Sanjeev Dalal (Retd.) vs. International Recreation & Amusement Ltd - Delay in filing claim during CIRP

 NCLT (PB) New Delhi (02.08.2019) in Col. Sanjeev Dalal (Retd.) vs. International Recreation & Amusement Ltd.[[IB)-297(PB)/2018] held that; considering resolution plan is pending consideration before the Adjudicating Authority and in view of the same the claims of the financial creditors can be accepted and adjudicated by the RP.
 

Excerpts of the order;

The present applications have been filed by claimants who are the allottees/joint allottees. The applicants state that their claims were rejected by the Resolution Professional on the ground of delay. It is further stated that the application considering resolution plan is pending consideration before the Adjudicating Authority and in view of the same the claims of the financial creditors can be accepted and adjudicated by the RP. The delay in filing of claims is not intentional and many applicants were unaware of the CIRP and filing of claims. 

Considering the submissions made by the counsels and documents on record. The RP is directed to accept claims and adjudicate the same as per law. 

 

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Kodak Ltd. V/s South Indian Film Corporation held - Funds held in trust for failed negotiations

 High Court Madras (08/01/1937) in  Kodak Ltd. V/s South Indian Film Corporation held that; An advance received in respect of a contract which was under negotiations retains its character of trust money, upon the failure of negotiations. As such, these funds will not form part of “Liquidation Estate” in liquidation proceedings.

 

Excerpts of the order;

# 2. ………….By Section 52(1), Presidency Towns Insolvency Act 1919, it is provided that the properties of the insolvent divisible amongst his creditors shall not comprise amongst others the property held by the insolvent on trust for any other person. Section 94, Trusts Act, provides that in any case not coming within the scope of any preceding sections of the Act, where there is no trust, but the person having possession of property has not the whole beneficial interest in such property, he holds it for the benefit of the persons having such interest.

# 3. …………..  I have been referred to Official Assignee of Bombay v. Abdul Hajee AIR 1933 Bom 437, a case in which a sum of Rs. 1,000 was paid to a firm subsequently becoming insolvent by way of deposit in contemplation of the payer entering into a service agreement with the payee, the sum paid being the contemplated sum by way of fidelity guarantee. No agreement was ever concluded and in that case it was held by Wadia, J. that the payees were the trustees of the payers in respect of that money.

 

# 4. When the Company intimated to the creditor that there would be no concluded contract between them, in other words, when the Company withdrew its offer to make a contract upon the terms contained in an earlier letter (which they were entitled to do), the position of mere negotiation which had then existed terminated and upon the letters which I have seen it is quite clear that the Company were holding this sum of Rs. 250 for the benefit of the creditor …………...

 

# 5. I therefore hold that the sum of Rupees 250 out of the sum of Rs. 1,100 is in the words of Section 52(1) property not divisible amongst the general body of creditors, in other words they are not entitled to that amount. Whether questions arise in regard to other secured creditors I do not know. It may be a matter for subsequent application to the Court. So far as this matter is concerned, these creditors' claim is allowed with costs.

 

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Author’s Comments ; Section 36 of the Code in respect of Trust Money in Liquidation Estate reads as follows;

Section 36. Liquidation estate. -

(1) For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in sub-section (3), which will be called the liquidation estate in relation to the corporate debtor.

(2) The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors.

XXXXXXXX

(4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation: -

• (a) assets owned by a third party which are in possession of the corporate debtor, including -

• (i) assets held in trust for any third party;

XXXXXXXX

 

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L & T Infrastructure Finance Company Limited V/s Maharashtra Vidyut Nigam Private Limited - Section 7 Application & Inadequate Stamp Duty

NCLT Mumbai (14.02.2019), in L & T Infrastructure Finance Company Limited V/s Maharashtra Vidyut Nigam Private Limited [CP (I&B) 593/NCLT/MB/2018] held that; The proceedings before this Adjudicating Authority are summary in nature. It is pertinent to mention that stamp duty payable and paid on letter of guarantee is Rs. 100 and it has been purchased by the Corporate Debtor. Therefore, the Corporate Debtor has no right to raise the objection of insufficient stamp duty.

 

Excerpts of the order;

# 1. It is a Company Petition filed u/s 7 of Insolvency & Bankruptcy Code, 2016 (IBC) by the financial creditor namely L & T Infrastructure Finance Company Limited against the Corporate Debtor namely Maharashtra Vidyut Nigam Pvt. Ltd. to initiate corporate insolvency resolution process against the corporate debtor. The amount claimed to be in default is Rs. 94,95,68,366/- as on 21.3.2018. The date of default has been stated as 31.1.2015, and the date of declaration of Corporate Debtor’s account as a nonperforming

asset has been stated as 31.3.2016.

 

# 10. Reference has been made to the specific clause in the Deed of Guarantee dated 5.1.2015 to show that the Corporate Debtor unconditionally and irrevocably guaranteed the debt of GGRPL.

 

# 13. The Corporate Debtor did not file a reply even though several opportunities were given for the same. During the hearing the Corporate Debtor raised, inter-alia, following defences:

• e) It is submitted that the Deed of Guarantee dated 5.1.2015 executed in Delhi is not duly stamped in accordance with the provisions of the Maharashtra Stamp Act, 1958, therefore, the same cannot be acted upon or looked into by this Tribunal. Reference has been made to Sections 18, 33 & 34 of the Stamp Act and it is stated that as per Section 18, if an instrument is executed outside Maharashtra, then  same has to be stamped within 3 months from the date first it is received in the state. Reference has also been made to the judgment of SMS Tea Pvt. Ltd. v. Chandmari Tea & Co. Pvt. Ltd. [(2011) 14 SCC 66]. It is further submitted that since the Deed of Guarantee is insufficiently stamped, the Tribunal should not act upon it.

• f) It is submitted since the Financial Creditor brought the Deed of Guarantee into the state of Maharashtra from Delhi, the burden of complying with the provisions of Section 18 of the Stamp Act falls on the Financial Creditor. Reference has also been made to Section 30A of the Stamp Act to state the liability to pay stamp duty falls on the Financial Creditor.

 

# 14. The Financial Creditor rebutted the defences raised by arguing the following:

• b. The Deed of Guarantee executed by the Corporate Debtor is not insufficiently stamped. It is stated that the Stamp for this document was purchased by the Corporate Debtor as apparent from Pg. 253 of the Petition. The Corporate Debtor has acted upon the document. To substantiate this, reliance has been placed on Tata Capital Financial Services v Unity Infraprojects (MANU/ MH/1362/2015) to state that since the guarantee has been acted upon and the debt has been admitted by the corporate debtor, it cannot raise the objection that the document is insufficiently stamped.

 

# 19. The proceedings before this Adjudicating Authority are summary in nature. It is pertinent to mention that stamp duty payable and paid on letter of guarantee is Rs. 100 and it has been purchased by the Corporate Debtor. Therefore, the Corporate Debtor has no right to raise the objection of insufficient stamp duty.

 

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John Varghese Vs Value Designbuild Private Limited - Section 7 Application & Inadequate Stamp Duty

NCLT Bengaluru (10.01.2019) in John Varghese Vs Value Designbuild Private Limited [CP(IB).No.46/BB/2018] allowed / accepted the application of the creditor U/s 7 of the Code & for deficient stamp duty on the loan agreement observed that Discrepancy if any, in the Loan Agreement, can be looked into by the Resolution Professional, and, would issue necessary direction to the Financial Creditor to pay additional fees, and penalty to the appropriate authority under the Stamp Act. 

 

Excerpts of the order;

# 1. The Petitioner Mr.John Varghese, through his authorised Power of Attorney holder Smt.M.Jamuna Rani, has submitted an application under Section 7 of the I&B Code, 2016 read with Rule -4 of the I&B (AAA) Rules, 2016 seeking to initiat Corporate Insolvency Resolution Process in the matter of M/s Value DesignBuild Private Limited, Corporate Debtor.

 

# 6. However, the respondent has denied that this is not a financial debt as the loan agreement executed therein is not sufficiently stamped under the Karnataka Stamp Act, 1957 and therefore cannot be looked into for any purpose. He has also submitted that the loan agreement in terms of Section 33(1) of the Karnataka Stamp Act, 1957 the loan agreement ought to be impounded and made over to the Registrar General of Stamps and Investigation for adjudicating appropriate duty and penalty to be paid thereon. Extract of Section 33 is reproduced for convenience as under: 

• "33. Examination and impounding of instruments (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same". 

 

# 23. Since the transactions being bonafide in nature and amount having been brought in through proper banking channels , and the use of which has not been precluded in law, it is stated that the same does not in any manner attract any of the FEMA Regulations. 

 

# 28. Petitioner reiterates that the contention of the Respondent that the Loan Agreement had been inadequately stamped cannot be agreed to, as the loan agreement is prepared by the Respondent themselves. Petitioner is always ready and willing to pay additional stamp duty if any to cure the said defects as alleged by the Respondent. 

 

# 32. The Petitioner has also cited case law which reads as follows: 

Hon'ble Supreme Court in Chilakuri Gangulappa vs Revenue Divisional Officer [Appeal (civil) 1800  of  2001] held as under: 

• “13. In the present case, an argument is raised that the instrument is not actually an agreement of sale as envisaged in the Schedule to the Stamp Act (subject to amendment made by the State of Andhra Pradesh) but it is only a deed of compromise entered into by two disputing persons. We refrain from expressing any opinion on the said plea as it is open to the parties to raise their contentions regarding the nature of the document before the trial court. In the present case the trial court should have asked the appellant, if it finds that the instrument is insufficiently stamped, as to whether he would remit the deficient portion of the stamp duly together with a penalty amounting to ten time the deficiency. If the appellant agrees to remit the said amount the court has to proceed with the trial after admitting the document in evidence. In the meanwhile, the court has to forward a copy of the document to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty as provided in Section 40(1)(b) of the Act. Only if the appellant is unwilling to remit the amount the court is to forward the original of the document itself to the Collector for the purpose of adjudicating on the question of deficiency of the stamp duty. The penalty of ten times indicated therein is the upper limit and the Collector shall taken into account all factors concerned in deciding as to what should be proper amount of penalty to be imposed. 

• 14. Inasmuch as none of the above proceedings had been adopted by any of the authorities including the High Court, we set aside the impugned orders. We direct the Munsif to consider first whether the document is insufficiently stamped and if he finds that question in the affirmative he has to adopt the next step indicated above. 

• 15. This appeal is accordingly allowed." 

 

# 33. All these suggest that the case in hand is a case covered under Financial Creditor whether Loan Agreement and the Real Estate Project by virtue being kept Real Estate Project. This is not in dispute that the payments of few lakhs of Rupees as stated above have been made as it is through the banking channel and the same is not disputed by the Respondent. Discrepancy if any, in the Loan Agreement, can be looked into by the Resolution Professional, and, would issue necessary direction to the Financial Creditor to pay additional fees, and penalty to the appropriate authority under the Stamp Act. 

 

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Standard Chartered Bank Vs. Essar Steel India Ltd. - Inadequate Stamp Duty & Verification of Claim in CIRP

NCLT Ahmedabad (08.03.2019) in Standard Chartered Bank Vs. Essar Steel India Ltd. [CP(IB) Nos. 39-40 /2017 & Allied IA’s] Claims were not admitted by RP due to non-payment of requisite stamp duty. AA held that this being a disputed issue whether such agreements in question (i.e.  inter- corporate deposit letters) has been properly stamped or otherwise at the time of producing it before the RP for consideration or not can only be looked into  by the RP or by competent authority for registering claims. Hence in our view this can be adjudicated only by a competent Civil Court, having  necessary  jurisdiction ….. because it is the subject matter of scrutiny by the office of Collector of Stamps and is in the domain of a competent Civil Court.

Excerpts of the order;

# 8, (Page 44). We carefully examined that issue and perused the material available on record including the documents in question, which shows that the applicants claims have not been admitted by the RP due to non -payment of requisite stamp duty and for non-completing the statutory formalities for not without furnishing the proof of making payments of requisite stamp duty as per Indian Stamp Act. Hence, such an agreement cannot be looked into as evidence nor it can be treated as valid claim. Therefore , in our view the RP cannot be found fault with due to non - admissions of such claims of the applicants for want of proper stamp duty. Further , this being a disputed issue whether such agreements in question (i.e.  inter- corporate deposit letters) has been properly stamped or otherwise at the time of producing it before the RP for consideration or not can only be looked into  by the RP or by competent authority for registering claims. Hence in our view this can be adjudicated only by a competent Civil Court, having  necessary  jurisdiction and this Adjudicating Authority cannot be expected to deal the relevant  provisions of the Indian Stamp Act or to make a declaration about documents in question are properly stamped or otherwise, because it is the subject matter of scrutiny by the office of Collector of Stamps and is in the domain of a competent Civil Court.

 

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A. Senthil Kumar V/s. Paragon Steels Pvt. Ltd. - Inadequate Stamp Duty & Verification of Claim in CIRP

 NCLT Chennai (18.01.2018) A. Senthil Kumar V/s. Paragon Steels Pvt. Ltd., [CA No.38 of 2017 In CP No.553/IB/CB/2017] In the present case IRP rejected the claim on the grounds that the document evidencing the credit was not stamped. AA directed the appellant to fulfill the requirement under the stamp act in consultation with the IRP and provisions of the Tamil Nadu Stamp Act so that the MoU may be accepted as a valid evidence of the financial debt.

Excerpts of the order;

# 1. In this case, the applicant A.Senthil Kumar has advanced a sum of Rs.15 crores to the corporate debtor M/s.Paragon Steels Private Limited on 05.06.2013 through a MOU on the pledging of 51% of the Company shares by its Directors and other shareholders for the purpose of funding the working capital requirements of the Corporate Debtor. The claim was made by the applicant based on the public notice issued on 27.09.2017 and the claim has been made on 07.10.2017 by the applicant.  

# 2. The applicant A.Senthil Kumar has stated that he had given an amount of Rs.15 crores on 05.06.2013 to the corporate debtor/2nd respondent to meet the working capital  requirements of the corporate debtor and had given the details of disbursements of the loan also. It has been stated in the application that the loan is secured by a pledge of 51% of the shareholding of the properties of the corporate debtor. He has also stated that in connection with such loan and security creation, the applicant had executed a MoU on 05.06.2013 mentioning the terms of the financial credit including interest and the repayment schedule. The applicant has submitted an application in Form C after the public announcement giving details of the amount due to the applicant and enclosing the copy of the MoU and ledger extract. It is also evidenced by the entries in the balance sheet which clearly acknowledged the liability of the corporate debtor to the applicant. The applicant has also stated that they have responded to the clarifications sought by IRP. The main contention in this case relates to query (A) which is reproduced below along with the annexure that to given by the applicant.

• A. MoU is a receipt and is sufficiently stamped: Clause 1.1 of MoU acknowledges the receipt of money by the borrower. It read as follows: “The lender has this date lent to the borrower aggregate sum of Rs. 15,00,00,000/- (Rupees Fifteen Crores only) in terms of details set out in Schedule II hereto, the receipt whereof is hereby acknowledged by the borrower” (at page no. 15 of CATS). 

• A receipt is defined in Section 2(23) of The Indian Stamp Act read as follows: Section 2(23) – Receipt: “receipt includes any note, memorandum or writing-(a) whereby any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received, or (b) whereby any other movable property is acknowledged to have been received in satisfaction of a debt, or (c ) whereby any debt or demand, or any part of debt or demand, is acknowledged to have been satisfied or discharged, or (d) which signifies or imports any such acknowledgement, and whether the same is or is not signed with the name of any person”; 

• Schedule – I of the Indian Stamp Act, Article 53 states that the stamp duty on a receipt should be "One rupee” (for any money or the other property the amount or value of which exceeds Rupees Five Thousand). Therefore the MoU dated 05.06.2013 is sufficiently stamped. 

# 3. The applicant has stated that the IRP has rejected the claim on the ground that the applicant has failed to provide a demand promissory note duly stamped in evidence of the claim, while accepting the fact that the amount claimed by the applicant was reflected in the books of accounts of the corporate debtor. The applicant has stated that vide Regulation 8 it is not mandatory that the debt ought to be proved only by production of the demand promissory note.

 # 4. According to the applicant's submission that the MoU does not fall within the list of documents that are prescribed for Registration under the Indian Registration Act 1908. The document does not need Registration and the IRP has given no reason in support of his contention.

#  5. The applicant have prayed that the IRP may be directed to consider the claim of the applicant for Rs.15 crores as a valid claim and directing the IRP to recognize the applicant as a financial creditor for the purpose of proceedings under IBC and to declare as null and void the meeting of the COC and any decision taken thereat which have been conducted without the presence of the applicant. 

# 6. In this case, the applicant was asked to submit any loan agreement or other legally valid document evidencing the debt based on the MOU. The learned counsel for the applicant has stated that there is no other documents and non-judicial stamp which was affixed on the MoU's was for the receipt of the money by the corporate debtor and in this case no demand promissory note was drawn on and there were no other legal documents apart from the MoU which has already been cited. 

# 9. The perusal of the MoU reveals it not only contains the particulars of the cheques by which the credit was extended by the applicant but also the rate of interest and also the details of the pledging of shares held by its promoters and others as a security for the loan extended to the corporate debtor. In view of this it is felt that it is a financial contract/loan agreement and not mere receipt for the amount paid to the Corporate Debtor. In this connection the provisions of Section 23(A) of the Indian Stamp Act which is reproduced below may also been seen wherein by which is clear that instruments which are connected with mortgages of marketable securities are to be charged as agreements. In the instance case, since there is no other financial contract evidencing the pledging of securities the MoU is to be treated as an agreement which is to be taxed in terms of the Stamp Act. In this connection, Article 6 of Schedule I to the Indian Stamp Act may also be referred to 23A. Certain instruments connected with mortgages of marketable securities to be chargeable as agreements: 

• (1) Where an instrument (not being a promissory note or bill of exchange) (a) Is given upon the occasion of the deposit of any marketable security by way of security for money advanced or to be advanced by way of loan, or for an existing or future debt, or

•  (6) Makes redeemable or qualifies a duly stamped transfer, intended as a security, of any marketable security, it shall be chargeable with duty as if it were an agreement or memorandum of an agreement chargeable with duty under 53 [Article No.5(c)] of Schedule I.  

# 10.In the absence of any other document as a follow up to the MoU like a loan agreement the Tribunal is inclined to agree with the contention of the IRP. The applicant is hereby directed to fulfill the requirements under the stamp act in consultation with the IRP and provisions of the Tamil Nadu Stamp Act so that the MoU may be accepted as a valid evidence of the financial debt. After this has been done the claim may be admitted by the IRP and may be included as a financial credit. The applicant may also be allowed to participate as a member of committee of creditors, with respect to further proceedings in the solution of a resolution plan. The petition is disposed of with these directions. 

 

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Schweitzer Systemtek India Pvt. Ltd. Vs. Phoenix ARC Pvt. Ltd. & Ors - Recovery from Guarantor's property during Moratorium U/s - 14(3)

NCLAT (09.08.2017) in Schweitzer Systemtek India Pvt. Ltd. Vs. Phoenix ARC Pvt. Ltd. & Ors. [Company Appeal (AT) (Insolvency) No. 129 of 2017] taking recourse to strict interpretation of the word “its” [section 14(1)(c)], ruled that the language of the section is so simple that there is no scope to even supply casus omissus. Thus, the property not owned by the corporate debtor does not fall within the purview of the Moratorium. In other words, the moratorium shall prohibit the action against the properties of the corporate debtor that reflects in its balance sheet and not on the properties beyond the ownership of the corporate debtor.

•  As a result, "its" denotes the property owned by the Corporate Debtor. The property not owned by the Corporate Debtor do not fall within the ambits of the Moratorium. Even Section 10 is confined to the Book of the Accounts of the Corporate Debtor, due to the reason that Section 10(3) has specified that the Corporate Applicant shall furnish "its" Books of Accounts. This Bench has no legislative authority to expand the meaning of the term "its" even under the umbrella of 'Ejusdem generis'.

• Before I part with it is necessary to clarify my humble view that The SARFAESI Act may come within the ambits of Moratorium if an action is to foreclose or to recover or to create any interest in respect of the property belonged to or owned by a Corporate Debtor, otherwise not.

 

Excerpts of the order;

09.08.2017: The Appellant-Corporate Applicant has challenged the order dated 3rd July, 2017 passed by Ld. Adjudicating Authority (National Company Law Tribunal) Mumbai Bench, Mumbai in T.C.P. No. 1059/I&BP/ NCLT/MB /MAH /2017, whereby and whereunder the application preferred by appellant under Section 10 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I & B Code") has been admitted, an order of Moratorium has been passed and Insolvency Resolution Professional has been ordered to be appointed.

 

# 2. The grievance of the appellant is that the movable and immovable property of Guarantor (promoter) has been attached pursuant to Corporate Resolution Process initiated under section 10 against the Appellant-Corporate Applicant. However, such statement has been disputed by the Ld. Counsel appearing on behalf of 1st Respondent/ 'Financial Creditor'.

 

# 3. From the impugned order, we find that the Ld. Adjudicating Authority noticed the provision relating to Moratorium (Sec. 14) and clarified as to which property is to be attached, as apparent from the observations and finding as quoted below:

• 8.1. On careful reading I have noticed that the term "its" is significant. The plain language of the Section is that on the commencement of the Insolvency process the 'Moratorium' shall be declared for prohibiting any action to recover or enforce any security interest created by the Corporate Debtor in respect of "its" property. Relevant section which needs in-depth examination is Section 14 (1) (c) of The Code. There are recognised canons of interpretation. Language of the Statute should be read as it existed. This is a trite law that no word can be added or substituted or deleted from the enacted Code duly legislated. Every word is to be read and interpreted as it exists in the statute with the natural meaning attached to the word. Rather in this Section the language is so simple that there is no scope even to supply casus omissus, I hasten to add that the doctrine of Noscitur a Sociis' is somewhat applicable that the associated words take their meaning from one another so that common sense meaning coupled together in their cognate sense be interpreted. As a result, "its" denotes the property owned by the Corporate Debtor. The property not owned by the Corporate Debtor do not fall within the ambits of the Moratorium. Even Section 10 is confined to the Book of the Accounts of the Corporate Debtor, due to the reason that Section 10(3) has specified that the Corporate Applicant shall furnish "its" Books of Accounts. This Bench has no legislative authority to expand the meaning of the term "its" even under the umbrella of 'Ejusdem generis'.

• 8.2 The outcome of this discussion is that the Moratorium shall prohibit the action against the properties reflected in the Balance Sheet of the Corporate Debtor. The Moratorium has no application on the properties beyond the ownership of the Corporate Debtor. As a result, the Order of the Hon'ble Court directing the Court Commissioner to take over the possession shall not fall within the clutches of Moratorium. Even otherwise, the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (the SARFAESI Act) may be having different criteria for enforcement of recovery of outstanding debt, which is not the subject matter of this Bench. Before I part with it is necessary to clarify my humble view that The SARFAESI Act may come within the ambits of Moratorium if an action is to foreclose or to recover or to create any interest in respect of the property belonged to or owned by a Corporate Debtor, otherwise not.

• 9. To conclude the Application under Section 10 of The Code is hereby "Admitted" subject to the exception as carved out supra. The consequential directions shall be that the provisions of Section 14 of The Code i.e. "Moratorium" shall come into operation. Next, the proposed name of Interim Resolution Professional i.e. (Page 4 name) is hereby approved. The IRP shall take appropriate action such as Public Announcement etc. so that the Insolvency Resolution Process shall be initiated expeditiously. He is directed to submit a Progress Reportwithin one month's time from the commencement of Insolvency Resolution Process."

 

# 4. Similar question fell for consideration before this Appellate Tribunal in "Alpha & Omega Diagnostics (India) Ltd. V. Asset Reconstruction Company of India Ltd. & Ors." in Company Appeal (AT) (Insol.) No. 116 of 2017 by judgment dated 31st July, 2017, this Appellate Tribunal while upheld such findings, made following observations: -

• "4. Ld. Counsel appearing on behalf of the Appellant submitted that the appellant has grievance only relating to qualifying part of the impugned order as quoted above. According to the appellant, the Moratorium should take into its recourse on the subject matters and assets relating to its matters pending before the Debt Recovery Tribunal (DRT) and under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).

• 5. However, we are not inclined to accept such submissions as Appellant-Corporate Applicant has sought for "its" own insolvency resolution process that will include only the assets of the Corporate Debtor and not any assets, movable or immovable of a third party, like any director or other. In so far as 'guarantor' is concerned, we are not expressing any opinion, as they come within the meaning of 'Corporate Debtor individually', as distinct from principal debtor who has taken a loan.

 

# 6. In the aforesaid background, if Ld. Adjudicating Authority, on careful reading of the provisions has come to the definite conclusion that on commencement of the insolvency process the "Moratorium" shall be declared for prohibiting any action to recover or enforce any security interest created by the 'Corporate Debtor' in respect of "its" property, no ground is made out to interfere with the said order."

 

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