2017 (3) TMI 1008 - HC - Companies Law

Direction to Official Liquidator to release the mortgaged property - Held that - Considering the valuation report prepared by the Official Liquidator, and the valuation report prepared under the supervision of the applicant, the Official Liquidator and the applicant are directed to fix a reserve price for the sale of the property in question. The Official Liquidator is further directed to issue an advertisement, for placing the property in question, on auction block. However, it is hereby clarified that the date for auction shall be intimated to the applicant, and the applicant shall be present on the date of auction. Before, the finalization of the auction can be done, the bid offered by the bidders shall be brought to the notice of this court as required under the Act, and the Company Court Rules. An endeavour shall be made by both the parties to ensure that the auction is carried out efficiently. The applicant is permitted to appoint a Valuer within a period of one week from the date of receipt of certified copy of this order. The Valuer so appointed is directed to assess the valuation of the property in dispute within a period of fifteen days from the date of visiting the property. The Official Liquidator is directed to permit the Valuer, along with the applicant, for having assess to the property in question, on the date and the time fixed by the applicant. Once the valuation report is prepared by the Valuer appointed by the applicant, the applicant and the Official Liquidator shall declare the reserve price of the assets within fifteen days thereafter. The Official Liquidator is directed to issue an advertisement within a period of fifteen days from the date the reserve price is agreed upon by the parties. The auction shall be held after a period of thirty days from the date of advertisement; the report with regard to the bids offered shall be submitted before this Court within two weeks from the date of holding of the auction.

Summary

Issues:
1. Application for direction to release mortgaged property
2. Assignment of financial assets under SARFAESI Act
3. Cooperation between applicant and Official Liquidator for auctioning property
4. Appointment of Valuer for asset valuation
5. Fixing reserve price and conducting auction

Issue 1: Application for direction to release mortgaged property
The judgment involves an application filed by M/s. J.M Financial Asset Reconstruction Company seeking direction to release a mortgaged property, an industrial plot, from the Official Liquidator. The property was mortgaged with the State Bank of India, and the applicant, as per an assignment agreement, claims rights under the SARFAESI Act.

Issue 2: Assignment of financial assets under SARFAESI Act
Following an assignment agreement, the applicant asserts stepping into the shoes of the State Bank of India regarding the financial assets of M/s. Shakambari Fashions Private Limited. The Official Liquidator, having taken over the assets of the Company in liquidation, is involved in the proceedings.

Issue 3: Cooperation between applicant and Official Liquidator for auctioning property
The Official Liquidator expressed no objection to the applicant continuing proceedings under the SARFAESI Act and proposed mutual cooperation for auctioning the property to realize the money due. The applicant agreed to cooperate and sought directions for the valuation of assets by appointing a Valuer.

Issue 4: Appointment of Valuer for asset valuation
The applicant requested access to the property for valuation purposes, which the Official Liquidator had already assessed. The court directed the Official Liquidator to allow the applicant's Valuer to visit the property for valuation and participate in fixing the reserve price for the property.

Issue 5: Fixing reserve price and conducting auction
Both parties were directed to fix a reserve price based on valuation reports and conduct an auction. The applicant was permitted to appoint a Valuer for valuation within a week, and the auction was to be held after thirty days from the date of advertisement, with bid details to be submitted to the court.

In conclusion, the judgment addressed the application for releasing a mortgaged property, assignment of financial assets under the SARFAESI Act, cooperation for auctioning the property, appointment of a Valuer for asset valuation, and the process of fixing a reserve price and conducting an auction, providing detailed directions and timelines for the parties involved.