Prateek Gupta And Ors vs Kotak Mahindra Bank Ltd. And Anr

Mr. Prateek Gupta & Ors. ...Appellants

Versus

Kotak Mahindra Bank Limited & Anr. ...Respondents

Present: For Appellant: Mr. Kunal Tandon, Ms. Richa Sandilya, Advocates For Respondent: Mr. Jayant Kr. Mehata, Sr. Advocate with Mr. Rajive R Raj, Advocate for R-1 Mr. Ashwani Kumar Gupta, Advocate for R-2.

ORDER

(Virtual Mode)

07.03.2022: Heard Mr. Kunal Tandon, Advocate for the Appellant, Mr.

Jayant Kr. Mehta, Sr. Advocate for the Kotak Mahindra Bank, Mr. Ashwani

Kr. Gupta, for Liquidator and Learned Counsel appearing for the Liquidator.

2. This Appeal has been filed against the Ex-Directors of the Corporate

Debtor challenging the Order dated 04.01.2022 of the Adjudicating Authority

(National Company Law Tribunal, New Delhi, Court-III) passed in IA-

6014/2021 filed by the Kotak Mahindra Bank Limited-Financial Creditor.

3. In the Liquidation Proceeding of the Corporate Debtor, Kotak Mahindra

Bank Limited-Financial Creditor has filed an Application IA-6014/2021

wherein following prayers have been made:

"a. The suitable directions to be issued to Respondent for handing over vacant physical possession of 260 sq. yards plot standing in the name 2

of Corporate Debtor under the provisions of the SARFAESI Act to limited extent of conducting a public E Auction under SARFAESI Act;

b. the suitable directions be issued to applicant (Kotak Mahindra Bank) for sale of land admeasuring 260 sq. yards belonging to corporate debtor under the provisions of the SARFAESI Act, 2002 alongwith another three plots of land admeasuring 1400 square yards belonging to suspended directors/mortgagors; c. Authorise and permit the Authorised Officer of the Applicant Bank to conduct joint E-Auction of the entire property admeasuring :-1660 sq. yards, as mentioned hereinabove;

d. Pro-rata of Sale Price deposited with the Applicant Bank be transferred to the Liquidator for further distribution by the Authorised Officer of the Applicant on conclusion of the joint E-Auction Proceedings;

e. any other or further relief, may be granted in favour of applicant, as deemed fit in the aforesaid circumstances."

4. The necessary facts to be noticed for deciding the Appeal are:

 That Corporate Debtor holds a plot of land admeasuring 260 sq. yards

situated at Nangloi. There is another 1400 sq. yards land which was

under the Promoters of the Corporate Debtor who are appellant before

us. 1400 sq. yards land was mortgaged with the Kotak Mahindra Bank

Limited and it is the case of the Bank that they have already issued

Notice under Section 13(2) of the SARFAESI Act, 2002 on 28.09.2017

and has taken various steps under Section 13(4) for having physical and

symbolic possession of the 1400 sq. yards. It is further on record that

with regard to the measures taken by Bank under Section 13(4) of the

SARFAESI Act, 2002 with regard to 1400 sq. yards an Application under

Company Appeal (AT) (Ins.) No. 147 of 2022 3 Section 17 of the SARFAESI Act, 2002 has been filed by the Appellant

before the Debt Recovery Tribunal (DRT in short) being Application No.

396 of 2019 which is pending consideration before the DRT. 260 sq.

yards admeasuring land belonging to the Corporate Debtor is in the

liquidation estate and the Application filed by the Kotak Mahindra Bank

Limited i.e. I.A. No. 6014 of 2017 where the Bank has requested that

Liquidator may give possession of the 260 sq. yards to the Bank so that

the said land belonging Corporate Debtor may be sold under the

SARFAESI Act along with area admeasuring 1400 sq. yards. This

application has been allowed vide Impugned Order dated 04.01.2022 by

the Adjudicating Authority. The Liquidator has made statement before

the Adjudicating Authority that Liquidator has no objection in any of

the prayers made in the I.A., consequently the result is that after

allowing the Application the entire land 1660 sq. yards shall be sold as

per SARFAESI Act, 2002 and the amount proportionate pertaining to

260 sq. yards shall be handed over to the Liquidator after the sale of the

entire property.

5. The Learned Counsel for the Appellant challenging the Impugned Order

contends that there is no occasion to permit the sale of the 260 sq. yards

belonging to the Corporate Debtor along with the sale of 1400 sq. yards which

belong to the promoters of the Corporate Debtor. It is submitted that the sale

of the plot of land admeasuring 260 sq. yards ought to be sold under the IBC,

2016 Proceedings and the other plots admeasuring 1400 sq. yards will be sold

under SARFAESI Act, 2002 and the Liquidator ought not to have given to the

Company Appeal (AT) (Ins.) No. 147 of 2022 4

Bank for composite sale. It is submitted by the Appellant that he has filed an

Application under Section 17 challenging the measures taken by the Bank

under Section 13(4) of the SARFAESI Act, 2002 for the sale of 1400 sq. yards

which application is pending.

6. In the present case, there is no doubt that 260 sq. yards land belongs

to the Corporate Debtor which is in the liquidation estate. The Liquidator who

is present before us submits that in view of the peculiar facts and

circumstances of the case 1400 sq. yards and 260 sq. yards are not separable

and sale of composite property can obtain the maximum revenue for the said

land and joints sale of the property is material to have more revenue for the

property which may be beneficial to the liquidation estate.

7. After considering the submissions which have been made by the

Learned Counsel for the Appellant, we are of the view that in the peculiar facts

and circumstances of the case, no error can be found with the Order of the

Adjudicating Authority directing for composite sale of land of both the parts

under the SARFAESI Act, 2002. Even the Liquidator when he sells the

property under the liquidation, he has to follow the procedure under the

SARFAESI Act, 2002 for sale of the property. In the peculiar facts and

circumstances of the case, the property which is a composite one, we are of

the view that no illegality can be said to have been committed by the

Adjudicating Authority in directing the joint sale of the property. The

proportionate amount will be given to the Liquidator which shall be in the

liquidation estate hence, the Corporate Debtor cannot suffer any loss in the

aforesaid sale.

Company Appeal (AT) (Ins.) No. 147 of 2022 5

8. We are thus of the view that there is no sufficient ground to entertain

this Appeal, the Appeal is dismissed. We make it clear that it shall be open for

the Appellant to proceed with the Application under Section 17 which is

pending before the DRT.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

Basant/nn

Company Appeal (AT) (Ins.) No. 147 of 2022