# In the matter of Woolways (P) Ltd. IB-29-ND-2018

> NCLT judgment dated 2019-07-01. Citation: TCN-2019-NCLT-02734. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 1 Jul 2019
- **Citation:** TCN-2019-NCLT-02734
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/woolways-p-ltd-ib-29-nd-2018-8683c1a6

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. An affidavit was filed by State Bank of India (SBI), the second respondent, regarding a property mortgaged to the bank. The Resolution Professional (RP) filed CA No.294/2019 pursuant to directions dated 10.6.2019. The property was mortgaged to SBI under documents No.1283 and 1284 of 2007. Sandhu Automobiles (P) Limited had mortgaged the property and made payments to the bank, leading to the release of mortgage documents on 16.4.2019. However, the satisfaction of the mortgage was not reflected with the Sub-Registrar or Revenue Authority.

## Facts

Standard Chartered Bank initiated insolvency proceedings against Woolways (P) Ltd under Section 7 of the IBC, 2016. State Bank of India (SBI) is involved as the second respondent due to a property mortgaged to them by Sandhu Automobiles (P) Limited. The property was mortgaged under documents No.1283 and 1284 of 2007. Sandhu Automobiles (P) Limited made payments to SBI, leading to the release of mortgage documents on 16.4.2019. However, the satisfaction of the mortgage was not recorded with the Sub-Registrar or Revenue Authority. The RP was directed to file a detailed compilation of property documents. Several other applications (CA No.293/2018, CA No.123/2019, CA No.358/2019, CA No.339/2018, CA No.57/C-III/ND/2019) are also being considered, relating to preferential

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## Issues and analysis

### Issue 1: Whether the satisfaction of the mortgage by Sandhu Automobiles (P) Limited to State Bank of India …

**Ratio:** The principle is that once a mortgage is satisfied, the record should accurately reflect

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**Reasoning:** The court noted that while the mortgage documents were released by SBI on 16.4.2019, the

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**Interpretation:** The interpretation is that the release of mortgage documents by the bank is not

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**Application:** SBI's counsel stated that the recording of the satisfaction of the mortgage

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## Parties

- **Judges:** R. VARADH…; DeepaKr…
- **Appellants:** Standard Chartered…
- **Respondents:** Woolways (…

## Timeline

- **2019-05-27 — Directions issued in CA…**: Pursuant to the directions dated 27.5.2019, passed by this Tribunal, Ld. RP represents…
- **2019-06-10 — Directions iss…**: Directions issued to the RP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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