AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 782
X X X X Extracts X X X X
X X X X Extracts X X X X
....2022 in CP(IB) No.4447/MB/2018, whereof the Ld. NCLT had rejected the application of the appellant and had rather allowed the application filed by the Respondent No.1 qua approval of resolution plan. 2. The facts are the Appellant granted financial assistance to M/s Heera Constructions Company Pvt. Ltd. (Corporate Debtor), a real estate company, to the tune of Rs. 50 Crores, by way of a Corporate Loan Agreement; which loan was secured by various mortgages in respect of following properties: (i) 5.46 Acres of land at Attipra Village, Thiruvananthapuram, Kerala ("Attipra Land") (a third party asset); (ii) 0.60 Acres of land at Poonithura Village, Ernakulam, Kerala ("Poonithura Land") (CD's asset); (iii) 0.30 Acres of land at Nedumangad Village, Thiruvananthapuram, Kerala (Ex-Promoter of CD's asset); (iv) 6 residential flats at Heera Windfaire, Vytilla, Ernakulam, Kerala (Ex-Promoter of CD's asset). 3. Admittedly there were default by the Corporate Debtor; hence a petition under Section 7 of IBC was filed by the appellant viz Company Petition No.4447/MB/2018 and it stood admitted by Ld. NCLT, Mumbai vide order dated 27.03.2019. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aluable piece of land on the ground (a) the Corporate Debtor had only developmental rights over the land; (b) the land is not owned by Corporate Debtor; (c) the land would not be a part of the liquidation estate of the Corporate Debtor; (d) there is no permit/no construction of the project. 10. Assuming the above position was correct, however, but then the RP dealt with identically positioned property in an exactly opposite fashion, where also the land owned by a third party; with developmental rights available through a joint venture; no construction or permit being available, but a value was given. 11. It was argued by the learned senior counsel for the appellant despite the fact both these lands were to be developed and permits were not obtained yet a valuation of Rs.5.26 crore was given to land -M/s Heera River Park and Nil valuation was given to M/s Heera Nature on the pretext, limited construction was carried in the project M/s Heera River Park and no construction commenced in project M/s Heera Nature; though Successful Resolution Applicant in its reply alleged there also existed a limited construction on M/s Heera Nature land. Thus the version of the Resolution Profess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the fair value and of the liquidation value computed in accordance with internationally accepted valuation standards, after physical verification of the inventory and fixed assets of the corporate debtor; Provided that the resolution professional shall facilitate a meeting wherein registered valuers shall explain the methodology being adopted to arrive at valuation to the members of the committee before computation of estimates. (b) if the two estimates of a value in an asset class are significantly different, or on receipt of a proposal to appoint a third registered valuer from the committee of creditors, the resolution professional may appoint a third registered valuer for an asset class for submitting an estimate of the value computed in the manner provided in clause (a). Explanation.- For the purpose of clause (b), (i) "asset class" means the definition provided under the Companies (Registered Valuers and Valuation) Rules, 2017; (ii) "significantly different" means a difference of twenty-five per cent. in liquidation value under an asset class and the same shall be calculated as (L1-L2)/L1, where, L1= higher valuation of l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Iron Works Ltd. (supra), the Hon'ble Supreme Court, inter alia, examined the meaning and scope of the expression of "asset" of a corporate debtor. The question before the Supreme Court was whether developmental rights (obtained through developmental agreements) of the corporate debtor over an immovable property were required to be considered an asset of the corporate debtor and be valued in the CIRP. The Hon'ble Supreme Court examined the definition of the expression "property" as contained in Section 3(27) of the Code and made the following observation. "Para 35... At the cost of repetition, it must be recapitulated that the definition of the expression "property" under Section 3(27) includes "every description of interest, including present or future or vested or contingent interest arising out of or incidental to property". Since the expression "asset" in common parlance denotes "property of any kind", the bundle of rights that the Corporate Debtor has over the property in question would constitute "asset" within the meaning of Section 18(f) and Section 25(2)(a) of IBC." 18. A bare perusal of Regulation 35 shows there is nothing in the Regulation that limits ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cess of Corporate Debtor. Even the sale deed of Poonithura land was available at the Corporate office of the Corporate Debtor and was seized as a part of search operation and attachment order. Admittedly Mr. Manu Subhash was appointed as Consultant by the Resolution Professional to do the work of the Corporate Debtor and he remained associated with investigations conducted by the Enforcement Directorate, hence was fully aware of the title deeds of Poonithura land and of other properties. Despite this Resolution Professional argued he was unaware of various properties as were never brought to his knowledge. 23. It is now an admitted position several assets existed which were never a part of information memorandum of the CIRP of Corporate Debtor and the registered value(s) of such assets, as per ED attachment order dated 12.01.2024 ran into crores Rs.23.35 crore approximately for 23 assets and the market value of which may even be higher, but many were left out. The argument of the Resolution Professional he was not present during the ED operation and/or was not at fault or he had no control over the office of Corporate Debtor cannot be accepted. 24. The learned counsel for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the knowledge of the Resolution Professional. He miserably failed to account for such properties and to include it in Information Memorandum. 27. Section 25(2)(a) of the IBC casts a duty upon the Resolution Professional to take immediate custody and control of all the assets of the Corporate Debtor and to prepare an Information Memorandum in accordance with Section 29. Further explanation to Section 29 says the relevant information would include the financial position of the Corporate Debtor, including of information relating to disputes etc. and Regulation 36 of CIRP Regulations, 2016 says the Information Memorandum shall include all assets and liabilities, including contingent liabilities with such description as on the insolvency commencement date, as are generally necessary for ascertaining their value. Further Clause 2(b) of Regulation 36 refers to declaration of details of all material litigations and ongoing investigation or proceedings initiated by Government and statutory authorities. Thus there was a failure on the part of Resolution Professional on this account. 28. Now in the schedule of properties attached by the Enforcement Directorate, the Poonithura land is....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... forming part of the Hotel Building constructed at Plot No. 4, Dwarka City Centre, Sector-13, Dwarka, New Delhi and issue the Information Memorandum; (c) issue a fresh 'Form G' through a wide publication; and (d) complete the entire process of seeking approval of CoC, for the Resolution Plans if received, at the earliest. It is, however, made clear that the SRA of the present resolution plan will have the liberty to submit its EOI if it so wishes." 6. The Adjudicating Authority has taken in consideration the fact that properties shall come to the kitty of the Corporate Debtor, as noted above, whose value is much more than the entire plan value submitted by the Resolution Applicant, hence, order was issued for issuance of Form G. We fully agree with the observation of the Adjudicating Authority as made in Para 19, 20 and 21 of the impugned order, as extracted above, which was sufficient reason for issuance of fresh Form G. However, we are of the view that some time ought to have been fixed by the Adjudicating Authority for completion of the entire process. We, thus, while affirming order of the Adjudicating Authority issue further direction in following manner: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lements, benefits of the Corporate Debtor (whether reflected in the books or not) shall continue to remain vested in the Corporate Debtor free and clear from all Encumbrances. 33. A similarly worded clause was not approved by Hon'ble Supreme Court in Jaypee Kengiston Boulevard Apartments Welfare Association v. NBCC (India) Limited (2022) 1 SCC 401, wherein the Hon'ble Supreme Court held as under- 259.3. As noticed, in the said Clause 23, a fleeting suggestion on the part of the resolution applicant had been that "JAL lenders mortgaged land shall continue to be vested in the corporate debtor free from any mortgage, charge and encumbrance". The adjudicating authority dealt with the said clause of the resolution plan in an equally cursory manner by observing that the point was not clear but, if it was referring to the land mortgaged with the lenders of JAL, the issue had already been decided by the Supreme Court and need not be reiterated. In this entire process of mistakes/errors (might be accidental) and corrections as also cursory observations, the adjudicating authority totally missed out that one transaction relating to 100 acres of land, being "Tappal Property 1", re....