TMI Blog2019 (12) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 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 That order was challenged before Hon'ble NCLAT and it was dismissed as withdrawn on 17.05.2019.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 po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. - CA No. 1079(PB)/2019 in (IB)-455(PB)/2017 - - - Dated:- 4-12-2019 - M.M. Kumar, C.J. (President) and Santanu Kumar Mohapatra, Member (T) For the Appellant : Sudhir Kr. Makkar, Karan Gandhi, Rajeev Bajaj, Sagarika, Sudiksha Saini, Advocates, Sumesh Dhawan, Vatsala Kak and Geetika Sharma, Advs. For the Respondents : Vivek Sibal, Adv., Varun K. Chopra, Gauri Rishi, Srishti Juneja, Advs., Gurtejpal Singh, Manish Rajput, Rakesh Kumar and Aashish Khattar, Advs. ORDER M.M. Kumar, C.J. (President) CA-1079(PB)/2019:- 1. This is an application filed by the erstwhile director and shareholder of the Corporate Debtor-Company in Liquidation (M/s. Forging Pvt. Ltd.) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code'). The prayer made in this application is to set aside the valuation report submitted to the liquidator by SCS Consultants of Mr. Anil Kumar Saxena and Mr. Sunil Dhingra. A consequential prayer is to set aside the sale notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er agricultural land and it has to be regarded as industrial land. However, that application was disposed of on 24.04.2019 granting 10 days time to the applicant to produce any evidence to show that the land in question is 'Industrial in nature'. The relevant part of that order shall be considered in the succeeding paras. 5. The applicant is back with a similar prayer in the present application which has been filed on 31.05.2019 and the following reliefs have been sought:- I. Set aside the valuations reports received by the liquidator from SCS Consultants of Mr. Anil Kumar Saxena and Mr. Sunil Dhingra; II. Set aside the sale notice dated 15.05.2019; III. Appoint the valuers for ascertaining the value of the land of the Corporate Debtor in terms of IBBI (Liquidation Process) Regulations, 2016 on the basis of industrial nature and applicable TOD policy of Town Country Planning, Haryana Government as applicable; IV. Direct the Liquidator to pay and bear the cost of the valuers appointed till date for the purposes of ascertaining the value of the land of the Corporate Debtor; V. Direct the Liquidator to pay and bear the cost employed will date in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by the earlier valuers. According to the allegations, the present valuers have used cost residual method for the purposes of determining the value of the land (Annexure 8), on the basis that the land is agricultural in nature. The applicant has also adversely commented upon and the liquidator by alleging that his sole purpose is to diminish the value of the land and dispose it of at a minimum value at an early date and that the liquidator is in hot hurry as the sale of the land would result in speedy recovery which would defeat the basic purpose of the Code i.e. maximization of the assets. It is insisted that the land in question is industrial in nature which is evident from the document issued by MCF on 29.05.2019 (Annexure 9) and a letter dated 16.12.2002. It is alleged that the aforesaid letter shows the details concerning change of land use. (Annexure 10). It is claimed that an agreement for change of land was executed on 24.10.1978. It is claimed that the sale notice dated 15.05.2019 describing the land as agricultural deserved to be set aside in toto. The applicant asserts that the Corporate Debtor falls under the TOD Zone approved by the Haryana Government and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the land became Industrial in nature. The entry in letter dated 29.05.2019 point No. 4 have also been resisted by submitting that the same is for the purposes of house tax. For tax purpose it has been treated as industrial land. It has also been submitted that in the letter dated 16.12.2002, the MCF clearly pointed out that the corporate debtor were to pay the aforementioned external development charges within a period of 30 days of the notice failing which legal action in accordance with the conditions incorporated in CLU-II agreement and as per the provisions in Act was to be initiated. They were also ask to submit certified copy of the completion certificate in respect of the buildings existing at site. Nothing has been placed record to show the compliance of the aforesaid conditions so as to conclude that there was change of land use. 10. In a separate reply filed by the sole financial creditor-Indiabulls Housing Finance Pvt. Ltd. has taken the stand that the petition filed by the ex.-director is abuse of the process of the Court. According to the assertions made it is alleged that the applicant has time and again misuse/abuse the process of law with impunity and examp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter. He has not brought on record the correct fact as was indicated to him by his counsel on September 14, 2018. That being so it was a fit case where we could take action against the petitioner for filing a false affidavit under Section 340 Cr.P.C., so also for misusing the process of law and initiate criminal contempt against him. But at present, in view of the unconditional apologies expressed we let off the petitioner with a warning to remain careful in future, failing which we would take action against him. Copy of the Order dated 20.09.2018 passed by the Hon'ble Delhi High Court is annexed herewith and marked as Annexure-4. d) Further, the Hon'ble NCLAT, in an appeal being Company Appeal (AT) (Ins.) No. 423 of 2018, filed by the Applicant challenging the order dated 04.07.2018 of this Hon'ble Adjudicating Authority in the captioned company petition took into cognizance the misconduct of the Applicant. The Hon'ble NCLAT, while dismissing the said Appeal vide its order dated 02.08.2018, directed the Applicant surrender his passport to the Bench Officer with a direction not to leave the country without prior permission of this Tribunal. Copy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been placed on the minutes of 5th consultative meeting of the stakeholders of the corporate debtor held on 14.03.2019 wherein the applicant himself stated that on account of non-deposit of huge amount of demand of ₹ 8.50 crores raised on 16.12.2002 the land use could not be changed from agricultural to commercial and that the charges from conversion of subject land to commercial use presently were over 110 crores. The minutes of fifth consultative meeting dated 14.03.2019 have been placed on record (Annexure -10). It has also been asserted that ten days time granted by the order dated 24.04.2019 by this tribunal while disposing of CA No. 501 of 2019 to produce evidence with regard to the nature of the land. The order clarified that in case no supporting evidence was produced then the valuers were to proceed with the valuation as per the evidence already on record. However, no evidence could be produced nor any document were placed on record thereafter to prove that conversion charges of land in question from agricultural to commercial were ever paid in respect of the demand raised nor any document has been placed on record showing that the land was to be converted from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process of the court and has been continuously causing obstruction in the timely conclusion of the proceedings. It has been pointed out that against the liquidation order passed by us on 26.10.2018, the applicant preferred an appeal being Company Appeal (AT) (Insolvency) No. 779 of 2018 which was dismissed on 09.01.2019. Thereafter, a Civil Appeal being Civil Appeal no. 3363 of 2019 was filed before Hon'ble the Supreme Court challenging the order of the NCLAT and the appeal was dismissed vide order dated 16.04.2019 by observing as under:- Having heard Mr. Gopal Sankarnarayanan, learned Senior counsel appearing for the appellant, Mr. K.V. Viswanathan, learned Senior counsel appearing for the respondents and carefully scrutinizing the material available on record, we don't find any reason to interfere with the impugned order dated 9 January, 2019 passed by National Company law Appellate Tribunal at New Delhi in the Company appeal (AT) (Insolvency) No. 779 of 2018. We find no merit in the appeal. Accordingly, the Appeal is dismissed. 16. The financial creditor has also alleged that the permission for change in land use from agricultural to industrial was attempte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shareholding of Forging Private Limited (In Liquidation) sometime in 1994 (when the CD was under purview of the Sick Industrial Companies (Special Provisions) Act, 1985) and that no records of the CD prior to the time of their acquisition were available with them as the same had been lost in fire. He further mentioned that the subject land building of CD was in use for an industrial activity both prior to and after take-over of the CD by his Family. He further mentioned that there may be a notice regarding charges payable for change of land use received sometime in the past and a demand of about ₹ 8.5 crores was probably raised and not deposited, and that no documents are available with him in respect thereof. He also further mentioned that the charges for conversion of the subject land to commercial use are over ₹ 110 crores. 21. A perusal of the aforesaid statement made by the applicant clearly shows that the applicant's family took over the shareholding of the corporate debtor (company in liquidation) sometime in 1994 when it was under the purview of SICA and that he had no record available with him prior to that date which was lost in fire. It has been st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bidder with better price and then further time of ten days was granted to produce any evidence to facilitate the job of the valuers and the application was disposed of on 24.04.2019 by a detailed order which reads as under:- CA-501(PB)/2019, CA-741(PB)/2019 CA-740(PB)/2019:- The principal prayer in all these applications is this that with regard to the notice of sale concerning land in question dated 28.02.2019 issued by the liquidator. The Ex-Management in its application i.e. CA-501(PB)/2019 has alleged that the reserve price of the land fixed at ₹ 52.83 Crores may not be a fair price. Some dispute was raised with regard to the nature of the land stating whether it is agricultural or industrial? Mr. Sibbal, Ld. Senior Counsel with Mr. Deora, Liquidator and Mr. Dhawan, Ld. Counsel for sole financial creditor have made a joint statement that meeting of all the stake holders have taken place on 16.04.2019 and 23.04.2019 and a decision has been taken to go for fresh valuation from two valuers. We have also been shown the additional affidavit dated 23.04.2019 Progress Report (2nd Report, 1st Quarterly) filed through CA-741(PB)/2019 and attention was invited to 5th c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce before the liquidator within the next ten days so that the job of the valuer is facilitated. If no evidence with regard to the nature of land is produced then the valuer shall proceed with the valuation as per the evidence already on record. After the valuation is completed the liquidator shall take all necessary steps contemplated by the IBBI Liquidation Process Regulation, 2016. Accordingly, we find that the prayer made in the application would not require consideration at this stage and we dispose of the same with aforesaid observation. A copy of the valuation report may be furnished to the Ex-Management Mr. Karan Gambhir as per the procedure laid down in the process regulation. CA-501(PB)/2019, CA-741(PB)/2019 CA-740(PB)/2019 are disposed of. 24. A perusal of the above mentioned order shows 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AESI Act. In the reply dated 24.04.2016, the applicant stated that the notice was not maintainable and the financial creditor could not have proceeded in respect of the land in question as the said land/property was agricultural land. The bar of Section 31(i) of the SARFAESI Act by pleading that it was agricultural in nature. A copy of the reply has been placed on record by the financial creditor (Annexure-2). 27. The matter does not end there. The applicant challenged the action of the financial creditor before the DRT by filing SA No. 03 of 2017. A categorically stand has been taken by the applicant is that the land in question is an agricultural land. 28. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. A perusal of the aforesaid regulation shows that the two registered valuers are to be appointed to determine the fair and liquidation value and both the aforesaid registered valuers shall not be a relative of the resolution professional or a related party of the corporate debtor or its auditor or a partner/director of Insolvency Professional entity. (See Regulation 27). There is no allegation that the valuer who submitted the valuation report on 27.04.2019 were not registered or they suffered from any disability contemplated by proviso to Regulation 27 of the Insolvency Resolution Regulations. The Regulation 35 (1) further required to that two registered valuers were to submit an estimate of the fair and of the liquidation value computed in accordance with internationally value standard after physical verification of the inventory of the fixed assets of the corporate debtor. Again there is no allegation that the estimate of the fair and liquidation value has not been computed in accordance with the acceptable internationally value standard and same has not been done after physical verification of the fixed assets. The regulation vest the resolution professional (liquidator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liquidator the estimates of realisable value of the assets or businesses, as the case may be, computed in accordance with the Companies (Registered Valuers and Valuation) Rules, 2017, after physical verification of the assets of the corporate debtor. (4) The average of two estimates received under sub-regulation (3) shall be taken as the value of the assets or businesses.] 34. After 24.04.2019, no evidence has been produced before the new valuers by the applicant which could warrant a different view. Therefore, the valuers while conducting the valuation afresh has proceeded on the basis of the evidence which was produced by the applicant and which was already on record. 35. The applicant has made a valiant attempt to persuade us to accept that the land in question must be regarded as industrial in nature and for the aforesaid purposes he has placed on record a copy of the memo dated 29.05.2019 send by the MCF in response to an RTI application and the same read as under:- Sub: Regarding Information under RTI Act, 2005. With reference to your Letter dated 24.04.2019 on the subject cited above. The point wise reply mention in the application of Sh. Mona K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appreciate unwarranted insinuation and wholly baseless allegations made against the liquidator. In fact we find that the allegations are unfair and emerge from frustration. These allegations must be viewed in the light of the observations made by Hon'ble Delhi High Court where the conduct of the applicant is highlighted in the reply filed by the financial creditor. In its order dated 20.09.2018 passed in Writ Petition (C) No. 9799 of 2018 (Annexure 4), the following observations with regard to the conduct of the applicant have been made:- On going through various aspects of the matter as brought on record, we find that the petitioner has misused the process of law, has filed the petition on false and incorrect averments and has sworn a false affidavit with regard to various factual aspects of the matter. He has not brought on record the correct fact as was indicated to him by his counsel on September 14, 2018. That being so it was a fit case where we could take action against the petitioner for filing a false affidavit under Section 340 Cr.P.C., so also for misusing the process of law and initiate criminal contempt against him. But at present, in view of the unconditio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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