Asset Reconstruction Company (India) Ltd. vs Venkatramanrao Nagarajan & Ors.

Per: ANIL KUMAR B, MEMBER (TECHNICAL)

The above application has been preferred by Asset Reconstruction Company (India) Ltd., under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”) sought to record the Joint Compromise Memo dated 14.02.2022 entered into between the parties and pass such further orders as this Tribunal may deem fit and proper.

The Learned Counsel for the Applicant submitted that the Applicant is a Company incorporated under the Companies Act, 1956 and is also a Reconstruction Company as defined under the Provision of SARFAESI Act, 2002 and has been registered with Reserve Bank of India as mandated by the said Act.

It was further submitted that CIRP in respect of the Corporate Debtor (Cethar Limited) was ordered by this Tribunal on 16.06.2017 and the 1st Respondent herein was appointed as Interim Resolution Professional (IRP). Since, no resolution plan was approved by the CoC, on the application filed by the 1st Respondent in MA.No.32/IB/2018, this Tribunal has ordered Liquidation of the Corporate Debtor and appointed the 1st Respondent as the Liquidator vide order dated 25.04.2018.

It was further submitted that the Applicant is a secured creditor. The property at Boothagudi and Melapachagudi Village, Illupur Taluk, Viralimalai, via Pudukottai District, a Factory Unit (Unit-VII which is now closed), in an extent of 85 acre is mortgaged with the Applicant. The Plant & Machinery available inside the said Unit is also hypothecated to the Applicant.

It was further submitted that the Applicant Company being a secured creditor has opted to stand outside the purview of the liquidation proceedings under Section 52 of the Insolvency and Bankruptcy Code.

It was further submitted that the Applicant filed an application in M.A.No.457/2018 sought a direction against the 1^st Respondent to hand over physical possession of the property. In the said Application, the Applicant filed an interim application in IA.No.798/2020 sought a stay of the sale which was to be conducted by the Liquidator, which was allowed by this Tribunal vide order dated 05.03.2021.

It was submitted that based on the above order, on 11.03.2021, the Applicant issued a Public Notice for the sale of said property. The said Public Notice was published by the Applicant with an indication that the constructive possession of the said property (hereinafter referred to as the 'Factory Unit') remained with the Applicant and the 4^th Respondent, while the physical possession remained 1^st Respondent herein. It was also indicated that the property is sold pursuant to the orders of this Tribunal.

It was further submitted that the 3^rd Respondent herein, placed its offer and participated in the e-auction. In the said Auction, the 3^rd Respondent bid an amount of Rs.62,02,00,000/- and was declared as the successful bidder. It was further submitted that the Applicant has confirmed that the 3^rd Respondent was the highest bidder vide its letter bearing no. BGCWG/JL/FY21/1301 dated 27.03.2021.

Thereafter on 30.3.2021, the 3^rd Respondent herein deposited 25% of the bid amount vide letters bearing no. BGCWG/JL/FY21/10 and BGCWG/JL/FY21/11 dated 03.04.2021. Further, the Applicant issued a Letter of Confirmation of Sale to the 3^rd Respondent. It was also informed that the Sale Certificate would be issued after payment of full consideration.

It was further submitted that thereafter on 15.4.2021, the 3^rd Respondent has requested an extension of time for the payment of balance consideration.

It was further submitted that this Tribunal vide order dated 01.04.2021 had disposed of the Application MA No.457 of 2018 by directing the Liquidator to conduct an enquiry whether the Applicant was an exclusive charge holder. The said order has been challenged by the 3^rd Respondent, 1^st Respondent and the Applicant in CA.No.125 of 2021, CA No.128 to 130 of 2021 and CA No.131 of 2021 respectively.

It was further submitted that when matters were pending, the Applicant and the Respondents herein, with a view to maximising the value of the assets of the Corporate Debtor, entered into a Joint Compromise.

It was further submitted that under the said Compromise, all the parties have recognized the sale conducted by the Applicant and therefore, the only pending dispute would be the apportionment of the sale consideration given by the 3rd Respondent herein.

The Joint Compromise Memo entered into between the parties was initially filed before the Hon'ble NCLAT in Appeal No. 125 of 2021. The Hon'ble NCLAT at the hearing dated 11.2.2022 took the view that Section 60 (5) of the Code would apply. In these circumstances, the parties herein have approached this Tribunal to record the Joint Compromise Memo dated 14.02.2022, in order to receive the maximum value for the assets of the Corporate Debtor.

We have heard learned counsel for both sides and perused all the documents placed on record. It is seen that both the parties were entered into a Joint Compromise Memo dated 14.02.2022. We see that all the parties have signed the said memo under their seal which portrayed hereunder.

Further, the above-said memo was taken on record by this Tribunal on 22.02.2022, Clause 10 and 12 of the above-said memo stated as follows,

Thus, considering circumstances and submission made by the Learned Counsel for the parties, we hereby permit

With the above said directions this Application stands disposed of.