Srei Infrastructure Finance Ltd vs Sundresh Bhatt, Rp Sterling Biotech Ltd

Srei Infrastructure Finance Ltd. ...Appellant

Vs.

Sundresh Bhatt, Resolution Professional Sterling Biotech Ltd. ...Respondent

Present: For Appellant: - Mr. Abhijeet Sinha, Mr. Arijit Mazumdar, Mr. Shambo Nandy and Mr. Saikat Sarkar, Advocates.

For Respondent: - Mr. Sandeep Bajaj, Mr. Soayib Qureshi and Mr. Deepanjan Dutta, Advocates.

O R D E R

31.07.2019─ The Appellant, a 'Financial Creditor' of a related

entity of 'Sterling Biotech Limited'- ('Corporate Debtor'), challenged the

order dated 7th December, 2018 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench-I, Mumbai, whereby

in view of the stand as was taken by the 'Resolution Professional' on his

application, the Appellant was directed to explain as to why action

should not be taken against it under the provisions of the Insolvency

and Bankruptcy Code, 2016 ("I&B Code" for short).

2. The 'Resolution Professional' filed application under Section 60(5)

of the 'I&B Code' seeking directions against the Appellant to return the

physical possession of the 'B' Wing premises of Lakshmi Towers to the

Contd/-.............

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'Resolution Professional' and to restrain the Appellant from taking any

action in relation to 'A' Wing premises pursuant to the notices issued by

the Appellant under Section 13(4) of the 'SARFAESI Act.'

3. The Adjudicating Authority, on hearing the parties, allowed the

application filed by the 'Resolution Professional' and directed the

Appellant to immediately return the physical possession of the 'B' Wing

premises to the 'Resolution Professional' and restrained the Appellant

from taking any further action in relation to 'A' Wing premises pursuant

to the notices issued by the Appellant under Section 13(4) of the

'SARFAESI Act.'

4. Learned counsel appearing on behalf of the Appellant submitted

that the immovable property, in question, i.e. 'A' & 'B' Wings premises of

'Lakshmi Towers' do not belong to the 'Corporate Debtor' and being a

third party property, the order of 'Moratorium' passed under Section 14

of the 'I&B Code' will not be applicable.

5. The 'Resolution Professional'/ 'Liquidator' in its reply has

accepted that both 'A' and 'B' Wing premises of Lakshmi Towers do not

belong to the 'Corporate Debtor'. However, it is stated that the office of

the 'Corporate Debtor' is running from the said premises and it was the

employees of the 'Corporate Debtor' who have been evicted persons

under Section 13(4) of the 'SARFAESI Act.'

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6. According to learned counsel for the Liquidator, the Appellant

should not have evicted the employees from the premises, in question,

which amounts to obstruction in the matter of keeping the 'Corporate

Debtor' as a going concern. It is informed that the Appellant has already

handed over the possession of 'B' Wing of Lakshmi Towers and not

disturbed 'Corporate Debtor' from the 'A' Wing of the said Lakshmi

Towers.

7. Although 'A' and 'B' Wings premises of Lakshmi Towers do not

belong to the 'Corporate Debtor', in view of Section 14(1) (d), the

'Corporate Debtor' cannot be ejected or disturbed from the premises, in

question, during the 'Moratorium'.

8. For the said reason, we hold that the Adjudicating Authority has

rightly directed the Appellant to hand over the possession of 'B' Wing

premises of Lakshmi Towers and rightly prohibited the Appellant from

evicting the 'Corporate Debtor' from 'A' Wing premises of Lakshmi

Towers.

9. So far as the question as to who is the owner of 'A' and 'B' Wings

premises of Lakshmi Towers and whether the Appellant has any right

over the said property, such questions are not required to be

determined in the proceeding under the 'I&B Code'. If the 'Corporate

Debtor' is saved during the liquidation proceeding pursuant to Section

Company Appeal (AT) (Insolvency) No. 781 of 2018 -4-

230 of the Companies Act, 2013 or if it is sold to a third party along

with the employees then, in such case, one may move before the

Competent Court of law for appropriate decision.

10. On the other hand, if action is taken under Section 53 of the 'I&B

Code', the Liquidator cannot sell the assets of the premises in question.

11. In view of the aforesaid position of law, we feel that no further

explanation is required to be given by the Appellant. The Adjudicating

Authority will close the matter against the Appellant.

The appeal stands disposed of. No costs.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial)

(Kanthi Narahari) Member(Technical) Ar/g

Company Appeal (AT) (Insolvency) No. 781 of 2018