In a significant ruling by the Delhi High Court, the Land Liquidation Case aims to provide relief to allottees and creditors of the company. The decision focuses on selling the assets to benefit those who have invested in the project. Various conditions and obligations have been outlined, ensuring a fair and transparent process for all parties involved. Stay tuned for more updates on this important legal matter.
Facts
- ZION shall place a draft sale notice requiring proposed purchasers to deposit 25% of the sale consideration directly into the OL’s account and 75% in favor of ZION.
- Upon payment of Rs. 2 crores, ZION is allowed to put up 50 flats for sale, and agreements with new purchasers must be jointly signed by the Official Liquidator and ZION.
- Sale consideration to be divided into 25:75 ratio between OL and ZION respectively.
- Execution of sale deeds for 252 allottees to be concluded by 31st January, 2024.
- If any flats remain unsold, details must be submitted for further orders.
- ZION to deposit Rs. 2 crores with OL within three months to put up unsold flats for sale.
- Allottees to deposit requisite stamp duty at the time of registration of sale deeds.
- DTCP license renewal required for the land in Sector-78, involving payment of fees and charges.
- Draft sale notice to include conditions for payment of EDC, enhanced EDC, and renewal of bank guarantees by new developer.
- Acceptance of valuation by M/s Nagpal & Associates as provided in their report dated 7th November, 2023.
- Direction to not insist on compliance of remaining conditions upon TIDCO’s liquidation by December, 2023.
- Recognition of the DTCP license as crucial for attracting better bids for the land at sector 78, Faridabad.
- Order for DTCP, Haryana to consider the letter dated 27 September, 2023 from OL and determine renewal amount under the Samadhan Se Vikas Scheme Haryana, 2022.
- Requirement for DTCP to submit an affidavit to the Court within two weeks regarding the renewal amount.
- Instruction to proceed with valuation of the land per acre, considering most of the land is yet to be constructed and towers are partly completed.
Arguments
- Mr. Akhil Sibal, Senior Counsel, refuted TFAA’s stance on the land liquidation
- He argued that the land under OL’s control must be liquidated to satisfy all allottees’ claims
- Total allottees range from 1800 to 2000
- TFAA, representing about 800 allottees, should not dictate terms for land use
- The land in Sector 78, Faridabad, is to be utilized to satisfy all allottees’ claims
- Allottees cannot insist on being allotted apartments
- The association members of TFAA are considered claimants, not allottees, in the case.
- The powers of the Court in a winding-up petition were established in the 1968 Supreme Court case J.K. (Bombay) Pvt. Ltd. v. New Kaiser-I-Hind Spg. & Wvg. Co. Ltd. and Ors. (AIR 1970 SC 1041).
- Liquidators have the statutory duty to realize assets and pay creditors from the sale proceeds.
- Creditors are entitled to receive payments pari passu.
- Failure of the company to execute a second mortgage can result in immediate repayment obligations to creditors.
- Rights established under a scheme cannot override the distribution of assets among creditors.
- No new rights can be created or incomplete rights completed once the winding-up process begins.
Analysis
- The judgement discusses the sale of assets of TIDCO, particularly the land at Sector 78, Faridabad.
- The decision emphasizes the need to sell the assets to provide relief to all the allottees and creditors who have invested in the project.
- Various conditions and obligations related to the sale, renewal of licenses, and compliance with formalities are mentioned throughout the analysis.
- The DTCP license renewal is crucial for the marketability of the assets and obtaining the best possible value for the sale.
- The reserve price for the land at Sector 78, Faridabad is set at Rs. 550 crores based on the valuation.
- Different viewpoints and interests of flat buyers, creditors, and allottees are acknowledged, making it challenging to reconcile everyone’s interests.
- The priority is given to ensure the resolution of disputes and provide relief to investors awaiting a solution.
- Steps have been taken for valuation and collection of outstanding amounts from the Land Acquisition Collector in favor of TIDCO.
- The matter was challenged before the Supreme Court in SLP Nos. 1777-78/2014 titled ‘BSF Family Welfare Society v. Madhur Mittal & Ors.’
- The Official Liquidator will examine the assets of the company and sell the assets as per directions of the learned Company Judge.
- The sale proceeds shall be distributed among the creditors in accordance with the law.
Decision
- BSF Family Welfare Society has been granted approval for transferring beneficial interest in Towers B1, B2, B3, and B4.
- The renewal amount for the DTCP license must be deposited by 10th January, 2024, and renewal completed by 25th January, 2024.
- Maximal Infrastructure Pvt. Ltd. is responsible for compliance with all provisions of relevant laws and license agreements.
- The land owning company cannot transfer land without permission after joint development and marketing rights assignment.
- Both BSF Family Welfare Society and Ex-Management agree to withdraw complaints and proceedings against each other upon transfer of beneficial interest.
- DTCP approval granted for joint development and marketing rights for specific towers subject to conditions.
- An interim payment of Rs.5,59,27,151/- made towards license renewal till 22nd January, 2025.
- Notice issued to Mr. Jagdish Sharma for service upon LAC, Faridabad.
- Draft sale notices for unsold inventory and land in Sector 78, Faridabad to be finalized and published.
- Extension granted for in-principle approval for remaining towers in Sector 89, Faridabad.
- Finalized draft sale notice to be given adequate publicity for e-auction.
- Any further claimants must file claims with the OL within four weeks.
Case Title: SH. SAMEER SHARMA Vs. M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO LTD (2024:DHC:3881)
Case Number: CO.PET.-333/2010
