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2020 (2) TMI 1407 - Tri - Insolvency and BankruptcyLiquidation Order - transfer of possession of two properties mortgaged by the corporate debtor - only aspect that remains is that possession has not been handed over in favour of R3 prior to the date of declaration of moratorium in order to complete the transfer - Section 33(1)(a) of IBC, 2016 - HELD THAT - The sale certificate has not so far been engrossed in a stamp paper. In such circumstances, R 3 cannot claim legal title or ownership over the Bankura property. In the said circumstances, we have no hesitation to hold that the Bankura property is the property of the Corporate Debtor as on the date of declaration of moratorium i.e as on 20.08.2019 and R3 has no right to retain possession of the said property. In respect of Howrah property, since the R1 was obliged not to conclude the sale as per the undertaking dated 16.08.2019 before the DRT, the issuance of sale certificate and alleged handing over of possession of the Howrah property to R2 become illegal because as on the date of declaration of the moratorium the said undertaking was in force. More-over, the said sale certificate also was not engrossed on stamp paper and no evidence was led in to prove that the Howrah property was handed over to R2 as attempted to prove on the side of R1. Taking into account the overall factual scenario, and the fact that the possession of the property has not been granted in favour of R3 before the date of declaration of moratorium and since no evidence was led in other than sale certificate to prove that possession was handed over to the R2 and that issuance of sale certificate in favour of R2 being found illegal and issuance of sale certificate in favour of R3 was subsequent to the date of declaration of moratorium, we are of the view that Bankura property as well as Howrah property are the assets of the CD and that R2 and R3 has not obtained any legal ownership or title as claimed by them. In short, R2 and R3 have no right to retain the properties and the property belongs to the Corporate Debtor. As regards the Bankura Property, it was in the possession of the R1 as on the date of declaration of moratorium. That property ought not to have been permitted to be transferred to the purchaser. So RP himself who was duty bound to safeguard the property did not take as much care as was expected at least from a prudent man. However, we are not going deep into the circumstances behind the handing over possession of the disputed property by R1, in the case in hand. The application is liable to be allowed by directing the RP to recover possession back from the auction purchasers and to be listed as liquidation assets and to have valuation of the properties in accordance with provisions of Code, and Regulations. An application filed by two of the members of the suspended board of directors of the Corporate Debtor, under section 60(5) challenging the inclusion of an operational creditor's claim and its representative in the CoC constituted by the RP. When this application was taken up for hearing, the Ld. Sr. Counsel for the applicant did not press it for hearing. Moreover, the CIRP period of 180 days have already expired. The prayer also has become infructuous. Hence the same is liable to be dismissed - An application filed by the RP under section 19 and 70 of the Code alleging non-cooperation from the directors of the suspended board of Corporate Debtor. Since the CIRP period expired on 15.02.2020 has not been extended and RP prays for passing an order of Liquidation for want of resolution plan, we are closing the CA without entering into merits of the allegations leveled by the RP as against the directors. This application also requires no further consideration. Accordingly it is liable to be dismissed. No resolution plan was obtained by the RP within the period of 180 days, and the CoC has not decided for extension of CIRP period, we have no other alternative than to pass an order requiring the Corporate Debtor to be liquidated in the manner as laid down in Chapter III of the Code - In the said peculiar circumstance brought out in the case in hand it appears to us that it is fair and just to appoint an independent insolvency professional other than proposed by the PNB. The Corporate Debtor namely, Amrit Hatcheries Private Limited is ordered to be liquidated - Application allowed by directing the Liquidator to take possession of Howrah property from R2 and Bankura property from R3 and include the same in the liquidation assets. The liquidator is at liberty to appoint valuers for valuing the said properties in accordance with the provisions of the Code and Regulations.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Extension of CIRP Period 3. Liquidation of Corporate Debtor 4. Transfer of Possession of Mortgaged Properties 5. Inclusion of Operational Creditor's Claim in CoC 6. Non-cooperation from Directors of Suspended Board 7. Condonation of Delay in Filing Claim Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) The application under Section 9 of the Insolvency and Bankruptcy Code, 2016, was filed by an Operational Creditor against the Corporate Debtor. The application was admitted on 20th August 2019, and Mr. Khetan Mukhija was appointed as the Interim Resolution Professional (IRP), later replaced by Mr. Arun Kumar Gupta. 2. Extension of CIRP Period The Resolution Professional (RP) convened eight meetings of the Committee of Creditors (CoC). The last day for receiving resolution plans was 7th February 2020, but no plan was submitted. The CoC discussed extending the CIRP period but did not vote on the resolution. Consequently, the RP did not file an application for an extension under Section 12(2) of the IBC, 2016, leading to the likely liquidation of the Corporate Debtor under Section 33(1)(a) of IBC, 2016. 3. Liquidation of Corporate Debtor Due to the lack of a resolution plan and the CoC's failure to approve an extension, the Tribunal ordered the liquidation of the Corporate Debtor. Mr. Bijay Murmuria was appointed as the Liquidator. The Liquidator was directed to issue a public announcement and proceed with the liquidation process as per Chapter III of the Code. 4. Transfer of Possession of Mortgaged Properties The RP filed applications regarding the transfer of possession of two properties mortgaged to Punjab National Bank (PNB). The properties were sold before the declaration of moratorium but were contested for being handed over during the moratorium. The Tribunal found that the sale of the Bankura property was not completed before the moratorium, making the transfer invalid. The Howrah property sale was also deemed illegal due to an existing injunction. Both properties were ordered to be included in the liquidation assets. 5. Inclusion of Operational Creditor's Claim in CoC An application challenging the inclusion of an Operational Creditor's claim in the CoC was dismissed as the CIRP period had expired, making the prayer infructuous. 6. Non-cooperation from Directors of Suspended Board An application filed by the RP under Sections 19 and 70 of the Code alleging non-cooperation from the directors was dismissed since the CIRP period had expired and the RP was praying for liquidation. 7. Condonation of Delay in Filing Claim An application by an Operational Creditor for condoning the delay in filing its claim was disposed of with liberty to file the claim with the Liquidator in accordance with the Code and Regulations. Conclusion: The Tribunal ordered the liquidation of the Corporate Debtor, appointed Mr. Bijay Murmuria as the Liquidator, and directed the inclusion of disputed properties in the liquidation assets. The applications challenging the inclusion of claims and alleging non-cooperation were dismissed, while the application for condonation of delay was disposed of with liberty to refile. The Tribunal emphasized strict adherence to the provisions of the Code and Regulations in the liquidation process.
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