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TMI Blog2020 (8) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 61 of the Insolvency and Bankruptcy Code, 2016 (In Short I&B Code) against the order dated 04.12.2019 passed by the Ld. Adjudicating Authority (National Company Law Tribunal, Principal Bench, New Delhi). By the impugned order the Ld. Adjudicating Authority dismissed the Application No. 1079 (PB)/2019 in Company Petition No. (IB)-455(PB)/2017 and imposed cost of Rs. 50,000/. These Appeals were heard together and disposed of by this common Judgment. 2. Brief facts of this case are that on 26.10.2018 in Company Application No. 656 (PB)/2018 liquidation order was passed against the Corporate Debtor Company i.e. M/s Forgings Pvt. Ltd. Mr. Sajeve Bhushan Deora (Resolution Professional) was appointed to act as a Liquidator (Respondent No. 1 herein) of the Corporate Debtor in terms of Section 34(1) of the I&B Code. The Liquidator was directed to proceed with the Liquidation Process in the manner laid down in Chapter III of Part II of I&B Code and the relevant Regulations. The Liquidator issued sale notice for the piece of land and building belonging to the Corporate Debtor on 28.02.2019. The Corporate Debtor possesses only one asset i.e. piece of land and building situated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is more than 100 - 120 Crores. Whereas in the Sale Notice Reserve price of the land in question fixed at Rs. 52.58 Crores. In the Application, the Appellant has challenged the methodology used by the valuers and also alleged that the Liquidator is in hot hurry as the sale of land in question, would result in speedy recovery which would defeat the basic purpose of the I&B Code, i.e. maximization of the assets. The land in question is industrial in nature which is evident from the document issued by Municipal Corporation, Faridabad (In Brief MCF). The Appellant in this Application claimed mainly the relief that Valuation Reports of Mr. Anil Kumar Saxena and Mr. Sunil Kumar Dhingra be set aside and Sale Notice dated 15.05.2019 also set aside and appoint another valuers for ascertaining the valuation of the land in question. The Ld. Adjudicating Authority while issuing the notice of the Application directed that auction may take place and the same was not to be finalized. 8. The Liquidator Respondent No. 1 herein stated that the valuation report submitted by the valuers are in accordance with the provisions of Regulation 35(3) of the IBBI (Liquidation Process) Regulations, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are though in the knowledge of the Respondent No. 1 completely ignored at the time of valuation of the land in question. 12. It is further submitted on behalf of the Appellants that the valuation reports although records that the land has been put to industrial use but completely overlook the fact that the Reserve price (Rs. 52.58 Crores) and the Circle Rate of the land (Rs. 99 Crores) is a whopping Rs. 46 Crores. The Financial Creditor (Respondent No. 2) valued the land in question at a Reserve price of Rs. 80 Crores when it sought to sell the land under SARFAESI Proceedings. In the valuation reports there is a reference to commercial use of land in question, however, there is nobody's case that the land in question is a commercial in nature. It is wrongly noticed conversion fees Rs. 100 - 110 Crores is required to be paid to convert the land to industrial use. Actually, such fees is required to be paid for conversion of land to commercial use. Thus, the valuation reports are wrong and have to be set aside. 13. It is also contended on behalf of the Appellants that the Sale Notice dated 15.05.2019 is ambiguous since, it is not clear as to the exact nature and use of the land in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 who representing the Liquidator submits that the valuers appointed by the Liquidator are registered with the IBBI. All the information and documents were provided to valuers. The Reserve price was determined on the basis of valuation arrived as per Regulations 34 and 35. The Liquidator convened in all 11 consultative meetings of stakeholders during the Liquidation Proceedings. The Meetings were held with prospective bidders wherein the Appellant Mr. Karan Gambhir was invited however, he did not attend the meetings. Thus, the Liquidator has followed the due process for valuation and conducted e-Auction of land in question. 20. It is also contended on behalf of the Respondent No. 1, Mr. Sanjay Gambhir, a Director of 99.99% shareholder of Corporate Debtor acting for Appellant D.D. Real Estate Pvt. Ltd. admitted during stakeholder Meeting that the land in question is an agricultural land and conversion charges about 8.5 Crores where probably raised by the MCF but not paid. It is also pointed out that the Appellant in response to notice issued by Financial Creditor (Respondent No. 2 herein) under the SARFAESI Act, stated that the land in question is an agriculture land. The Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. Learned Counsel for the Respondent No. 2 also submitted that the Ld. Adjudicating Authority while dismissing the earlier Application CA No. 501 of 2019 on 24.09.2019 granted liberty to the Appellant Karan Gambhir to produce evidence before the Liquidator within 10 days with regard to the nature of the land however, he has not produced any evidence and challenged the order before this Appellate Tribunal and subsequently, the Appeal was dismissed as withdrawn. Hence, the order dated 24.04.2019 passed by the Ld. Adjudicating Authority attained finality. Therefore, on the same ground impugned order cannot be challenged by way of these Appeals. 24. It is submitted that the Ld. Adjudicating Authority while deciding the earlier Application had also granted opportunity to the Appellant to bring a bidder with higher price vide order dated 08.04.2019 however, even after, lapse of more than a year from the date of auction the Appellant did not introduce prospective buyer. Due process of Liquidation is followed by the Liquidator. Hence, the Appeals be dismissed. 25. Learned Counsel for the Respondent No. 3 & 4 who are the successful auction purchaser submitted that the outstanding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objection in regard to jurisdiction before the Ld. Adjudicating Authority. We found no substance in such an objection. 30. The bone contention of the Learned Counsel for the Appellants is that the valuation reports are prepared on the basis that use of land in question is Agricultural though use of land is industrial. In respect of the arguments Appellants have placed reliance on the documents (1) Copy of possession memo dated 10.11.1994. (2) Copy of land sanction letter dated 31.12.2007 issued by Respondent No. 2. (3) Copy of MCF receipt of Municipal Tax. (4) MCF letter dated 16.12.2002. 31. On the other hand, the Respondents placed reliance on the MCF letter dated 16.12.2002 the District Town Planner Enforcement, Faridabad communication dated 02.05.2009, admission of the Appellant in response to notice issued by Financial Creditor in the SARFAESI Act and admission of Mr. Sanjay Gambhir a Director of 99% shareholder of the Corporate Debtor. 32. We have considered the arguments of Learned Counsel for the parties, conversion of land from agriculture to any other use is governed by the Punjab Scheduled Road and Controlled Areas Restriction of Unregulated Development Rules, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor) in loan sanction letter dated 31.12.2007 mentioned that the land in question is industrial. This is a private document. Property Tax receipt dated 22.04.2018 in which payment particular mentioned as industrial, on the basis of these documents it cannot be held that the land use is changed. As per Rules land use was not changed this fact was in the knowledge of the Appellant therefore, Appellant in response to notice under Section 13 of the SARFAESI Act, took stand that the notice was not maintainable as the land in question is Agricultural land and there is a bar of Section 31 (1) of SARFAESI Act. 34. With the aforesaid, we are of the considered view that the land in question is Agricultural land though in past, it was used as industrial land however, as per Rules use of land was not changed. 35. Now, we have considered the objection that the valuation reports are prepared on the basis that use of land in question is Agricultural though, use of land is industrial. 36. In this regard, we have gone through the valuers report Mr. Anil Kumar Saxena and Mr. Sunil Dhingra two valuers have prepared a detailed reports in which they have mentioned that the land in question is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and costs and charges payable in respect thereof, including those for industrial use in the past. The demands of providers of utilities and service at the subject land and building may too be confirmed from appropriate authorities/ agencies. All demands, whether outstanding or payable in relation to subject land and building, will be the liability of successful bidder." In the notice, it is nowhere mentioned that the conversion fees for the land in question to industrial use is Rs. 110 crores. 41. We are of the view that in the Sale Notice nothing is mentioned which prejudices the prudent bidder for bidding. It is pertinent to note that the Ld. Adjudicating Authority while deciding the objections granted an opportunity to the Appellant, to produce any person who is prepared to purchase the land in question at price higher than the Reserve price. He may also file his bid before the Liquidator before the closing date. In terms and conditions of the direction the Appellant was not able to produce any bidder with better price. The land in question was earlier put to e-auction during Liquidation in March, 2019 with Reserve price of Rs. 52.83 Crores and no bid was received even at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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