2019 (4) TMI 1974 - Tri - Companies Law

Sale of Landed property - HELD THAT - It is an admitted fact that the plots are booked and sold by various sale agents in respect of various land banks located throughout India, and therefore, the sales reports generated out of such bookings and sale deeds registered shall be submitted to the Committee every week - In case, any issue arises with regard to fixing ERP rates, on which there is difference of opinion among the members, the same will be resolved by the Observer amicably. It is made clear that all the pending booking shall also be subject to the ERP rates fixed by the Committee and the procedure mentioned. The Interim Relief prayed stands granted with modifications as recommended. The matter is posted for making final submissions in relation to the interim prayers made under Para U-B (IV) (VI) along with the issue of maintainability of the Petition.

Summary

Issues: Alleged inadequate consideration in sale of landed property by Respondents.

The judgment by the National Company Law Tribunal, Chennai, involved allegations of inadequate consideration in the sale of landed property by Respondents. The Counsel for the Petitioners claimed that the Respondents were selling the property below guideline values. To address this issue and protect the interests of the company, a five-member Committee was constituted, with representatives appointed by the Respondents and the Petitioners, along with an Observer. The Committee's mandate was to decide on Enhanced Recovery Price (ERP) rates based on market values in the property locations.

Analysis:

The judgment highlighted the formation of a Committee to address the concerns raised by the Petitioners regarding the sale of landed property by the Respondents. The Committee, consisting of representatives from both sides and an Observer, was tasked with determining ERP rates in line with prevailing market values. This step aimed to ensure fairness and transparency in the property transactions and protect the interests of the company.

The judgment emphasized the importance of submitting sales reports generated from property bookings and registrations to the Committee regularly. These reports were required to contain detailed information such as layout names, party names, booking dates, plot details, rates, and other relevant data. By mandating the submission of such reports, the Tribunal aimed to facilitate informed decision-making by the Committee regarding ERP rates.

In cases where disagreements arose among Committee members regarding ERP rates, the judgment specified that the Observer would intervene to resolve such issues amicably. This provision was crucial in ensuring smooth functioning and consensus within the Committee, ultimately leading to fair determinations of ERP rates. Additionally, the judgment clarified that all pending bookings would be subject to the ERP rates fixed by the Committee, ensuring uniformity and consistency in property transactions.

Furthermore, the judgment granted interim relief requested by the Petitioners, subject to modifications recommended by the Tribunal. The matter was scheduled for final submissions on interim prayers and the issue of the petition's maintainability. The judgment also allowed the Observer to determine their remuneration based on mutually agreed terms and conditions, highlighting the flexibility provided in the appointment of the Observer.