/2022 INSC 0397/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION 
CIVIL APPEAL NO. 4750 OF 2021
INDIAN OVERSEAS BANK                ...APPELLANT(S)
VERSUS
M/S RCM INFRASTRUCTURE LTD.
AND ANOTHER ...RESPONDENT(S)
J U D G M E N T
B.R. GAVAI, J.
1. This   appeal   challenges   the   judgment   dated   26 th
March 2021 passed by the National Company Law Appellate
Tribunal, Principal Bench, New Delhi (hereinafter referred to
as “the NCLAT”) in Company Appeal (AT) (Insolvency) No. 736
of   2020,   thereby   dismissing   the   appeal   filed   by   the   present
appellant­Indian   Overseas   Bank,   which   was   in   turn   filed
challenging   the   order   dated   15 th
  July   2020   passed   by   the
National   Company   Law   Tribunal,   Hyderabad   Bench­1,
Hyderabad   (hereinafter   referred   to   as   “the   NCLT”)   in   I.A.
1

No.832   of   2019   in   C.P.   (IB)   No.   601/10/HDB/2018,   vide
which the learned NCLT had allowed the application filed by
the respondent No.2 herein, former Managing Director of the
respondent   No.1   herein­M/s   RCM   Infrastructure   Ltd.
(hereinafter   referred   to   as   the   "Corporate   Debtor”)   and   set
aside the sale of the assets of the Corporate Debtor.
2. The   facts  in   brief,  giving   rise   to   filing   of   the   present
appeal, are as under:
The   appellant   Bank   had   extended   certain   credit
facilities   to   the   Corporate   Debtor.     However,   the   Corporate
Debtor   failed   to   repay   the   dues   and   the   loan   account   of   the
Corporate   Debtor   became   irregular.     As   such,   on   13 th
  June
2016,   the   loan   account   of   the   Corporate   Debtor   came   to   be
classified as “Non­Performing Asset” (NPA).
3. The   appellant   Bank   issued   a   Demand   Notice   under
Section   13(2)   of   the   Securitisation   and   Reconstruction   of
Financial   Assets   and   Enforcement   of   Security   Interest   Act,
2002 (hereinafter  referred to as the “SARFAESI Act”), calling
upon   the   Corporate   Debtor   and   its   guarantors   to   repay   the
outstanding   amount   due   to   the   appellant   Bank.     Since   the
2

Corporate   Debtor   failed   to   comply   with   the   Demand   Notice
and   repay   the   outstanding   dues,   the   appellant   Bank   took
symbolic   possession   of   two   secured   assets   mortgaged
exclusively   with   it.     The   same   was   done   by   the   appellant
Bank   in   exercise   of   powers   conferred   on   it   under   Section
13(4)   of   the   SARFAESI   Act   read   with   Rule   8   of   the   Security
Interest (Enforcement) Rules, 2002 (hereinafter referred to as
the   “said   Rules”).     One   of   the   said   properties   stood   in   the
name   of   Corporate   Debtor   and   the   other   in   the   name   of
Corporate Guarantor.  An E­auction notice came to be issued
on 27 th
 September 2018 by the appellant Bank to recover the
public money availed by the Corporate Debtor.
4. In   the   meantime,   on   22 nd
  October   2018,   the
Corporate   Debtor   filed   a   petition   being   CP(IB)   No.
601/10/HDB/2018   under   Section   10   of   the   Insolvency   and
Bankruptcy Code, 2016 (hereinafter referred to as “the IBC”)
before   the   learned   NCLT.     In   the   first   E­auction   held   on   6 th
November 2018, no bids were received.   As such, the second
E­auction   notice   came  to   be   issued   on   27 th
  November  2018,
which was scheduled to be held on 12 th
  December 2018.   In
3

the   second   E­auction,   three   persons   became   successful
bidders   by   offering   jointly   a   price   of   Rs.32.92   crore   for   both
the   secured   assets.     On   13 th
  December   2018,   the   sale   was
confirmed   in   favour   of   the   successful   bidders/auction
purchasers   in   the   public   auction.     The   successful   bidders
deposited   25%   of   the   bid   amount,   i.e.,   Rs.8.23   crore
including the Earnest Money Deposit of the said amount and
the   appellant   Bank   issued   a   sale   certificate   to   them.     The
auction purchasers were directed to pay  the balance 75% of
the   bid   amount   within   15   days,   i.e.,   prior   to   28 th
  December
2018.
5. It   appears   that   the   auction   purchasers,   on   28 th
December   2018,   addressed   a   letter   to   the   appellant   Bank
seeking   handing   over   of   peaceful   and   vacant   possession   of
the   secured   assets   and   also   prayed   for   extension   of   time   to
pay   the  balance  75%  of   the  bid  amount   till  8 th
  March   2019.
The   request   made   by   the   auction   purchasers   was   accepted
by the appellant Bank on 29 th
 December 2018.  It is the case
of   the   appellant   Bank   that   in   exercise   of   its   powers   under
Rule   9(4)(a)   of   the   said   Rules,   it   extended   the   period   till   8 th
4

March   2019   for   payment   of   the   balance   75%   of   the   bid
amount.
6. The   learned   NCLT,   vide   order   dated   3 rd
  January
2019,   admitted   the   petition   filed   by   the   ex­promoter   of   the
Corporate Debtor.  As a result of the said order passed under
Section   10   of   the   IBC,   the   Corporate   Insolvency   Resolution
Process   (hereinafter   referred   to   as   “the   CIRP”)   of   the
Corporate   Debtor   commenced.     A   moratorium   as   provided
under   Section   14   of   the   IBC   was   notified   and   an   Interim
Resolution   Professional   (hereinafter   referred   to   as   “the   IRP”)
was also appointed.
7. The   appellant   Bank   on   21 st
  January   2019,   filed   its
claim in Claim Form­C with the IRP, upon it coming to know
about   the   admission   of   the   insolvency   petition   filed   by   the
Corporate   Debtor.     According   to   the   appellant   Bank,   since
the   balance   75%   of   the   bid   amount   was   not   yet   received   on
the said date, it was not excluded from the claim filed before
the   IRP.     During   the   pendency   of   the   CIRP,   the   appellant
Bank   accepted   the   balance   75%   of   the   bid   amount,   i.e.,
Rs.24.69   crore   on   8 th
  March   2019.     Upon   receipt   of   the
5

payment,   the   appellant   Bank   submitted   its   revised   claim   in
Claim Form­C to the IRP on 11 th
 March 2019.  The appellant
Bank also intimated the IRP about the successful sale of the
said secured assets.   The promoter  of the Corporate Debtor,
i.e.,   respondent   No.2   herein,   thereafter   filed   an   application
being   I.A.   No.832/2020   in   the   pending   company   petition
being   CP(IB)   No.   601/10/HDB/2018,   thereby   praying   the
learned NCLT to set aside the security realization during the
CIRP   period   carried   out   by   the   appellant   Bank   or   in   the
alternative   to   cancel   the   impugned   transaction.     Vide   order
dated   15 th
  July   2020,   the   learned   NCLT   passed   an   order
thereby allowing the said application filed by the respondent
No.2 and setting aside the sale of the property owned by the
Corporate   Debtor.     Being   aggrieved   thereby,   the   appellant
Bank filed an appeal being Company Appeal (AT) (Insolvency)
No. 736 of 2020 before the learned NCLAT and the same was
rejected   by   the   impugned   judgment   dated   26 th
  March   2021.
Being aggrieved thereby, the present appeal.
8. We have heard Shri Tushar Mehta, learned Solicitor
General appearing on behalf of the appellant Bank, Shri C.S.
6

Vidyanathan, learned Senior Counsel appearing on behalf of
the impleading applicants, i.e., the auction purchasers, Shri
K.V.   Viswanathan,   learned   Senior   Counsel   appearing   on
behalf   of   the   respondent   No.1   and   Shri   Aditya   Verma,
learned counsel appearing on behalf of the respondent No.2.
9. Shri Tushar Mehta submitted that the very initiation
of   the   voluntary   insolvency   proceedings   under   Section   10   of
the   IBC,   by   the   ex­promoter   of   the   Corporate   Debtor,   was
with   mala   fide   intent   and   as   such,   hit   by   Section   65   of   the
IBC.    It  is  submitted  that  the   loan  account  of  the   Corporate
Debtor was classified as “NPA” on 13 th
 June 2016.  Thereafter
on   18 th
  April   2018,   the   appellant   Bank   issued   a   Demand
Notice   under   Section   13(2)   of   the   SARFAESI   Act.     He
submitted that since the Corporate Debtor failed to make the
payment,   a   symbolic   possession   came   to   be   undertaken   by
the   appellant   Bank   under   Section   10   of   the   SARFAESI   Act
and an E­auction notice was issued on 26 th
 September 2018.
He   submitted   that   the   said   notice   was   challenged   by   the
Corporate   Debtor   by   filing   an   application   being   SA   No.
340/2018   before   the   learned   Debt   Recovery   Tribunal­II,
7

Hyderabad   (hereinafter   referred   to   as   “the   DRT”).     However,
no stay was granted by the DRT in the said application.  It is
submitted that on the contrary, an order came to be passed
on   29 th
  October   2018   by   the   learned   DRT,   whereby
confirmation   of   sale   was   stayed,   subject   to   deposit   of   Rs.12
crore  by   the   Corporate   Debtor.     The   Corporate  Debtor   failed
to do so.  After that, with  mala fide  intent, instead of making
payment, a petition came to be filed under Section 10 of the
IBC  by   the  Corporate  Debtor  for   the  sole  purpose  of  stalling
the   sale.     He   further   submitted   that   the   second   E­auction
notice was issued on 27 th
  November 2018, which resulted in
sale of the two properties.
10. Shri   Mehta   submitted   that   the   order   of   the   learned
NCLT,   admitting   the   petition   under   Section   10   of   the   IBC,
came   to   be   passed   only   on   3 rd  
January   2019,   i.e.,   prior   to
confirmation of sale.   He submitted that it is thus clear that
the   CIRP   was   initiated   only   to   stall   the   SARFAESI
proceedings.     It   is   submitted   that   though   the   issue   with
regard   to   Section   65   of   the   IBC   was   subsequently   raised   by
the appellant Bank, neither the learned NCLT nor the learned
8

NCLAT   had   considered   the   same.     It   is   submitted   that   the
mala fide   intention of the IRP is clear inasmuch as since the
ex­promoters   could   not   submit   a   credible   plan,   the   learned
NCLT,   vide   order   dated   7 th
  February   2022,   has   ordered   for
liquidation.     It   is   submitted   that   a   perusal   of   the   said   order
dated   7 th
  February   2022   would   reveal   that   the   delay   was
caused   at   the   instance   of   the   IRP,   who   has   been   seen   to   be
helping the ex­promoters.
11. Shri   Mehta   further   submitted   that   since   the
moratorium   under   Section   14   of   the   IBC   has   ceased   to
subsist   after   the   order   directing   liquidation   was   passed
under   Section   52   of   the   IBC,   the   secured   creditors   were
allowed   to   realise   their   security   interest.     It   is   therefore
submitted that now, there is no bar on the appellant Bank to
realise its money.
12. Shri Mehta submitted that in view of the provision of
Section   54   of   the   IBC,   the   sale   was   complete   after   the
appellant Bank had received 25% of the bid amount and the
said was confirmed.   He submitted that merely because a part
of the sale consideration was received subsequently, it could
9

not   affect   the   sale.     A   reference   in   this   respect   is   placed   on
the   judgments   of   this   Court   in   the   cases   of   Vidhyadhar   v.
Manikrao   and   Another 1
,   B.   Arvind   Kumar   v.   Govt.   of
India   and   Others 2
  and   Kaliaperumal   v.   Rajagopal   and
Another 3
.
13. It   is   lastly   submitted   by   Shri   Mehta   that   Section
14(1)(c)  of   the   IBC   interdicts  any  action   to   foreclose,  recover
or   enforce   any   security   interest   including   any   action   under
SARFAESI.     However,   it   does   not   undo   actions   which   have
already stood completed.
14. Shri   Vaidyanathan,   learned   Senior   Counsel   also
supported   the   submissions   of   the   learned   Solicitor   General
made   on   behalf   of   the   appellant   Bank.     It   is   submitted   that
the   promoters   of   the   Corporate   Debtor   have   indulged   into
forum   shopping   with   the   malicious   intent   and   as   such,   the
learned NCLT ought not to have granted relief in their favour.
It is submitted that the applicants were  bona fide  purchasers
and   put   into   possession   and   therefore   should   not   be
1   (1999) 3 SCC 573
2   (2007) 5 SCC 745
3   (2009) 4 SCC 193
10

disturbed.   It  is   submitted  that   the  Corporate  Debtor’s  right
in   respect   of   the   mortgaged   property   is   the   right   of
redemption under Section 60 of the Transfer of Property Act,
1882 (hereinafter referred to as “the TP Act”).  It is submitted
that under Section 13(8) of the SARFAESI Act, as amended in
2016,   the   right   of   redemption   is   lost   on   issuance   of   public
notice of auction or tender.
15. Shri   Vaidyanathan   further   submitted   that   the   mala
fide  intention of the Corporate Debtor and the IRP are glaring
inasmuch   as   the   applicants   were   successful   auction
purchasers and they were not added as party respondents in
the   proceedings   before   the   learned   NCLT.     Relying   on
paragraph   (21)   of   the   Insolvency   Law   Committee   Report,
2018,   Shri   Vaidyanathan   submitted   that   the   rights   and
priorities   of   creditors   established   prior   to   insolvency   under
commercial laws should be upheld to preserve the legitimate
expectations of creditors and encourage greater predictability
in commercial relationship.
16. Shri   Viswanathan,   learned   Senior   Counsel   has
supported   the   impugned   judgment   passed   by   the   learned
11

NCLAT as well as the order passed by the learned NCLT.  He
submitted   that   the   title   of   the   secured   assets   cannot   be
conveyed   to   the   auction   purchasers   merely   upon
confirmation   of   sale   even   before   receiving   full   sale
consideration.     He   submitted   that   the   title   would   be   passed
over  only after  receipt of the full consideration and issuance
of   sale   certificate.     The   learned   Senior   Counsel   submitted
that  such  contentions  are  totally   contrary   in view  of various
provisions   of   the   SARFAESI   Act,   the   said   Rules   as   well   as
Sections   14(1)(c),   31(1)   and   238   of   the   IBC.     He   submitted
that only after the transfer takes place under Rules 8 and 9
of   the   said   Rules,   the   title   would   be   passed   over   to   the
auction purchasers.   He relies on the judgment of this Court
in the case of   Hindon Forge Private Limited and Another
v.   State   of   Uttar   Pradesh   through   District   Magistrate,
Ghaziabad and Another 4
.
17. Shri   Viswanathan   further   submitted   that   Section
13(8)   of   the   SARFAESI   Act   itself   provides   a   right   of
redemption of secured assets to the owner/debtor.   He relies
4   (2019) 2 SCC 198
12

on the judgment of this Court in the case of  S. Karthik and
Others v. N. Subhash Chand Jain and Others 5
  in support
of this proposition.
18. Shri   Viswanathan   submitted   that   upon   approval   of
the   Resolution   Plan   (hereinafter   referred   to   as   “the   RP”),   in
view   of   Section   31(1)   of   the   IBC,   all   the   debts   stand   legally
resolved and the same is binding on all parties including the
Corporate   Debtor,   its   employees,   members,   creditors,   all
Govt. dues and the successful resolution applicant would be
entitled to start on a clean slate.  The learned Senior Counsel
submitted   that   the   Jural   relationship   of   Creditor­Debtor
would   get   altered/severed   under   a   new   contract   upon
approval of a new RP.  It is submitted that as a consequence,
the   security   created   under   the   old   contract   would   stand
released   by   operation   of   law   and   the   relationship   would   be
governed by the terms of the approved plan and the mortgage
created   under   the   old   contract   would   get
extinguished/novated.     It   is   submitted   that   in   any   case,   in
view   of   Section   238   of   the   IBC,   the   provisions   contained
5   2020 SCC OnLine SC 787
13

therein will override all other laws for the time being in force
and   the   provisions   of   the   IBC   would   also   prevail   over   any
other instrument having effect by virtue of any other law.     A
reliance   in   this   respect   is   placed   on   the   judgment   of   this
Court   in   the   case   of   Anand   Rao   Korada,   Resolution
Professional   v.   Varsha   Fabrics   Private   Limited   and
Others 6
.
19. Shri   Viswanathan   further   submitted   that   the
continuation   of   any   proceeding   including   the   proceeding
under   the   SARFAESI   Act   is   totally   illegal   in   view   of   Section
14(1)(c)   of   the   IBC.     It   is,   therefore,   submitted   that   the
continuation   of   any   action   under   the   SARFAESI   Act   by   the
appellant   Bank   and   the   receipt   of   the   balance   sale
consideration was violative of Section 14(1)(c) of the IBC.   He
submitted that the amount payable by the Corporate Debtor
to   the   other   Financial   Creditors   is   much   more   than   the
amount received by the appellant Bank during the pendency
of   the   CIRP.    He   submitted  that   under   the   provisions   of   the
IBC,  all the  Financial  Creditors would  be entitled  to a  share
6   (2020) 14 SCC 198
14

in   the   amount   received  upon   realization   of   the   assets   of   the
Corporate   Debtor   and   the   appellant   Bank   cannot   keep   it   in
entirety. 
20. Shri   Viswanathan   submitted   that   the   allegations
with regard to   mala fide   are made only in order to prejudice
the   Court.     It   is   submitted   that   in   the   petition   filed   under
Section   10   of   the   IBC,   the   Corporate   Debtor   has   clearly
mentioned   about   declaration   of   NPA   by   both   the   appellant
Bank and Andhra Bank and also initiation of auction process
by both the Banks.  He submitted that in any case, initiation
of   the   proceedings   under   the   IBC   for   overall   resolution   of
debts   of   the   Corporate   Debtor   cannot   be   labelled   as   a   mala
fide   attempt.   He   submitted   that   Section   65   of   the   IBC
expressly   provides   for   the   mechanism   and   the   remedy   for
addressing frivolous or malicious proceedings initiated under
the SARFAESI Act.  However, the appellant Bank has chosen
not   to   take   recourse   to   such   proceedings.     As   such,   the
allegations of  mala fide  cannot be heard.
21. Shri   Verma,   learned   counsel   also   supported   the
impugned judgment passed by the learned NCLAT as well as
15

the   order   passed   by   the   learned   NCLT   and   the   submissions
made by Shri Viswanathan. It is submitted that the appellant
Bank has never challenged the order dated 3 rd
 January 2019,
vide   which   the   learned   NCLT   commenced   the   CIRP.     He
submitted that though the order of liquidation was passed by
the   learned   NCLT  on   7 th
  February   2022,   the   same   has   been
stayed by the learned NCLAT on 8 th
 March 2022.
22. It   is   further   submitted   by   Shri   Verma   that   as   a
matter   of   fact,   after   the   CIRP   was   initiated,   the   appellant
Bank itself has submitted its claim  in Claim  Form­C  on 21 st
January   2019   for   an   amount   of   Rs.79.94   crore,   which
included   the   full   value   of   the   assets.     It   is,   therefore,
submitted   that   the   appellant   is   estopped   from   contending
that   the   amount   of   Rs.8.23   crore   cannot   be   included   in   the
amount available for CIRP.
23. For   appreciating   the   rival   submissions,   it   will   be
apposite to refer to Section 14(1)(c) of the IBC:
“ 14. Moratorium . —(1) ……
( a ) ……;
( b ) …….;
16

( c )   any   action   to   foreclose,   recover   or   enforce   any
security   interest   created   by   the   corporate   debtor   in
respect   of   its   property   including   any   action   under   the
Securitisation   and   Reconstruction   of   Financial   Assets
and   Enforcement   of   Security   Interest   Act,   2002   (54   of
2002);
………. ”
24. It is thus clear that after the CIRP is initiated, there
is moratorium  for   any   action  to  foreclose,  recover  or   enforce
any   security   interest   created   by   the   Corporate   Debtor   in
respect   of   its   property   including   any   action   under   the
SARFAESI Act.  It is clear that once the CIRP is commenced,
there   is   complete   prohibition   for   any   action   to   foreclose,
recover   or   enforce   any   security   interest   created   by   the
Corporate   Debtor   in   respect   of   its   property.     The   words
“including   any   action   under   the   SARFAESI   Act”   are
significant.   The legislative intent is clear that after the CIRP
is   initiated,   all   actions   including   any   action   under   the
SARFAESI   Act   to   foreclose,   recover   or   enforce   any   security
interest are prohibited.
25. It will  also  be relevant  to refer  to Section 238 of  the
IBC:
17

“ 238.   Provisions   of   this   Code   to   override   other
laws . —The provisions of this Code shall have effect,
notwithstanding   anything   inconsistent   therewith
contained   in   any   other   law   for   the   time   being   in
force   or   any   instrument   having   effect   by   virtue   of
any such law.”
26. It could  thus  be seen  that  the  provisions  of  the  IBC
shall   have   effect,   notwithstanding   anything   inconsistent
therewith   contained   in   any   other   law   for   the   time   being   in
force   or   any   instrument   having   effect   by   virtue   of   any   such
law.
27. It   has   been   consistently   held   by   this   Court   that   the
IBC is a complete Code in itself and in view of the provisions
of   Section   238   of   the   IBC,   the   provisions   of   the   IBC   would
prevail   notwithstanding   anything   inconsistent   therewith
contained   in   any   other   law   for   the   time   being   in   force.     A
reference in this respect could be placed on the judgments of
this Court in the cases of  Innoventive Industries Limited v.
ICICI   Bank   and   Another 7
,   Principal   Commissioner   of
Income   Tax   v.   Monnet   Ispat   and   Energy   Limited 8
  and
7   (2018) 1 SCC 407
8   (2018) 18 SCC 786
18

Ghanashyam   Mishra   and   Sons   Private   Limited   through
the   Authorised   Signatory   v.   Edelweiss   Asset
Reconstruction   Company   Limited   through   the   Director
and Others 9
.
28. It   is   the   contention   of   the   appellant   Bank   that   the
sale   in   question   was   complete   on   its   confirmation   on   13 th
December 2018 and as such, the admission of the petition on
3 rd
  January   2019   by   the   learned   NCLT   would   not   affect   the
said  sale.    Relying   on   the   provisions  of   Section   54  of   the   TP
Act,   the   learned   Solicitor   General   submitted   that   merely
because   a   part   of   the   payment   was   received   subsequently
after initiation of CIRP, it will not deprive the appellant Bank
from receiving the said money in pursuance to the sale which
has   already   been   completed.     A   reliance   in   this   respect   is
placed on various judgments of this Court.
29. Insofar   as  the   judgment   of   this  Court   in  the   case  of
Vidhyadhar   (supra) is concerned, no doubt that it has been
held   that   even   if   the   full   price   of   the   property   has   not   been
paid, the  transaction  of the sale will take effect and the title
9   (2021) 9 SCC 657
19

would pass on that transaction.  This Court has further held
that the real test is the intention of the parties.   It has been
held that the parties must intend to transfer ownership of the
property and that they must also intend that the price would
be paid either in praesenti or in future.   However, it is to be
noted that in the said case, the defendant No.2 had not only
executed   the   sale   deed   in   favour   of   the   plaintiff   but   had
presented it for registration, admitted its execution before the
Sub­Registrar   before   whom   the   remaining   part   of   the   sale
consideration   was   paid   and   thereafter,   the   document   was
registered.
30. In   the   case   of   B.   Arvind   Kumar   (supra),   the
property   in   question   was   a   suit   property   and   was   sold   in   a
public   auction.     The   sale   was   confirmed   by   the   District
Judge, Civil and Military Station, Bangalore.   What has been
held  by  this  Court  is  that  when  a  property   is sold  by   public
auction in pursuance of the order of the court and the bid is
accepted and the  sale is confirmed by   the court  in  favour  of
the purchaser, the sale becomes absolute and the title vests
in   the   purchaser.     It   has   been   held   that   a   sale   certificate   is
20

issued   to   the   purchaser   only   when   the   sale   becomes
absolute.     It   was   held   that   when   the   auction   purchaser
derives  title  on   confirmation   of  sale  in   his   favour   and   a  sale
certificate is issued evidencing such sale and title, no further
deed   of   transfer   from   the   court   is   contemplated   or   required.
Additionally,   in   the   said   case,   the   Court   found   that   the   sale
certificate itself was registered.
31. In   the   case   of   Kaliaperumal   (supra)   also,   the   sale
deed   was   registered   on   partial   payment   of   consideration.
However, in spite of registration of the sale deed, in the facts
of   the   said   case,   the   Court   held   that   what   was   important   is
the   intention   of   the   parties.     It   was   held   that   normally   the
ownership   and   the   title   of   the   property   will   pass   to   the
purchaser on registration of the sale deed with effect from the
date of execution of the sale deed.  However, that was not an
invariable   rule.     What   was   paramount,   was   the   intention   of
the parties.   In the facts of the said case, the Court held that
the parties intended that the ownership of the property would
be   transferred   to   the   appellant   only   after   the   receipt   of   the
entire   sale   consideration   by   the   vendors   as   a   condition
21

precedent.     Upon   interpretation   of   the   sale   deed,   the   Court
found   that   the   title   was   intended   to   be   passed   only   on   the
payment of the balance consideration.
32. It is further to be noted that the present case arises
out of a statutory sale.  The sale would be governed by Rules
8 and 9 of the said Rules.   The sale would be complete only
when   the   auction   purchaser   makes   the   entire   payment   and
the   authorised   officer,   exercising   the   power   of   sale,   shall
issue   a   certificate   of   sale   of   the   property   in   favour   of   the
purchaser in the Form given in Appendix V to the said Rules.
33. In   the   case   of   Shakeena   and   Another   v.   Bank   of
India   and   Others 10
,   which   was   a   case   arising   out   of
SARFAESI   Act,   this   Court   has   held   that   the   sale   certificate
issued   in   favour   of   the   respondent   No.3   did   not   require
registration   and   that   the   sale   process   was   complete   on
issuance of the sale certificate.   The same has been followed
by this Court in the case of  S. Karthik  (supra).
34. Undisputedly,   in   the   present   case,   the   balance
amount   has   been   accepted   by   the   appellant   Bank   on   8 th
10   2019 SCC OnLine SC 1059
22

March   2019.     The   sale   under   the   statutory   scheme   as
contemplated   under   Rules   8   and   9   of   the   said   Rules   would
stand   completed   only   on   8 th
  March   2019.     Admittedly,   this
date   falls   much   after   3 rd
  January   2019,   i.e.,   on   which   date
CIRP commenced and moratorium was ordered.  As such, we
are unable to accept the argument on behalf of the appellant
Bank   that   the   sale   was   complete   upon   receipt   of   the   part
payment.
35. In   view   of   the   provisions   of   Section   14(1)(c)   of   the
IBC,   which   have   overriding   effect   over   any   other   law,   any
action   to   foreclose,   recover   or   enforce   any   security   interest
created   by   the   Corporate   Debtor   in   respect   of   its   property
including   any   action   under   the   SARFAESI   Act   is   prohibited.
We   are   of   the   view   that   the   appellant   Bank   could   not   have
continued the proceedings under the SARFAESI Act once the
CIRP was initiated and the moratorium was ordered.
36. Insofar as the contention of the appellant Bank that
the   petition   filed   by   the   Corporate   Debtor   was   mala   fide   is
concerned,   we   do   not   find   any   merit   in   the   said   contention.
All   the   details   with   regard   to   action   taken   by   the   appellant
23

Bank have been specifically mentioned in the petition filed by
the   Corporate   Debtor.   Insofar   as   the   contention   with   regard
to   liquidation   order   being   passed   is   concerned,   the   same   is
already under challenge before the learned NCLAT.  As such,
we need not make any observation with regard to the same. 
37. We,   therefore,   find   that   no   case   is   made   out   for
interfering with the concurrent orders passed by the learned
NCLT   dated   15 th
  July   2020   and   learned   NCLAT   dated   26 th
March 2021.
38. In   the   result,   the   present   appeal   is   dismissed.
Pending   application(s),   if   any,  shall   stand   disposed   of   in  the
above terms.  No order as to costs.
……..….......................J.
[L. NAGESWARA RAO]
…….........................J.       
[B.R. GAVAI]
NEW DELHI;
MAY 18, 2022.
24