IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 20694 of 2022 ==========================================================

M/S MUKTA INDUSTRIES PVT. LTD.

Versus THE DRT-I, AHMEDABAD ==========================================================

Appearance:

KULDEEP K ADESARA(9222) for the Petitioner(s) No. 1,2,3,4,5,6,7,8,9 MR KM PARIKH(575) for the Petitioner(s) No. 1,2,3,4,5,6,7,8,9 MR PRANAV G DESAI(290) for the Respondent(s) No. 2 NOTICE SERVED for the Respondent(s) No. 1 ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 01/02/2023

ORAL ORDER

1.Heard learned advocate Mr. K.M. Parikh for the petitioners and learned advocate Mr.

Pranav G. Desai for respondent no.2.

2.By this petition under Articles 226 and 227 of the Constitution of India, the petitioners have challenged the order dated 6.10.2022 passed by the Debts Recovery Tribunal-I, Ahmedabad (For short “DRT”) in Securitization Application No.187/2021.

3.Brief facts of the case are that the petitioners have challenged the notice dated 11.09.2022 issued by the Court Commissioner on the basis of order dated 02.02.2022 passed by the Chief Judicial Magistrate, Ahmedabad for taking physical possession of the properties belonging to the petitioner nos. 4 and 8 and e-auction sale notice issued under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 (For short “the Rules”) dated 22.08.2022 by respondent no.2 bank for auctioning the property of petitioner nos. 4, 5 and 8 on 27.09.2022 by filing the amendment application before the DRT in the pending Securitization Application No.187/2021 preferred by the petitioner - original borrower under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short “the SARFAESI Act”).

4.It is the case of the petitioners that on

27.09.2022, respondent no.2 bank received bid in respect of the e-auction sale notice issued on 22.08.2022.

5.It is the case of the petitioners that petitioner no.4 Mr. Hemendra Babulal Shah who was personal guarantor of petitioner no.1 Corporate Debtor had filed an application under section 94 of the Insolvency and Bankruptcy Code, 2016 (For short “IBC”) before the National Company Law Tribunal, Ahmedabad Bench (For short “NCLT”) on 22.03.2022. It is further the case of the petitioners that in view of section 96 of the IBC, the interim moratorium would start on the date of filing of the application till the application is admitted by the NCLT and therefore, the respondent bank could not have proceeded with the auction sale.

6.By the impugned order, the DRT after analysing the provisions of sections 95 to

100 of IBC held as under :

“20. Thus from an analysis of the provisions contained in sections 95 to 100 of IBC, we find that a definite time-line has been provided at each stage of the proceeding. That apart, the interim moratorium in terms of section 96 which commences from the date of the application remains in force till the date of admission of such application under section 100. Though time-lines have been prescribed at each stage of the proceeding leading to acceptance or rejection of the application under section 100, I find that no such time-line has been prescribed for submission of report by the resolution professional though section 100 provides that the adjudicating authority shall take a decision either admitting or rejecting the application within 14 days from the date of submission of the report.

21. In the case on hand, though Applicant No.4 has filed the alleged application u/s 94 on 22/03/2022 before NCLT, Ahmedabad, it has not yet been admitted or rejected and he has not placed on record the present status of his application. The Applicants have also not shown as to what efforts were made by them for listing of their application u/s 94 filed before NCLT, Ahmedabad. Therefore, the Applicants cannot claim benefit of such Interim moratorium for an indefinite pe