Authority: High Court of Judicature at Bombay (Civil Appellate Jurisdiction)

Order Date: 14 October 2026

Case Overview

  • Petition No. 16082 of 2025 filed by Bank of Maharashtra (petitioner) against Food Pharma India Private Limited and others (respondents).
  • The petitioner challenged the order dated 07 Nov 2025 passed by Debt Recovery Tribunal III, Mumbai (DRT), which held that a moratorium under the Insolvency and Bankruptcy Code (IBC) prevented the bank from taking possession of secured assets.
  • The DRT had relied on a pending proceeding before the National Company Law Tribunal (NCLT) under Section 95 IBC and treated the moratorium as applicable.
  • The petition argued that the properties constituting the secured assets do not belong to the guarantor and that the amendment introduced by sub‑section (4) of Section 96 IBC removes the moratorium for insolvency proceedings of personal guarantors to a corporate debtor.
  • The Court noted a recent order dated 05 Feb 2026 of the Debt Recovery Appellate Tribunal, Chennai (In‑charge DRAT, Mumbai), which must be considered.
  • The Court also referred to its earlier judgment in Indian Bank vs. Shabbir Abbas Patel and Ors. (Writ Petition No. 2819 of 2026, dated 18 Sep 2026), where it categorically held that the Section 96(4) amendment applies even to pending proceedings.
  • The petitioners sought a short adjournment for respondents to file a reply affidavit, which was ordered to be filed on or before 24 Jul 2026, with the matter listed for further consideration on 29 Jul 2026.
  • The Court observed that the pending Securitisation Application No. 107 of 2024 is ready for hearing and can be disposed of promptly.

Final Outcome

  • The writ petition is allowed in terms of prayer clause (a); the DRT order dated 07 Nov 2025 is set aside as its basis has been removed by the amendment to Section 96(4) IBC.
  • The Debt Recovery Tribunal III, Mumbai is directed to expeditiously dispose of Securitisation Application No. 107 of 2024, with a deadline to complete disposal on or before 15 Jan 2027.

Topics: Insolvency, Banking Regulation