w w w . L a w y e r S e r v i c e s . i n



Deccan Chronicle Holdings Limited, Secunderabad (TS), through the Resolution Professional, Mamta Binani, Rep. by her constituted Power of Attorney Lovkesh Batra v/s Indiabulls Housing Finance Ltd., Hyderabad, Rep. by Authorized Officer, B. Venkatasubbaiah & Others


Company & Directors' Information:- POWER FINANCE CORPORATION LIMITED [Active] CIN = L65910DL1986GOI024862

Company & Directors' Information:- INDIABULLS HOUSING FINANCE LIMITED [Active] CIN = L65922DL2005PLC136029

Company & Directors' Information:- A V S R HOLDINGS PRIVATE LIMITED [Active] CIN = U67120TG2005PTC045117

Company & Directors' Information:- DECCAN CHRONICLE HOLDINGS LIMITED [Active] CIN = L22122TG2002PLC040110

Company & Directors' Information:- MAMTA HOUSING FINANCE COMPANY PRIVATE LIMITED [Active] CIN = U65922TN2014PTC094409

Company & Directors' Information:- S R HOLDINGS LIMITED [Active] CIN = U65993TN1988PLC083659

Company & Directors' Information:- S R HOLDINGS PRIVATE LIMITED [Active] CIN = U65993TN1988PTC083659

Company & Directors' Information:- A B HOLDINGS PRIVATE LIMITED [Active] CIN = U70102KA2006PTC040894

Company & Directors' Information:- INDIABULLS FINANCE COMPANY PRIVATE LIMITED [Amalgamated] CIN = U65993DL2005PTC134191

Company & Directors' Information:- S K A HOLDINGS LIMITED [Active] CIN = U65993DL1981PLC012592

Company & Directors' Information:- S K A HOLDINGS LIMITED [Active] CIN = L65993DL1981PLC012592

Company & Directors' Information:- G J HOLDINGS PRIVATE LIMITED [Active] CIN = U51100DL2004PTC126687

Company & Directors' Information:- G J HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL2004PTC126687

Company & Directors' Information:- P P HOLDINGS LTD [Active] CIN = U65993PN1981PLC025916

Company & Directors' Information:- G S D HOLDINGS PVT LTD [Strike Off] CIN = U70109WB1990PTC048518

Company & Directors' Information:- DECCAN INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U74900TG2009PTC064949

Company & Directors' Information:- DECCAN POWER CORPORATION LIMITED [Strike Off] CIN = U40100DL1994PLC056924

Company & Directors' Information:- S T HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1979PTC021588

Company & Directors' Information:- M C HOLDINGS PRIVATE LIMITED [Active] CIN = U67190DL2009PTC190957

Company & Directors' Information:- J S K HOLDINGS PVT LTD [Active] CIN = U67120WB1994PTC065660

Company & Directors' Information:- P R HOLDINGS LIMITED [Active] CIN = L27310AS1983PLC007154

Company & Directors' Information:- P R HOLDINGS LIMITED [Active] CIN = L27310DL1983PLC314402

Company & Directors' Information:- G R A HOLDINGS PVT LTD [Active] CIN = U70101WB1992PTC055865

Company & Directors' Information:- B S S HOLDINGS PVT LTD [Active] CIN = U67120WB1992PTC056874

Company & Directors' Information:- DECCAN FINANCE LIMITED [Active] CIN = U65910TN1978PLC007632

Company & Directors' Information:- H M HOLDINGS PRIVATE LIMITED [Active] CIN = U65993ML2005PTC007956

Company & Directors' Information:- S M H HOLDINGS PRIVATE LIMITED [Active] CIN = U65993TG2006PTC049309

Company & Directors' Information:- M M HOLDINGS PVT LTD [Active] CIN = U70109WB1993PTC058147

Company & Directors' Information:- D J HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1992PTC067448

Company & Directors' Information:- R S M P HOLDINGS PRIVATE LIMITED [Active] CIN = U67190MH1995PTC088443

Company & Directors' Information:- V A G HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057817

Company & Directors' Information:- K E HOLDINGS PRIVATE LIMITED [Active] CIN = U70101TN2013PTC089953

Company & Directors' Information:- S M B HOUSING FINANCE LIMITED [Active] CIN = U65922DL2014PLC267087

Company & Directors' Information:- K C HOLDINGS PRIVATE LIMITED [Active] CIN = U65990MH1981PTC024688

Company & Directors' Information:- BATRA FINANCE PVT LTD [Active] CIN = U65921CH1963PTC002497

Company & Directors' Information:- A TO Z HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1987PTC028294

Company & Directors' Information:- V R HOLDINGS PRIVATE LIMITED [Active] CIN = U70102KA2009PTC051724

Company & Directors' Information:- J B HOLDINGS LIMITED [Strike Off] CIN = U91110ML1995PLC004396

Company & Directors' Information:- MAMTA HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65993MH1991PTC060804

Company & Directors' Information:- P G T HOLDINGS LIMITED [Strike Off] CIN = U74899DL1994PLC057886

Company & Directors' Information:- S M HOLDINGS PRIVATE LIMITED [Active] CIN = U65990MH2011PTC225004

Company & Directors' Information:- M S R HOLDINGS LIMITED [Active] CIN = U85110KA1995PLC018599

Company & Directors' Information:- V N C A HOLDINGS PRIVATE LIMITED [Active] CIN = U74999TN2011PTC081684

Company & Directors' Information:- S C HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U74899DL1986PTC025017

Company & Directors' Information:- S G HOLDINGS PVT LTD [Active] CIN = U70109WB1986PTC040839

Company & Directors' Information:- K C A HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1995PTC066204

Company & Directors' Information:- S N J HOLDINGS PRIVATE LIMITED [Active] CIN = U67120DL1997PTC084488

Company & Directors' Information:- H P HOLDINGS LIMITED [Strike Off] CIN = U67120HP1997PLC019474

Company & Directors' Information:- K L N HOLDINGS PRIVATE LIMITED [Active] CIN = U65990TG1986PTC006344

Company & Directors' Information:- INDIABULLS HOLDINGS LIMITED [Active] CIN = U74140DL2010PLC201275

Company & Directors' Information:- M R HOLDINGS LIMITED [Active] CIN = U67120MH1978PLC020559

Company & Directors' Information:- J T HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1979PTC021585

Company & Directors' Information:- B M D HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U51909TN1995PTC031179

Company & Directors' Information:- H K R HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1982PTC013032

Company & Directors' Information:- R J HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1982PTC013033

Company & Directors' Information:- K D R HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1982PTC013034

Company & Directors' Information:- P D R HOLDINGS PVT LTD [Amalgamated] CIN = U67120WB1996PTC077248

Company & Directors' Information:- W A HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL1997PTC084687

Company & Directors' Information:- W D HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL1997PTC084667

Company & Directors' Information:- A K HOLDINGS PRIVATE LIMITED [Active] CIN = U74899UP1986PTC037306

Company & Directors' Information:- J R D HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059769

Company & Directors' Information:- C S HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U85110KA1995PTC018441

Company & Directors' Information:- R A HOLDINGS LIMITED [Strike Off] CIN = U17119GJ1986PLC037333

Company & Directors' Information:- W. M. F. HOLDINGS PRIVATE LIMITED [Active] CIN = U70101CT2011PTC022482

Company & Directors' Information:- A V HOLDINGS PVT LTD [Active] CIN = U51109WB1992PTC054035

Company & Directors' Information:- K B R HOLDINGS PRIVATE LIMITED [Active] CIN = U67120TG1998PTC030518

Company & Directors' Information:- U B P HOLDINGS LTD [Strike Off] CIN = U67120WB1988PLC045279

Company & Directors' Information:- E K HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC040323

Company & Directors' Information:- N R HOLDINGS PVT LTD [Strike Off] CIN = U67120WB1993PTC060077

Company & Directors' Information:- B P A HOLDINGS PVT LTD [Strike Off] CIN = U74990DL1982PTC013326

Company & Directors' Information:- V V HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC060480

Company & Directors' Information:- BATRA AND BATRA PRIVATE LIMITED [Active] CIN = U74899DL1989PTC034591

Company & Directors' Information:- D D B HOLDINGS PVT LTD [Strike Off] CIN = U67120WB1992PTC055592

Company & Directors' Information:- M D HOLDINGS PRIVATE LIMITED [Active] CIN = U67120DL2001PTC111221

Company & Directors' Information:- L L HOLDINGS AND FINANCE PVT LTD [Active] CIN = U65990MH1993PTC071369

Company & Directors' Information:- V H A HOLDINGS PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U65993DL2003PTC120147

Company & Directors' Information:- K E F HOLDINGS LTD [Amalgamated] CIN = U67120WB1988PLC045280

Company & Directors' Information:- A P HOLDINGS PVT LTD [Active] CIN = U65993PN1981PTC025915

Company & Directors' Information:- N. R. HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1993PTC140612

Company & Directors' Information:- M B HOLDINGS LTD. [Not available for efiling] CIN = U70109WB1986PLC041226

Company & Directors' Information:- J S R HOLDINGS PRIVATE LIMITED [Active] CIN = U45200KA2006PTC040195

Company & Directors' Information:- K M HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1995PTC064343

Company & Directors' Information:- A S H HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL2004PTC125403

Company & Directors' Information:- C M HOLDINGS PVT LTD [Strike Off] CIN = U45203WB1986PTC041627

Company & Directors' Information:- BATRA HOLDINGS PRIVATE LIMITED [Converted to LLP] CIN = U65921UP1994PTC017025

Company & Directors' Information:- S J FINANCE AND HOLDINGS PVT LTD [Active] CIN = U65921PB1983PTC005280

Company & Directors' Information:- K S J FINANCE AND HOLDINGS PRIVATE LIMITED [Active] CIN = U67120DL2002PTC116831

Company & Directors' Information:- M H HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1995PTC067392

Company & Directors' Information:- I K HOLDINGS LTD [Strike Off] CIN = U70101WB1951PLC019703

Company & Directors' Information:- C & R HOLDINGS PVT. LTD. [Active] CIN = U65929WB1991PTC051376

Company & Directors' Information:- J J HOLDINGS LTD [Amalgamated] CIN = U65993WB1980PLC032736

Company & Directors' Information:- K G HOLDINGS PVT LTD [Active] CIN = U65929WB1987PTC042868

Company & Directors' Information:- B & T HOLDINGS PRIVATE LIMITED [Active] CIN = U74920DL2007PTC171796

Company & Directors' Information:- THE BINANI COMPANY PRIVATE LIMITED [Active] CIN = U27320OR1961PTC000423

Company & Directors' Information:- H D HOLDINGS PVT LTD [Amalgamated] CIN = U51109WB1991PTC051415

Company & Directors' Information:- N AND N HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC040846

Company & Directors' Information:- B AND S HOUSING FINANCE PRIVATE LIMITED [Strike Off] CIN = U65929AS1996PTC004785

Company & Directors' Information:- M P HOLDINGS PRIVATE LIMITED [Under Process of Striking Off] CIN = U67120DL1997PTC088350

Company & Directors' Information:- B P HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC038274

Company & Directors' Information:- K L S HOUSING FINANCE PRIVATE LIMITED [Strike Off] CIN = U65922KA1990PTC011425

Company & Directors' Information:- K P R HOLDINGS PRIVATE LIMITED [Active] CIN = U74900TZ2011PTC017467

Company & Directors' Information:- U AND V HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65999TN2005PTC057659

Company & Directors' Information:- TS HOLDINGS PRIVATE LIMITED [Active] CIN = U70102TN2010PTC076431

Company & Directors' Information:- B AND B HOLDINGS PRIVATE LIMITED [Active] CIN = U70101AS1999PTC005674

Company & Directors' Information:- M. G. HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120DL2010PTC198226

Company & Directors' Information:- D G HOLDINGS PRIVATE LIMITED [Active] CIN = U65110DL1998PTC094466

Company & Directors' Information:- I R HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U74120DL2008PTC185743

Company & Directors' Information:- S I HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U74120DL2008PTC186043

Company & Directors' Information:- C J G HOLDINGS INDIA PRIVATE LIMITED [Active] CIN = U70101KL2010PTC038559

Company & Directors' Information:- U P L HOLDINGS PVT LTD [Strike Off] CIN = U67120OR1990PTC002414

Company & Directors' Information:- N N HOLDINGS PVT LTD [Strike Off] CIN = U65999WB1990PTC048493

Company & Directors' Information:- O M K HOLDINGS PVT LTD [Strike Off] CIN = U67120WB1995PTC072914

Company & Directors' Information:- A M HOUSING FINANCE LIMITED [Strike Off] CIN = U65922PB1996PLC017644

Company & Directors' Information:- HYDERABAD FINANCE PVT LTD [Strike Off] CIN = U65910TG1987PTC007966

Company & Directors' Information:- M K HOLDINGS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U65993TN1996PTC036985

Company & Directors' Information:- K I HOLDINGS PVT LTD [Strike Off] CIN = U67120MH1981PTC024069

Company & Directors' Information:- D R HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL1982PTC013031

Company & Directors' Information:- R R HOLDINGS PRIVATE LIMITED [Active] CIN = U74899DL1983PTC017127

Company & Directors' Information:- G J HOLDINGS PVT LTD [Not available for efiling] CIN = U65993PB1985PTC006327

Company & Directors' Information:- DECCAN HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1990PTC059427

Company & Directors' Information:- M G L HOLDINGS PRIVATE LIMITED [Active] CIN = U65993TN1994PTC029354

Company & Directors' Information:- K V R HOLDINGS PRIVATE LIMITED [Active] CIN = U65191KA2012PTC063353

Company & Directors' Information:- R N M HOLDINGS P LTD. [Active] CIN = U65921WB1990PTC050174

Company & Directors' Information:- M D HOLDINGS PVT LTD [Strike Off] CIN = U67120CH1983PTC005399

Company & Directors' Information:- R V HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC036577

Company & Directors' Information:- B J HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH1982PTC028820

Company & Directors' Information:- R S HOLDINGS PVT LTD [Active] CIN = U70109WB1986PTC040255

Company & Directors' Information:- A D HOLDINGS PVT LTD [Strike Off] CIN = U65993WB1976PTC030525

Company & Directors' Information:- S P HOLDINGS PVT LTD [Strike Off] CIN = U65993WB1988PTC044540

Company & Directors' Information:- R A HOLDINGS PVT LTD [Strike Off] CIN = U70200WB1986PTC040138

Company & Directors' Information:- A HOLDINGS PVT LTD [Strike Off] CIN = U70101WB1962PTC025617

Company & Directors' Information:- K T R HOLDINGS PVT LTD [Strike Off] CIN = U67120WB1993PTC059078

Company & Directors' Information:- B I HOLDINGS PVT LTD [Strike Off] CIN = U65922WB1988PTC043690

Company & Directors' Information:- J K BATRA AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U51909HR1980PTC010288

Company & Directors' Information:- E TO E HOLDINGS INDIA PRIVATE LIMITED [Active] CIN = U65999KA2008PTC047780

Company & Directors' Information:- M A HOLDINGS PRIVATE LIMITED [Active] CIN = U26106UP2003PTC027990

Company & Directors' Information:- G L HOLDINGS PRIVATE LIMITED [Dormant under section 455] CIN = U74996KA2008PTC044867

Company & Directors' Information:- A AND M HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67190TG1995PTC021464

Company & Directors' Information:- K V S HOLDINGS PVT LTD [Strike Off] CIN = U65993WB1993PTC060850

Company & Directors' Information:- V K HOLDINGS PRIVATE LTD [Strike Off] CIN = U27924DL1987PTC027924

Company & Directors' Information:- Q AND A HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120MH2000PTC127319

Company & Directors' Information:- S K HOLDINGS PVT. LTD [Strike Off] CIN = U99999UP1988PTC010231

Company & Directors' Information:- MAMTA AND COMPANY PRIVATE LIMITED [Active] CIN = U52100DL1993PTC052705

Company & Directors' Information:- V A HOLDINGS PVT LTD [Strike Off] CIN = U67120KL1986PTC004442

Company & Directors' Information:- S R HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65993TN1980PTC008388

Company & Directors' Information:- M T R HOLDINGS PRIVATE LIMITED [Active] CIN = U67110KA2007PTC042600

Company & Directors' Information:- DECCAN HOUSING PRIVATE LIMITED [Strike Off] CIN = U70102AP2004PTC045019

Company & Directors' Information:- C S A HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65990MH1995PTC092555

Company & Directors' Information:- K N Z HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120MH1998PTC117331

Company & Directors' Information:- S H HOLDINGS PRIVATE LIMITED [Active] CIN = U67120MH2001PTC131041

Company & Directors' Information:- DECCAN CHRONICLE SECUNDERABAD PRIVATE LIMITED [Active] CIN = U99999TG1994PTC018204

Company & Directors' Information:- D L HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67100TN2012PTC083929

Company & Directors' Information:- P C T HOLDINGS PRIVATE LIMITED [Active] CIN = U70101TZ2004PTC010971

Company & Directors' Information:- M J P HOLDINGS PRIVATE LIMITED [Active] CIN = U74900TG2015PTC098835

Company & Directors' Information:- P H HOLDINGS PVT LTD [Active] CIN = U67120WB1985PTC039369

Company & Directors' Information:- J D S HOLDINGS PRIVATE LIMITED [Active] CIN = U65993DL1993PTC053637

Company & Directors' Information:- M R S HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120DL2001PTC113197

Company & Directors' Information:- D D FINANCE AND HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U74899DL1981PTC011399

Company & Directors' Information:- J S M S HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U45201DL2002PTC117110

Company & Directors' Information:- R M G HOLDINGS PVT LTD [Active] CIN = U67120MP1987PTC004209

Company & Directors' Information:- B R HOLDINGS PRIVATE LIMITED [Amalgamated] CIN = U74899HR1994PTC064054

Company & Directors' Information:- P R S HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120KA2010PTC052295

Company & Directors' Information:- MAMTA CORPORATION (INDIA) PRIVATE LIMITED [Strike Off] CIN = U16008GJ2012PTC071641

Company & Directors' Information:- M AND D HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U67120MH1981PTC025882

Company & Directors' Information:- A T HOLDINGS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74899DL1994PTC057216

Company & Directors' Information:- J AND S HOLDINGS PVT LTD [Strike Off] CIN = U67120RJ1996PTC012114

Company & Directors' Information:- S K V HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U65993DL1981PTC012910

Company & Directors' Information:- S M K S HOLDINGS PVT LTD [Strike Off] CIN = U45400WB1990PTC048498

Company & Directors' Information:- PROFESSIONAL HOLDINGS PVT LTD [Strike Off] CIN = U65991TN1991PTC020255

Company & Directors' Information:- S J P HOLDINGS PRIVATE LIMITED [Strike Off] CIN = U99999GJ1981PTC004682

    W.P. No. 29732 of 2018

    Decided On, 26 October 2018

    At, In the High Court of Judicature at Hyderabad

    By, THE HONOURABLE MR. JUSTICE RAMESH RANGANATHAN & THE HONOURABLE MRS. JUSTICE KONGARA VIJAYA LAKSHMI

    For the Petitioner: R. Raghunandan, Senior Counsel for Sanjay Suraneni, Advocate. For the Respondents: R1, S. Nirajnan Reddy, Senior Counsel for Rusheek Reddy K.V. Advocate, R3, K. Lakshman, Assistant Solicitor General.



Judgment Text

Ramesh Ranganathan, J.

1. In this Writ Petition, a writ of mandamus is sought to declare the order passed by the Chief Metropolitan Magistrate, Hyderabad, in Crl.MP. No.2479 of 2013 dated 17.08.2013, as arbitrary, illegal and violative of the moratorium order passed by the National Company Law Tribunal (‘NCLT’ for short) dated 19.07.2017 under Section 14 of the Insolvency & Bankruptcy Code, 2016 (‘IBC’ for short); and for a consequential direction to the respondents not to take any further steps to execute the warrant dated 12.07.2018, including dispossessing the petitioner company, from the property situated at 36, Sarojini Devi Road, Secunderabad, during the pendency of the Corporate Insolvency Resolution Process.

2. Facts, to the extent necessary, are that the NCLT passed an order, under Section 7 of the IBC on 19.07.2017, appointing an interim Resolution Professional in the exercise of its powers under Section 16 of the IBC. Pursuant thereto the Corporate Insolvency Resolution Process (‘CIRP’ for short) of the petitioner commenced from 19.07.2017. By its order dated 19.07.2017, the NCLT also declared a moratorium, under Section 14 of the IBC, prohibiting the following action: (i) the institution of Suits, or the continuation of pending Suits or proceedings except before the High Court and Supreme Court against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) transferring, encumbering, alienating or disposing of, by the Corporate Debtor, of any of its assets or any legal right or beneficial interest therein; (iii) any action to foreclose, recover or enforce any security interest created by the Corporate debtor in respect of its property, including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for short); (iv) recovery of any property by an owner or the lessor, where such property is occupied by, or is in the possession of, the corporate Debtor; and (v) goods and services i.e., water, electricity, printing ink, printing plates, printing blanket, solvents etc., falling under Section 14(2) of the IBC, and which are essential goods and services to the corporate debtor, shall not be terminated or suspended, and interrupted during the moratorium period.

3. The Insolvency Resolution Professional ('IRP' for short) issued a public announcement on 20.07.2017 inviting claims from the creditors of the petitioner-corporate debtor, and thereafter a committee of creditors ('CoC' for short) of the petitioner company, in respect of the claims received from its creditors, was constituted, of which the 1st respondent was a member. Since one of the financial creditors i.e. SREI Infrastructure Finance Limited (‘SREI’ for short) was denied the right to represent, participate and vote in the meetings of the CoC, they filed an application seeking permission to participate. While the NCLT initially granted interim relief, by its order dated 21.07.2017, the said application was subsequently dismissed by order dated 16.11.2017.

4. Aggrieved thereby, SREI preferred an appeal to the National Company Law Appellate Tribunal (‘NCLAT’ for short). Consequent to the order passed by the NCLT on 16.11.2017, the IRP conducted the second meeting of the CoC on 04.01.2018, wherein it was decided to extend the period of the CIRP by 90 days, and the IRP was authorized to file an application before the NCLT which extended the CIRP period, in the case of the petitioner, by a period of 90 days till 14.04.2018. Subsequently, by its order dated 08.02.2018, the NCLT confirmed the appointment of the Resolution Professional ('RP' for short) who took charge on 12.02.2018, and conducted the 4th meeting of the CoC on 16.02.2018 wherein the CoC instructed the RP to file an application, before the NCLT, seeking exemption of the period from 21.08.2017 to 16.11.2017, as the CIRP of the petitioner had come to a standstill during the operation of the stay order dated 21.08.2017. On an application being filed by the RP, the NCLT, by its order dated 26.03.2018, excluded the period of 87 days from 21.08.2017 till 16.11.2017. In the meanwhile the NCLAT pronounced its orders, in the appeal filed by SREI, on 20.07.2018 excluding the period of pendency of the appeal, i.e., from 11.12.2017 till 20.07.2018, in computing the period of the CIRP of the petitioner. Consequently, the period of moratorium of the petitioner continues even as on date.

5. The registered office of the petitioner is said to be located at 36, Sarojinidevi Road, Secunderabad in a property owned by the 4th respondent herein who had mortgaged the subject property with the 1st respondent. On proceedings being initiated by the 1st respondent under Section 14 of the SARFAESI Act, and on an application being filed in Crl.M.P.No.2479 of 2013, the Chief Metropolitan Magistrate, Hyderabad appointed the 2nd respondent as the Advocate Commissioner to take physical possession of the said property. The Advocate Commissioner, vide letter dated 19.07.2018, directed the petitioner to remove all its articles in the said property, failing which the premises would be sealed by 08.08.2018. Aggrieved by the order of the Chief Metropolitan Magistrate, and the consequential letter of the 2nd respondent dated 19.07.2018, the petitioner, through the RP, filed an application in I.A. No.290 of 2018 before the NCLT seeking an order restraining the 1st respondent from taking possession of the said property.

6. By its order dated 08.08.2018, the NCLT permitted the objections, raised by the RP on behalf of the petitioner-corporate debtor, to be urged before the Chief Metropolitan Magistrate. The Counsel for the financial creditor, who had contended that SARFAESI proceedings could be continued against the property not owned by the corporate debtor, was also permitted to raise the same before the Chief Metropolitan Magistrate, Hyderabad. Thereafter the RP approached the Chief Metropolitan Magistrate who, by his order dated 17.08.2018, rejected the prayer of the petitioner company holding that the moratorium under Section 14 of the IBC did not apply to the present situation.

7. In his order dated 17.08.2018, the Chief Metropolitan Magistrate, Hyderabad observed that the 1st respondent had advanced Rs.100 crores as loan to the petitioner, and the unofficial respondents, on the mortgage of certain immoveable properties; on their committing default, the 1st respondent had filed an application under Section 14 of the SARFAESI Act, and an Advocate Commissioner was appointed on 22.07.2013 to take possession of the secured assets; the said proceedings were questioned, and the matter culminated in the order of the Supreme Court in Civil Appeal No.18 of 2018 dated 23.02.2018; in view of the order of the Supreme Court, a fresh warrant was issued, under Section 14 of the SARFAESI Act on 12.07.2018, to take possession of the subject premises; Section 14(a) of the IBC prohibited institution of Suits, or continuation of pending proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel, or any authority; Section 14(c) prohibited action against the property of the corporate debtor, under the SARFAESI Act, during the moratorium period; the undisputed fact was that the moratorium period was in subsistence; it was also not disputed that the properties stood in the name of the 4th respondent, but not in the name of the petitioner i.e., the corporate-debtor; the administrative office of the corporate debtor was being run in the said premises; the petitioner company was a juristic person, and had its own entity in the eye of law; it could hold property in its name, and take pos-session under lease from third parties; in the present case, there was no lease in respect of the subject property; possession of the corporate debtor, over the subject property, was only permissive; in any event, the property could not be called as the property of the petitioner; it did not, therefore, come under Section 14 (c) of the IBC; if the moratorium was extended to the present case, it would defeat the provisions of the SARFAESI Act; the moratorium could be extended only against the assets standing in the name of the corporate debtor, and not against the personal assets of the promoters which had been given as security to the financial institutions; and since the property in question was not the property of the corporate debtor, it could be proceeded against under the SARFAESI Act. Aggrieved by the said order, the petitioner has invoked the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India.

8. Elaborate submissions were put forth by Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner and Sri S. Niranjan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent. It is convenient to examine the rival contentions under different heads.

I. SECTION 14 IBC. ITS SCOPE:

9. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that the purpose of Section 14 IBC is to protect the corporate debtor during the insolvency resolution process; the object of prescribing a moratorium is to permit the corporate debtor to continue to carry on its business; the petitioner’s case is covered by clauses (a) and (d) of Section 14(1); and the interim protection extended in terms of the IBC, of the moratorium under Section 14(1), would remain in force only during the revival process, and would come to an end in either of the events of a revival plan being accepted or liquidation proceedings being initiated.

10. On the other hand Sri S. Nirajnan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that the golden rule of interpretation of statutes is its literal construction; other aids, including ascertaining the intention of the legislation, can be resorted to only if the language of Section 14(1) of the IBC suffers from any ambiguity; and since Section 14(1) of the IBC is unambiguous in its language, no other rule, apart from the literal construction rule, need be applied.

11. As noted hereinabove, the petitioner is in occupation of the subject premises of which the 4th respondent is the owner. The 4th respondent, as a co-borrower, had mortgaged the subject property as security for the loan extended to him by the 1st respondent- Bank. It is not even the petitioner’s case that a lease agreement has been entered into with the 4th respondent, much less such a lease having been registered. They do not also appear to be paying any rent to the 4th respondent for being permitted to occupy the said property. Proceedings were initiated by the 1st respondent against the 4th respondent under Section 14 of the SARFAESI Act; and it is as a consequence thereof that the 1st respondent is seeking to take possession of the subject property.

12. The primary duty of a Court is to find the natural meaning of the words used in the context in which they occur, that context including any other phrase in the Act which may throw light on the sense in which the makers of the Act used the words in dispute. (Shahadara (Delhi) Saharanpur Light Railway Co. Ltd. v. S.S. Railway Workers’ Union (1) 1969 (2) SCR 131 = AIR 1969 SC 513). The words of a statute must be understood in their natural, ordinary or popular sense, and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie, be given their ordinary meaning. (Gurudevdatta VKSSS Maryadit v. State of Maharashtra (2) (2001) 4 SCC 534 = 2001 (3) ALT 14.3 (DN SC); Mohd. Ali Khan v. CWT (3) (1997) 3 SCC 511). The construction must not be strained to include cases plainly omitted from the natural meaning of the words. (State of U.P. v. Dr Vijay Anand Maharaj (4) 1963 (1) SCR 1 = AIR 1963 SC 946). A liberal construction does not justify an extension of the statute’s scope beyond the contemplation of the legislature. (Dr. Vijay Anand Maharaj (4 supra)).

13. Courts have sometimes pronounced judgments affecting actions in a manner that the persons, who originated and prepared the Act, never dreamt of. The proper rule, for construing statutes, is to adhere to its words strictly. (Shahadara (Delhi) Saharanpur Light Railway Co. Ltd. I; Latham v. Lafone Martin B (5) (1867) L.R.2 Ex 115, 121). When a language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. The meaning must be collected from the expressed intention of the legislature. (Dr. Vijay Anand Maharaj (4 supra)). If the words of a statute are precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such a case best declaring the intention of the legislature. (Shri Ram v. State of Maharashtra (6) AIR 1961 SC 674). Courts ought to give a literal meaning to the language used by Parliament, unless the language is ambiguous or its literal sense gives rise to an anomaly or results in something which would defeat the purpose of the Act. (Manmohan Das Shah v. Bishun Das (7) 1967 (1) SCR 836 = AIR 1967 SC 643; Electrical Mfg. Co. Ltd v. D.D. Bhargava (8) 1968 (1) SCR 394 = AIR 1968 SC 247; State of H.P. v. Pawan Kumar (9) (2005) 4 SCC 350; Jugalkishore Saraf v. Raw Cotton Co. Ltd. (10) 1955 SC 376; Slate of Rajasthan v. Babu Ram (11) 2008 (1) ALT (Crl.) 295 (SC) = (2007) 6 SCC 55; Craies on Statute Law, 7th Edn., pp. 83-85; M.T. Khan v. Govt. of A.P., (12) 2004 (2) ALT 24 (SC) = (2004) 2 SCC 267; Gurudevdatta VKSSS Maryadit (2 supra); Shahadara (Delhi) Saharanpur Light Railway Co. Ltd (1 supra)). It is only in the case of ambiguity, that a court is entitled to ascertain the intention of the legislature, by construing the provisions of the statute as a whole and taking into consideration other matters and circumstances which led to the enactment of the statute. (S.A. Venkataraman v. State (13) 1958 SCR 1040 = AIR 1958 SC 107).

14. Effort should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplussage, if they can, have a proper application in circumstances conceivable within the contemplation of the statute. (M.T. Khan (12: supra); Oswal Agro Mills Ltd v. CCE (14) 1993 Supp (3) SCC 716; Manmohan Das Shaw (7); Colgate Palmolive (India) Ltd v. MRTP Commission (15) (2003) 1 SCC 129; Gurudevdatta VKSSS Maryadit (2 supra)). Courts will reject that construction which will defeat the plain intention of the legislature even though there may be some inexactitude in the language used, (MT Khan (12 supra); Balram Kumawat v. Union of India (16) (2003) 7 SCC 628 = 2003 (6) ALT 8.1 (DN SC); Salmon v. Duncombe (17) (1886) 11 AC 627).

15. When the meaning of the words are plain, it is not the duty of the Courts to busy themselves with supposed intentions, as the words themselves declare the intention of the Legislature. The words mean just what they say. (Pakala Narayana Swami v. Emperor (18) AIR 1939 PC 47). Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary, (Doypack Systems (P) Ltd v. Union of India (19) (1988) 2 SCC 299; Chandavarkar S.R. Rao v. Ashalata (20) (1986) 4 SCC 447; Halsbury’s Laws of England, 4th Edn., para 856 at page 552; Nokes v. Doncaster Amalgamated Collieries Limited (21) (1940) Appeal Cases 1014 at 1022), or there be something in the context, or in the object of the statute in which they occur, or in the circumstances with reference to which they are used, to show that they were used in a special sense different from their ordinary grammatical sense. (Corporation of the City of Victoria v. Bishop of Vancouver Island (22) AIR 1921 Privy Council 240). If a literal reading leads to absurdity, and the words are susceptible of another meaning; the Court may adopt the same. But if no such alternative construction is possible, the court must adopt the ordinary rule of literal interpretation. (Jugalkishore Saraf (10 supra); Grey v. Pearson (23) (1857) 6 H.L.C. 61 = 26 L.J. Ch. 481; Corporation of the City of Victoria (22 supra); Caledonian Ry. Co. v. North British Ry. Co. (24) (1881) 6 A.C. 114; and Jessel, MR. in Walton Ex Parte, Levy, In re (25) 50 L.J. Ch. at P,659 = 17 Ch. D. at 290).

16. If the words of an Act are clear, you must follow them even though they lead to a manifest absurdity. The rule has always been this:- If the words of an Act admit of two interpretations, then they are not clear, and if one interpretation leads to an absurdity, and the other does not, the Court will conclude that the legislature did not intend to lead to an absurdity, and will adopt the other interpretation. (Rega v. Judge of the City of London Court (26) (1892) 1 Q.B. 273 = 61 L.J. Q.B. 343; Corporation of the City of Victoria (22 supra)).

17. Bearing these principles in mind, let us now examine the provisions of the IBC The IBC is an Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of the assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues, and to establish an Insolvency and Bankruptcy Board of India. Chapter-II of the IBC relates to the corporate insolvency resolution process. Section 6 stipulates that, where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in the manner as provided in Chapter-II. While Section 7(1) enables a financial creditor, either by itself or jointly with other financial creditors, to file an application for initiating the corporate insolvency resolution process against a corporate debtor, before the Adjudicating Authority, when a default has occurred, an operational creditor is entitled to make an application for initiation of the corporate insolvency resolution process under Section 9(1). Section 10(1) enables a corporate applicant to initiate the corporate insolvency resolution process.

18. Section 12 of the IBC prescribes the time limit for completion of the insolvency resolution process. Section 12(1) stipulates that, subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of 180 days from the date of admission of the application to initiate such process. Section 12(2) confers power on the resolution professional to file an application, to the adjudicating authority, to extend the period of the corporate insolvency resolution process beyond 180 days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of 75% of the voting shares. Section 12(3) stipulates that, if the adjudicating authority is satisfied that the corporation resolution process cannot be completed within 180 days, it may, by order, extend the duration of such process beyond 180 days, by such further period as it thinks fit, but not exceeding 90 days. Under the proviso thereto, any extension of the period of the corporate insolvency resolution process under Section 12 shall not be granted more than once. Section 13(1) requires the adjudicating authority, after admission of the application under Section 7 or Section 9 or Section 10, by an order to (a) declare a moratorium for the purposes referred to in Section 14; (b) cause a public announcement of the initiation of the corporate insolvency resolution process, and call for the submission of claims under Section 15; and (c) appoint an interim resolution professional in the manner laid down in Section 16.

19. Section 14 relates to moratorium and, since the dispute in the present Writ Petition revolves around its scope, it is useful to extract the said Section in its entirety.

Section 14:

(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.

(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

(4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process:

Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.'

20. Section 16 relates to the appointment and terms of the Interim resolution professional. Section 17 relates to the management of the affairs of the corporate debtor by the interim resolution professional. Section 18 deals with the duties of the interim resolution professional. Section 20(1) requires the interim resolution professional to make every endeavour to protect and preserve the value of the property of the corporate debtor, and manage the operations of the corporate debtor as a going concern. Section 21 relates in the committee of creditors. Section 22 relates to the appointment of a resolution professional who is obligated, under Section 23, to conduct the corporate insolvency resolution process. Section 24 relates to the meeting of the committee of creditors. Section 25 prescribes the duties of the resolution professional. Section 30 relates to the submission of a resolution plan, and Section 31 relates to the approval of the resolution plan.

21. Under Section 31(1), if the adjudicating authority is satisfied that the resolution plan, as approved by the committee of creditors under Section 30(4), meets the requirements, as referred to in Section 30(2), it shall, by order, approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. Under Section 31 (2), where the adjudicating authority is satisfied that the resolution plan does not confirm to the requirements referred to in Section 31(1), it may, by an order, reject the resolution plan. Section 31(3) stipulates that, after the order of approval under Section 31(1), (a) the moratorium order passed by the adjudicating authority under Section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. Section 32 provides for an appeal from the order of the adjudicating authority approving the resolution plan. Section 33 relates to initiation Of liquidation and, under Section 33(1), where the adjudicating authority either on completion or before the expiry of the maximum period under Section 12 or where it rejects the resolution plan under Section 31, passes an order requiring the corporate debtor to be liquidated in the manner laid down in Chapter-III of the IBC, to issue a public announcement stating that the corporate debtor is in liquidation; and require such an order to be sent to the authority with which the corporate debtor is registered. Section 33(5) stipulates that subject to Section 52, when a liquidation order has been passed, no Suit or other legal proceeding shall be instituted by or against the corporate debtor. Under the proviso thereto, a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the adjudicating authority. Section 33(7) stipulates that the order for liquidation under Section 33 shall be deemed to be a notice of discharge to the officers, employees and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator. Section 34 relates to the appointment of a liquidator and fee to be paid and under Section 34(2), on the appointment of a liquidator under Section 34, all powers of the Board of Directors, key managerial personnel and the partners of the corporate debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator.

22. While Section 14(1) IBC is no doubt made subject to the provisions of sub-sections (2) and (3) of Section 14, neither sub-section (2) which relates to supply of essential goods or services to a corporate debtor, nor sub-section (3) which makes the provisions of sub-section (1) inapplicable to such transactions as may be notified by the Central Government, are applicable to the case on hand.

23. By the use of the words 'for prohibiting all of the following namely' in Section 14(1) of the IBC, the legislature has restricted the power of the adjudicating authority, to pass an order declaring a moratorium of prohibition, only to those matters specifically referred to in clause (a) to (d) thereunder. In Black’s Law Dictionary, 5th Edn., the word 'namely' has been stated as: 'A difference, in grammatical sense, in strictness exists between the words namely and including. Namely imports interpretation i.e. indicates what is included in the previous term; but including imports addition i.e. indicates something not included. In Webster’s Encyclopredic Unabridged Dictionary of the English Language, the word 'namely' has been stated as 'that is to say, explicitly, specifically to wit, on item of legislation, namely, certain bail'. In Chambers 21st Century Dictionary the word 'namely' has been stated as 'used to introduce an expansion or explanation of what has just been mentioned'. In World Book Dictionary, the word 'namely' has been stated as 'that is to say to wit'. Therefore the word 'namely', ordinarily, imports enumeration of what is comprised in the preceding clause; and it ordinarily serves the purpose of equating what follows with the clause described before. (State of Karnataka v. Balaji Computers (27) (2007) 2 SCC 743; State of Bombay v. Bombay Education Society (28) AIR 1954 SC 561).

24. The word 'namely' has also been explained in Oxford English Dictionary as 'that is to say'. (Balaji Computers (27 supra); Bombay Education Society (28 supra)). Ordinarily, the expression 'that is to say' is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used as a rule, to amplify a meaning while removing a possible doubt for which purpose the word 'includes' is generally employed. Depending upon the context of the words 'that is to say', this expression may be followed by illustrative instances. (State of T.N v. Pyare Lal Malhotra (29) AIR 1976 SC 800; Mahindra Engg. and Chemical Products Ltd. v. Union of India (30) (1992) 1 SCC 727; Sait Rikhaji Furtarnal v. State of A.P. (31) AIR 1991 SC 354; Stroud’ s Judicial Dictionary (4th Edn., Vol. 5); Balaji Computers (27); and R. Dalmia v. CIT. (32) (1977) 2 SCC 467; Castrol India Ltd. v. CCE (33) (2005) 3 SCC 30 = 2005 (4) ALT 17.3 (DN SC)).

25. That is to say’ is the commencement of an ancillary clause which explains the meaning of the principal clause. It has the following properties: (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the principal clause is general in terms it may restrict it. (Stroud’s Judicial Dictionary (4th Edn., Vol. 5, at p. 2753: Balaji Computers (27 supra); Castrol India Ltd. (33 supra)). Use of expressions ‘namely’, or ‘that is to say’ followed by a description is usually exhaustive unless there are strong indications to the contrary. (Mahindra Engineering and Chemical Products Ltd. (30 supra)). The expression 'that is to say' is descriptive, enumerative and exhaustive and circumscribes to a great extent the scope of the provision. (CST v. Popular Trading Co., (34) (2000) 5 SCC 511 = AIR 2000 SC 1578; Sait Rikhaji Furtarnal (31 supra); Pyare Lal Malhotra (29 supra)).

26. Clauses (a) to (d) of Section 14(1) must, therefore, be understood as being exhaustive of the circumstances in which a moratorium can be declared by the adjudicating authority; and since Section 14(1), and clauses (a) to (d) thereunder, neither suffer from any ambiguity, nor are they capable of two possible constructions, they must be understood in its literal sense. The question which necessitates examination is whether the 1st respondent is barred from taking action under Section 14 of the SARFAESI Act for delivery of possession of the subject premises in view of Clauses (a) to (d) of Section 14(1) IBC.

27. While Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that clauses (b) and (c) are inapplicable, and the present case would fall within the ambit of clauses (a) and (d), we shall, later in this order, examine the scope of clause (c) also, since the submission, urged on behalf of the petitioner, is that clause (c) is, in any case, covered by clause (a) of Section 14(1) of the IBC.

II. SECTION 14(1)(a) IBC: ITS SCOPE:

28. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that the provisions of Section 14(1)(a) of the IBC are attracted in the present case, as the order of the Chief Metropolitan Magistrate, which is sought to be executed through the Advocate Commissioner, is 'in the execution of an order of other authorities'; the said order was also passed against the petitioner-Corporate debtor which is the 1st respondent in the Section 14 proceedings before the Chief Metropolitan Magistrate; the proceedings are, in effect, only against the corporate debtor as it is they who are sought to be dispossessed; in any event, be it administrative, judicial or quasi judicial, execution of the order of the Chief Metropolitan Magistrate, under Section 14 of the SARFAESI Act, would undoubtedly fall within the ambit of Section 14(1)(a) of the IBC; the authorised Officer, under Section 14 of the SARFAESI Act, is an authority under Section 14(1) IBC; and, consequently, the order of the Chief Metropolitan Magistrate cannot be executed.

29. On the other hand Sri S. Niranjan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that only judicial proceedings, instituted against a corporate debtor, would fall within the ambit of Section 14(1)(a); a secured creditor is not prohibited, by clause (a) of Section 14(1) of the IBC, from taking possession of the subject property, otherwise than under Section 14 of the SARFAESI Act; mere administrative assistance, provided by the Chief Metropolitan Magistrate under Section 14, would not disable the 1st respondent from taking possession; and clause (a) of Section 14(1) IBC is not attracted where administrative assistance of the magistrate is sought under Section 14 of the SARFAESI Act.

30. Section 14(1)(a) of the IBC prohibits institution of suits, or continuation of pending suits or proceedings, against the corporate debtor including execution of any judgment, decree or order in any Court of law, tribunal, arbitration panel or other authority. Proceedings under Section 14 of the SARFAESI Act cannot be equated to a suit or an execution proceeding against the corporate debtor i.e., the petitioner. Section 14 of the SARFAESI Act enables a secured creditor to seek assistance of the Chief Metropolitan Magistrate or the District Magistrate in taking possession of the secured asset. The power exercised by the Magistrate under Section 14 of the SARFAESI Act is administrative in character, and proceedings under Section 14 of the SARFAESI Act cannot be equated to a suit or an execution proceeding against the corporate debtor i.e., the petitioner. The word 'proceedings', in clause (a) of Section 14(1) IBC, must be read in its context, and can only mean proceedings similar to those of suits such as proceedings for recovery of dues under Section 19 of the The Recovery of Debts and Bankruptcy Act, 1993 (for short the 'RDB Act'). It would not bring within its ambit other forms of proceedings including administrative assistance being sought to take possession of the secured asset under Section 14 of the SARFAESI Act. As proceedings, under Section 14 of the SARFAESI Act, is not akin to a suit and, since the proceedings instituted by the 1 si respondent under Section 14 of the SARFAESI Act to take delivery of possession of the subject property is not against the petitioner, but against the 4th respondent, it cannot even be construed as the institution of a proceeding against the corporate debtor i.e., the petitioner herein.

31. Sri R. Raghunandan, learned Senior Counsel appearing on behalf of the petitioner, would submit that proceedings under Section 14 of the SARFAESI Act is invoked for the execution of an order of 'other authority', This submission is based on the premise that the Authorised Officer is an 'authority' under Section 14(1)(a) of the IBC, and the proceedings under Section 14 of the SARFAESI Act is to execute his order. While the provisions of the SARFAESI Act do not define an 'Authorised Officer', Rule 2(a) of the Security Interest (Enforcement) Rules, 2002 defines an 'authorised officer' to mean an officer not less than the chief manager of a public sector bank or equivalent, as specified by the Board of Directors or Board of Trustees of the secured creditor or any other person or authority exercising powers of superintendence, direction and control of the business or affairs of the secured creditor, as the case may be, to exercise the rights of a secured creditor under the Act. The 'authorised officer' is either an employee of the secured creditor or a person exercising some form of control over the affairs of the secured creditor. Rule 4 enables the authorised officer to realise the amount due to the secured creditor, by adopting the measures specified in Section 13(4) of the SARFAESI Act to take possession of the mortgaged property. While certain powers are conferred, and certain obligations are imposed, on the authorised officer under the Rules, that would not bring the authorised officer within the ambit of 'other authority' under Section 14( 1)( a) of the IBC. The words 'other authority' are used in Section 14(1)(a) of the IBC in the context of execution of a judgment, decree or order. Use of the words 'other authority' along with the words Court, tribunal or arbitral panel can only mean an authority who has been conferred the power to adjudicate disputes. No such power is conferred on the 'authorized officer' under the SARFAESI Act and the Rules. Proceedings, under Section 14 of the SARFAESI Act, are administrative in character. The Magistrate only authorizes the subordinate officers to take possession of the assets after examining the factual correctness of the assertion made in the affidavit. Any assistance taken by the financial institution/ secured creditor for recovery of the asset, before the authority referred to in Section 14 of the SARFAESI Act, is only procedural in nature and no adjudication is involved. The word 'order', used in the second proviso to Section 14 of the SARFAESI Act is only an administrative order, made for taking possession of the secured asset, if all other conditions are fulfilled. (M/s. T.R. Jewellery, a proprietary concern Rep., by its proprietor Thiriveedhi Suresh Babu v. M/s. State Bank of India, Vedayapalem Branch, Nellore (35) 2016 (2) ALT 226 (F.B.) = 2016 (2) ALD 164).

32. This question can be examined from another angle also. Section 13(4)(a) of the SARFAESI Act enables the secured creditor to take possession of the secured asset of the borrower to recover its secured debt. Exercise of such a power by a secured creditor, en its own and without the assistance of the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act, would undisputably not amount to the execution of an order of any authority, since action taken by the secured creditor, under Section 13(4)(a), is on its own accord. Possession of the mortgaged property is not taken, in such a case, in the execution of any judgment, decree or order. If that be so, inability of the secured creditor to take possession under Section 13(4)(a), as the borrower or the person in occupation has refused to deliver possession to the secured creditor, necessitating its having to take the assistance of the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act, would hardly make a difference. All that the Chief Metropolitan Magistrate would do, on his jurisdiction being invoked, is to provide administrative assistance to the secured creditor to take possession of the subject property. Proceedings taken against a co-borrower, under Section 14 of the SARFAESI Act, would not fall within the ambit of Section 14(1)(a) of the IBC and, consequently, the 1st respondent is not disabled from taking action under the SARFAESI Act seeking delivery of possession of the subject property belonging to the 4th respondent.

III. DOES SECTION 14(1)(a) IBC ALSO COVER SECTION 14(1)(c)?

33. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that the mere fact that the petitioners’ case would not fall within the ambit of clause (c) of Section 14(1) of the IBC would not result in its being denuded of the protection available to it under Section 14(1)(a); and as Section 14(1)(a) also covers matters falling under clause (c), can only mean that clause (c) was inserted in Section 14(1) as a matter of abundant caution.

34. On the other hand Sri S. Niranjan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that, since Section 14(1)(c) expressly refers to the provisions of the SARFAESI Act, it is evident that Section 14(1)(a) of the IBC is not attracted to proceedings initiated against a co-borrower under Section 14 of the SARFAESI Act, notwithstanding that the petitioner is in occupation of the property mortgaged by the co-borrower.

35. Parliament has, by enacting clause (c) in Section 14(1), restricted the power of the adjudicating authority to declare a moratorium only for prohibiting any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property, including any action under the SARFAESI Act 2002. Enforcement of the security interest, created by the corporate debtor in respect of its property, is alone prohibited from action being taken under the SARFAESI Act. In the present case, it is not in dispute that the security interest in the subject property was created not by the petitioner corporate-debtor, but by the 4th respondent. The subject property does not belong to the petitioner and is, admittedly, owned by the 4th respondent.

36. One of the principles of statutory construction is that when one or more things of a class are expressly mentioned, others of the same class are excluded. (D.R. Venkatachalam v. Transport Commr., (36) (1977) 2 SCC 273; Taylor v. Taylor (37) (1876) 1 Ch. D. 426; Nazir Ahmad v. King Emperor (38) (1936) L.R.63 I.A. 372). If Parliament had intended to bring all proceedings under the SARFAESI Act, including taking possession of the property belonging to a co-borrower, within the ambit of clause (a) of Section 14(1) of the IBC, it was wholly unnecessary for it to have made a separate provision under clause (c) of Section 14(1) of the IBC, for clause (a) would have sufficed to bring all proceedings under the SARFAESI Act within its ambit. The very fact that clause (c) of Section 14(1) refers only to foreclosure, recovery or enforcement of any security interest created by the corporate debtor that too in respect of its property, including taking action under the SARFAESI Act, can only mean that all other actions under the SARFAESI Act are excluded from its ambit.

37. Accepting the construction that clause (a) would bring within its ambit the contents of clause (c) would also result in clause (c) of Section 14(1) IBC being rendered redundant and inapposite surplussage. Courts always presume that the legislature inserted every part thereof for a purpose. (Mohd. Ali Khan (3 supra); J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of UP., (39) 1961 (3) SCR 185 = AIR 1961 SC 1170). A Section of a statute should be construed so that there may be no repugnancy or inconsistency between its different portions. (Corporation of the City of Victoria (22 supra); Cooke v. Charles A. Vogeler Co. (40) (1901) A.C. 102=70 L.J. Q.B. at p.183). Courts would not add words to a statute or read words into it which are not there. It is for the Courts to see what Parliament had said, instead of reading into an Act what ought to have been said. (Shahadara (Delhi) Saharanpur Light Railway Co. Ltd. (I supra); Salomon v. A. Salomon & Co. Ltd (41) (1897) AC 22, 38). Effort should be made to give meaning to each and every word used by the legislature, and it is not a sound principle of construction to brush aside words in a Statute as being inapposite surplusage, if they can have a proper application in circumstances conceivable within the contemplation of the Statute. (Gurudevdatta VKSSS Maryadit (2 supra)). A construction, which requires for its support addition or substitution of words or which results in-rejection of words as meaningless, should be avoided. (Mohd. Ali Khan (3 supra. Courts should be reluctant to hold that Parliament has achieved nothing by the language it used, when it is tolerably plain what it seeks to achieve. Reducing the legislation to a futility should be avoided. (MT Khan (12 supra); BBC Enterprises v. Hi- Tech Xtravision Ltd. (42) (1990) 2 All ER 118). Such a construction of clauses (a) and (c) of Section 14(1) of the IBC is, therefore, impermissible.

38. The submission of Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, that clause (c) was inserted in Section 14(1) of the IBC as a matter of abundant caution does not merit acceptance. Statutes may sometimes contain provisions introduced because abundans cautela non nocet (there is no harm in being cautious). (Gokaraju Rangaraju v. State of A.P., (43) (1981) 3 SCC 132). Nor is surplusage or even tautology wholly unknown in the language of the legislature. (Income Tax Special Purposes Commissioners v. Pemsel (44) (1891=94) All ER Rep. 28). It is not unusual for Parliament to say expressly what the courts would have inferred anyway. (Walker (Inspector of Taxes) v. Centaur Clothes Group Ltd. (45) (2000) 2 All ER 589 at 595). The only inference which a court can draw from superfluous provisions (which generally find a place in Acts to meet unfounded objections and idle doubts), is that the legislature was either ignorant or unmindful of the real state of the law, or that it acted under the influence of excessive caution. (Mary Angel v. State of TN, (46) (1999) 5 SCC 209; Harish Chandra Bajpai v. Triloki Singh (47) 1957 S.C.R. 371; Maxwell on Interpretation of Statutes, 10th Edn., pp. 316- 317).

39. As a general rule, the legislature may be presumed not to make a superfluous provision. (Hakim Ali v. Board of Revenue, U.P., (48) 1991 Supp (1) SCC 565; G.P. Singh on Principles of Statutory Interpretation, 4th edn., p. 51). In the interpretation of statutes the Court always presumes that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. (J.K. Cotton Spinning & Weaving Mills Co. Ltd. (39 supra)), One ought not lightly to assume that any statutory enactment has no effect or is superfluous. (Inland Revenue Commissioners v. Dowdell O’Mahoney & Co. Ltd. (49) (1952) 1 All ER 531 at 537).

40. The very fact that clause (c) of Section 14(1) of the IBC, prohibits action to enforce the security interest created only by a corporate debtor in respect of its property, including action being taken under the SARFAESI Act, would clearly show that Parliament did not intend to confer power on the adjudicating authority to declare a moratorium under Section 14(1) of the IBC prohibiting the secured creditor from enforcing the security interest created by a co-borrower of a corporate debtor, merely because the said property is occupied by the corporate debtor.

41. Accepting the construction placed on clauses (a) and (c) of Section 14(1) of the IBC by Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would also lead to abuse of the protection conferred on a corporate debtor under Section 14(1) of the IBC; and by, merely, occupying the property of a co-borrower, the corporate debtor can disable the secured creditor from taking possession of the secured asset mortgaged in their favour by the eo-borrower,

42. While examining the scope of Section 14 IBC, in the context of whether it is applicable to a guarantor, the Supreme Court, in State Bank of India v. V. Ramakrishnan (50) (Judgment of the Supreme Court in Civil Appeal No.3595 of 2018, dated 14.08.2018), observed that Section 14 of IBC refers to four matters that may be prohibited once the moratorium comes into effect. In each of the matters referred to, be it the institution or continuation of proceedings, the transferring, encumbering or alienating of assets, action to recover security interest, or recovery of property by an owner which is in the possession of the corporate debtor, what is conspicuous, by its absence, is any mention of the personal guarantor. Indeed, the corporate debtor and the corporate debtor alone is referred to in the said Section. A plain reading of the said Section, therefore, leads to the conclusion that the moratorium referred to in Section 14 can have no manner of application to the personal guarantors of a corporate debtor. Like a guarantor, Section 14(1) IBC has also no application to a eo-borrower who has permitted the petitioner corporate debtor to occupy his property which has been mortgaged in favour of the l' respondent secured creditor.

43. In this context, it is relevant to note that, in its report submitted to the Government of India dated 26.03.2018, the Insolvency Law Committee had opined that since many guarantees, for loans of corporates, are given by its promoters in the form of personal guarantees, if there is a stay on actions against their assets during a CIRP, such promoters (who are also corporate applicants) may file frivolous applications to merely take advantage of the stay and guard their assets. The Committee concluded that Section 14 does not intend to bar actions against the assets of guarantors it to the debts of the corporate debtor, and recommended that an explanation to clarify this may be inserted in Section 14 of the Code; and the scope of the moratorium may be restricted to the assets of the corporate debtor only. (V. Ramakrishnan (50 supra)). Construing Section 14(1)(a) as prohibiting a secured creditor from taking possession of a secured asset mortgaged in favour by a co-borrower, merely because the mortgaged property has been permitted to be occupied by a corporate debtor, may well result in a co-borrower resorting to this subterfuge only to avoid possession of their property being taken by the secured creditor, and avoid the said property from being put to sale thereafter.

IV. BANKRUPTCY LAW REFORMS COMMITTEE:

44. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioners, would submit that the moratorium period has been referred to, in the 2015 Bankruptcy Law’ Reforms Committee report, as the 'calm period'; and no disturbance, including under Section 14 of the SARFAESI Act, is permissible. Learned Senior Counsel would rely on the report of the Bankruptcy Law Reforms Committee report, 2015, and the Insolvency Law Committee Report, 2018, to submit that, since the Insolvency Law Committee’s report was extensively relied upon by the Supreme Court, in V. Ramakrishnan (50 supra). this Court should refer to the said report to ascertain the legislative intent in prescribing the moratorium under Section 14(1) of the IBC; and this report makes it clear that even possession of a corporate debtor, other than by way of lease, is protected under Section 14(1)(a) and (d) of the IBC.

45. If the basic purpose underlying construction of a legislation is to ascertain the real intention of Parliament, aids which Parliament availed of, such as the report of a special committee preceding the enactment, the existing state of the law, the environment necessitating enactment of the legislation, and the object sought to be achieved, should not be denied to the Court whose function is primarily to give effect to the real intention of Parliament in enacting the legislation. Such denial would deprive the Court of a substantial and illuminating aid to construction. Therefore, reports of the committee which preceded the enactment of a legislation, reports of joint parliamentary committee, report of a commission set up for collecting information leading to the enactment are permissible external aids to construction. (R.S. Nayakv. A.R. Antulay (51) (1984) 2 SCC 183 = 1984 SCC (Cri) 172).

46. The general history of a statute and the various steps leading upto an enactment including amendments or modifications of the original bill and reports of legislative committees can be looked at for ascertaining the intention of the Legislature where it is in doubt. However legislative history is inadmissible when there is no obscurity in the meaning of the statute. (R.S. Nayak (51 supra); Crawford on Statutory Construction (p. 388).

47. Reports of commissions or committees preceding the enactment of a statute may be considered as showing the mischief aimed at and the state of the law as it was understood to be by the Legislature when the statute was passed. (R.S. Nayak (51 supra); Halsbury’s Laws of England, Fourth Edition, VoI. 44, para 901). It is permissible to refer to the Law Commission and other reports to ascertain the legislative intent behind the provision. Where a particular enactment or amendment is the result of the recommendation of the Law Commission, it may be permissible to refer to the relevant report. What importance can be given to it will depend on the facts and circumstances of each case. (Mithilesh Kumari v. Prem Behari Khare (52) AIR 1989 SC 1247 = (1989) 2 SCC 95). The Supreme Court in V. Ramakrishnan (50 supra) has referred extensively to the Insolvency Law Committee Report and, since reference to Committee reports which preceded the legislation is permissible in order to understand the environment leading upto the enactment, we shall refer to the contents of both the Bankruptcy Law Reforms Committee and the Insolvency Law Committee reports.

48. In its report, submitted to the Government of India in November, 2015, the Bankruptcy Law Reforms Committee opined that:- (1) while the IRP is in process, the law enshrines a ‘calm period’ where creditors stay their claims; this gives a better chance for the firm to survive as a going concern; for the 180 days, for which the IRP is in operation, the creditors committee will analyse the company, hear the rival proposals, and make up its mind about what has to be done; and (2) Resolution Phase I envisages a calm period for insolvency resolution. The Committee recommended two phases of resolution, once a procedure of default resolution has been triggered. The first phase was a collective negotiation to rationally assess the viability of the debt. The Committee recommended that the assessment must ensure a calm period where the interest of the creditors can be protected, without disrupting the running of the enterprise; (3) a calm period for negotiations i.e., during insolvency resolution, there is a time bound moratorium against debt recovery actions, and any new case filed; (4) moratorium on debt recovery action, since the motivation behind the moratorium was that it is value maximization for the entity to continue operations, even as its viability is being assessed during the IRP; there would be no additional stress on the business after the public announcement of the IRP; the order for the moratorium during the IRP imposes a stay not just on debt recovery actions, but also any claims or expected claims from old lawsuits, or on new lawsuits, for any manner of recovery from the entity; (5) the moratorium will be active for the period over which the IRP is active; (6) moratorium period, as one of the goals of having an insolvency law, is to ensure the suspension of debt collection actions by the creditors, and to provide time for the debtors and creditors to re-negotiate their contract; and this requires a moratorium period in which there is no collection or other action by creditors against the debtors.

49. The Government of India set up the Insolvency Law Committee on 16.11.2017 to make recommendations on issues arising from the implementation of the Insolvency and Bankruptcy Code, 2016, as well as on the representations received from various stake-holders. The Committee submitted its report dated 26.03.2018. In para 5 of its report, the Committee dealt with moratorium under Section 14 of the IBC. In Para 5.1 it opined that the scope of the moratorium, under Section 14(1)(a) mc, was broader than the moratorium in the repealed Sick Industrial Companies (Special Provisions) Act, 1986 ('SICA') in two ways; first under SICA actions which were barred could be instituted or continued with the consent of the BIFR, and second, the language used in Section 22 of SICA clarified that proceedings, which affected the assets of the company or recovery of money etc, were barred; and, on a plain reading, Section 14 was wider in its ambit.

50. Para 5.2 of the report refers to purposes of the moratorium to include keeping the corporate debtor’s assets together during the insolvency resolution process, for facilitating orderly completion of the envisaged processes, and thereby ensuring that the company continues as a going concern during the period when the creditors take a view on resolution of default; and the moratorium, on initiation and continuation of legal proceedings, including debt enforcement action, ensures a stand-still period during which creditors cannot resort to individual enforcement action which may frustrate the object of the corporate insolvency resolution process; and the intent does not appear to be to debar only those Suits or proceedings which affect the assets of the corporate debtor, as they appear to be only one of the components that is barred.

51. In so far as guarantors of the secured debt, extended by banks/financial institutions to the corporate debtor, are concerned para 5.9 of the report states that the general principle of contracts of guarantee is that the liability of the principal debtor and the surety is co-extensive and is joint and several; the characteristic of such contracts i.e. of having a remedy against both the surety and the corporate debtor, without the obligation to exhaust the remedy against one of the parties before proceeding against the other, is of utmost importance for the creditor, and is the hallmark of a guarantee contract; and availability of such remedy is, in most cases, the basis on which the loan may have been extended.

52. In para 5.10 of its report, the Committee opined that a literal interpretation of Section 14 was prudent, and a broader interpretation may not be necessary; the assets of the surety were separate from those of the corporate debtor, and proceedings against the corporate debtor may not be seriously impacted by the actions against the assets of third parties like sureties; additionally, enforcement of the guarantee may not have a significant impact on the debt of the corporate debtor as the right of the creditor against the principal debtor is merely shifted to the surety, to the extent of payment by the surety; contractual principles of guarantee require being respected even during a moratorium, and an alternate interpretation may not have been the intention of the Code, as is clear from a plain reading of Section 14.

53. In para 5.11 of its report the Committee observed that, since many guarantees for loans of corporates were given by its promoters in the form of personal guarantees, if there was a stay on actions against their assets during a CIRP, such promoters (who were also corporate applicants) may file frivolous applications to merely take advantage of the stay and guard their assets; many applications have been filed by the corporate applicant under Section 10 of the Code; and this may corroborate the apprehension of abuse of the moratorium provision. The Committee concluded that Section 14 did not intend to bar actions against the assets of the guarantors, to the debts of the corporate debtor, and recommended that an explanation to clarify this may be inserted in Section 14 of the Code; and the scope of the moratorium may be restricted to the assets of the corporate debtor only.

54. The Insolvency Law Committee, in so far as the moratorium under Section 14 IBC is concerned, observed that a broad interpretation of the moratorium may curtail significant rights of the creditor which are intrinsic to a contract of guarantee; a literal interpretation of Section 14 IBC was prudent, and a broader interpretation may not be necessary in this context; the assets of the surety are separate from those of the corporate debtor, and proceedings against the corporate debtor may not be seriously impacted by the actions against the assets of third parties like sureties; and an alternate interpretation may not have been the intention of the IBC, as is clear from a plain reading of Section 14 thereof. (V. Ramakrishnan (50 supra)).

55. As noted hereinabove, a moratorium was suggested by the Bankruptcy Law Reforms Committee to ensure that, while the Insolvency Resolution is in process, a 'calm period' should be ensured whereby the creditors stay their claims. According to the said report, one of the goals, of having an insolvency law, is to ensure suspension of debt collection actions by creditors and to provide time for debtors and creditors to re-negotiate their contracts. In the present case, the 1 st respondent secured creditor is not seeking to collect its debt from the petitioner-corporate debtor, and has refrained from doing so in view of the moratorium under Section 14(1) of the IBC. It has proceeded to take action under the SARFAESI Act for recovery of its dues from the 4th respondent-co-borrower. Occupation by a corporate debtor of a property owned by another, and which is mortgaged in favour of a secured creditor, is not protected by the moratorium under Section 14(1) of the IBC nor can the said Section be so construed relying on certain observations in the Bankruptcy Law Committee Reports.

56. The Insolvency Committee Report, in para 5.1, opines that a literal interpretation of Section 14 IBC was warranted, and the assets of a surety which are separate from those of the corporate debtor can be proceeded against. If the assets of a surety or of a guarantor can be proceeded against, there is no reason why the assets of a co-borrower should not be proceeded against, under the SARFAESI Act, for recovery of the dues of the secured creditor merely because the mortgaged property is in the occupation of a corporate debtor. Para 5.2 of the Insolvency Committee Report dated 26.03.2018 specifically notes that the purpose of the moratorium is to keep the corporate debtors’ assets together during the insolvency process for facilitating orderly completion of the envisaged processes. The subject property is not the asset of the petitioner corporate debtor. 'Reliance placed on the Bankruptcy Law Committee Report and the Insolvency Law Committee Report is, therefore, of no avail.

V. SECTION 14(1)(d) IBC: ITS SCOPE:

57. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that, just as the owner of the property cannot proceed against the Corporate debtor under Section 14(1)(d), the mortgagee cannot, likewise, proceed against the corporate-debtor thereunder; by the use of the words 'owner', apart from 'lessor', Section 14(1)(d) implicitly protects even unlawful possession;' if Section 14(1)(d) were to apply only to possession under a registered/unregistered lease, it would have sufficed to use the words 'lessor'; and use of the word 'owner' in Section 14(1)(d) would have been wholly unnecessary.

58. On the other hand Sri S. Niranjan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that, since the 1st respondent is neither the lessor nor the owner of the subject premises, the protection conferred, under clause (d) of Section 14(1) of the IBC, on a corporate debtor has no application; Section 14(1)(d) only protects a corporate debtor against the owner/lessor of the property, and not against the assignee of the secured debt; the protection, conferred under clause (d) of Section 14(1) of the IBC, does not extend to proceedings for enforcement as in clause (c); clause (c) and (d) of Section 14(1), when read together, deal with both the proceedings conducted, and the subject of such proceedings i.e., the borrower; and clause (d) does not relate to enforcement of the security interest.

59. Section 14(1)( d) prohibits recovery of any property by the owner or lessor of such property occupied by or in possession of the corporate debtor. In the present case, possession of the subject property is sought to be taken not by the owner or lessor of the property, but by a secured creditor in order to put the ‘secured asset to sale for recovery of its dues from the co-borrower of a corporate debtor. The submission of Sri R. Raghunandan, Learned Senior Counsel, that, by the use of the word 'lessor' in addition to the words 'owner', Parliament intended to prohibit a person, other than the owner of the property in occupation of the corporate debtor, to also seek recovery of the said property is not tenable. The word 'lessor' in clause (d) of Section 14(1) of the IBC evidently refers to cases where the corporate debtor is granted a sub-lease by a lessee of the property. In such cases the lessee, not being the owner, would be the lessor or the corporate debtor to whom the property has been sub-leased. The word 'lessor', in Section 14(1)(d) of the IBC, cannot be stretched to include a secured creditor, since Parliament has, by the use of the words 'owner' or 'lessor', prohibited recovery of the property only by these two categories of persons, and none other.

60. The contention that Section 14(1)(d) implicitly protects unlawful possession is only to be noted to be rejected for, if unlawful possession of a corporate debtor was intended to be protected thereby, the word 'any person' would have been inserted in the place of the words 'owner or lessor'. The very fact that Section 14(1)(d) of the IBC refers only to the owner or lessor makes it clear that it is only they who are disabled from seeking recovery of the property in the occupation or in the possession of a corporate debtor. Where the language of a statutory provision is unambiguous, resort to any other aid of construction is impermissible and the statutory provision must be given its literal meaning. The intention of the legislature is a common but very slippery phrase, which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact. (Shahadara (Delhi) Saharanpur Light Railway Co. Ltd. (1 supra); A. Salomon & Co. Ltd. (41 supra). Unless the grammatical construction leads to an absurdity, it is safe to give words their natural meaning because the framer is presumed to use the language which conveys the intention. It is only if two constructions are possible, that the construction which advances the intention of the legislation, remedies the mischief to thwart which it is enacted, should be accepted. (Glaxo Laboratories (1) Ltd. v. Presiding Officer (53) (1984) 1 SCC 1 = 1984 SCC (L&S) 42). Clause (d) of Section 14(1) of the IBC is unambiguous, and does not lend itself to two possible constructions. We see no reason, therefore, to take any other aid to construe the said provision.

VI. SECTION 14 OF THE SARFAESI ACT: ITS SCOPE

61. Sri R. Raghunandan, Learned Senior Counsel appearing on behalf of the petitioner, would submit that, in view of the law declared by the Supreme Court in Vishal N Kalsaria v, Bank of India (54) (2016) 3 SCC 762, evidence can be produced before the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act; and as evidence is permitted to be produced in such proceedings, Section 14 of the SARFAESI Act must be held to be a judicial proceeding, and not an administrative proceeding.

62. On the other hand Sri S., Niranjan Reddy, Learned Senior Counsel appearing on behalf of the 1st respondent, would submit that Section 14 of the SARFAESI Act is an administrative proceedings, and is not judicial in character; in the present case, proceedings were initiated against the co-borrower (the 4th respondent), and not the petitioner corporate-debtor; the subject property belongs to the co-borrower, who incidentally is one of the promoters of the petitioner-company; the petitioner was arrayed as a respondent, in the Section 14 application filed before the Chief Metropolitan Magistrate, only with respect those properties which were mortgaged by it in favour of the 1st respondent; the subject property was mortgaged not by the petitioner, but by the 4th respondent; the petitioner is not concerned with the proceedings initiated against the 4th respondent under Section 14 of the SARFAESI Act; even otherwise, symbolic possession was already taken, under Section 13(4) of the SARFAESI Act, on 29.05.2013 long before the IBC was enacted in the year 2016 and proceedings under the IBC, with respect to the petitioner, was admitted on 05.07.2017; since the 1st respondent has already taken symbolic possession under Section 13(4) of the SARFAESI Act, the petitioner must be held to be in unlawful possession of the subject property; such unlawful possession is not protected by Section 14 of the IBC; the jurisdiction exercised by this Court, under Article 226 of the Constitution of India, is discretionary; since the petitioner is admittedly in unlawful possession, this Court would not come to its aid in the exercise of its discretionary jurisdiction under Article 226 of the Constitution of India; and whatever be the result of the resolution process, be it liquidation or acceptance of the resolution plan, the corporate-debtor cannot claim entitlement to continue in possession of the subject property, which belongs to a co-borrower, thereafter. Learned Senior Counsel would rely on Harshad Govardhan Sonddagar v. International Assets Reconstruction Company Limited (55) 2015 (2) ALT (Crl.) 306 (SC) = (2014) 6 SCC 1.

63. Before taking note of the law declared by the Supreme Court in Harshad Govardhan Sondagar (55 supra), and Vishal N Kalsaria (54 supra), it is useful to refer to the relevant provisions of the SARFAESI Act. Section 2(t) of the SARFAESI Act defines 'borrower' to mean any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or has created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution, and includes a person who becomes the borrower of an asset reconstruction company consequent upon acquisition by it of any right or interest of any bank or financial institution in relation to such financial assistance. Chapter-Ill of the 'SARFAESI Act' relates to enforcement of security interest and under Section 13(1), notwithstanding anything contained in Section 69 or Section 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal, by such creditor in accordance with the provisions of the SARFAESI Act. Under Section 13(2) where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of the secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as a non-performing asset, then the secured creditor may require the borrower, by notice in writing, to discharge in full his liabilities to the secured creditor within 60 days from the date of the notice, failing which the secured creditor shall be entitled to exercise all or any of the rights under Section 13(4).

64. Section 13(4) stipulates that, in case the borrower fails to discharge his liability in full within the period specified in subsection (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, viz., (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (c) appoint any person to manage the secured assets, the possession of which has been taken over by the secured creditor; and (d) require, at any time by notice in writing, any person, who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.

65. Section 14 of the SARFAESI Act requires the Chief Metropolitan Magistrate or the District Magistrate to assist the secured creditor in taking possession of the secured asset and under sub-section (1) thereof, where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured assets is required to be sold or transferred by the secured creditor under the provisions of the SARFAESI Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate, within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him, (a) take possession of such asset and documents relating thereto; and (b) forward such assets and documents to the secured creditor. Section 14( I A) of the SARFAESI Act enables the District Magistrate, or the Chief Metropolitan Magistrate, to authorize any officer subordinate to him to take possession of such assets and documents relating thereto; and to forward such assets and documents to the secured creditor.

66. In Harsha Govardhan Sondagar (55 supra), the appellants were all tenants of premises which were mortgaged to different banks as securities for the loans advanced by the banks and, on the borrowers having defaulted in repayment of their secured debt or instalment thereof and on their accounts being classified as a Non Performing Asset, action was initiated by the banks under the provisions of the SARFAESI Act. The case of the appellants, before the Supreme Court, was that they are not borrowers but were lessees of the borrowers and were entitled to remain in possession of the secured asset. The question which fell for the consideration of the Supreme Court was whether the provisions of the SARFAESI Act affect the rights of a lessee, to remain in possession of the secured asset, during the lease period.

67. It is in this context that the Supreme Court observed that Section 13 of the SARFAESI Act confers a statutory right on the secured creditor to take possession of the secured asset, and enforce the secured asset for realisation of the secured debt; where lawful possession of the secured asset is not with the borrower, but with the lessee under a valid lease the secured creditor cannot take over possession of the secured asset until lawful possession of the lessee gets determined; Section 13 of the SARFAESI Act does not provide that a lease, in respect of a secured asset, shall stand determined when the secured creditor decides to take the measures referred to in Section 13 of the said Act; without the determination of a valid lease, possession of the lessee is lawful; such lawful possession of a lessee should be protected by all courts and tribunals; Section 13 (13) of the SARFAESI Act, and the provisions of the Transfer of Property Act enabling the borrower or the mortgagor to make a lease, are inconsistent with each other; sub-section (13) of Section 13 of the SARFAESI Act w

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ill override the provisions of Section 65-A of the Transfer of Property Act by virtue of Section 35 of the SARFAESI Act, and a lease of a secured asset made by the borrower, after he receives notice under Section 13(2) from the secured creditor intending to enforce that secured asset, will not be a valid lease; the provisions of Section 13 of the SARFAESI Act do not override the provisions of the Transfer of Property Act relating to the rights of a lessee under a lease created before receipt of a notice under sub-section (2) of Section 13 of the SARFAESI Act; if any of the appellants claim that they were entitled to possession of a secured asset for any term exceeding one year from the lease made in their favour, they have to produce proof of execution of the registered instrument in their favour by a lessor; where they do not produce proof of execution of a registered instrument in their favour and, instead, rely on an oral agreement accompanied by delivery of possession, the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, will have to come to the conclusion that such a tenant is not entitled to possession of the secured asset for a period more than one year from the date of the instrument or from the date of delivery of possession in their favour by the landlord. In the light of the law laid down in Harsha Govardhan Sondagar (55 supra), and as no registered leased has been executed in their favour, the petitioner cannot claim to be entitled to remain in possession of the subject property for more than a year after they were put in possession of the property. 68. In Vishal N Kalsaria (54 supra), the question which arose for consideration was whether a protected tenant under the Maharashtra Rent Control Act, 1999 could be treated as a lessee, whether the provisions of the SARFAESI Act would override the provisions of the Rent Control Act, and as to how the right of a 'protected tenant' could be preserved in cases where the debtor landlord secured a loan by offering the very same property as a security interest either to banks or financial institutions. The Supreme Court held that the Transfer of Property Act remains silent on the position of law in cases where the agreement is not reduced into writing; if the two parties are executing their rights and liabilities in the nature of a landlord-tenant relationship, and if regular rent is being paid and accepted, then the mere factum of non-registration of the lease deed will not make the lease itself nugatory; if no written lease deed exists, then such tenants are required to prove that they have been in occupation of the premises as tenants by producing such evidence in proceedings under Section 14 of the SARFAESI Act before the learned Magistrate; in terms of Section 55(2) of the Rent Control Act, the onus to get the lease deed registered is on the landlord; and neither can the landlord nor the banks be permitted to exploit the fact of non-registration of the tenancy deed against the tenant. After referring to Harsha Govardhan Sondagar (55 supra), the Supreme Court further observed: ' ... As far as granting leasehold rights being created after the property has been mortgaged to the bank, the consent of the creditor needs to be taken. We have already taken this view in Harshad Govardhan Sondagar. We have not stated anything to the effect that the tenancy created after mortgaging the property must necessarily be registered under the provisions of the Registration Act and the Stamp Act. In view of the above legal position, if we accept the legal submissions made on behalf of the Banks to hold that the provisions of the SARFAESI Act override the provisions of the various Rent Control Acts to allow a bank to evict a tenant from the tenanted premises, which has become a secured asset of the bank after the default on loan by the landlord and dispense with the procedure laid down under the provisions of the various Rent Control Acts and the law laid down by this Court in a catena of cases, then the legislative powers of the State Legislatures are denuded which would amount to subverting the law enacted by the State Legislature. Surely, such a situation was not contemplated by Parliament while enacting the SARFAESI Act and therefore, the interpretation sought to be made by the learned counsel appearing On behalf of the Banks cannot be accepted by this Court as the same is wholly Untenable in law .... ' (emphasis supplied) 69. In the present case, the petitioner is neither a protected tenant nor are they governed by the Provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. As such the question whether their tenancy is protected by the provisions of the said Rent Control Act does not arise for consideration. Reliance placed on Visha/ N Kalsaria (54 Supra) is, therefore, misplaced. 70. In examining the scope of Section 14 of the SARFAESI Act, it must be borne in mind that the amounts that public sector banks and financial institutions have to recover are staggering, and at least one statutory measure has proved to be of some efficacy. Courts would be loathe to give such an interpretation as would thwart the recovery process under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which Act alone seems to have worked to some extent at least. (V. Ramakrishnan (50 supra)). 71. In the case on hand, the petitioner is in occupation of a premises owned by the 4th respondent who is a eo-borrower of the secured debt due to the 1st respondent. Proceedings, under Section 14(1) of the SARFAESI Act, were initiated by the 1st respondent to secure possession of the property belonging to the 4th respondent. No lease, let alone a registered lease deed, has been executed by the 4th respondent in the petitioner’s favour. The petitioner claims that its possession over the property is permissive, as the 4th respondent had permitted it to use the subject premises as its registered office, and from where it controls its business being carried on in different locations. 72. Proceedings initiated by the 1st respondent under the SARFAESI Act, with respect to the subject property, is not against the petitioner, but against the 4th respondent. The petitioner was arrayed as a respondent in the application filed under Section 14 of the SARFAESI Act, along with the 4th respondent and others, since the said application, made under Section 14 of the SARFAESI Act, is a composite application covering several properties, some of which belonged to the petitioner also. It is not in -dispute that proceedings, with respect to the subject property, were initiated under Section 14 of the SARFAESI Act against the 4th respondent who is its owner. In such circumstances, it cannot be held that the 1st respondent is disabled from taking possession of a property, mortgaged by a co-borrower, in the exercise of its powers under the SARFAESI Act, merely because the property is in the occupation of the petitioner corporate debtor. We find no error in the order of the Chief Metropolitan Magistrate dated 17.08.2018 rejecting the contention of the petitioner, and in holding that the subject property can be proceeded against under Section 14 of the SARFAESI Act. 73. Pursuant to the order passed by the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act, the 1st 50 respondent is entitled to take possession of the subject property. As the petitioner has been in occupation of the subject property, and has been carrying on its operations therfrom for the past several years, permitting the 1st respondent to forthwith take possession of the subject premises would undoubtedly hamper their business operations. We consider it appropriate, in such circumstances, to grant the petitioner time till 30th November, 2018 to vacate the subject premises. In case the petitioner fails to vacate the premises on or before 30.11.2018, it is open to the 1st respondent, thereafter, to take such action, as is available to them in law, to take possession of the subject property. 74. Subject to the aforesaid observations, the Writ Petition fails and is, accordingly, dismissed. The miscellaneous petitions pending, if any, shall stand closed. No costs.
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