In a significant development in the land liquidation case, the Delhi High Court has issued a crucial judgment regarding the resolution of claims for all allottees involved. The Court’s decision aims to provide a fair and equitable solution for the parties affected by the case, ensuring that the interests of all allottees are duly considered.
Facts
- ZION shall place before the Court a draft sale notice which shall require the proposed purchasers to deposit 25% of the sale consideration directly into the OL’s account and 75% in favour of ZION.
- Subject to payment of the aforementioned amount of Rs. 2 crores, ZION is permitted to put up the 50 flats for sale, and the new sale agreements shall be jointly signed by the Official Liquidator and ZION.
- The entire sale consideration shall be divided into 25:75 between the OL and ZION respectively.
- ZION shall deposit a sum of Rs. 2 Crores with the OL within three months, subject to which ZION would be permitted to put up the remaining 50 unsold flats for sale.
- Upon the stamp duty being paid and the sale deeds being executed, the 25% sale consideration lying with the OL shall be released in favour of Zion, after deducting OL’s expenses.
- If any of the flats remain unsold, the details of the same shall be placed on record by way of an affidavit for further orders.
- The time limit for execution of the sale deeds in favour of the existing Allottees is a period of three months to allow for arrangement of stamp duty.
- The draft sale notice published by the OL for selling the development rights shall include conditions regarding payment of EDC, enhanced EDC, and renewal of bank guarantees.
- The Court accepted the valuation provided by M/s Nagpal & Associates in their report dated 7th November, 2023.
- Due to TIDCO’s liquidation status, DTCP was directed not to insist on the compliance of remaining conditions beyond December, 2023.
- The DTCP license was deemed crucial for attracting better bids for the land in sector 78, Faridabad.
- To expedite the sale process, DTCP was instructed to consider the letter dated 27th September, 2023 from the OL regarding the renewal of the DTCP license under the Samadhan Se Vikas Scheme Haryana, 2022.
- DTCP was asked to determine the renewal amount and submit an affidavit to the Court within two weeks.
- The Court emphasized on proceeding with the value of the land per acre given the incomplete construction status of the land.
Arguments
- Mr. Akhil Sibal, Senior Counsel, refuted TFAA’s stance on the utilization of land in Sector 78, Faridabad.
- He argued that the land under OL control must be liquidated to satisfy claims of all allottees, not just those represented by TFAA.
- Total allottees range from 1800 to 2000, and TFAA represents about 800, not in a position to dictate terms for all.
- Allottees cannot demand specific apartments; the land should be used to satisfy claims of all allottees.
- The association members of TFAA are considered claimants before the OL, not allottees.
- The powers of the Court in a winding-up petition were established in the case of J.K. (Bombay) Pvt. Ltd. v. New Kaiser-I-Hind Spg. & Wvg. Co. Ltd. and Ors. (AIR 1970 SC 1041).
- Once a company goes into winding-up, its assets come under the control of the liquidator, whose duty is to realize them and pay the creditors from the sale proceeds.
- Creditors are to be paid pari passu, meaning equally and without preference.
- Any agreements or schemes that the company had are subject to the winding-up process, and creditors have the right to have the proceeds from asset sales distributed equally among them.
Analysis
- Flat buyers are considered unsecured creditors with conflicting viewpoints.
- The draft sale notice for development rights of Sector 78, Faridabad was submitted.
- Most allottees have filed their claims with the OL, indicating a step towards resolution.
- Efforts are being made for valuation and resolution of disputes for the investors’ relief.
- Outstanding amounts from Land Acquisition Collector to be collected and credited to TIDCO.
- The matter was challenged in SLP Nos. 1777-78/2014 titled ‘BSF Family Welfare Society v. Madhur Mittal & Ors.’
- The Official Liquidator will examine and sell the assets of the company as per the directions of the Company Judge.
- The sale proceeds will be distributed among the creditors in accordance with the law.
Decision
- The renewal amount for the license shall be deposited with DTCP by 10th January, 2024.
- DTCP license renewal must be completed by 25th January, 2024.
- The amount for renewal shall be computed and resolved, with details placed on record by way of an affidavit by 20th December, 2023.
- Renewal of the license shall be reported to the Court.
- Permission for assignment of joint development and marketing rights is granted with specific conditions.
- Maximal Infrastructure Pvt. Ltd. is responsible for complying with all laws and agreements related to the project.
- Any advertisement for the sale of flats must prominently display the name of the colonizer.
- DTCP officials must be present on the next date.
- Intimation should be given to Mr. Yeeshu Jain regarding service if not present on the next date.
- The Applicant-Society agrees to withdraw complaints against the ex-management upon transfer of beneficial interest.
- Complaints and proceedings against each other by BSF Family Welfare Society and Ex-Management will be withdrawn, subject to certain conditions.
- A sum of Rs.5,59,27,151/- is to be paid by the OL for the renewal of the license, valid till 22nd January, 2025.
- Notice to be issued to Mr. Jagdish Sharma for effective service upon LAC, Faridabad.
- In-principle approval expires on 28th June, 2024, for the remaining towers in Sector 89, Faridabad.
- OL’s proposal for selling land in Sector 78, Faridabad is permitted to proceed as per the finalized draft sale notice.
- Draft sale notice for unsold inventory of ZION flats to be finalized within two weeks.
- Further claimants, including allottees, can file their claims with OL within four weeks.
- Finalized draft sale notice to be given adequate publicity for e-auction conducted through RailTel Ltd.
- DTCP to extend in-principle approval for another three months.
- Directions in paragraphs 27 and 28 apply in the case of the BSF Family Welfare Society and Ex-Management regarding beneficial interest transfer.
Case Title: DINESH MITTAL & ORS. Vs. M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. LTD (2024:DHC:3881)
Case Number: CO.PET.-39/2009
