Tribunal confirms legality of Nicco House sale process under Insolvency and Bankruptcy Code.

The Tribunal upheld the legality of the sale process of Nicco House, finding that the Liquidator followed prescribed procedures, including obtaining valuations and conducting public auctions. Compliance with the Insolvency and Bankruptcy Code and relevant regulations was confirmed. Allegations of undervaluation and private arrangements were dismissed, with the sale deemed transparent. Claims of unauthorized construction and lack of building plans were rejected. The rights and interests of tenants/occupants were preserved, with the sale not impacting their occupation rights. The applications challenging the sale were dismissed, and parties were directed to bear their own costs.

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Issues Involved:
1. Legality of the sale process of Nicco House.
2. Compliance with the Insolvency and Bankruptcy Code (IBC) and relevant regulations.
3. Allegations of undervaluation and private arrangements in the sale.
4. Claims of unauthorized construction and lack of building plans.
5. Rights and interests of the tenants/occupants in the property.

Detailed Analysis:

1. Legality of the Sale Process of Nicco House:
The applications M.A. (IB) Nos. 585/KB/2019 and 586/KB/2019 challenged the sale of Nicco House, arguing that the sale was conducted without public notice or prior information to the tenants. The Tribunal found that the Liquidator had followed the prescribed procedure, including obtaining valuation reports from two independent valuers and conducting multiple public announcements/e-auctions. The highest bid received was Rs. 28.25 crores, and the sale was finalized accordingly. The Tribunal concluded that the sale process was transparent and complied with the relevant regulations.

2. Compliance with the Insolvency and Bankruptcy Code (IBC) and Relevant Regulations:
The Tribunal examined whether the Liquidator followed the prescribed procedure under the IBC and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. It was found that the Liquidator had prepared an asset memorandum, obtained valuations from two registered valuers, and conducted the sale through public auction. The Tribunal noted that the Liquidator had complied with all necessary regulations, including filing progress reports and obtaining approval from the monitoring committee.

3. Allegations of Undervaluation and Private Arrangements in the Sale:
The applicants alleged that the property was sold at a significantly lower price than its market value and that private arrangements were made without following due process. The Tribunal found no merit in these allegations, noting that the valuations were conducted transparently, and the sale price was determined based on competitive bidding. The Tribunal also dismissed claims of collusion between the Liquidator and the buyers, stating that the sale process was supervised by the monitoring committee and adhered to the regulations.

4. Claims of Unauthorized Construction and Lack of Building Plans:
The applicant in Inv. A. (IB) No. 604/KB/2019 raised concerns about the unauthorized construction of Nicco House and the lack of building plans. The Tribunal dismissed these claims, stating that the building was constructed in 1890 and must have had some approval from the competent authority at that time. The Tribunal emphasized that the applicants, as tenants, had no right to challenge the building's construction, especially since they had been occupying the premises for a long time.

5. Rights and Interests of the Tenants/Occupants in the Property:
The Tribunal addressed the concerns of the tenants/occupants, who argued that their rights were affected by the sale. The Tribunal clarified that the sale was conducted on an "as is where is" basis and did not interfere with the tenants' right of occupation. The Tribunal also noted that the applicants had not participated in the sale process despite multiple public announcements and opportunities to do so. The Tribunal concluded that the applicants had no locus standi to challenge the sale and that their attempts to stall the process were motivated and unauthorized.

Conclusion:
The Tribunal dismissed all three applications, finding no irregularity or illegality in the sale process of Nicco House. The Liquidator was found to have complied with all relevant regulations and conducted the sale transparently and fairly. The Tribunal also dismissed the claims of unauthorized construction and lack of building plans, stating that the applicants had no right to challenge the building's status. The applications were dismissed with the parties directed to bear their respective costs.

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