SARFAESI Action Unaffected by Resolution Plan of CD | HC

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  • Last Updated on 27 June, 2025

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resolution plan of corporate debtor

Case Details: Ashok Harry Pothen v. Authorised Officer - [2025] 175 taxmann.com 631 (HC-Kerala)

Judiciary and Counsel Details

  • Gopinath P., J.
  • V.K. Peermohamed Khan & Girish Kumar V.C. , Advs. for the Petitioner.
  • Binoy Vasudevan, SC for the Respondent.

Facts of the Case

In the instant case, the petitioner had availed of a loan from the respondent bank. The loan was secured by a mortgage of an item of property belonging to the petitioner. The petitioner had entered into an agreement with a company known as ‘H’ for the joint development of the said property.

‘H’ was the subject matter of proceedings before the NCLT under provisions of the Insolvency and Bankruptcy Code, and a resolution plan had now been approved in respect of ‘H’.

The petitioner filed an instant writ, claiming that the joint venture with him was also part of the resolution plan; therefore, the respondent bank could not proceed against the petitioner’s property under the provisions of the SARFAESI Act.

It was noted that the bar against any claim outside the resolution plan would apply only to a claim against the corporate debtor and not to a person, such as the petitioner, who claims to have agreed with the corporate debtor.

High Court Held

The High Court held that the right of the respondent bank to proceed against the property which had been mortgaged by the petitioner was thus not affected in any manner by any resolution plan in respect of ‘H’, especially when the respondent bank was not even a party to the proceedings before the NCLT or the resolution plan.

Therefore, there was no merit in the contention taken by the petitioner that since the petitioner was in agreement with ‘H’, for the development of the property and since a resolution plan had been sanctioned in respect of ‘H’, the respondent bank must be restrained from continuing proceedings under the SARFAESI Act. Thus, the instant writ petition was to be dismissed.

List of Cases Reviewed

  • Ghanashyam Mishra and Sons Pvt. Ltd through the Authorised Signatory v. Edelweiss Asset Reconstruction Company Ltd through Director and others; [2021] 9 SCC 657 (Para 4) distinguished.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied