{"id":199742,"date":"2018-08-06T09:47:04","date_gmt":"2018-08-06T04:17:04","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=199742"},"modified":"2018-08-30T10:11:27","modified_gmt":"2018-08-30T04:41:27","slug":"insolvency-and-bankruptcy-code-2016-prevails-over-sarfaesi-act-2002-nclat","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2018\/08\/06\/insolvency-and-bankruptcy-code-2016-prevails-over-sarfaesi-act-2002-nclat\/","title":{"rendered":"Insolvency and Bankruptcy Code, 2016 prevails over SARFAESI Act, 2002: NCLAT"},"content":{"rendered":"

National Company Law Appellate Tribunal (NCLAT):<\/strong> A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial), dismissed an appeal filed by the Financial Creditor, holding it to be sans merit.<\/p>\n

The appeal was filed by the appellant Bank (Financial Creditor) against the order passed by the National Company Law Tribunal, Chennai whereby and whereunder the application preferred by the Operational Creditor under Section 9 of Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor was admitted, order of moratorium was passed and name of the Interim Resolution Professional was called for. It was submitted that the Bank had taken possession of certain lands of the Corporate Debtor, and therefore, the Corporate Debtor colluded with the Operational Creditor to file the application under Section 9.<\/p>\n

The National Company Law Appellate Tribunal rejected the submission of the Bank in absence of evidence. Moreover, NCLT could not have decided the issue of collusion which could only be decided by a Court of competent jurisdiction. The contentions regarding insufficiency in service of Demand Notice to the Corporate Debtor were also rejected as the Corporate Debtor itself did not raise any such objection. It was observed that as per the Supreme Court decision in Innoventive Industries Ltd. <\/em>v. ICICI Bank<\/em><\/strong>, (2018) 1 SCC 407<\/a>, if the application under Section 9 is complete and there is no existence of dispute<\/em> and there is a debt <\/em>and default<\/em>, then the Adjudicating Authority (NCLT) is bound to admit the application. The Appellate Tribunal also noted that the appellant Bank had already taken steps under Securitisation and Reconstruction of Financial Assets and Enforcement of Interest Act, 2002. It was held, however, that such action could not continue as I&B Code prevails over SARFAESI Act. In the result, the appeal filed by the Bank was dismissed. [Canara Bank v. Sri Chandramoulishvar Spg. Mills (P) Ltd.,2018 SCC OnLine NCLAT 389<\/b><\/a>, order dated 03-08-2018]<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. 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