2022 (7) TMI 462 - Tri - Insolvency and Bankruptcy

Seeking direction for updation of the revenue records and for carrying out the demarcation of the subject property of the corporate debtor - Section 60(5) of the IBC, 2016 - HELD THAT - Considering the fact that the plot which was identified through the physical inspection of the plot is much smaller than the size of the land as reflected in the records of the corporate debtor, it is essential to ascertain the exact holding over which the corporate debtor has ownership rights for the purposes of subsequent sale of the liquidation assets. As laid down under section 35 36, it is the duty of the liquidator to take all such measures to protect and preserve the assets of the corporate debtor. For this purpose, a proper demarcation of the properties and updation of revenue records are required. The respondents have therefore, directed to update the revenue records and carry out the demarcation of the subject property of the corporate debtor located at Village Jugiana, Ludhiana in accordance with law. Application allowed.

Summary

Issues:
1. Application under Section 60(5) of the IBC, 2016 for directions to update revenue records and carry out demarcation of subject property.

Detailed Analysis:

Issue 1: Application under Section 60(5) of the IBC, 2016 for directions to update revenue records and carry out demarcation of subject property

The application filed under Section 60(5) of the IBC, 2016 pertained to the liquidation proceedings against the corporate debtor, where the Liquidator sought directions for updating revenue records and conducting demarcation of the property. The property in question, located at Village Jugiana, Ludhiana, was subject to mortgage by Kotak Mahindra Bank. Discrepancies arose regarding the exact size of the land, with valuation reports indicating varying measurements. Despite efforts by the Liquidator to ascertain the accurate land holdings through a title search and correspondence with the respondents (Naib Tehsildar and Patwari), no response was received, hindering the sale and release of the subject land.

The Tribunal observed that as per the provisions of Section 35 and 36 of the IBC, the Liquidator is entrusted with powers and duties to safeguard and manage the assets of the corporate debtor, including taking measures to protect and preserve assets, and to apply for necessary orders for liquidation. Given the discrepancies in land measurements and the importance of ascertaining the exact ownership rights for subsequent sale of assets, the Tribunal directed the respondents to update revenue records and conduct demarcation of the subject property in compliance with the law. The order was also to be served on relevant authorities for necessary compliance.

In conclusion, the Tribunal allowed the application under IA No.152/2021, emphasizing the significance of accurate demarcation and updating of records to facilitate the liquidation process effectively and ensure proper management of the corporate debtor's assets.