replace the secured creditors. The Division Bench further observed that at best the Authorized Officer can not be termed as Civil or Revenue Court, Collector or Revenue Officer. Observing so, the Division Bench held that notice issued under Section 47-A of the Indian Stamp Act, claiming stamp duty on the market value of the property is proper. 22. The Sale Certificate issued by the Authorised Officer of the bank cannot be agnated with the Sale Certificate issued by a Civil or Revenu....
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....ate is concerned, under Section 17(2)(xii) of the Registration Act, the Sale Certificate issued by a Civil or Revenue Officer does not fall under the category of non-testamentary documents which requires registration under sub-Section 17(1)(b) and (c) of the said Act. In the case on hand, the Sale Certificate was issued by the Authorised Officer, the second respondent. That being the case, the auction purchaser derives title on confirmation of sale in their favour and the Sale Certificate was issued evidencing such sale and title. In respect of the registration of the Sale Certificate issued by the second respondent, since the second respondent is not a Civil or Revenue Officer, the registration of the Sale Certificate is not exempted under Section 17(2)(xii) of the Registration Act. Therefore, we are of the view that though the auction purchaser derived title on confirmation of sale in their favour and a Sale Certificate was issued by the Authorised Officer, evidencing such sale and title, no further deed of transfer is required. In view of the judgment reported in (2007) 5 Supreme Court Cases 745 and the provisions of 17(2)(xii) of the Registration Act, the Sale Certificate issue....
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....the Hon'ble Supreme Court held as follows in Paragraph No. 34: 34. "An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false. Suppression of a material document would also amount to a fraud on the court. (Vide S.P. Changalvaraya Naidu V. Jagannath, (1994) 1 SCC 1; Gowrishankar V. Joshi Amba Shankar Family Trust, (1996) 3 SCC 310:AIR 1996 SC 2202; Ram Chandra Singh V. Savitri Devi, (2003) 8 SCC 319; Roshan Deen V. Preeti Lal, (2002) 1 SCC 100:2002 SC (L&S) 97:AIR 2002 SC 33; Ram Preeti Yadav V. U.P. Board of High School & Intermediate Education, (2003) 8 SCC 311:AIR 2003 SC 462....
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....imprisonment. In addition thereto, the learned Single Judge made appropriate directions to remedy the breach of undertaking. It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions to in addition to punishing the petitioners for contempt of court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach [of undertaking]". (Emphasis supplied) 18. The above principle has been applied even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadburn [1985 (1) All.E.R. 211], Sir Robert Megarry V-C observed: "I need not cite authority for the proposition that it is of high importance that orders of the court should be obeyed. Willful disobedience to an order of the court is punishable as a contempt of court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some charge in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties f....
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....ri Naphade. It would mean that consequences of nullifying such transaction not being provided by the Statute, it would not lose its legal efficacy even if it is in utter disregard to or in violation of or breach of prohibitory order or order of injunction issued by a Court of law. It would mean that parties can breach and violate Court orders openly and with impunity and neither they nor the beneficiaries suffer any consequences. It is time that we recognise the principle that transfer of immovable property in violation of an order of injunction or prohibition issued by Court of law, confers no right, title or interest in the transferee, as it is no transfer at all. The transferee cannot be allowed to reap advantage or benefit from such transfer merely because he is not party to the proceedings in which order of injunction or other prohibitory direction or restraint came to be issued. It is enough that the transferor is a party and the order was in force. These two conditions being satisfied, the transfer must not be upheld. If this course is not adopted then the tendency to flout orders of Courts which is increasing day by day can never be curbed. The Court exercises its powers on....
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....ow the perpetuation of the wrong doing. In our view, the inherent power will not only be available in such a case, but it is bound to be exercised in that manner in the interests of justice. Even apart from Section 151, we should observe that as a matter of judicial policy, the court should guard against itself being stultified in circumstances like this by holding that it is powerless to undo a wrong done in disobedience of the court's orders. But in this case it is not necessary to so to that extent as we hold that the power is available under Section 151. C.P.C." (Emphasis Supplied) 55. The Learned PCS for the 1st Respondent falls back upon the decision of the Hon'ble Supreme Court of India in Sujit Pal v. Prabir Kumar Sun & Ors. (1995) 6 SCC at Page 50, wherein, at Paragraphs 9 and 11, it is observed as under: 9. "In a case like the present one where the 'restoring things to their former condition is the only remedy' the Court, in our opinion, has to take steps for the purpose in the exercise of its inherent power. In Bhagat Singh v. Dewan Jagbir Sawhney, AIR 1941 Cal 670, it has been observed by Lord Williams J. that the Code is not exhaustive;....
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....19, passed by the 'Adjudicating Authority'('NCLT', Bench - I, Hyderabad), between Bank of India, Mumbai (Branch Office at : Hyderabad Large Corporate Branch, Hyderabad) v. M/s. ECI Infra Towers Company Pvt. Ltd., Hyderabad, Telangana (vide Page 159 of the Appellant's Appeal Paper Book - Diary No. 35 dated 13.01.2022). Hon'ble Supreme Court's Decisions: 57. This 'Tribunal', points out the decision of the Hon'ble Supreme Court of India in B. Arvind Kumar v. Government of India & Ors., dated 28.05.2007 (vide Civil Appeal No. 3540 of 2002), reported in (2007) 5 SCC at Page 745, wherein at Paragraph 10, it is observed as under: Re : Point (ii) 10. "The plaintiff has produced the original registered sale certificate dated 29.8.1941 executed by the Official Receiver, Civil Station, Bangalore. The said deed certifies that Bhowrilal (father of plaintiff) was the highest bidder at an auction sale held on 22.8.1941, in respect of the right, title, interest of the insolvent Anraj Sankla, namely the leasehold right in the property described in the schedule to the certificate (suit property), that his bid of Rs.8,350 was accepted and the sale was confirmed by the District....
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..... It was argued by the appellants that only upon registration of the sale certificate, the right of the borrower to redeem the mortgage would get extinguished and obliterated. 25. Indisputably, after the disposal of the writ appeals by the Division Bench of the High Court vide impugned judgment on 10th August, 2007, the auction purchaser (respondent No.3) got the sale certificate registered on 18th September, 2007 and then transferred the property by a registered sale deed on 5th October, 2007 to third party. It is not the case of the appellants that some interim injunction prohibiting respondent No.3 from registering the sale certificate or transferring the suit property, was operating against him after the decision of the Division Bench of High Court. In fact, the impugned judgment was not even carried in appeal before this Court by the appellants until then. The special leave petitions came to be filed only on 13th October, 2007 and order of status quo was passed by this Court on 23rd November, 2007. In other words, there has been a paradigm shift in the rights of the parties upon registration of the sale certificate on 18th September, 2007 and also because of the regis....
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....nt was allegedly deposited by them in the account of the father of appellant No.2 and not in their loan accounts as such. Unless the amount was transferred/deposited in the loan accounts of the appellants in relation to which the mortgage operated, it would not be a valid tender for paying the outstanding dues. Similarly, on the second occasion the appellants attempted to pay in the form of cheque(s) issued on 2nd January, 2006. However, as per the terms and conditions for grant of loan payment by cheque(s) was not permissible. Thus, the respondent bank was not obliged to accept the amount in the form of cheque(s). The respondent bank, therefore, justly declined to accept the cheque(s), not being a valid tender. Even the third attempt made by the appellants was to offer demand drafts drawn in favour of or in the name of the Authorised Officer of the respondent bank and not in the name of the bank or authorising the bank to appropriate it towards the subject loan accounts. Hence, these demand drafts were rightly not accepted as a valid tender. 28. Notably, the appellants took no steps, whatsoever, to pay the outstanding dues to the respondent bank by way of a valid tender n....
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....tion 13(8) of the 2002 Act which has come into force w.e.f. 1st September, 2016, will now stare at the face of the appellants. As per the amended provision, stringent condition has been stipulated that the tender of dues to the secured creditor together with all costs, charges and expenses incurred by him shall be at any time before the "date of publication of notice" for public auction or inviting quotations or tender from public or private deed for transfer by way of lease assessment or sale of the secured assets. That event happened before the institution of the subject writ petitions by the appellants. 30. Having said thus, in the peculiar facts of the present case, we do not deem it necessary to dilate further on the argument that registration of the sale certificate in relation to the auction conducted under the 2002 Act is essential. Similarly, it is not necessary to examine other grounds urged by the appellants, in light of our conclusion that the appellants have failed to make a valid and legal tender to the respondent bank before the issue of sale certificate on 6th January, 2006, muchless registration thereof on 18th September, 2007." 59. In the Judgment of t....
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....ade on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT." (Emphasis supplied by us) 20. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT." 60. In the decision of the Hon'ble Supreme Court of India in Transcore v. Union of India, reported in (2008) I SCC at Page 125, wherein, at Paragraphs 73 and 74, it is observed as under: "The word possession is a relative concept. It is not an absolute ....
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....4 of the NPA Act states that where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred, the secured creditor may, for the purpose of taking possession, request in writing to the District Magistrate to take possession thereof. Section 17(1) of NPA Act refers to right of appeal. Section 17(3) states that if the DRT as an appellate authority after examining the facts and circumstances of the case comes to the conclusion that any of the measures under Section 13(4) taken by the secured creditor are not in accordance with the provisions of the Act, it may by order declare that the recourse taken to any one or more measures is invalid, and consequently, restore possession to the borrower and can also restore management of the business of the borrower. Therefore, the scheme of Section 13(4) read with Section 17(3) shows that if the borrower is dispossessed, not in accordance with the provisions of the Act, then the DRT is entitled to put the clock back by restoring the status quo ante. Therefore, it cannot be said that if possession is taken before confirmation of sale, the rights of the b....
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....th the 2002 Rules." 61. In the decision of the Hon'ble Supreme Court of India in Embassy Property v. State of Karnataka (2019) SCC Online SC 1542, wherein, at Paragraph 37, it is observed as under: 37. "From a combined reading of Sub−section (4) and Sub− section (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the government under the provisions of MMDR Act, 1957 and the Rules issued there−under. The only provision which can probably throw light on this question would be Sub−section (5) of Section 60, as it speaks about the jurisdiction of the NCLT. Clause (c) of Sub−section (5) of Section 60 is very broad in its sweep, in that it speaks about any question of law or fact, arising out of or in relation to insolvency resolution. But a decision taken by the government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase "arising out of or in relation to the insolvency resolution" appearing in Clause (c) of Sub−sect....
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....efore us, there is no explanation much less any reasonable explanation as to why effective steps were not taken and why the interest of the Bank was permitted to be jeopardized. 78. The concept of public accountability and performance is applicable to the present case as well. These are instrumentalities of the State and thus all administrative norms and principles of fair performance are applicable to them with equal force as they are to the Government department, if not with a greater rigor. The well established precepts of public trust and public accountability are fully applicable to the functions which emerge from the public servants or even the persons holding public office. In the case of State of Bihar v. Subhash Singh [ (1997) 4 SCC 430], this Court, in exercise of the powers of judicial review stated that, the doctrine of full faith and credit applies to the acts done by officers in the hierarchy of the State. They have to faithfully discharge their duties to elongate public purpose." Hon'ble High Court's Decisions: 63. In the decision of the Hon'ble High Court of Madras in Re, The Official Liquidator, High Court of Madras, 2010 (2) CTC 113, whereby and whe....
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....ent except in the Military or Naval Service, whether the duties are Executive or Judicial or in the highest or the lowest departments". The term "Civil Officer" has to be understood only in the context of "civilians" as opposed to persons in Military Service. It is doubtful, if an Official Liquidator can be equated to a Civil Officer or a Revenue Officer, so as to make the certificate of sale issued by him come within the purview of Section 17(2)(xii) of the Registration Act, 1908. I do not think that an Official Liquidator can be considered to be a "Revenue Officer" within the meaning of Section 89(4) since he is not collecting revenue for the Government. Even assuming for the sake of argument that he can be equated, Article 18 under Schedule-I of the Indian Stamp Act makes a certificate of sale issued by a Revenue Officer also liable to stamp duty. The term "Revenue Officer" appearing both in Article 18 under Schedule-I of the Indian Stamp Act and also in sections 17(2)(xii) and 89(4) of the Registration Act, are to be given the same meaning and to be construed to indicate the same person. 59. Therefore, the only conclusion that one can draw by a combined reading of the ....
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....icate', was issued and the 'Money', was 'Recovered', the purpose is over, and therefore, it cannot be 'termed' as a 'Secured Creditor', and the 'Property', cannot be 'Secured Debt'. Further, it was observed that, the 'Banks', are entitled, to take 'Possession', under Section 14 (2) of the SARFAESI Act and the 'Issuance of Sale Certificate', is not a 'Bar', to take 'physical possession'. Principle of Lis Pendens: 66. The Principle of Lis Pendens under Section 52 of the Transfer of Property Act, 1882, 'applies', not only, to the 'Private Transfers inter vivos', but also to the 'Court Sales', as per decision in 'Sayar Bai v. Yashoda Bai & Ors., reported in AIR 1983 Raj. 161'. 67. It is pointed out that a subsequent 'Transferee', even though, he has obtained the 'Transfer', without 'Notice' of 'Original Contract', cannot set up against the 'Plaintiff' - 'Agreement Holder', any 'Right', defeating the 'Rule of Lis Pendens', which is founded upon 'Public Policy', as per decision in 'P. Lakshmi Ammal v. S. Lakshmi & Ors., AIR 1991 Mad. 137. 68. When the 'Doctrine of Lis Pendens', is attracted, the 'Transferee', cannot take the 'Plea' of 'Good Faith', to avoid 'applicability of ....
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.... of Income Tax'. 78. In Gopi Parshad v State of Punjab, AIR 1957 P & H 45, it is held that the expression, 'the Revenue', means the 'Income of Nation', derived from its 'Taxes', 'Duties' or the 'other Sources', for the 'payment of Nation's Expenses'. 79. In the decision Apambi Kabuini v Chief Commissioner, AIR 1965 Mani. at Pages 3 & 8, it is held that the 'Chief Commissioner' or 'Administrator', as he is called in the 'Act', has the 'Right of Review', and he is included, within the term 'Revenue Officer', in Section 96 of the 'Act'. 80. The expression, 'Revenue Officer' in Section 89 of the 'Registration Act', includes 'Tax Revenue Officer', as per decision of the Hon'ble Supreme Court of India in Shanti Devi Lal Singh v. Tax Recovery Officer, AIR 1991 SC 1880. Charge: 81. A 'Charge', is an 'Encumbrance', a 'Right' vested in 'one Person', to 'look to the proceeds of another's Property', for 'satisfaction of a Debt due', which may be through an 'Agreement of Law', as opined by this 'Tribunal'. Confirmation of Sale: 82. A 'Confirmation of Sale', by a 'Secured Creditor', under subrule 6 of Rule 9 of 'Security Interest Enforcement Rules, 2002', is necessary for 'F....
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....ncerned authority, over Phone, i.e., Mr. Shitanshu, from the 'Appellant' / the 'Financial Creditor', and he informed the 'Interim Resolution Professional', that the 'Plant', was already sold to the 2nd Respondent / M/s. Srinivasa Edifice Pvt. Ltd. However, the 'Security Persons', still gave the name and Contact Number of the 'Appellant'/'1st Respondent', as the concerned 'Authority'. 89. According to the 1st Respondent / Resolution Professional, the 'Financial Creditor' (the 'Appellant'), was requested to provide details Viz., (a) the date of 'Sale Notice' (b) 'Auction Notice' and (c) 'Name of the Successful Bidder' (d) 'Bid Amount' and also the (e) 'Valuation Reports' of the 'Independent Third Party Valuers', appointed by the 'Financial Creditor' (the 'Appellant'), etc. through an email, but, was not in receipt of the same. 90. The grievance of the 1st Respondent / Petitioner / Resolution Professional, before the 'Adjudicating Authority', in IA No. 124 of 2021 in CP (IB) No. 673 / 7 / HDB /2019, is that he had made a request to the 'Financial Creditor' ('Appellant'), to furnish the Private Treaty Agreement Copy, but, was not provided, but was given, only the 'Offer Letter', ....
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....ng the 'Respondents' in 'Interlocutory Application' No. 124 of 2021 therein, to handover the 'Properties' of the 'Corporate Debtor', including Company's entire fixed and current assets, including stocks and receivables, which include 'Plant and Machinery', on the lease hold land admeasuring Plant and Machinery on the lease hold land admeasuring Ac. 11.37 guntas in Sy. No. 334 / A, 3 / 1A, 3 / 1B, 5 and Ac. 10.27 guntas in Sy. No. 332 / A, 333/A, 7, 8B, 8A, are situated at Kaveli Village, Kohir Mandal, Sangareddy District (erstwhile Medak District) and (d) to pass an 'Order', in directing the 'Commissioner of Police', Sangareddy at Office of the 'Superintendent of Police', Sangareddy to provide necessary assistance to him and his team, to takeover the 'Control' and 'Custody' of the 'Properties' of the 'Corporate Debtor', etc. 97. It transpires that the 'Appellant' / '1st Respondent', had preferred OA No. 598 of 2018 (before the Debts Recovery Tribunal, Hyderabad, against the '1st Respondent' / 'M/s. ECI India Towers Company Pvt. Ltd.', Hyderabad, and three Ors. (as 'Defendants'), seeking 'Recovery of Sum of Rs.20,97,66,801.41 from the 'Defendants', with costs and future interest ....
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....favour of 'United Bank of India' (under SARFAESI Act, 2002), by the 'Borrower', was purportedly 'assigned', in favour of the 'Appellant' / '1st Respondent', through 'Assignment Deed', dated 04.04.2019. 102. The 'Appellant' / '1st Respondent', had caused a 'Notice', as per Section 13 (1) of the SARFAESI Act, 2022, requiring the 'Borrower', to wipe out the 'Liability', within the time prescribed therein and owing to the failure of the 'Borrower', in fulfilling the conditions of the 'Demand Notice', the 'Secured Asset', was taken possession by means of the 'Possession Notice' dated 27.09.2019 and subsequently, the 'Property', was sold, based on a 'Private Treaty', to the 2nd Respondent for a 'Monetary Consideration of Rs.9,75,00,000/-. 103. As a matter of fact, the 'Sale', was affirmed on 20.01.2021, and was Registered on 04.03.2021 in the Office of the Sub-Registrar, Zaheerabad, Medak District, in favour of the '2nd Respondent'. 104. In this connection, this 'Tribunal', points out that based on the three 'Expression of Interest', received on 25.09.2020, for the 'Sale of Property', under 'Private Treaty', the '2nd Respondent' selected as 'H1 Bidder', who submitted an 'Offer' ....
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....te', in the instant case was 'Registered', 'violating' the clear 'Order' of 'Moratorium' in force (vide 'Order' dated 18.01.2021, passed by the 'Adjudicating Authority', 'National Company Law Tribunal', Hyderabad Bench - I, Hyderabad, in IA No. 124 of 2021 in CP(IB) No. 673 / 7 / HDB / 2019), the 'Sale Certificate' dated 20.01.2021, issued by the 'Appellant' / '1st Respondent', in favour of the '2nd Respondent' and the said 'Certificate', which got 'Registered', on 04.03.2021, are clearly 'non-est in Law' and further that the '2nd Respondent', cannot 'Stake', any 'Claim' / get any 'Advantage' / 'Title' / 'Interest' or 'Right', in regard to the Property, covered under the 'Sale Certificate' dated 20.01.2021. 109. Indeed, the Hon'ble Supreme Court of India in the Judgment in Duncans Industries Limited v A.J. Agrochem (vide Civil Appeal No.5120 of 2019) dated 04.10.2019, at Paragraph 28, had observed the following: 28. "...... Therefore, considering Section 238 of the IBC, which is a subsequent Act to the Tea Act, 1953, shall be applicable and the provisions of the IBC shall have an overriding effect over the Tea Act, 1953. Any other view would frustrate the object and pur....