2022 (8) TMI 764 - Tri - Insolvency and Bankruptcy

Seeking to transfer the right, title and interest in subject properties and hand over vacant and peaceful possession in the subject properties to the Petitioner along with a Possession Letter - failure or negligence to execute the sale deeds in respect of the subject properties - execution of sale deeds conveying all right, title and interest in the Petitioner s favour - seeking order and injunction restraining Respondent No. 1 from dealing with and/or creating any rights whatsoever (including parting with possession) over the subject properties - time limitation. HELD THAT - The SICA Repeal Act came into effect on 01.12.2016 and the Petitioner was bound to file the Petition within 180 days from the same. Thus, the Petitioner is well in time and within limitation. It is pertinent to note that this Tribunal can invoke the provisions of Rule 11 of the NCLT Rules, 2016. The said inherent powers have been conferred over the Tribunal under Section 469 of the Companies Act, 2013. Hence, the Respondent No. 2 has failed to clarify the provision which debars the applicability of Rule 11 to Sections 424 and 434 of the Companies Act, 2013 - the repeal of SICA shall not affect the order of BIFR and thus the order dated 30.06.2016 shall stand confirmed as on today. It is important to take a note that in this case where the case has been decided by the Board, the Tribunal is not bound to adhere to Rules 21 to 26 of NCLT Rules, 2016, which deals with the manner and procedure in which the petition or application is ought to be drafted and filed. The Respondent had earlier stated that they shall resume with their role as an operating agency once the case is filed before the NCLT. However, now the Respondent has challenged the jurisdiction of the NCLT to entertain this Petition, claiming that the civil courts have the jurisdiction to entertain the same, thereby contradicting their own statement. This shows that the Respondent is unnecessarily trying to delay the process and mislead the authorities. Respondent No. 1 are directed to transfer the right, title and interest in subject properties to the Petitioner after duly executing the Conveyance Deed, hand over all the documents showing the prior ownership relating to the subject properties in original, give the proof of liabilities settled in respect of the subject properties including electricity, MIDC, Land Revenue, labour, telephone, water, Panchayat tax, arrears of property tax, etc and to hand over vacant and peaceful possession in the subject properties to the Petitioner along with a Possession Letter - petition allowed.

Summary

Issues Involved:
1. Jurisdiction of the Tribunal under Sections 424 and 434 of the Companies Act, 2013.
2. Applicability of Rule 11 of the NCLT Rules, 2016.
3. Validity of BIFR orders post-SICA Repeal Act.
4. Execution of sale deeds and transfer of property rights.

Detailed Analysis:

1. Jurisdiction of the Tribunal under Sections 424 and 434 of the Companies Act, 2013:
The Tribunal noted that the property in question falls within its jurisdiction. The Petitioner argued that the Tribunal has the jurisdiction to try and entertain the Petition under Sections 424 and 434 of the Companies Act, 2013. Respondent No. 2 contested this, stating that the Tribunal does not have jurisdiction under these sections and that the matter should be taken to a civil court. The Tribunal found that it is the appropriate body to determine matters relating to both the IBC, 2016, and the Companies Act, 2013, thereby confirming its jurisdiction over the case.

2. Applicability of Rule 11 of the NCLT Rules, 2016:
The Petitioner invoked Rule 11 of the NCLT Rules, 2016, which grants the Tribunal inherent powers to make necessary orders to meet the ends of justice or prevent abuse of the Tribunal's process. Respondent No. 2 argued that Rule 11 does not apply to Sections 424 and 434 of the Companies Act, 2013. However, the Tribunal clarified that inherent powers under Rule 11 are conferred by Section 469 of the Companies Act, 2013, and Respondent No. 2 failed to provide any provision that debars the applicability of Rule 11 to these sections.

3. Validity of BIFR orders post-SICA Repeal Act:
The Petitioner contended that the BIFR orders dated 30.06.2016 remain valid and binding despite the SICA Repeal Act. The Tribunal noted that Section 5(1)(d) of the SICA Repeal Act states that the repeal of SICA does not affect any order made by the Board for the sanction of schemes. Thus, the BIFR's order dated 30.06.2016 stands confirmed. The Tribunal also highlighted that the Petitioner filed the Petition within the 180-day limitation period post-SICA Repeal Act, making it timely and within limitation.

4. Execution of sale deeds and transfer of property rights:
The Petitioner participated in a public auction and submitted the highest bid of Rs. 2.70 crores, which was accepted and confirmed by Respondent No. 2 and the BIFR. Despite the confirmation, Respondent No. 2 failed to execute the sale deeds. The Tribunal found that Respondent No. 2 is in breach of the BIFR's order dated 30.06.2016, causing injustice to the Petitioner. The Tribunal ordered Respondent No. 1 to transfer the right, title, and interest in the subject properties to the Petitioner after executing the Conveyance Deed and handing over all relevant documents and vacant possession. Respondent No. 2 was directed to forthwith execute the sale deeds in the Petitioner's favor and comply with all other requirements as laid down in the BIFR's order dated 30.06.2016.

Conclusion:
The Tribunal allowed the Petition filed by Mount Overseas Private Limited under Sections 424 and 434 of the Companies Act, 2013. It directed Respondent No. 1 to transfer the property rights to the Petitioner and Respondent No. 2 to execute the sale deeds forthwith, ensuring compliance with the BIFR's order dated 30.06.2016.