# In the matter of Nagpur Nagrik Sahakari Bank Ltd. vs. Mohanlal Ayyapan Pillai and Ors.

> NCLAT judgment dated 2025-05-05. Citation: TCN-2025-NCLAT-00052. The case involves two Company Appeals, No. 2382 of 2024 and No. 448 of 2025, both related to…

- **Court:** NCLAT
- **Order date:** 5 May 2025
- **Citation:** TCN-2025-NCLAT-00052
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/nagpur-nagrik-sahakari-bank-ltd-vs-mohanlal-ayyapan-pillai-and-ors-66dfa6e9

## Summary

### Background

The case involves two Company Appeals, No. 2382 of 2024 and No. 448 of 2025, both related to insolvency proceedings. Appeal No. 2382 challenges an order dated 24.10.2024 passed in I.A. No. 1047/2020, where an application by a Suspended Director was allowed, and a sale conducted by Respondent No. 2 was deemed in violation of Section 14(1)(c) of the IBC. Appeal No. 448 challenges the same order. The Adjudicating Authority had declared the sale in violation of Section 14(1)(c) of the IBC and set aside the sale. The CIRP against Virgo Marine Shipyards Private Limited commenced on 21.01.2020.

## Facts

Nagpur Nagrik Sahakari Bank Ltd. initiated auction proceedings under the SARFAESI Act, 2002. Vyankatesh Engineers & Contractors Private Limited was declared the successful bidder on 02.12.2019, and the sale was confirmed. Respondent No. 1 challenged the auction sale before the DRT but was unsuccessful in obtaining an interim order. Subsequently, Respondent No. 1 filed I.A. No. 1047/2020 before the Adjudicating Authority, challenging the auction. The Adjudicating Authority declared the sale in violation of Section 14(1)(c) of the IBC and set aside the sale. The CIRP against Virgo Marine Shipyards Private Limited commenced on 21.01.2020. The auction notice was issued on 17.11.2019, and the successful bidder submitted its bid on 02.12.2019. The sale was not completed

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## Issues and analysis

### Issue 1: Whether the sale conducted by Respondent no. 2 was …

**Ratio:** Section 14(1)(c) of the IBC imposes a moratorium on any action to foreclose, recover, or

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**Reasoning:** The Tribunal relied on the judgment of the Supreme Court in 'Indian Overseas Bank Vs. RCM

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**Interpretation:** Section 14(1)(c) of the IBC has an overriding effect over any other law,

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**Application:** The Tribunal found that the sale conducted by Respondent no. 2 was in violation

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Nagpur Nagrik…
- **Respondents:** Virgo Marine…; Mohanlal Ayyapan…

## Timeline

- **2019-11-17 — Auction Notic…**: Nagpur Nagrik Sahakari Bank Ltd.…
- **2019-12-02 — Successful…**: Vyankatesh Engineers & Contractors Private Limited submitted its bid and was declared the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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