Haldiram Incorporation Pvt. Ltd. Vs. Amrit Hatcheries Pvt. Ltd. : The Supreme Court Holds That Handing Over Sale Certificate Completes Auction
The supreme Court in Haldiram Incorporation Pvt. Ltd. Vs. Amrit Hatcheries Pvt. Ltd (Civil Appeal No. 1733 of 2022 ) has held that handing over of sale certificate under SARFAESI Act completes auction under SARFAESI Act.
Facts of the case
Two blocks of land of the Corporate Debtor i.e. Amrit Hatcheries Pvt. Ltd. in Howrah District of West Bengal were sold in auction sale under SARFAESI Act. Payment was completed on 16.08.2023. Sale certificate was issued on 19th August, 2023. A petition was filed by Operational Creditor for initiation for CIRP, which was admitted on 20.08.2019. The NCLT was of the view that sale was not complete and vide order dated 25.02.2020 held issue of sale certificate and handing over of property illegal and held that the aforesaid property were assets of the Corporate Debtor. Appeal before the NCLAT was dismissed.
The Findings of the Supreme Court
The Supreme Court noted that sale had been concluded before declaration of moratorium. The Supreme Court relied on Esjaypee Impex pvt. Ltd. vs. Assistant General Manager and Authorised Officer, Canara Bank (2021) 11SCC537 wherein it has been held that the mandate of law in terms of Section 17 (2) (xii) read with Section 89 (4) of the Registration Act, 1908 only required the authorized officer of the Bank under the SARFAESI Act to hand over the duly validated sale certificate to the auction-purchaser with a copy forwarded to the registering authorities to be filed in Book I as per Section 89 of the Registration Act.
The Supreme Court noted that the Bank does not dispute the factual position that the sale stood concluded before declaration of moratorium. The Court held that properties in question cannot be treated as liquidation estate of the Corporate Debtor and set aside the order of the Adjudicating Authority to the extent of two properties in question.
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Mukesh Kumar Suman is an advocate and legal author based at Delhi. He regularly appears before various Judicial Forums including NCLT, NCLAT, High Courts and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.