Haravtar Singh Arora vs Debt Recovery Appellate Tribunal And Others

Surya Kant, J

[1] The petitioner is promoter of M/s James Hotel Limited, namely, 5th respondent which is a public limited Company registered under the Companies

Act, 1956. The Company has set-up a hotel in Sector-17, Chandigarh on a piece of land measuring 9602 square yards which was taken on 99 years

lease from Chandigarh Administration.

[2] The Company is borrower of respondent No.3-Bank (Punjab National Bank). It appears to have taken loan from various other banks as well.

Punjab National Bank served the Company with a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (for short, the 2002 Act) on 09.08.2014 alleging that the Company is in default of payment of about

Rs.33.50 crores. Similar notice was issued by Union Bank of India also for recovery of about Rs.11.61 crores. Likewise, State Bank of India

transferred its right and lien in favour of Asset Reconstruction Company (ARC), who too issued notice under Section 13(2) of the 2002 Act

demanding recovery of more than Rs.58 crores from the Company. These notices were followed by action under Section 14 of the 2002 Act as the

District Magistrate, Chandigarh vide order dated 23.08.2016 directed the borrower(s) to hand-over the 'secured assets' to the bank(s). The aforesaid

action led to certain proceedings before the Debt Recovery Tribunal which were decided vide order dated 30.08.2016 (P-2). The order would reveal

that the Presiding Officer passed strictures against the PNB officials and made some other observations which are not necessary to be quoted for the

purpose of this order.

[3] Suffice to say that Punjab National Bank has taken up the matter in appeal before the Debts Recovery Appellate Tribunal, Delhi and the matter is

still sub-judice before the Appellate Tribunal. The Appellate Tribunal has passed certain self-speaking interlocutory orders including the one vide

which it has noticed that the 'moratorium period under IBC-2016 has expired as far as the bank's corporate-debtor is concerned and there was thus no

impediment in the way of the bank for proceeding further for recovery of its dues in accordance with law'. We are informed that the Appellate

Tribunal is yet to pass the final order.

[4] Simultaneously, Punjab National Bank has also moved an application under Section 7 of the Insolvency and Bankruptcy Code-2016 against the

Company in which the National Company Law Tribunal (NCLT) has appointed 4th respondent as the Insolvency Resolution Professional. The

proceedings before the NCLT too are still pending as it has stated that passing of final order has been stayed by this Court in some other proceedings.

[5] Be that as it may, in the instant writ petition the petitioner, namely, the promoter of the borrower-Company claims, INTER-ALIA, the following

reliefs:-

(i) To declare that simultaneous proceedings will clash in between the two Tribunals, i.e., DRAT and NCLT for the same relief, hence, these

proceedings are not maintainable;

(ii) initiation of simultaneous proceedings by the Punjab National Bank amounts to Forum Shopping and contrary to Section 234 of the Insolvency and

Bankruptcy Code, 2016;

(iii) all the further proceedings before DRAT and NCLT be stayed; and/or

(iv) this Court may issue any other appropriate writ, order or direction.

[6] In all fairness, learned counsel for the petitioner while touching upon the merits of the case, urges INTER-ALIA that the DRAT is likely to pass

an adverse order against the petitioner and NCLT cannot proceed in the matter as it amounts to initiation of parallel proceedings before two different

Tribunals.

[7] Having given our thoughtful consideration to the submissions, we do not deem it necessary to go into the merits of the case at this stage. The

instant writ petition appears to be pre-mature and misdirected. We say so for the reasons that the DRAT has not passed yet any final order and it

would be inappropriate for this Court to infer that the order to be passed by the Appellate Tribunal would necessarily be against the petitioner. Still

further, even if an adverse order is passed by the Appellate Tribunal, the petitioner in no way is remediless as such an order can be assailed in

appropriate proceedings.

[8] As regard to continuation of parallel proceedings before NCLT, it appears prima-facie that the nature of proceedings under the 2016 Code or the

relief sought therein are alien and distinct from the measures which a secured creditor is entitled to take under the provisions of 2002 Act.

Nevertheless, nothing precludes the petitioner to move an application before NCLT and make out a case that such proceedings pending are liable to

be kept in abeyance till the decision of the appeal by the DRAT. We grant leave to the petitioner to move an application within one week from today,

if already not moved, and if any such application is filed or is already filed, we direct NCLT to decide the same in accordance with law within one

month.

The writ petition stands disposed of accordingly.