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2019 (12) TMI 1369
Liquidation of the Corporate Debtor - Section 33(2) of the IBC, 2016 - HELD THAT:- At the time of hearing, there was an objection by the suspended director before this Tribunal. The suspended director has submitted that he is willing to settle the entire dues of the Bank of India, who constitute more than 90% of the total value of credit. However, this Tribunal has granted ample time to the suspended director to settle of its dues to the Financial Creditor and then approach this Tribunal by filing an application under Section 12A of the IBC, 2016, but it never fructified - Since there was no invitation for Expression of Interest was issued, the CoC based on commercial considerations has decided to liquidate the Corporate Debtor.
Taking into consideration the provisions of Section 33 of IBC, 2016 and also guided by the decision of the Hon'ble Supreme Court in the matter of Mr. K. Sasidharan -Vs- Indian Overseas Bank [2019 (2) TMI 1043 - SUPREME COURT] this Tribunal orders for the liquidation of the Corporate Debtor.
Application allowed.
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2019 (12) TMI 1368
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The corporate debtor is entitled to point out to the Adjudicating Authority that a default has not occurred; in the sense that a debt, which may also include a disputed claim is not due i.e. it is not payable in law or in fact. However, it is not the case of respondent that the entire loan or the entire OTS amount has been paid. Bank loan having not paid in its entirety, the default of debt is apparent - It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the outstanding loan amount.
In the facts it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.
Application admitted - moratorium declared.
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2019 (12) TMI 1367
Reconciliation of books - petitioner submits that the reconciliation exercise could not be completed since the case was to be listed on 26.11.2019 - HELD THAT:- Considering the fact that there has been substantial progress and the reconciliation exercise has resulted in reduction of tax exposure drastically, the impugned orders can be set aside and the case may be remitted back to the respondent to pass a fresh order denovo after taking into account of the outcome of the reconciliation exercise.
Petition allowed by way of remand.
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2019 (12) TMI 1366
Re-constitution of Committee of Creditors - Corporate Guarantee not invoked - whether the amount of uninvoked corporate guarantee could be considered as claim as per the provisions of Insolvency & Bankruptcy Code, 2016? - HELD THAT:- The action of RP is not correct in law. Moreover, having regard to the general importance of the issue, we consider it pertinent to discuss few aspects which have got a great bearing on such types of matters.
Unless a claim becomes due only then it gets converted into debt. Further, debt must be due and payable in law or fact for occurrence of event of default. Thus, there is a marked difference between both the terms i.e. "claim" and "debt". Both have got different implications on various aspects/process which are undertaken under the Insolvency and Bankruptcy Code, 2016 - an uninvoked corporate guarantee or counter corporate guarantee is of the nature of contingent liability which may or may not arise. As per established accounting practices as well as accounting standard in some cases where principal borrower might have defaulted but if the guarantee holder has not invoked such guarantee, then a provision fair valuation on the basis of prudence or as per accounting standard AS 29 or Ind AS 37 may be made. Therefore, even accounting and business practice do not recognise uninvoked corporate guarantee as a debt due or ascertained liability as on a particular date. Hence, when viewed from this angle uninvoked corporate guarantee cannot be considered as debt due and payable.
Admittedly, corporate guarantee has been issued by the corporate debtor and it cannot be considered as a debt due and payable then the question arises as to whether this can be ignored at all? In our considered view, this cannot be done for the simple reason that some financial commitment exists in law which may have implications for viability and implementation of resolution plan. Resolution applicant has to submit a plan which should be prepared on the basis of information memorandum provided to him by the resolution applicant in consultation/after approval of CoC. If details uninvoked corporate guarantee(s) are not disclosed, then a situation may arise in future whereby the resolution applicant may not implement the resolution plan and back out in case guarantee is invoked.
Meaning of the term financial debt owed - HELD THAT:- This term has been used in Sec. 5(7) which defines who will be a financial creditor. Similarly, in Sec. 5(20) operational creditor has been meant as a person to whom an operational debt is owed. In Sec. 3(11) debt has been defined as a liability obligation in respect of a claim which is due. Sec. 3(12) prescribes a situation of default on non-payment of debt which has become due and payable. Thus, the rights of a person are obligations to other persons to that transaction, hence, debt due and payable by a person is debt owed to a person. Thus, when the scheme of the Code is read as a whole, it can be safely concluded that voting rights are to be determined only on the basis of financial debt owed.
A complete mechanism has been provided in the Insolvency and Bankruptcy Code, 2016 as to how and when claims become due and payable/debt owed and, consequently how voting share of a financial creditor is to be determined. As stated earlier, in the present case, there is a violation of this mechanism - even if uninvoked corporate guarantee is found to be considered as claim, the same cannot be taken into consideration for determining the voting share of a financial creditor.
Whether the decision of the RP can be said to be in line with the scheme and objects of Insolvency and Bankruptcy Code, 2016? - HELD THAT:- The role of IRP/RP is very crucial. IRP has to constitute CoC as per the provisions of Sec. 18(1)(c) of Insolvency and Bankruptcy Code, 2016. The IRP is also obliged to make every endeavour to protect and preserve the value of property of the corporate debtor and manage the operations of corporate debtor as a going concern. The RP is required to conduct CIRP and convene the meeting of CoC as well as to chair the same. As per Sec. 24(6) each creditor is required to vote with the voting share assigned to him based on the financial debt owed to such creditor. As per Sec. 24(7) the resolution professional has been given authority to determine the voting share to be assigned to each creditor in the manner specified by the Board. If resolution professional assigns higher voting share to any creditor, then such creditor gets an added advantage. In the present case, the facts have already been narrated and findings have been given as regard to both contentions of the applicant in his favour which also refers to mode and manner of process which has been adopted. The other facts are that in one of the meetings of the CoC, this issue was discussed and it was agreed that for assigning voting shares one of rights, RP would take a legal opinion which he has not done till date.
The uninvoked corporate guarantee cannot be considered a claim as per the provisions of Code, 2016, hence, not to be concluded in the list of claims maintained and updated by the RP - Uninvoked corporate guarantee would also not be considered as a debt due and payable or financial debt owed to financial creditor, hence, the same would not be taken into consideration in determining voting share of financial creditor. This remains so assuming that a view is taken that uninvoked corporate guarantee is categorised as a claim.
Application disposed off.
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2019 (12) TMI 1365
Validity of arrest of petitioner's father made by the State Tax Officer-3, Enforcement, DIV-2, Ahmedabad vide Arrest Memorandum Dated 06.12.2019 - foundation of this petition is that the father of the applicant has been deprived of his personal liberty, without following the procedure established by law, which is violative of Article 21 of the Constitution of India.
HELD THAT:- The case of the respondent Authorities is accepted by this Court to this extent. But at the same time, it is also held by this Court that, not only any officer authorised by the Commissioner, but even the Commissioner himself also could not have ordered arrest of any person under the Act, if he (the Commissioner) has not arrived at the conclusion or is satisfied that he (the Commissioner) has reasons to believe that a person has committed any offence under the Act. The satisfaction to be arrived at by the competent authority in this regard is the condition precedent for ordering arrest of that person. The obligation to be satisfied with regard to the reasons to believe that a person has committed any offence under the Act is cast upon the Commissioner. Whether the said duty could have been delegated by the Commissioner to any officer or not is not gone into by this Court leaving it open to be gone into in an appropriate case, since this Court finds that as a matter of fact, no delegation is made by the Commissioner in that regard vide order dated 23.06.2017 – Entry No.49.
If any citizen is deprived of his personal liberty, without following the procedure established by law, it would be violative of Article 21 of the Constitution of India, the High Court does have power under Article 226 of the Constitution of India to examine the issue and pass appropriate order. Even if a person is in judicial custody and even if the bail is asked for by him and is rejected, either by the Magistrate or even by the Sessions Court, that itself may not be the deciding factor to form an opinion, whether the judicial custody is otherwise legal or not.
Thus, this petition can not be said to be not maintainable.
It is attempted on behalf of the respondent Authorities to demonstrate before this Court how the corpus can be said to have committed offence under the Act. Learned Public Prosecutor has referred to the details in this regard as contained in the affidavit in reply filed on behalf of the State Authorities. Since we are not examining whether the corpus has committed any offence under the Act or not, dealing with those submissions, would be beyond the scope of the petition. We do not intend to expand the scope of this petition. The details with regard to the illegalities committed by the corpus, as perceived by the State Authorities, is therefore not recorded in this order.
The satisfaction recorded by the Joint Commissioner, with regard to he (the Joint Commissioner) having reasons to believe that the corpus - Sureshbhai Ugarchand Gadhecha has committed offence under the Act, is without any authority of law and is of no consequence and can not be taken cognizance of. Consequently, the first requirement of Section 69(1) of the Act, which is condition precedent to order arrest of any person under the Act, is not satisfied in the present case. The arrest of Sureshbhai Ugarchand Gadhecha - the corpus is thus without any authority of law. Thus, the corpus has been deprived of his personal liberty, without following the procedure established by law and is therefore violative of Article 21 of the Constitution of India and his continuance in judicial custody is no less than illegal confinement.
The arrest of the corpus – Sureshbhai, son of Ugarchand Gadhecha, by the State Tax Officer-3, Enforcement, DIV-2, Ahmedabad, vide Arrest Memorandum No.DCST/ENF-2/ STO-3/ARREST MEMORANDUM/2019-20/B, Dated : 06.12.2019, is held to be without authority of law and thus, illegal - petition allowed
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2019 (12) TMI 1364
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Financial Debt - existence of debt and dispute or not - HELD THAT:- In the instant Petition, the Petitioner has proved its case by placing documentary evidence viz., Copies of Facility Agreements and sanction letters, date and details of all disbursements of the facilities etc., and copies of entries in Bankers Book in accordance with the Bankers Books Evidence Act, 1891 (18 of 1891) which proves that a default has occurred for which the present Corporate Debtor was liable to pay. In their counter affidavit, the Respondents have not denied the facts regarding the existence of 'financial debt' and 'default' committed by the Corporate Debtor - the learned counsel for the Corporate Debtor had sought time for settling the debt with the Financial Creditor. It is a different matter that settlement talks have not fructified, but the very attempt by the Corporate Debtor to get it settled, establishes the 'debt' and 'default'.
In the present case, this Adjudicating Authority is satisfied with the submissions put forth by the Petitioner/Financial Creditor regarding existence of 'financial debt' and occurrence of 'default'. Further, the Financial Creditor has fulfilled all the requirements as contemplated under IB Code - instant petition is hereby admitted and this Adjudicating Authority Orders the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed as per the time line stipulated in section 12 of the IB Code, 2016, reckoning from the day this order is passed.
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2019 (12) TMI 1363
Classification of services - taxable service “Real Estate Agent” and “Site Formation and Clearance, Excavation and Earth Moving and Demolition” provided by the Appellant during the period 2005-2006 to 2009-2010 - Circular dated 27 July 2005 - It was held by CESTAT that activity carried out by the Appellant would, therefore, not fall under ‘site formation’.
HELD THAT:- There are no reason to interfere with the order of the CESTAT - Appeal dismissed.
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2019 (12) TMI 1362
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT:- Corporate Debtor/Respondent Company has not produced any documentary proof with respect to the averments made in the One Time Settlement proposal or failure on the side of Financial Creditor to consider their proposal. While on this, existence of the debt is proved as mentioned in the order passed by the Debts Recovery Tribunal and other documents produced before this Adjudicating Authority, otherwise there is a mere allegation of dispute. The Respondent/Corporate Debtor could not produce any proof before this Tribunal so as to disprove its debt and default.
Time Limitation - it has been alleged that the present application is barred by limitation as the claim pertains to loan sanctioned in the year 2005 and the mortgage extended in favour of the Petitioner as security was given in the year 2005 - HELD THAT:- Even though the 'right to sue' accrues for the Financial Creditor on the date of NPA, i.e. 29.06.2013, the Hon'ble NCLAT in SESH NATH SINGH, AKHSAR KUMAR SINGH VERSUS BAIDYABATI SHEORAPHULI COOPERATIVE BANK LTD, ANIMESH MUKHOPADHYAY [2020 (2) TMI 286 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], has held that in computing the period of limitation, the time during which the Financial Creditor has been prosecuting with due diligence another civil proceedings against the corporate debtor for the same relief shall be excluded as per Section 14(2) of the Limitation Act, 1963.
Even otherwise, the Financial Creditor has obtained a Debt Recovery Certificate against the Corporate Debtor and in view of the Judgment of the Hon'ble Supreme Court in the matter of VASHDEO R BHOJWANI VERSUS ABHYUDAYA CO-OPERATIVE BANK LTD AND ANR. [2019 (9) TMI 711 - SUPREME COURT], it is clear that the period of limitation would begin ticking from the date of issuance of the Recovery Certificate, as in this case, since the Recovery Certificate was issued by on 24.01.2019 and based on the recovery certificate issued the Financial Creditor has filed the present petition before this Authority on 15.04.2019. In view of the same, the present petition falls well within the period of limitation.
The Application as filed by the Applicant - Financial Creditor is required to be admitted under Section 7 (5) of the I&B Code, 2016 - Application admitted - moratorium declared.
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2019 (12) TMI 1361
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is true that assets of Company are to be made available for payment or discharge of its liabilities and obligation even after the date of the order removing the name of the Company from the Registrar Companies. However, it is settled position of law that provisions of Code cannot be invoked for recovery of outstanding amounts. It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount.
This is not a fit case for admission and it is liable to be rejected - petition rejected.
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2019 (12) TMI 1359
Rectification of assessment - tribunal while adjudicating the appeal filed by the assessee has failed to consider grounds which challenges initiation of reassessment proceedings u/s 147 on the erroneous presumption that the assessee has not pressed grounds relating to initiation of reassessment proceedings u/s 147 - HELD THAT:- Fact remains that it is a settled position of law, once there is a specific ground in an appeal, the same needs to be adjudicated irrespective of the fact that whether, said ground is pressed or not . Therefore, we are of the considered view that insofar as, grounds No.1 to 3 of assessee appeal regarding initiation reassessment proceedings u/s. 147. There is an error in the order of the Tribunal in not adjudicating specific ground taken by the assesee, which constitute mistake apparent on record, which can be rectified u/s 254(2) .
Disallowance of interest and commission paid on loans - no specific adjudication on those grounds in the order of the Tribunal - HELD THAT:- AsseSsee has taken specific grounds challenging additions made by the Ld. AO towards disallowance of consequent interest paid on unsecured loans u/s 68 and related commission expenditure incurred in relation to said unsecured loans, but the Tribunal has by inadvertent mistake omitted to consider and adjudicates those grounds. Further, the issue of addition towards unsecured loans, consequnet interest paid on said loan and related commission and brokerage expenses are interrelated and interconnected, because the findings of one ground may have bearing on the other ground and hence all grounds needs to be considered together. If, one ground is considered and other ground is not adjudicated, then certainly it constitutes a mistake on face of the order - non consideration of specific ground taken by the assessee constitutes a mistake apparent on record, which can be rectified u/s 254(2) - MP of assessee allowed.
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2019 (12) TMI 1358
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- In the instant case the invoices has been raised against corporate debtor on 13.03.2014 and there is no pursuance of the said liability by operational creditor against the corporate debtor till the issuance of demand notice dated 27.03.2019. Thus there is huge gap of more than five years in between the two dates which is unexplained - Since the Limitation Act is applicable to applications filed under Section 7 & 9 of I&B Code, Article 137 of the Limitation Act is invoked. The said Article provides the period of Limitation as in case of any other application for which no period of limitation is provided elsewhere, to be three years from the time when the right to apply accrues.
In the present case the legal action accrues from the date of invoice and the time limitation also accrues from the same date. In the instant case invoice has been raised on 13.03.2014 and the present proceedings have been initiated by way of the statutory demand notice only on 27.03.2019.
Petition dismissed.
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2019 (12) TMI 1357
Condonation of delay in filing petition - Registration of transfer of shares - making entries in the Register of members and register of share transferred and thereafter return the share certificates to the Petitioners - HELD THAT:- Reliance placed in the case of AKAL SPRING LIMITED & ORS. VERSUS AMREX MARKETING PRIVATE LIMITED [2019 (11) TMI 1131 - NATIONAL COMPANY LAW] where it was held that It cannot be gain said that ‘Right to refuse’ registration of transfer of shares, ‘Sufficient Cause’ is question of law and the cause shown for refusal is sufficient or otherwise in a given case, can also be a ‘mixed question of law’ and fact. Besides this, a refusal may be on the basis of ‘Breach of Law’ or any other ‘Sufficient Cause’.
The application for condonation of delay permitting the parties to argue their respective versions on merits.
Let the matter be listed for hearing on the main petition C.P. No. 295/KB/2017 on 23.01.2020.
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2019 (12) TMI 1356
Winding up of Company - termination of Joint Venture Agreement - Section 248 (5) of the Companies Act, 2013 - HELD THAT:- This application was filed by M/s. Odisha Mining Corporation Ltd. for winding up of 1st respondent Company. After filing of this application, the Company was struck off by ROC under Section 248 (5) of Companies Act, 2013 and Company was dissolved by the gazette notification dated 22-28 July, 2017. The first respondent Company M/s. Kalinga Coal Mining Pvt. Ltd. has only two shareholders, namely, M/s. Sainik Mining and Allied Services Ltd. in TP No. 97/CTB/2019 and M/s. Odisha Mining Corporation Ltd. in TP No. 244/CTB/2019.
It is deemed just and equitable to order winding up of the 01st respondent company.
Company stands wound up under Section 271-272(1)(b) of the Companies Act, 2013 without any cost - petition allowed.
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2019 (12) TMI 1355
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - whether debt and default in question, is established, without there being any dispute raised by the Respondent? - HELD THAT:- The Petitioner issued said statutory Demand Notice only on 08.10.2018, and the instant Company Petition was filed on 09.07.2019, even though the Demand Notice allowed only 10 days from the date of receipt of the copy of the Order either to settle the issue or bring to notice any notice of dispute. Therefore, the Petitioner failed to explain the delay in approaching the Adjudicating Authority, as the due date was only 30.08.2016. The only explanation given by the Petitioner is one Gmail stated to have sent from iPhone dated 17.08.2016 from Vikash Roy, wherein it is stated that they would definitely release the payments, once they receive the payments from their advertisers. However, there is no further corroboration about the alleged mail by the Petitioner and it did not refer as what is outstanding due and it is prior to impugned demand notice, and the subsequent correspondence and Police are serious pre-existing dispute between the parties for the services rendered.
It is a settled position of law that the provisions of the Code can be invoked where fundamental issues like debt, default, are not in dispute as it is summary proceedings in nature. Relevant issues to be examined in a Petition filed U/s 9 of the Code is whether there are debt and default in question and whether any pre-existing dispute is there or not - It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount.
The Petitioner has failed to make out any case that the debt and default in question is not in dispute, so as to initiate CIRP against the Corporate Debtor as prayed for - Petition dismissed.
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2019 (12) TMI 1354
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- In the instant Application it is seen that the Interim Resolution Professional has acted as an extra constitutional Authority beyond the scope of the I&B Code, 2106 as well as the Order passed by this Adjudicating Authority in terms of I&B Code, 2016 thereby seriously undermining the CIR Process initiated by this Authority against the Corporate Debtor and rather subverting it.
It is required to be noted that immediately after initiation of the CIR Process, it is the bounden duty on the part of the Interim Resolution Professional to issue paper publication calling for the claims from the Creditors in terms of Regulation 6 (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Debtor) Regulations, 2016, within 3 days from the date of receipt of the copy of the Order and he cannot hold his hands from issuing the said publication under any circumstance.
Since this Tribunal as Adjudicating Authority, does not have the power to take action against the Interim Resolution Professional/Resolution Professional/Liquidator, we are constrained to forward this Order along with MA/1327/2109 to the IBBI being the Regulator for a suitable action to be initiated against the Interim Resolution Professional as contemplated under the Scheme of the I&B Code, 2016 and the Regulations framed there under by IBBI, as may be warranted in the circumstances.
Registry is directed to communicate the IBBI for suitable and necessary action as against the Interim Resolution Professional.
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2019 (12) TMI 1353
Sanction of proposed Company Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- We considered the contents and salient features of the proposed company scheme and have gone through the report and observations of the Regional Director and Official Liquidator, respectively. We also perused the reply affidavit submitted by the petitioner companies and the undertaking/assurance given therein can be accepted and acted upon. Hence, we find the proposed company scheme appears to be reasonable and bona fide for sanctioning of the Scheme of amalgamation, which is not going to prejudice to the paramount interest of its shareholders, creditors not it appears to be detrimental to the public interest at large. Therefore, the proposed scheme of amalgamation of Essen Polymers Private Limited with Essen Multipack Limited deserves to be sanctioned.
Petition allowed.
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2019 (12) TMI 1352
Dissolution of the Corporate Debtor - Section 54(2) of I&B Code - Release of closing balance in liquidation bank account and fixed Deposit Account to stakeholders/Liquidation expenses - HELD THAT:- The dues of the Government are not considered as a secured debt under Section 3(31) of the Code, do not get precedence over secured creditors under Section 53 and do not fall in Clause(b) of Section 53, but fall under Clause(e) of Section 53 - Hence, it is clear that amount dues to the Central Govt. and State Govt. shall be paid after the dues of the financial secured creditors are paid. In this case, the admitted dues of the secured creditor were ₹ 139.60 Crores, whereas the liquidation proceeds of ₹ 35.60 crores could only satisfy 25.5% of the secured financial creditor's admitted dues. Hence, there is no assets available for payment of dues of the Income Tax Deptt., Govt. of India and State Tax Deptt., Govt. of Gujarat.
Hence, the claims of the Income Tax Dept for the assessment for the year 2009-2010 and 2012-13 are not paid as there is no liquidation assets left over for payment to the Income Tax Deptt.
Matter disposed off.
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2019 (12) TMI 1351
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is found that as per the original agreement dated 30th August, 2019 entered into between and operational creditor and the corporate debtor, the first instalment of ₹ 9.00 lacs were to be paid within seven days of signing the settlement agreement dated 30.08.2019 and the last instalment of ₹ 2,41,974/- on 29.02.2020. On perusal of the original agreement dated 30.08.2019 and the schedule given at page No. 21 of the reply shows different due dates of instalment and it is not the replica of agreement dated 30.08.2019 which is agreed between the parties - On perusal of the agreement dated 30.08.2019 it is clear that there is/are default in payment and as such the corporate debtor entered into agreement dated 30.08.2019 with covenant to pay as per the schedule mentioned in the agreement but that too corporate debtor has defaulted and has not paid a single instalment.
On perusal of the records it is also found that the respondent has not raised any dispute regarding the debt payable to the operational creditor.
Thus, the petition is complete in all respect.
Petition admitted - moratorium declared.
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2019 (12) TMI 1350
Validity of Valuation report submitted to the liquidator - validity of sale notice - direction to liquidator to pay the cost of the valuers appointed till date - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - Whether the valuation and the consequential sale notice is in accordance with the provisions of Regulation 35(3) & (4) of the IBBI (Liquidation Process), Regulations, 2016?
HELD THAT:- As per the record the land continues to be the agricultural land as the whooping charges of change of land use amounting to ₹ 8.5 crores due in 2002 were not deposited which were presently ₹ 110 crores. Despite that we granted ten days time to the applicant to produce any evidence before the liquidator/valuers within ten days commencing from 24.04.2019. We also clarified that if no evidence concerning the nature of land was produced then the valuers were to proceed with valuation as per the evidence on record and the liquidator was to proceed with the auction in accordance with the liquidation process regulations. However, no evidence before liquidator/valuers was produced by the applicant. That order was challenged before Hon'ble NCLAT and it was dismissed as withdrawn on 17.05.2019. The order dated 24.04.2019 attained finality and was required to comply with in letter and spirit
There is sufficient evidence showing that the land in question is agricultural land irrespective of its use. The revenue record in the form of Jamabandis has been placed on record and presumption of truth attaches to the Jamabandis under the Punjab Land Revenue Act as applicable to Haryana. The Jamabandis are prepared every four years in order to ascertain the proprietorship of the land. The photocopies of the Jamabandis have been placed on record. A perusal of the revenue record shows that the nature of land is Shamlat and it is in possession of M/s. Forging Pvt. Ltd. (Company in Liquidation). These entries are consistent starting from the year 1980-81 to 2000-01. However for the purposes of the rent, cultivator is stating to be paying rent for the factory - The valuers could not have proceeded on the basis that the land in question is industrial land as it would result in misleading the prospective bidder. No potential bidder could have purchased this land as industrial or commercial because there was no conversion of land use and as per the statement of the applicant himself initially the charges for conversion of land amounting to ₹ 8.5 crores were not paid and presently the charges amounted to ₹ 110 crores. The valuers would have been guilty of misconduct had they proceeded on the basis that the land is industrial/commercial in nature.
A potential bidder cannot be sold the property as Industrial because it continues to be the agricultural land and in order to convert it into industrial or commercial then huge dues are payable to the state authorities. It must be remembered that when land is converted 'Industrial" huge sources provided by the State come under stress which need to be paid. Therefore, we are unable to persuade our self to accept the aforesaid information given under the RTI to the applicant as a proof that the land in question must be regarded as commercial.
Validity of sale notice - other submission made by the applicant is that the sale deed for the property in the same vicinity would show that the value of the land of the corporate debtor is more than 120 crores and the same has been ignored by the liquidator - HELD THAT:- The fact remains that if the nature of the land is agricultural in record and it has never change its land use then it could not be sold as a commercial/industrial property. In any case the liquidator has done well by issue sale notice describing the land 'AS IS WHERE IS, AS IS WHAT IS AND WHATEVER THERE IS BASIS'. Therefore, there is no substance in the present application.
We are further constraint to observe that the sequence of event inclined us to believe that the effort made by the applicant is only to delay the liquidation process without any basis and indulge in baseless litigation endlessly. For the conversion of agricultural land to commercial/industrial huge amount is payable and the valuers and the liquidator could not be expected to treat the land commercial in nature. The liquidation order has been passed on 26.10.2018 and sufficient time has already elapsed. The applicant has successfully delayed it but no further delay would be warranted at the instance of the applicant and the application warrants dismissal.
The application is dismissed with cost of ₹ 50,000/- payable to the Prime Minister's Relief Fund - the liquidator is directed to accept the highest bid as the amount stand already deposited and proceed with the liquidation process as per law.
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2019 (12) TMI 1349
Classification of imported goods - heavy melting scrap HMS - to be classified as serviceable parts or not - eligibility for exemption under N/N. 21/02-Cus - Department opined that the impugned goods were secondary / defective / rejected stock comprising of stainless-steel U and C channels of grade 410 (magnetic) and HR coils / strips of grade 410 (magnetic) - HELD THAT:- The adjudicating authority has not explained as to why various certificates submitted by the appellants were not accepted. It is not known as to why the department has not allowed the request for mutilation of the goods before clearance. Chartered Engineer’s examination was also not ordered. This being the factual milieu, Department cannot reclassify the goods unilaterally on the basis of the examination report of officers alone. Technical opinion given by the pre-inspection certificate and by M/s. Alloys and Metal Test Services, cannot be disregarded. Also the fact that all the shipping documents describe the goods as steel melting scrap only cannot be denied. Under such circumstances, denying the classification and the benefit of exemption are not tenable. For the same reason, the department has not made its case for redetermination of the value of the impugned goods for the purpose of assessment.
The declared classification and valuation cannot be rejected only on the basis of examination report of the officers, more so, when technical reports were not in favour of the view taken by the Revenue. Therefore, taking recourse to LME prices is also not acceptable. It is not the case of the department that to value over and above the price declared in the invoice was paid to the overseas supplier. It is also not the case of the department that the said scrap was not utilised as scrap. Therefore, Department has not given forth any evidence to support the allegation.
Appeal allowed - decided in favor of appellant.
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9911796707
