INDIAN OVERSEAS BANKversusM/S RCM INFRASTRUCTURE LTD. AND ANOTHER

1090                       [2022]
                SUPREME COURT     7 S.C.R. 1090
                               REPORTS                     [2022] 7 S.C.R.


 A                        INDIAN OVERSEAS BANK
                                        v.
            M/S RCM INFRASTRUCTURE LTD. AND ANOTHER
                         (Civil Appeal No. 4750 of 2021)
 B                               MAY 18, 2022
               [L. NAGESWARA RAO AND B. R. GAVAI, JJ.]
              Insolvency and Bankruptcy Code, 2016: ss. 238, 10, 14 –
       Provisions of the Code to override other laws – On facts, corporate
       debtor filed an insolvency petition u/s. 10 on 22.10.2018 – NCLT
 C
       admitted the petition on 03.01.2019, moratorium was notified and
       Interim Resolution Professional was appointed – Meanwhile the
       appellant bank issued the second E-auction notice on 27.11.2018,
       to recover the public money availed by the corporate debtor –
       Thereafter, E-auction was held by the Bank, the properties were
 D     sold, sale certificate was issued and the sale was completed on
       8.03.2019 – Promoter of the corporate debtor filed an application
       before NCLT to set aside the security realization during the CIRP
       period carried out by the Bank or in alternative cancel the impugned
       transaction – NCLT set aside the sale of the property owned by the
       corporate debtor – Appeal thereagainst rejected by the NCLAT –
 E
       On appeal, held: After the commencement of the CIRP, 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 including any action under the SARFESI Act in the view
       of s.14(1)(c) rw s.238 which have overriding effect over any other
 F     law – On facts, the balance amount was accepted by the appellant
       Bank on 8.03.2019 – Sale under the statutory scheme as
       contemplated u/rr. 8 and 9 would stand completed only on 8.03.2019,
       which falls much after 03.01.2019, i.e., on which date CIRP
       commenced and moratorium was ordered – As such, it cannot be
       accepted that the sale was complete upon receipt of the part payment
 G
       – Appellant Bank could not have continued the proceedings under
       SARFESI Act once the CIRP was initiated and the moratorium was
       ordered – Thus, the orders of NCLT and NCLAT does not call for
       interference –Securitization and Reconstruction of Financial Assets
       and Enforcement of Security Interest Act, 2002 – s. 13 – Security
 H     Interest Enforcement Rules – rr. 8, 9.
                                       1090
 INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                           1091
               LTD. AND ANOTHER

      Dismissing the appeal, the Court                                    A
       HELD: 1.1 It is 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                  B
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                C
interest are prohibited. [Para 24][1100-E-G]
       1.2 In view of the provisions of s. 238 IBC, 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.                D
[Para 26][1101-A]
       1.3 The instant 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           E
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.
[Para 32][1102-F-G]
      1.4 In the instant case, the balance amount has been
accepted by the appellant Bank on 8th March 2019. The sale under          F
the statutory scheme as contemplated under Rules 8 and 9 of the
said Rules would stand completed only on 8th March 2019.
Admittedly, this date falls much after 3rd January 2019, i.e., on
which date CIRP commenced and moratorium was ordered. As
such, it cannot be accepted that the sale was complete upon               G
receipt of the part payment. [Para 34][1103-B-C]
      1.5 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
                                                                          H
1092           SUPREME COURT REPORTS                    [2022] 7 S.C.R.


 A     the Corporate Debtor in respect of its property including any
       action under the SARFAESI Act is prohibited. The appellant Bank
       could not have continued the proceedings under the SARFAESI
       Act once the CIRP was initiated and the moratorium was ordered.
       [Para 35][1103-C-D]
 B            1.6 The submission of the appellant Bank that the petition
       filed by the Corporate Debtor was mala fide cannot be accepted.
       All the details with regard to action taken by the appellant Bank
       have been specifically mentioned in the petition filed by the
       Corporate Debtor. Insofar as the submission with regard to
       liquidation order being passed is concerned, the same is already
 C     under challenge before the NCLAT. Thus, no case is made out
       for interfering with the concurrent orders passed by the NCLT
       and NCLAT. [Paras 36 and 37][1103-E-F]
            Vidhyadhar v. Manikrao and Another (1999) 3 SCC
            573 : [1999] 1 SCR 1168; B. Arvind Kumar v. Govt. of
 D          India and Others (2007) 5 SCC 745; Kaliaperumal v.
            Rajagopal and Another (2009) 4 SCC 193 : [2009] 2
            SCR 814; Hindon Forge Private Limited and Another
            v. State of Uttar Pradesh through District Magistrate,
            Ghaziabad and Another (2019) 2 SCC 198 : [2018] 11
 E          SCR 1019; S. Karthik and Others v. N. Subhash Chand
            Jain and Others 2020 SCC OnLine SC 787; Anand
            Rao Korada, Resolution Professional v. Varsha Fabrics
            Private Limited and Others (2020) 14 SCC 198 : [2019]
            14 SCR 695; Innoventive Industries Limited v. ICICI
            Bank and Another (2018) 1 SCC 407 : [2017] 8 SCR
 F          33; Principal Commissioner of Income Tax v. Monnet
            Ispat and Energy Limited (2018) 18 SCC 786;
            Ghanashyam Mishra and Sons Private Limited through
            the Authorised Signatory v. Edelweiss Asset
            Reconstruction Company Limited through the Director
 G          and Others (2021) 9 SCC 657; Shakeena and Another
            v. Bank of India and Others 2019 SCC OnLine SC
            1059 – referred to.
                            Case Law Reference
       [1999] 1 SCR 1168             referred to           Para 12
 H
 INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                           1093
               LTD. AND ANOTHER

(2007) 5 SCC 745                referred to              Para 12          A
[2009] 2 SCR 814                referred to              Para 12
[2018] 11 SCR 1019              referred to              Para 16
[2019] 14 SCR 695               referred to              Para 18
[2017] 8 SCR 33                 referred to              Para 27          B
(2018) 18 SCC 786               referred to              Para 27
(2021) 9 SCC 657                referred to              Para 27
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.4750 of
2021.                                                                     C
      From the final Order dated 26.03.2021 of the National Company
Law Appellate Tribunal, Principal Bench, New Delhi in Company Appeal
(AT) (Insolvency) No.736 of 2020.
      Tushar Mehta, SG, C. S. Vaidhyanathan, K. V. Viswanathan, Sr.
Advs., Vikas Mehta, Adith Nair, R. Anand Padmanabhan, E. Venkata          D
Siddhartha, Rahul Gupta, S. Santanam Swaminadhan, Kartik Malhotra,
Abhilasha Shrawat, Himani Thakur, J. Manivannan, (RP), R.
Venkataraman, Rahul Sangwan, Mrs. Aarthi Rajan, Aditya Verma, Ms.
Priyamvada Mishra, Rigved Prasad Advs. for the appearing parties.
        The Judgment of the Court was delivered by                        E

        B. R. GAVAI, J.
       1. This appeal challenges the judgment dated 26th March 2021
passed by the National Company Law Appellate Tribunal, Principal
Bench, New Delhi (hereinafter referred to as “the NCLAT”) in Company      F
Appeal (AT) (Insolvency) No. 736 of 2020, thereby dismissing the appeal
filed by the present appellant-Indian Overseas Bank, which was in turn
filed challenging the order dated 15th July 2020 passed by the National
Company Law Tribunal, Hyderabad Bench-1, Hyderabad (hereinafter
referred to as “the NCLT”) in I.A. No.832 of 2019 in C.P. (IB) No. 601/
10/HDB/2018, vide which the learned NCLT had allowed the application      G
filed by the respondent No.2 herein, former Managing Director of the
respondent No.1 herein-M/s RCM Infrastructure Ltd. (hereinafter
referred to as the “Corporate Debtor”) and set aside the sale of the
assets of the Corporate Debtor.
                                                                          H
1094             SUPREME COURT REPORTS                            [2022] 7 S.C.R.


 A           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.
 B     As such, on 13th June 2016, the loan account of the Corporate Debtor
       came to be classified as “Non-Performing 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
 C     the “SARFAESI Act”), calling upon the Corporate Debtor and its
       guarantors to repay the outstanding amount due to the appellant Bank.
       Since the 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
 D     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
       E-auction notice came to be issued on 27th September 2018 by the
 E     appellant Bank to recover the public money availed by the Corporate
       Debtor.
               4. In the meantime, on 22nd 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 E-auction held on 6th
 F
       November 2018, no bids were received. As such, the second E-auction
       notice came to be issued on 27th November 2018, which was scheduled
       to be held on 12th December 2018. In the second E-auction, three persons
       became successful bidders by offering jointly a price of Rs.32.92 crore
       for both the secured assets. On 13th December 2018, the sale was
 G     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 28th December 2018.
 H
 INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                               1095
         LTD. AND ANOTHER [B. R. GAVAI, J.]

       5. It appears that the auction purchasers, on 28th December 2018,      A
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 8th March 2019.
The request made by the auction purchasers was accepted by the
appellant Bank on 29th December 2018. It is the case of the appellant
                                                                              B
Bank that in exercise of its powers under Rule 9(4)(a) of the said Rules,
it extended the period till 8th March 2019 for payment of the balance
75% of the bid amount.
       6. The learned NCLT, vide order dated 3rd January 2019, admitted
the petition filed by the ex-promoter of the Corporate Debtor. As a result
of the said order passed under Section 10 of the IBC, the Corporate           C
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 21st January 2019, filed its claim in Claim   D
Form-C 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         E
the balance 75% of the bid amount, i.e., Rs.24.69 crore on 8th March
2019. Upon receipt of the payment, the appellant Bank submitted its
revised claim in Claim Form-C to the IRP on 11th 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/    F
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
15th July 2020, the learned NCLT passed an order thereby allowing the
                                                                              G
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 26th March 2021. Being
aggrieved thereby, the present appeal.                                        H
1096             SUPREME COURT REPORTS                           [2022] 7 S.C.R.


 A           8. We have heard Shri Tushar Mehta, learned Solicitor General
       appearing on behalf of the appellant Bank, Shri C.S. 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.
 B
               9. Shri Tushar Mehta submitted that the very initiation of the
       voluntary insolvency proceedings under Section 10 of the IBC, by the
       ex-promoter 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 13th June 2016.
 C     Thereafter on 18th 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 E-auction notice was issued on 26th September
 D     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 Tribunal-II, 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 29th
       October 2018 by the learned DRT, whereby confirmation of sale was
 E     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 E-auction notice was issued on
 F     27th 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 3rd 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
 G
       65 of the IBC was subsequently raised by the appellant Bank, neither
       the learned NCLT nor the learned NCLAT had considered the same. It
       is submitted that the mala fide intention of the IRP is clear inasmuch as
       since the ex-promoters could not submit a credible plan, the learned
       NCLT, vide order dated 7th February 2022, has ordered for liquidation. It
 H     is submitted that a perusal of the said order dated 7th February 2022
    INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                            1097
            LTD. AND ANOTHER [B. R. GAVAI, J.]

would reveal that the delay was caused at the instance of the IRP, who        A
has been seen to be helping the ex-promoters.
       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    B
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
                                                                              C
subsequently, it could 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 Another1, B. Arvind Kumar v. Govt. of India and
Others2 and Kaliaperumal v. Rajagopal and Another3.
       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   D
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    E
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 disturbed. It is submitted that the
Corporate Debtor’s right in respect of the mortgaged property is the
                                                                              F
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               G
applicants were successful auction purchasers and they were not added
as party respondents in the proceedings before the learned NCLT. Relying
1
  (1999) 3 SCC 573
2
  (2007) 5 SCC 745
3
  (2009) 4 SCC 193                                                            H
1098              SUPREME COURT REPORTS                          [2022] 7 S.C.R.


 A     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.
 B            16. Shri Viswanathan, learned Senior Counsel has supported the
       impugned judgment passed by the learned 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
 C     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
 D     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 Another4.
              17. Shri Viswanathan further submitted that Section 13(8) of the
 E     SARFAESI Act itself provides a right of redemption of secured assets
       to the owner/debtor. He relies on the judgment of this Court in the case
       of S. Karthik and Others v. N. Subhash Chand Jain and Others5 in
       support of this proposition.
              18. Shri Viswanathan submitted that upon approval of the
 F     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 Creditor-Debtor would get altered/
 G     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
       4
           (2019) 2 SCC 198
 H     5
           2020 SCC OnLine SC 787
    INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                            1099
            LTD. AND ANOTHER [B. R. GAVAI, J.]

old contract would get extinguished/novated. It is submitted that in any      A
case, in view of Section 238 of the IBC, the provisions contained 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
                                                                              B
Professional v. Varsha Fabrics Private Limited and Others6.
       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
                                                                              C
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 in the amount   D
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         E
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
                                                                              F
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.
                                                                              G
       21. Shri Verma, learned counsel also supported the impugned
judgment passed by the learned NCLAT as well as 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
6
    (2020) 14 SCC 198                                                         H
1100             SUPREME COURT REPORTS                               [2022] 7 S.C.R.


 A     3rd 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 7th February 2022, the same has been stayed by the
       learned NCLAT on 8th March 2022.
              22. It is further submitted by Shri Verma that as a matter of fact,
 B     after the CIRP was initiated, the appellant Bank itself has submitted its
       claim in Claim Form-C on 21st 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
 C
       refer to Section 14(1)(c) of the IBC:
              “14. Moratorium.—(1) ……
              (a) ……;
              (b) …….;
 D            (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);
 E            ……….”
              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,
 F     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.
 G            25. It will also be relevant to refer to Section 238 of the IBC:
              “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
 H            such law.”
    INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                                 1101
            LTD. AND ANOTHER [B. R. GAVAI, J.]

       26. It could thus be seen that the provisions of the IBC shall have         A
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            B
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 Another7, Principal Commissioner of Income Tax v. Monnet Ispat
and Energy Limited8 and Ghanashyam Mishra and Sons Private                         C
Limited through the Authorised Signatory v. Edelweiss Asset
Reconstruction Company Limited through the Director and Others9.
        28. It is the contention of the appellant Bank that the sale in question
was complete on its confirmation on 13th December 2018 and as such,
the admission of the petition on 3rd January 2019 by the learned NCLT              D
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              E
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 would pass on that transaction. This Court has
further held that the real test is the intention of the parties. It has been       F
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     G
the Sub-Registrar before whom the remaining part of the sale
consideration was paid and thereafter, the document was registered.

7
  (2018) 1 SCC 407
8
  (2018) 18 SCC 786
9
  (2021) 9 SCC 657                                                                 H
1102               SUPREME COURT REPORTS                          [2022] 7 S.C.R.


 A            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,
 B
       the sale becomes absolute and the title vests in the purchaser. It has
       been held that a sale certificate is 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
 C     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
 D     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
 E     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 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.
 F            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.
 G
             33. In the case of Shakeena and Another v. Bank of India and
       Others10, 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

       10
 H          2019 SCC OnLine SC 1059
 INDIAN OVERSEAS BANK v. M/S RCM INFRASTRUCTURE                                 1103
         LTD. AND ANOTHER [B. R. GAVAI, J.]

did not require registration and that the sale process was complete on          A
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 8th March 2019. The sale under
the statutory scheme as contemplated under Rules 8 and 9 of the said            B
Rules would stand completed only on 8th March 2019. Admittedly, this
date falls much after 3rd 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.
                                                                                C
      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                  D
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 Bank have been specifically mentioned in the             E
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         F
with the concurrent orders passed by the learned NCLT dated 15th July
2020 and learned NCLAT dated 26th 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.                                                              G

Nidhi Jain                                                   Appeal dismissed
(Assisted by : Shashwat Jain, LCRA)



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