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ANIRUDDHA BOSE, VIKRAM NATH
Haldiram Incorporation Pvt. Ltd. – Appellant
Versus
Amrit Hatcheries Pvt. Ltd. – Respondent
ORDER :
The appellant before us is the purchaser in an auction sale of certain properties of a defaulting borrower. A sale certificate was issued on 19th August 2019 under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) in relation to the immovable properties in respect of which auction sale was held i.e. two blocks of land situated in Howrah district in the State of West Bengal. The auction sale took place in respect of properties mortgaged by the borrower (respondent No.1 in this case, now represented before us by the Liquidator appointed under the provisions of the Insolvency and Bankruptcy Code, 2016) for availing credit facilities. The latter had defaulted in repayment of the same. It is the case of the appellant that payment was completed by it on 16.08.2019. An operational creditor filed a petition under Section 9 of the 2016 Code before the National Company Law Tribunal (NCLT) and consequently on 20.08.2019 moratorium was declared, initiating the Corporate Insolvency Resolution Process (CIRP). An erstwhile Director of the Corporate Debtor had taken out a notice of motion resisting the s
The auction sale of properties under the SARFAESI Act is valid if concluded before the declaration of moratorium, and such properties cannot be considered liquidation assets of the Corporate Debtor.
Auction sale of secured asset – Once CIRP is commenced, there is complete prohibition for any action to foreclose, recover or enforce any security interest created by Corporate Debtor in respect of i....
The right of redemption under SARFAESI Act is extinguished after the issuance of a sale certificate, rendering claims by lessees during such proceedings legally unsustainable.
Points of Law : Only required the authorised officer of the bank under the SARFAESI Act to hand over the duly validated sale certificate to the auction purchaser with a copy forwarded to the register....
The ownership of a secured asset is retained until a sale certificate is issued, and the interim moratorium under the IBC prevents transfer of possession.
The auction sale of secured assets was invalid due to violations of statutory procedures, including failure to obtain separate valuations and selling below the reserve price.
A loan classified as Non-Performing Asset must adhere to criteria set by the Reserve Bank of India; effective alternative remedies must be pursued before invoking writ jurisdiction.
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