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Judgment
26.05.2025: This appeal has been filed against the order passed by the NCLT, New Delhi, Court –IV by which while deciding IA No.383 of 2025, the Adjudicating Authority has imposed cost of Rs.1 Lakh on the Corporate Debtor.
An application was filed by the Suspended Director of the Corporate Debtor praying for stay of the e-auction proceeding which was initiated under SARFAESI Act by the Tourism Finance Corporation of India. When the Application came for hearing, the Appellant had requested the Court to permit the Appellant to withdraw the application. However, the Adjudicating Authority while permitting to withdraw the application, imposed cost of Rs.1 Lakh observing that the Appellant has been taking different proceedings which is nothing but forum shopping. On the said observation, which has been made in Para 5 of the order, cost of Rs.1 Lakh has been imposed. Para 5 of the order is as follows:
“5.During the course of the arguments tendered by the Ld. Counsel for the Applicant herein, it has been submitted by the said Counsel for the Corporate Debtor that they have approached the Ld. Debt Recovery Tribunal seeking the same reliefs as the sale Notice for e-auction had been published in accordance with the SARFAESI Act, 2002. The Counsel further submits that they have filed another application seeking the exact same reliefs before the Hon'ble High Court of Delhi invoking their inherent powers to seek justice for their cause.”
Learned counsel for the Appellant submits that the proceedings giving rise to the present Appeal were initiated by the Financial Creditor under Section 7 and the proceedings which was initiated by the Corporate Debtor before the DRT where the e-auction was prayed to be stayed was under SARFSESI Act.
Learned counsel for the Financial Creditor has also submitted that the Financial Creditor has no objection with regard to deletion of the cost.
After having heard learned counsel for the parties, we are of the view that although the Corporate Debtor has taken steps before the DRT challenging the e-auction notice under SARFAEI Act and has also filed application for stay of e-auction before the Adjudicating Authority. The observation of the Adjudicating Authority that the Corporate Debtor has resorted to forum shopping cannot be accepted. Relief under DRT is relief that are available under law to the Corporate Debtor to approach DRT for staying proceeding undertaken under the SARFAESI Act and filing application under Section 7 application was also for stay of the e-auction notice, which was permitted to be withdrawn. In view of the aforesaid, there is no case for imposing cost of Rs.1 Lakh when Appellant itself prayed to withdraw the application. We dispose of the appeal deleting the cost of Rs.1 Lakh. Appeal is disposed of accordingly.