TMI Blog2021 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... does not exempt the liquidator from following any rules of RIICO and they have to abide by it and accordingly use the plot which is in question. RIICO being directed to restore the allotment of the said property in favour of the CD once all the pending dues are submitted. Further RIICO is also directed to facilitate the transfer property to the successful bidder within reasonable time after payment had been done - Application disposed off. - IA/1492/2021 and IA/2569/2021 in IB-1075/ND/2018 - - - Dated:- 18-11-2021 - P.S.N. Prasad, Member (J) And Narender Kumar Bhola, Member (T) For the Appellant : Sandeep Kumar Bhatt, Liquidator and Anuj Bhandari, Advocate For the Respondents : Anuj Bhandari, Advocate and Sandeep Kumar Bhatt, Liquidator ORDER Authored By : P.S.N. Prasad, Narender Kumar Bhola P.S.N. Prasad, Member (J) and Narender Kumar Bhola, Member (T) 1. The present applications i.e., IA- 1492/2021 AND IA-2569/2021 have been field by the liquidator under Section 35(n) and 60 (5) of the Insolvency and bankruptcy Code, 2016 and rule 11 of the NCLT Rules read with regulation 9 (1) (c) and regulation 10(1) of the Liquidation Process Regulations, 2016 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation 10(3) of the liquidation process regulations, 2016 which was received by the respondent on 3.3.2021. The liquidator mentioned clearly that he will file application to Tribunal to have property and contract disclaimed as per regulation 10 of Liquidation Process regulations, 2016 but no response to the same is received till date. vii. There is only one admitted claim to the tune of ₹ 354.38 Cr of Financial Creditor namely stressed assets stabilization and the entire assets of the corporate debtor are mortgaged to the Financial Creditor. viii. The PF department has also filed claim of ₹ 15.88 Lac which is received by the liquidator ON 18.2.2021 AFTER 12 months of LCD i.e. 25.2.2020. This claim pertains to year 2001-02. The claim filed is time barred and is also in violations of the provisions of section 53 (1) (b) (i) and 53(c) of IB Code, which prescribes that the claim of workmen/Employees may be paid for preceding 24 months and 12 months respectively, moreover filing of claim to the liquidator is time barred now. ix. Liquidator further advertised of sale of land and building on 25.2.2021 in the business standard, Hindi and English and fixed the E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violated the moratorium under section 33(5) of the IB Code. xiii. As per letter dated 8.10.2020 the respondent had asked the liquidator/CD that why allotment should not be cancelled and fixed the hearing date on 26.10.2020 the liquidator filed his representation and by above order dated 3.3.2021, it is communicated that the allotment was cancelled on 7.8.2003 which is self-contradictory. xiv. It is pertinent to mention that the corporate debtor had been running its operations successfully with effect from 1995 to 2003 and had building constructions, plant and machinery with boundary. The constructed area of the building is 2400 Sq. Mtrs. Shed and 3400 Sq. Mtrs. RCC. The land and building are on E bidding which is scheduled on 10.3.2021, whereas plant and machinery has already been sold by the liquidator by E-Auction on 19.08.2020. xv. R1 had appointed the nominee director to the CD named as A.K. Sharma, which is evident from the annual accounts of the company of Financial Year 1999-2000. Hence, the verdict of the R1 that the plot is cancelled w.e.f. 7.8.2003 on account of non-completion of building and starting commercial operations is wrong. xvi. The responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1995 is annexed herewith and marked as Annexure R/2. vii. As CD wanted to keep the industrial unit as mortgage against loan from IDBI, a copy of the said lease deed was sent by RIICO to IDBI stating that breach of any condition of the lease deed would also be considered as breach of mortgage and that the mortgage was allowed subject to various provisions the lease deed would also be considered as breach of mortgage and that the mortgage and that the mortgage was allowed subject to various provisions of the lease deed. viii. The CD thereafter started defaulting in making various payment, raised unauthorised construction and breached various conditions of the lease deed and RIICO Land Disposal Rules, 1979. ix. RIICO sent a demand notice dated 3.11.1999 asking CD to make due payments. However, no payment was made by the CD to RIICO thereby violating the terms of lease deed and RIICO Land Disposal Rules, 1979. As no payment was made by CD, RIICO sent notices dated 3.11.99, 1.6.2000, 30.5.2001, 15.10.2001, 13.2.2002 and 21.5.2002 seeking payment of the due amount failing which the allotment of the plot shall be cancelled and lease would be terminated. The same had been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elled on 7.8.2003. The Estate officer further issued notice dated 3.2.2021 to the liquidator to appear before on 17.2.2021. xvi. The learned liquidator replied to the notice dated 8.10.2020. It is to be noted that this is for the first time the liquidator was well aware that the allotment has been cancelled by RIICO on 7.8.2003. xvii. After taking consideration the reply filed by the liquidator, the learned estate officer vide its order dated 3.3.2021 held that the allotment of the plot no. 121 Matsya Industrial Area was cancelled by RIICO on 7.8.2003 and the lease deed was terminated. The CD was therefore held to be an unauthorised occupant under the Rajasthan Public Premises Act, 1994 and was directed to handover possession of the plot to RIICO within 30 days of the order. A copy of the order dated 3.3.2021 of the estate officer is annexed herewith and marked as Annexure R/11. xviii. On 10.3.2021 RIICO again informed the liquidator that the allotment of the plot No. 121 MIA has already bee cancelled on 7.8.2003 and that application filed by RIICO for taking possession has been allowed by the estate officer. RIICO requested liquidator to stop the process of e-auctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t letter. iv. On 24.10.1994, physical possession of the Industrial plot was handed over by RIICO to Corporate Debtor. v. On 7.11.1994 M/s. J.L. Spinning Mills Limited changed its name to J.L. Knit India Limited. vi. A lease agreement dated 23.2.1995 was executed between RIICO and Corporate Debtor. vii. As CD wanted to keep the industrial unit as mortgage against loan from IDBI, a copy of the said lease deed was sent by RIICO to IDBI stating that breach of any condition of the lease deed would also be considered as breach of mortgage and that the mortgage was allowed subject to various provisions the lease deed would also be considered as breach of mortgage and that the mortgage and that the mortgage was allowed subject to various provisions of the lease deed. viii. The CD thereafter started defaulting in making various payment, raised unauthorised construction and breached various conditions of the lease deed and RIICO Land Disposal Rules, 1979. ix. RIICO sent a demand notice dated 3.11.1999 asking CD to make due payments. However, no payment was made by the CD to RIICO thereby violating the terms of lease deed and RIICO Land Disposal Rules, 1979. As n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises act, 1994 for eviction of the CD. A notice was issued by the estate officer dated 8.10.2020 to the CD as to why order of eviction shall not be passed as the lease has already been cancelled on 7.8.2003. The Estate officer further issued notice dated 3.2.2021 to the liquidator to appear before on 17.2.2021. xvi. The learned liquidator replied to the notice dated 8.10.2020. It is to be noted that this is for the first time the liquidator was well aware that the allotment has been cancelled by RIICO on 7.8.2003. xvii. After taking consideration the reply filed by the liquidator, the learned estate officer vide its order dated 3.3.2021 held that the allotment of the plot no. 121 Matsya Industrial Area was cancelled by RIICO on 7.8.2003 and the lease deed was terminated. The CD was therefore held to be an unauthorised occupant under the Rajasthan Public Premises Act, 1994 and was directed to handover possession of the plot to RIICO within 30 days of the order. xviii. On 10.3.2021 RIICO again informed the liquidator that the allotment of the plot No. 121 MIA has already been cancelled on 7.8.2003 and that application filed by RIICO for taking possession has been al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liquidator of the illegal cancellation of allotment. Further, after perusal of the documents shared by RIICO much later clearly shows that the cancellation letter was not signed by the unit head as per rule 24(1) of RIICO Rules and hence any action after the void cancellation notice dated 7.8.2003. iv. Till 6.10.2017, RIICO had been asking the CD to pay the dues and apply for restoration and when the liquidator applied as per their rules, then the restoration was denied vide order dated 25.6.2021. v. The liquidator was made aware by RIICO for the first time about cancellation of allotment only on 8.10.2020 and hence the application was well within limitation. vi. RIICO vide several letters particularly letters dated 28.5.2015, 14.07.2017 6.10.2017 had asked the CD to pay the dues and apply for restoration, hence RIICO was willing to restore on payment of dues. vii. As per RIICO rules 24(3) there is no time limit applicable for cases prior to 17.6.2014 and hence there is no reason to reject restoration. viii. Liquidator submitted copy of the allotment file from the unit head Alwar on 23.06.2021 and it is clear that before passing order, no approval is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atorium u/s. 14 of the Code was in force or the said proceedings were barred in terms of Section 32A (2) of the Code. 13. In Principal Commissioner of Income Tax vs Monnet Ispat and energy limited, [2018] SC, it was laid down that the Code would override anything consistent in any other enactment including the Income Tax and that Income Tax dues, which are in the nature of crown debts, would not take precedence even over secured creditors, who are private persons. 14. Further, Hon'ble Supreme Court in the matter of Innovative Industries Limited vs ICICI Bank and Another [2-17] SC and another had held that any proceeding under any law against the 'CD' cannot proceed once Moratorium is in effect. 15. Legislature chose to make the provisions of IBC superior to other applicable laws containing special provisions. 16. Therefore, Tribunal is of the view that the liquidator should pay all the dues to RIICO which are pending from CD. This order does not exempt the liquidator from following any rules of RIICO and they have to abide by it and accordingly use the plot which is in question. 17. RIICO being directed to restore the allotment of the said property in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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