Delhi High Court - Orders
Indiabulls Housing Finance Ltd. & Anr vs Shipra Estate Ltd on 17 June, 2022
Author: Jyoti Singh
Bench: Jyoti Singh
$~35 to 37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
35
+ ARB. A. (COMM.) 36/2022
INDIABULLS HOUSING FINANCE LTD.
& ANR ......Appellants
Through: Mr. Rajiv Nayar, Senior Advocate
with Mr. Rishi Agarwala, Mr. Karan Luthra and
Mr. Ankit Banati, Advocates.
versus
SHIPRA ESTATE LTD. ..... Respondent
Through: Mr. Abhimanyu Bhandari, Ms. Gauri
Rishi, Ms. Srishti Juneja and Ms. Garima Sehgal,
Advocates.
36
+ ARB. A. (COMM.) 37/2022
INDIABULLS HOUSING FINANCE LTD.
& ANR ......Appellants
Through: Mr. Rajiv Nayar, Senior Advocate
with Mr. Rishi Agarwala, Mr. Karan Luthra and
Mr. Ankit Banati, Advocates.
versus
SHIPRA HOTELS LTD. ..... Respondent
Through: Mr. Abhimanyu Bhandari, Ms. Gauri
Rishi, Ms. Srishti Juneja and Ms. Garima Sehgal,
Advocates.
37
+ ARB. A. (COMM.) 38/2022
INDIABULLS HOUSING FINANCE LTD.
& ANR ......Appellants
Through: Mr. Rajiv Nayar, Senior Advocate
with Mr. Rishi Agarwala, Mr. Karan Luthra and
Mr. Ankit Banati, Advocates.
versus
SHIPRA LEASING LTD. ..... Respondent
Through: Mr. Abhimanyu Bhandari, Ms. Gauri
Signature Not Verified
Signed By:KAMAL KUMAR
ARB. A. (COMM.) 36/2022 & connected matters Page 1 of 5
Signing Date:23.06.2022
15:35:31
Rishi, Ms. Srishti Juneja and Ms. Garima Sehgal,
Advocates.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
ORDER
% 17.06.2022 I.A. 9778/2022 (exemption) in ARB. A. (COMM) 36/2022 I.A. 9781/2022 (exemption) in ARB. A. (COMM.) 37/2022 I.A. 9784/2022 (exemption) in ARB. A. (COMM.) 38/2022
1. Allowed, subject to all just exceptions.
2. Applications stand disposed of.
I.A.9776/2022 (stay), I.A.9777/2022(exemption from filing arbitral record and direction to call for the record) in ARB. A. (COMM) 36/2022 I.A.9779/2022 (stay), I.A.9780/2022 (placing on record additional documents) in ARB. A. (COMM) 37/2022 I.A.9782/2022 (stay), I.A.9783/2022 (exemption from filing arbitral record and direction to call for the record) in ARB. A. (COMM) 38/2022
3. Issue notice.
4. Ms. Gauri Rishi, learned counsel accepts notice on behalf of the Respondents and seeks time to file replies.
5. Let replies be filed within a period of three weeks from today.
6. List on 06.07.2022, before the Roster Bench.
ARB. A. (COMM) 36/2022 ARB. A. (COMM) 37/2022 ARB. A. (COMM) 38/2022
7. Present Appeals have been filed assailing common order dated 11.06.2022, whereby the Learned Sole Arbitrator has set aside a Sale Notice dated 29.04.2022 issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act') read with Rule 8(6) of the Security Interest (Enforcement) Rules, 2002.
Signature Not Verified Signed By:KAMAL KUMAR ARB. A. (COMM.) 36/2022 & connected matters Page 2 of 5 Signing Date:23.06.2022 15:35:318. Issue notice.
9. Ms. Gauri Rishi, learned counsel accepts notice on behalf of the Respondents and seeks time to file replies.
10. Let replies be filed within a period of three weeks from today.
11. Mr. Nayar, learned Senior Counsel appearing on behalf of the Appellants inter alia contends that the impugned order is without jurisdiction inasmuch as action under Section 13(4) of the SARFAESI Act can only be challenged under Section 17(1) of the said Act before the Debts Recovery Tribunal ('DRT'), who has the 'exclusive' jurisdiction to test its validity. Once DRT approves the action taken by the Secured Creditor under Section 13(4) of SARFAESI Act, the Secured Creditor cannot be restrained from taking recourse to recover the secured debt under any other law for the time being in force, including any remedy under the Arbitration and Conciliation Act, 1996 ('A&C Act'). Section 34 of SARFAESI Act bars the jurisdiction of the Civil Court, it is contended and in support of the proposition that no other Court can interdict the Sale Notice, reliance is placed on a recent judgement of the Supreme Court in Phoenix ARC Pvt. Ltd. v. Vishwa Bharti Vidya Mandir & Ors., 2022 (5) SCC 345, more particularly paragraphs 16, 18 and 21 thereof.
12. It is further submitted that Shipra Group/Respondents herein, filed 8 petitions under Section 9 of A&C Act being OMP(I)(COMM) Nos. 113- 116/2021 and 154-157/2021 before this Court, seeking to restrain the Appellants herein from invoking the securities under the Loan Agreement, claiming that there was no Event of Default. These petitions were dismissed by a common judgement dated 20.05.2021, against which Appeals were filed, being FAO(OS)(COMM) Nos. 78-80/2021 and 118/2021, which are Signature Not Verified Signed By:KAMAL KUMAR ARB. A. (COMM.) 36/2022 & connected matters Page 3 of 5 Signing Date:23.06.2022 15:35:31 pending adjudication, but there is no stay in favour of the Respondents. The Appeals are now listed before the Division Bench on 07.07.2022 for hearing.
13. Mr. Nayar draws the attention of the Court to an earlier order passed by the Learned Arbitrator, whereby Appellant No.1 was permitted to hold the auction fixed for 06.06.2022, subject to a caveat that no further action shall be taken pursuant thereto and no third party rights shall be created in the subject property being, Shipra Mall situated at Plot No. 9, Vaibhav Khan, Indirapuram, Ghaziabad, till further orders to the contrary. It is submitted that on 11.06.2022 Appellant No.1 informed the Learned Arbitrator that the auction had failed as no bids were received and Appellant No.1 in exercise of its statutory rights under the SARFAESI Act intends to issue a fresh Sale Notice.
14. Learned counsel appearing on behalf of the Respondents seeks to justify the impugned order and submits that the object of Section 17 of A&C Act is to preserve the subject property during the pendency of the Arbitral proceedings and the Learned Arbitrator has rightly interdicted the Sale Notice and set it aside awaiting the decision/direction of the Division Bench in pending Appeals as aforementioned.
15. Mr. Nayar urges that Appellant No.1 be granted permission to issue a fresh Sale Notice in exercise of its statutory rights under the SARFAESI Act, to recover the secured debt and undertakes, on instructions, that the auction will be scheduled on 11.07.2022 from 02.00PM to 04.00PM, i.e. after the date of hearing in the Appeals, pending before the Division Bench.
16. Mr. Bhandari, learned counsel appearing on behalf of the Respondents, opposing the said prayer submits that the interest of the Signature Not Verified Signed By:KAMAL KUMAR ARB. A. (COMM.) 36/2022 & connected matters Page 4 of 5 Signing Date:23.06.2022 15:35:31 Respondents ought to be protected as the Arbitral proceedings as well as the Appeals are pending and thus a direction be issued to Appellant No.1 not to confirm the sale and/or create third party rights in the subject property, if the Court was to permit Appellant No.1 to issue a fresh Sale Notice.
17. I have heard the learned Senior Counsel for the Appellants and learned counsel for the Respondents.
18. In view of the undertaking given on behalf of Appellant No.1 to schedule the auction on a date post 07.07.2022, the date of hearing of the Appeals before the Division Bench, liberty, as sought, is granted to Appellant No.1 to issue a fresh Sale Notice.
19. List the matter before the Roster Bench on 06.07.2022, for hearing on the question whether the Respondents' interests are required to be protected by directing Appellant No.1 not to confirm the sale and/or create third party rights in the subject property, in case a Sale Notice is issued by Appellant No.1.
JYOTI SINGH, J (VACATION JUDGE) JUNE 17, 2022/shivam Signature Not Verified Signed By:KAMAL KUMAR ARB. A. (COMM.) 36/2022 & connected matters Page 5 of 5 Signing Date:23.06.2022 15:35:31