2013 (10) TMI 672 - HC - Companies Law

Winding up Petition Report of the Official Liquidator - Held that - So far as the present report of the OL was concerned, it was noticed that the OL proposed to auction sale certain properties which were presently in the hands of the OL, however in present case also the details regarding the measurement or clarity regarding the title ownership and as to whether there was any encroachment are not available - The aspects have been pointed out by the advocate for OL - though OL had urgency to dispose of the properties in question and the possession had been taken since quite long time and there were no fund available in the account the company, however if the OL provided the task of issuing advertisement then in absence of these details the exercise may not yield any result Several instructions were issued to the OL.

Summary

Issues:
1. Valuation and possession of properties by the Official Liquidator (OL)
2. Defects in valuation reports and possession procedures
3. Directions for OL regarding possession, valuation, and sale of properties

Analysis:
1. The judgment addresses the issues related to the valuation and possession of properties by the Official Liquidator (OL). The OL presented a summary of 11 properties tentatively identified as company assets in liquidation. However, the details gathered from the Registrar of Companies (ROC) were incomplete, lacking specifics on ownership, possession, and property measurements. The valuation reports submitted by the valuer also lacked crucial details on land measurements and ownership verification, indicating a lack of thorough examination before valuation.

2. The Court highlighted deficiencies in the possession procedures followed by the OL, noting a recurring pattern of inadequate precautions and documentation. The judgment emphasized the need for specific guidelines to ensure minimum requirements are met during possession, sale, and valuation processes. The Court directed the OL to collect property details from various sources, cross-check with revenue records, draw panchnamas during possession, and ensure independent property measurements and ownership verification by valuers.

3. To address the shortcomings identified, the Court issued detailed directions to the OL for improving possession, valuation, and sale procedures. The directions included steps such as drawing panchnamas during possession, independent property measurements by valuers, verification of encumbrances, and inviting claims from workers and creditors promptly. Additionally, the judgment mandated the inclusion of specific property details in sale advertisements, periodic reports from security agencies, and comprehensive documentation of all proceedings related to the liquidation process. The OL was instructed to undertake immediate actions to rectify deficiencies in the possession and valuation processes for effective asset realization in the liquidation proceedings.