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TMI Blog2022 (2) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding against the Personal Guarantors, till date no steps taken by them against the guarantors. Hence, both parties are in favour of the liquidation proceedings against the Corporate Debtor. The only thing is that the Personal Guarantors are opposing the action taken by the liquidator, which they are not entitled to because they have given on lease their properties to the Corporate Debtor and the Corporate Debtor has been put under liquidation. In such an event, the respondents 3 to 8 are estopped from seeking a relief from this Tribunal, that their properties cannot be treated as properties of the Corporate Debtor, which is proceeded under the IBC. In view of the fact that they have mortgaged their properties to the Corporate Debtor and the Corporate Debtor is now reached in the stage of Corporate Insolvency Process. The liquidator has rightly proceeded against their properties also for completion of the liquidation process. We do not find any merit in the contention of Respondents 3 to 8. Since the Resolution Professional has to conclude the proceedings, it is highly necessary to get the possession of the property, as it is the duty of the Resolution Professional to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Creditor M/s. Union Bank of India under Section 7 of the IBC, 2016 and the same was admitted by the NCLT, Chennai Bench, vide its Order dated 20.03.2019 in IBA/240/2019 and the applicant was appointed as the Resolution Professional. 3. The Applicant submitted that he has issued the Public Announcement in Form B dated 12.02.2020 for invitation of claims from the stakeholders and filed the Asset Memorandum and Preliminary Report under Regulations 5 34 of IBBI (Liquidation Process) Regulation, 2016 and Regulation 5 13 of IBBI (Liquidation Process) Regulation, 2016 on 24.02.2020. Since there was no Resolution Plan submitted by any prospective Resolution Applicants, on an application, MA/45/KOB 2019 filed by the RP at that point, the Applicant was appointed as Liquidator of the Corporate Debtor vide order dated 17.01.2020 to carry out the Liquidation Process of the Corporate Debtor as per Section 35 of the Code. 4. The Applicant further stated that after verification of the claims received, the Liquidator has observed that the land area measuring 100.16 Ares mortgaged to Respondent No. 1 is a leasehold land of the Promoters/Directors of the Corporate Debtor for a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the land into the liquidation estate, so as to ensure better realizable value for the entire asset to the stakeholders. It is also stated that once the lease is given for 99 years, it will be treated like permanent lease and all the usage rights were transferred to the Corporate Debtor. Hence no prejudice will be caused if this application is allowed. Even if the sale as a going concern fails, the Applicant has to sell the land and building together through E-Auction sale or as per the Act as the land and building cannot be sold separately being the building is constructed above the mortgaged land. 6. The Applicant further stated that the above action cannot be carried out unless the Respondents relinquish their interests under Section 52 of the Code in the mortgaged land and allow the Liquidator/Applicant to add the mortgaged assets into the liquidation estate of the Corporate Debtor. 7. The Respondent No. 1 filed counter stating that IBA/240/2019 was instituted by them, when there occurred default on the part of the Corporate Debtor in repayment of the debt. The attempt to formulate Resolution Plan was made to recover the debt which at the time of institution of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Respondent's right to enforce the security interest upon the said properties under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and allied provisions. It is also stated that the 2nd Respondent after expiry of the moratorium period granted in the Corporate Insolvency Resolution, initiated proceedings under SARFAESI Act on 29.12.2019, against the properties of the Personal Guarantors. Thereafter on 20.02.2020 this respondent as a secured Financial Creditor had duly submitted its proof of claim filing Form D dated 19.02.2020 before the Liquidator and relinquished its Security interest in the 7.04 Ares of land and building therein belonging to the Corporate Debtor, most specifically covered under Sale Deed No: 910/15 and Release Deed No: 1009/15 of Erattupetta SRO. 11. The 2nd Respondent further stated that the Applicant/Liquidator after due evaluation of their claims and contents, admitted their claim vide his letter dated 15.07.2020 and confirmed that the claims will be released as per the provision of Section 53 of Insolvency and Bankruptcy Code, 2016. 12. It is also stated that the 2nd Respondent is a Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KOB/2020 of this Tribunal. The Hon ble High Court of Kerala disposed of the aforesaid Writ Petitions on 26.04.2021 partially allowing and directing this Tribunal to hear the MA/76/KOB/2020 afresh by providing an opportunity to the Personal Guarantors/Petitioners in the Writ Petitions before passing an order in the present application. The operative portion of the order in the Writ Petitions is extracted below: - In the circumstances, the impugned order in MA No.76/KOB/2020 dated 01.02.2021 of the National Company Law Tribunal, Kochi Bench, Kerala (Ext.P4 in WP(C) No.3864/2021) is set aside to the extent it allows the Liquidator to add the mortgaged land of the petitioners into the Liquidation Estate. The Tribunal is directed to pass orders afresh on the issue of inclusion of the said land in the Liquidation Estate, in the light of the observations made herein above, after giving an opportunity of hearing to the petitioners, as expeditiously as possible. It is made clear that this judgment shall not be taken as one expressing any opinion on merits as to the inclusion of the properties of the petitioners in the Liquidation Estate. 16. In view of the above order, the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate proceedings under the Insolvency Bankruptcy Code has been initiated by the Financial Creditor against the guarantors and, therefore, mere fact that the promotors have permitted the Corporate Debtor to construct quarters for the Doctors of the hospital cannot be a fact which would influence the decision of the Tribunal to order addition of the property so mentioned as the liquidation estate in terms of Section 36 of the Insolvency Bankruptcy Code. They contended that there is no power vested with the Tribunal to do so in the light of the specific embargo created under Section 36 of the Insolvency Bankruptcy Code, which cannot be wriggled out in a casual manner. Therefore, the proceedings taken by the liquidator are completely misconceived and beyond the powers vested upon him under the Insolvency Bankruptcy Code. There is no inherent power on the Tribunal to order an addition of personal assets of the guarantors into the liquidation estate. Therefore, there cannot be any direction to the respondents to surrender the property into the liquidation estate. 20. The Respondents 7 8 filed their counter and stated that the liquidator has deliberately tried to mislead the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention of Respondents 3 to 8. 22. Moreover, since the Resolution Professional has to conclude the proceedings, it is highly necessary to get the possession of the property, as it is the duty of the Resolution Professional to dispose of the Liquidation Assets of the Corporate Debtor, if necessary, to settle the claims of all claimants including the Financial Creditors. Since, the Building/hospital is situated in the very same land having 16.55 Ares, no purpose would be served without getting the hospital property also into the Liquidation Assets. It is also noticed that the 1st Respondent Union Bank of India has no objection in handing over the possession and the 2nd Respondent Meenanchil East Urban Co-operative Bank Limited even though objected to; they have conditionally agreed to hand over possession, provided their interests is well secured. There is no doubt that the Liquidator will consider all the claims and make payments to each person/authority, as per the Regulations/Rules. Hence, the 2nd Respondent s apprehension cannot be sustained. 23. Hence, we affirm our order passed on 1st February, 2021 in MA/76/KOB/2020 and ordered as under: a. Both Respondents are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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