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IA No.245/2022 IN CP (IB) NO.307/ALD/2019

IN THE MATTER OF:

[An application under Section 60(5) of the Insolvency and

Bankruptcy Code, 2016 (IBC, 2016)]

IN THE MATTER OF:

M/S AARWANSS BUILDWELL AND INFRACON LLP

Address: 2151, Pocket A, Sector 16, Vashudhara, Ghaziabad

Uttar Pradesh 201012 ….APPLICANT

AND

IN THE MATTER OF:

RAMESH HIRALAL SHARMA

R/O. FLAT NO. 1101,

SATGURU KALYAN,

JN. OF 13^th AND 17^th ROAD, KHAR (WEST)

MUMBAI-400052

…….APPLICANT/FINANCIAL CREDITOR

Versus

MODINAGAR PAPER MILLS LTD.

HAVING REGISTERED OFFICE AT:

ASHA RAM TYAGI ROAD, MODINAGAR

GHAZTABAD-201204

.……..RESPONDENT/CORPORATE DEBTOR

Order pronounced on- 25th April, 2024

Coram:

Mr. Praveen Gupta. : Member (Judicial)

Mr. Ashish Verma : Member (Technical)

Appearances:

Sh. Krishna Dev Vyas with : For the Applicant in IA No.245/2022 Sh. Sushil Kumar Antal, Advs.

ORDER

1. This application has been filed by Aarwanss Buildwell and Infracon LLP (hereinafter referred as the “applicant”) seeking the following prayer:

a. Allow the instant application and clarify that the property of the Corporate Debtor purchased by the Applicant in auction under SARFAESI prior to commencement of CIR Process be excluded from the assets of the Corporate Debtor and/or b. Clarify that the Resolution Professional cannot take possession of the asset of the Corporate Debtor acquired by the Applicant pursuant to certificate for sale dated

08.12.2021. and/or;

c. Pass any further order(s) as this Hon'ble Tribunal may deem fit and proper in the interest of justice.

2. It has been averred in the application that the applicant had been issued a sale certificate dated 8th December, 2021 under the SARFEASI Act, 2002 in respect of the Corporate Debtor’s assets, prior to the initiation of CIRP against the Corporate Debtor. The Resolution Professional is now attempting to take possession of the said assets.

3. It is stated that initially an application U/s 7 of the Code was initiated by the Financial Creditor against the Corporate Debtor and on admission of the application filed U/s 7 of the Code, the CIRP was initiated on 06.04.2022. During the course of the aforementioned application, Kotak Mahindra Bank, submitted an intervention application to inform this Adjudicating Authority that the bank had realized and sold its security interest in the immovable properties and/or assets of the corporate debtor through an auction conducted under the (Security Interest Enforcement) Rules 2002. These submissions were acknowledged by the Adjudicating Authority in paragraph 6 of the order dated

06.04.2022.

4. The said assets were sold pursuant to an e-auction conducted by the intervenor bank for a sum of Rs. 26,01,00,000/- to the applicant. The said sale was done in accordance with Rule 6 of the SARFAESI Act, 2002 for a consolidated lot of land situated located at Khasra no. 193(kha), 193 (cha), 193 (Chha), 193 (da), 194, 195 falls in Village Sikri Khurd, Pargana Jalalabad, Tehsil Modinagar, District Ghaziabad and the properties comprising Khasra no. 364, 365, 366, 367 falls in Village Sikri Kalan, Pargana Jalalabad, Tehsil Modinagar, District Ghaziabad, Uttar Pradesh admeasuring 28332 square yards.

5. Section 18 of the IBC, 2016 casts a duty upon the resolution professional to take custody over assets of the corporate debtor but in the present case, the asset was already sold to the applicant and the same was confirmed via the sale certificate dated 08.12.2021. The Applicant therefore, asserts that the resolution professional cannot take control of the assets not in possession of the Corporate Debtor.

6. The Applicant has relied on the judgement of Shakeena v.

Bank of India wherein the SC opined as follows:-

“10.17 The ratio laid down by the Division Bench of this Court in Arumugham, S. & 2 Others Vs. C.K. Venugopal Chetty & 5 others and the Supreme Court in B. Arvind Kumar Vs. Government of India & Ors, referred supra, squarely applied to the case in hand and we, therefore, have no inc