2022 (11) TMI 1072 - AT - Insolvency and Bankruptcy

Valuation of Land - Liquidation proceedings - Issue attained finality - Appellant sought fresh valuation - NCLT imposed cost of Rs. 1,00,000/- Valuation under Regulation 35(2) of the Insolvency and Bankruptcy Board of India, (Regulation Process) Regulations, 2016 - HELD THAT - The Learned Adjudicating Authority in the first round of litigation has not determined the nature of the land in question but has only decided the objections in regard to the valuation of land in question and that of the Sale of Notice, and observed that the Sale Notice was in accordance with the provisions of Regulations 35(3) (4) of the IBBI (Liquidation Process) Regulations, 2016 - This Tribunal has categorically held that there is no defect in the Valuation Report and that as per the Rules in the Sale Notice, it is mentioned that sale is on an as is where is basis and it is nowhere mentioned that the conversion fees for the land in question to Industrial Use is Rs.110Crs./- The Liquidator has brought to the Notice of this Bench that the land in question was earlier put to e-Auction during Liquidation in March 2019 with the Reserve Price of Rs.52.83Crs./- and no bid was received even at that price and that the Applicant had failed to identify any bidder despite several opportunities being given. The same was also recorded by this Tribunal in the initial round of Litigation. The contention of the Learned Sr. Counsel that the Affidavit filed by MCF before the Hon ble Supreme Court showing that the land was of Industrial Use , is not relevant at this point of time and therefore the subject land has to be revalued, is untenable as the Hon ble Supreme Court has dismissed the Civil Appeal and upheld the Order of this Tribunal, whereunder this Tribunal has held that the Appellant was not able to produce any evidence before the Liquidator that the land was of Industrial Use . It is also an admitted fact that the Appellant did not pay the External Development Charges and there is an outstanding amount due with respect to the same. This issue having attained finality in two rounds of litigation we are constrained to observe that the Appellant has filed this Appeal only to delay the proceedings, which practice is deprecated. We confirm the costs of Rs.1,00,000/- imposed by the Adjudicating Authority. Appeal dismissed.

Summary

Issues Involved:
1. Challenge to the Impugned Order dated 24.03.2021.
2. Request for fresh valuation of land.
3. Nature and valuation of the land in question.
4. Imposition of costs on the Appellant for delaying the liquidation process.

Issue-wise Detailed Analysis:

1. Challenge to the Impugned Order dated 24.03.2021:
The appeal challenges the order of the National Company Law Tribunal (NCLT), Principal Bench, New Delhi, which dismissed the application filed by the Appellant and imposed costs of Rs. 1,00,000/- to be paid to the Corporate Debtor Company. The NCLT had previously imposed costs of Rs. 50,000/- on the Appellant in a related matter (CA 1079/2019).

2. Request for Fresh Valuation of Land:
The Appellant, M/s. DD Real Estate Private Limited, the Holding Company of the Corporate Debtor, sought a direction for fresh valuation of the land sold to the bidder under Regulation 35(2) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The land in question is located at 12/6 Village Sarai Khawaja, main Mathura Road, Faridabad, Haryana. The NCLT had previously determined that the base price of Rs. 52.58 Crores was higher than the circle rate of agricultural land and was reflective of the development potential of the property. Despite opportunities, the Appellant failed to identify any bidder willing to purchase the land at a higher price.

3. Nature and Valuation of the Land in Question:
The Appellant contended that the land was converted from agricultural to industrial use, which should have increased its valuation. However, the NCLT and the National Company Law Appellate Tribunal (NCLAT) found no defect in the valuation reports and upheld that the land was agricultural in nature. The NCLAT noted that the Appellant had failed to produce any evidence or bidder willing to pay a higher price. The Supreme Court also dismissed the Appellant's Civil Appeal, thereby upholding the NCLAT's findings.

4. Imposition of Costs on the Appellant for Delaying the Liquidation Process:
The NCLT and NCLAT both observed that the Appellant's actions were aimed at delaying the liquidation process without any substantial basis. The NCLT imposed costs of Rs. 1,00,000/- on the Appellant for filing repetitive and baseless litigation. The NCLAT confirmed these costs, emphasizing that the Appellant's conduct was intended to hinder the liquidation proceedings.

Conclusion:
The NCLAT dismissed the appeal, confirming the costs imposed by the NCLT. The Tribunal held that the issue of land valuation and its nature had attained finality through multiple rounds of litigation, including decisions by the Supreme Court. The Appellant's repeated attempts to challenge the valuation and nature of the land were deemed to be without merit and aimed at delaying the liquidation process. The appeal was dismissed with no further order as to costs.