# In the matter of Indiabulls Asset Reconstruction Company Ltd. vs. Pawan Kapoor

> NCLAT judgment dated 2024-08-28. Citation: TCN-2024-NCLAT-00237. The case involves an appeal against an order dated 25.02.2021 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 28 Aug 2024
- **Citation:** TCN-2024-NCLAT-00237
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/indiabulls-asset-reconstruction-company-ltd-vs-pawan-kapoor-2f082a6b

## Summary

### Background

The case involves an appeal against an order dated 25.02.2021 passed by the National Company Law Tribunal (NCLT), New Delhi, in IA No. 1009 of 2021 in CP (IB) No. 25/ND/2021. The NCLT directed the appellant to restore possession of a subject property to the respondent, which the appellant had taken over. Prior to the insolvency proceedings, the appellant had initiated proceedings under the SARFAESI Act, 2002, and had taken symbolic possession of the mortgaged property on 20.06.2019. The District Magistrate had also allowed an application by the appellant and passed an order of possession. However, subsequent to these actions, an application under Section 95 of the Code was filed to initiate insolvency proceedings against the Personal Guarantor, and the NCLT initiated

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## Facts

Indiabulls Asset Reconstruction Company Ltd. (Appellant) initiated proceedings under the SARFAESI Act, 2002, against Pawan Kapoor (Respondent) and took symbolic possession of the mortgaged property on 20.06.2019. On 16.03.2020, the District Magistrate allowed the Appellant's application and passed a possession order. Actual physical possession was taken on 27.01.2021. Subsequently, on 07.01.2021, an application under Section 95 of the IBC was filed to initiate insolvency proceedings against the Respondent (Personal Guarantor). On 03.02.2021, the NCLT initiated personal insolvency against the Respondent and held that a moratorium had commenced, effective 07.01.2021. The NCLT ordered the Appellant to restore possession of the property to the Respondent. The Appellant

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## Issues and analysis

### Issue 1: Whether the proceedings under the SARFAESI Act, 2002, were complete on 20.06.2019 when symbolic …

**Ratio:** The ratio is that the interim moratorium under Section 96 of the IBC applies to the

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**Reasoning:** The court reasoned that the mere fact that possession of the property was taken over by

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**Interpretation:** The interpretation is that Section 96 of the IBC creates an interim moratorium

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**Application:** In this case, no sale process had commenced with respect to the property

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## Parties

- **Judges:** Yogesh K…; Ajai Das Me…
- **Appellants:** Indiabulls Asset…
- **Respondents:** Pawan K…

## Timeline

- **2019-06-20 — Symbolic Pos…**: Appellant took symbolic possession of the…
- **2020-03-16 — Possession…**: District Magistrate allowed Appellant's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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