Yes Bank Limited vs Suresh Kumar Jain & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 603 of 2022
Ratio decidendi
The rule this decision rests on
A sale deed executed by a corporate debtor before the commencement of the corporate insolvency resolution process cannot be cancelled on an application filed by the Resolution Professional under Section 60(5) read with Sections 25, 68, 14, 231 and 238 of the Insolvency and Bankruptcy Code, 2016, and such a prayer cannot be entertained on that application. Where an application by the Resolution Professional seeks relief that cannot be granted on that application, the Adjudicating Authority is right to reject it, and any observations made in the impugned order on the merits of that relief do not bind the parties in any other proceeding in accordance with law.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Yes Bank Ltd. ...Appellant
Versus
Suresh Kumar Jain & Ors. ...Respondents
Present: For Appellant: Mr. Neeraj Yadav, Advocate.
For Respondents: Mr. Anoop Prakash Awasthi, Advocate for R-1. Ms. Ridhima Goyal, Advocate for R-7. Dr. Farrukh Khan and Mr. Attendra Saumya Singh, Advocates for R-6, 8-11 and 15-23. Mr. Sanjay Kumar Bhuwania, Advocate for R-12 and 13. Mr. Pradeep Singh, Advocate for R-14.
ORDER
(Virtual Mode)
30.05.2022: This Appeal has been filed by the Financial Creditor challenging the order passed by the Adjudicating Authority dated 12.01.2022 by which application filed under Section 60(5) r/w Section 25, 68, 14, 231 & 238 of the Insolvency and Bankruptcy Code, 2016 has been rejected. The Resolution Professional in the application has prayed for following reliefs:
"i. Issue notice and call for the presence of respondents and take appropriate action thereby cancelling the sale deeds attached to this application and declare all of these sale deeds as null and void.
ii. Restore physical possession and control of the properties/flats mentioned in sale deeds attached to this application for all purposes to the applicant/RP and permit to put the same in the pool of assets of Corporate Debtor.
Cont'd..../ -2-
iii. Pass such order or further order as may be deemed just and fit under the circumstances of the case."
2. The CIRP against the Corporate Debtor was initiated by order dated 19.09.2019 on Section 7 Application filed by a Financial Creditor. The Sale Deeds which were sought to be cancelled were executed by the Corporate Debtor prior to the CIRP. We are of the view that there was no occasion to cancel the Sale Deed in the application which was filed by the Resolution Professional under Section 60(5) r/w Section 25, 68, 14, 231 & 238 and the Adjudicating Authority has rightly rejected the Application. We uphold the order of the Adjudicating Authority rejecting the application on the ground that such prayer cannot be entertained on an application filed by the Resolution Professional. However, we are of the view that since prayer for cancelling the Sale Deeds could not have been entertained the observations made in the impugned order may not prejudice the parties in any other proceeding in accordance with law. The Appeal is dismissed accordingly.
[Justice Ashok Bhushan] Chairperson
[Shreesha Merla] Member (Technical)
[Naresh Salecha] Member (Technical) Archana/nn
Company Appeal (AT) (Insolvency) No. 603 of 2022
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