01/03/2021

Although any minor irregularity or any typographical error may be clarified by way of corrigendum, but the publication of sale notice in the newspaper is a primary requirement of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 – Syndicate Bank Vs. M/s Anand Industries – DRAT Allahabad Bench

DRAT held that there is no dispute on the point that the earlier sale notice dated 30.06.2016 fixing the date of auction on 30.07.2016 was not acted upon and the Bank has issued fresh sale notice dated 15.07.2016 and the same was sent to the borrowers and affixed on the premises. Thus, the earlier sale notice dated 30.06.2016 has become redundant. As such the publication made in the newspaper with regard to sale notice dated 30.06.2016 remained of no consequence. Although any minor irregularity or any typographical error may be clarified by way of corrigendum, but the publication of sale notice in the newspaper is a primary requirement of Rule 8(6) of the Rules, 2002. Thus, the Bank was required to publish the sale notice dated 15.07.2016 in the newspaper instead of publishing a corrigendum only to the effect that for the sale notice published in the newspaper on 30.06.2016, the date of auction be read as “26.08.2016”. This corrigendum does not clarify, as to what were the conditions of the sale notice and the other details thereof. The public at large cannot gather any inference from such corrigendum in order to participate in the bid. Therefore, this corrigendum was not sufficient to take place of the publication of sale notice dated 15.07.2016 in the newspaper as required under Rule 8(6) of the Rules, 2002.

Although any minor irregularity or any typographical error may be clarified by way of corrigendum, but the publication of sale notice in the newspaper is a primary requirement of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 – Syndicate Bank Vs. M/s Anand Industries – DRAT Allahabad Bench Read Post »

The Chief Manager or even authorized officer is not covered under the ambit of the terms of the Secured Creditor. The secured creditor denotes the Bank or the Financial Institution and not the Chief Manager in its individual capacity – Kanishka Kumar Vs. Bank of Baroda – DRAT Allahabad Bench

At the most the auction purchaser was declared to be a highest bidder and the sale was subject to the confirmation of secured creditor as required under Rule 9(2). The Chief Manager or even authorized officer is not covered under the ambit of the terms of the “secured creditor”. The secured creditor denotes the Bank or the Financial Institution and not the Chief Manager in its individual capacity. The secured creditor may confirm the sale in favour of the highest bidder or may decline the same assigning the reason. The highest bidder cannot claim the confirmation of sale as a matter of right. Thus, even otherwise, there was no question of extension of time on the date of sale and no separate extension was granted to the auction purchaser for deposit of sale price after 15 days. Since the amount was not deposited within 15 days as per the terms of the sale notice, therefore, the compliance of Rule 9(4) was not made and the sale is liable to be set aside on this ground also.

The Chief Manager or even authorized officer is not covered under the ambit of the terms of the Secured Creditor. The secured creditor denotes the Bank or the Financial Institution and not the Chief Manager in its individual capacity – Kanishka Kumar Vs. Bank of Baroda – DRAT Allahabad Bench Read Post »

A petition either under Section 7 or Section 9 of the IBC is an independent proceeding which is unaffected by winding up proceedings that may be filed qua the same company – A. Navinchandra Steels Private Limited Vs. SREI Equipment Finance Limited & Ors. – Supreme Court

Hon’ble Supreme Court held that it is important to restate a few fundamentals. Given the object of the IBC as delineated in paragraphs 25 to 28 of Swiss Ribbons (P) Ltd. v. Union of India, [2019] ibclaw.in 03 SC, it is clear that the IBC is a special statute dealing with revival of companies that are in the red, winding up only being resorted to in case all attempts of revival fail. Vis-à-vis the Companies Act, which is a general statute dealing with companies, including companies that are in the red, the IBC is not only a special statute which must prevail in the event of conflict, but has a non-obstante clause contained in Section 238, which makes it even clearer that in case of conflict, the provisions of the IBC will prevail.(p14)

A petition either under Section 7 or Section 9 of the IBC is an independent proceeding which is unaffected by winding up proceedings that may be filed qua the same company – A. Navinchandra Steels Private Limited Vs. SREI Equipment Finance Limited & Ors. – Supreme Court Read Post »

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