Dismissed

Ms S M Engineering Works v. Central Bank of India

DRT28 Nov 2023SA/223/2023

Case brief

AI extract

What is this about?

The DRT dismissed the applicant's interim application seeking a stay on a sale notice under the SARFAESI Act. The court held that claims for interim moratorium under the IBC must be made before the NCLT, especially where the loan notification is pending.

What did the court decide?

Disposal of the interim application for stay of sale notice; Applicant directed to approach NCLT for moratorium relief.

28/11/2023

Ex.
No.

Before Presiding Officer Dr. Rekha G. Dhakar,
DRT-1, Mumbai.
Order in IA No. 3303/2023
in
SA 223 of 2023
Ms S M Engineering Works Vs Central Bank of
India

Next date

MBA
Advocate Charles D’souza a/w Adv. Vineet
Jain i/b Aniruth Purshotam & Adv. Sankalp S.
appeared for the Applicant.
Advocate Rajesh Dubey a/w Shradha
Agarwal appeared for the Respondent.
IA No. 3303/2023

U
1. By
way
of
the
present
Interim
Application (IA), the Applicant has

RT1 M
prayed
to
stay
the
operation
and
implementation
of
the
impugned
notice dated 09.11.2023; and direct the
Respondents to maintain status quo in
respect of the property i.e. Plot No.
L-128 admeasuring 4836 sq. mts at
Verna Industrial Estate, Taluka Salcete,
District South Goa-403722 (hereinafter
referred to as “property in question”).
2. Ld. Counsel for the Applicant has
raised only one objection in the present
matter that the Interim Moratorium

would be applicable on the present

UMBAI proceeding he stated that a company petition has been filed against Mizba Shaikh who is one of the partner of the Applicant u/S 95 of the IBC, 2016, and Interim Moratorium came into effect while filing of the said petition on 02/06/2022, he submits therefore, that in terms of Section 96 of the IBC, 2016 the creditors cannot initiate any legal action or proceeding in respect of any debts which would include the debts at hand. Thus, he submits the impugned sale notice may be quashed and set aside.
1 M 3. Pre Contra, Ld. Counsel for the Respondent Bank strongly objected to the contention of the Applicant.
4. Record reveals that the Respondent
Bank issued demand notice on
06/12/2019 (ex-G of the SA), further
possession notice was issued on
13/02/2020 u/S 13 (4) of the
SARFAESI Act, 2002, and the symbolic
possession by the Respondent Bank
was taken on 29/02/2020 (exh.-G of the SA).

UMBAI
proceeding he stated that a company
petition has been filed against Mizba
Shaikh who is one of the partner of the
Applicant u/S 95 of the IBC, 2016, and
Interim Moratorium came into effect
while filing of the said petition on
02/06/2022, he submits therefore, that
in terms of Section 96 of the IBC, 2016
the creditors cannot initiate any legal
action or proceeding in respect of any
debts which would include the debts at
hand. Thus, he submits the impugned
sale notice may be quashed and set
aside.

1 M
3. Pre
Contra,
Ld.
Counsel
for
the
Respondent Bank strongly objected to
the contention of the Applicant.

4. Record reveals that the Respondent

Bank
issued
demand
notice
on

06/12/2019 (ex-G of the SA), further

possession
notice
was
issued
on

13/02/2020
u/S
13
(4)
of
the

SARFAESI Act, 2002, and the symbolic

possession by the Respondent Bank

was taken on 29/02/2020 (exh.-G of
the SA).

5. Further Ld. Mamlatdar issued a letter for taking possession on 12/07/2021
(exh.-H of the SA). Second letter of possession was issued on 16/12/2022 and the possession of the property in
question was taken on 30/12/2022
(exh.-J of the SA). Thereafter, the
BA property was put on auction on 20/02/2023; 24/05/2023; 01/08/2023; 07/09/2023; 09/10/2023 but the same
were failed for want of bids. From
these sale notices the notice of
20/02/2023 was set aside for the
property in question. Now the fresh
sale notice dated 09/11/2023 is
challenged by the Applicant in the
T1 present SA. wherein the auction has already taken place and as informed by
Ld. Counsel for the Respondent that
bids are received in the auction.
6. Record reveals that the Applicant
herein is having knowledge of all the
SARFAESI measures which are taken
by the Respondent Bank and even one
action is already been challenged
before this Tribunal however, the
Applicant herein never insisted/

5. Further Ld. Mamlatdar issued a letter
for taking possession on 12/07/2021

(exh.-H of the SA). Second letter of
possession was issued on 16/12/2022
and the possession of the property in

question was taken on 30/12/2022

(exh.-J
of
the
SA).
Thereafter,
the

BA
property
was
put
on
auction
on
20/02/2023; 24/05/2023; 01/08/2023;
07/09/2023; 09/10/2023 but the same

were failed for want of bids. From

these
sale
notices
the
notice
of

20/02/2023
was
set
aside
for
the

property in question. Now the fresh

sale
notice
dated
09/11/2023
is

challenged by the Applicant in the

T1
present SA. wherein the auction has
already taken place and as informed by

Ld. Counsel for the Respondent that

bids are received in the auction.

6. Record
reveals
that
the
Applicant

herein is having knowledge of all the

SARFAESI measures which are taken

by the Respondent Bank and even one

action
is
already
been
challenged

before
this
Tribunal
however,
the

Applicant
herein
never
insisted/

claimed any interim moratorium as
prayed today before this Tribunal.
AI According to the Applicant himself the Interim Moratorium was came into effect since 02/06/2022 and for the last one and half year Applicant never raised any objection to the action of the Respondent Bank and now Applicant is raising objection the act of the
MB applicant is appears to be a dilatory tactic.
U 7. Further in the present matter there is no loan granted to the Applicant
herein i.e. the partnership firm.
1 M Therefore, the objection raised by the Applicant is not acceptable. 8. Even otherwise this Tribunal while
T deciding another matter i.e. N. K. Realtors Vs Punjab National Bank TSA
No. 39/2023 dated 17/04/2023 has
D already recorded that: a. In these circumstances, it would
be appropriate that the parties who are claiming protection on
the ground of Interim
Moratorium as provided under

claimed any interim moratorium as

prayed
today
before
this
Tribunal.

AI
According to the Applicant himself the
Interim Moratorium was came into
effect since 02/06/2022 and for the last
one and half year Applicant never
raised any objection to the action of the
Respondent Bank and now Applicant
is raising objection the act of the

MB
applicant is appears to be a dilatory
tactic.

U
7. Further in the present matter there is
no
loan
granted
to
the
Applicant

herein
i.e.
the
partnership
firm.

1 M
Therefore, the objection raised by the
Applicant is not acceptable.
8. Even otherwise this Tribunal while

T
deciding another matter i.e. N. K.
Realtors Vs Punjab National Bank TSA

No. 39/2023 dated 17/04/2023 has

D
already recorded that:
a. In these circumstances, it would

be appropriate that the parties
who are claiming protection on

the
ground
of
Interim

Moratorium as provided under

Section 96 of the IBC, 2016, shall approach the concern NCLT only.
UMBAI b. This will not be out of context to discuss here that time and again the borrowers approaching this Tribunal and seeking protection with the similar prayer of Interim Moratorium under Section 96 of the IBC, 2016, on the basis that Insolvency Petitions are filed with the NCLT by or against the partners or individuals person, however, in fact, the provisions
T1 M pertaining to the partnership firm as well as individual person are still not notified, but, parties before this Tribunal are claiming
the Interim Moratorium by
showing the filing report of
Insolvency Petition with the
NCLT. This is a very absurd
effort by the parties.
c. Undoubtedly, on filing of a
Insolvency Petition under
Section 94 & 95 of IBC, 2016,
there shall be Interim

Section 96 of the IBC, 2016, shall
approach the concern NCLT only.

UMBAI
b. This will not be out of context to
discuss here that time and again
the borrowers approaching this
Tribunal and seeking protection
with the similar prayer of Interim
Moratorium under Section 96 of
the IBC, 2016, on the basis that
Insolvency
Petitions
are
filed
with the NCLT by or against the
partners or individuals person,
however, in fact, the provisions

T1 M
pertaining
to
the
partnership
firm as well as individual person
are still not notified, but, parties
before this Tribunal are claiming

the
Interim
Moratorium
by

showing
the
filing
report
of

Insolvency
Petition
with
the

NCLT. This is a very absurd

effort by the parties.

c. Undoubtedly,
on
filing
of
a

Insolvency
Petition
under

Section 94 & 95 of IBC, 2016,

there
shall
be
Interim

Moratorium qua the debts of the
RT1 MUMBAI debtor as contemplated under Section 96 of the IBC, 2016, thus, all the concerned parties are required to take all the action accordingly. d. Thus, in these circumstances it is hereby directed to the Applicant herein to file appropriate application before the Hon’ble NCLT only, for the relief / protection of Interim Moratorium under IBC, 2016. (emphasis provided) 9. Therefore, in these facts and circumstances the present IA is hereby disposed off.
D P.O. DRT-I

Moratorium qua the debts of the

RT1 MUMBAI
debtor as contemplated under
Section 96 of the IBC, 2016, thus,
all
the
concerned
parties
are
required to take all the action
accordingly.
d. Thus, in these circumstances it is
hereby directed to the Applicant
herein
to
file
appropriate
application before the Hon’ble
NCLT
only,
for
the
relief
/
protection
of
Interim
Moratorium under IBC, 2016.
(emphasis provided)
9. Therefore,
in
these
facts
and
circumstances the present IA is hereby
disposed off.

D
P.O.
DRT-I

Ms S M Engineering Works v. Central Bank of India

Case brief

What is this about?

What did the court decide?

Ms S M Engineering Works v. Central Bank of India

Case brief

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What the court decided

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