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Judgment
Raghvendra S. Chauhan, J.—An application, namely C.A. No. 188/2016 has been filed by M/s. J.M. Financial Asset Reconstruction Company Private Limited, for seeking direction from this Court to direct the Official Liquidator to release the mortgaged property, namely Industrial Plot No. 30-B, situated at Peenya 2nd Phase, Chokkasandra, Yeshwanthpur Hobli, Bangalore North Taluk in favour of the applicant Company.
The facts of the case are that M/s. Shakambari Fashions Private Limited, had taken, a loan amounting to Rs. 52 Crores, from the State Bank of India. As part of the mortgage for the said loan, Mr. Rajendra Goenka and others had mortgaged the property in question with the bank. Subsequently, the Company defaulted in repayment of the loan amount. Therefore, the bank filed an Original Application, namely O.A. No. 1019/2012, before the Debts Recovery'' Tribunal, Bangalore. The said proceedings are still pending before the Debts Recovery Tribunal.
By Assignment agreement dated 26.03.2014, the Bank had assigned the financial assets of the Company to the applicant, together with underlying security interest therein, under the provisions of SARFAESI Act. Therefore, according to the applicant, it has stepped into the shoes of the State Bank of India.
Meanwhile, by order dated 04.12.2012, this Court had directed the winding up of M/s. Shakambari Fashions Private Limited (henceforth referred to as the Company-in-liquidation). Therefore, the Official Liquidator had taken over the assets of the company. Incidentally, while land in question belongs to the Directors of the Company, the factory constructed thereupon belongs to the Company. Therefore, the entire asset, the land and building, are presently in possession of the Official Liquidator. However, as the land was mortgaged with the State Bank of India, the applicant claims its right over the property under the SARFAESI Act. Therefore, this application before this court for seeking directions as aforementioned.
The learned counsel for the applicant has reiterated the facts mentioned above, and sought directions mentioned herein above.
However, Mr. K.S. Mahadevan, the learned counsel for the Official Liquidator, has pleaded that the Official Liquidator does not have any objection if the applicant were to continue the proceedings under the SARFAESI Act. He has also suggested that if the applicant is willing to co-operate with the Official Liquidator, both the parties, through mutual co-operation, can auction the land and building, thereby both the parties will be able to realize the money due specifically to them.
To the proposal made by Mr. K.S. Mahadevan, the learned counsel for the applicant has no objection. The learned counsel for the applicant submits that it is willing to co-operate with the Official Liquidator in auctioning of the property.
The learned counsel for the applicant submits that under Rule 8 of the SARFAESI Act 2002, it is yet to appoint a Valuer for valuing the assets. However, as the possession of the land and building is with the Official Liquidator, the Valuer cannot have any access to the land. Therefore, the learned counsel for the applicant also seeks directions from this court to direct the Official Liquidator to give access to the Valuer appointed by the applicant so that proper valuation report can be prepared. To this request, Mr. K. S. Mahadevan submits that the Official Liquidator also already gotten the property assessed and valued by a duly appointed Valuer. Therefore, there may not be any need for the applicant to the valuation of the assets done.
Since the applicant is well within his rights to seek valuation of the assets, the Official Liquidator is directed to fix a particular date, in co-ordination with the applicant, for the Valuer appointed by the applicant to visit the property in question. The applicant is also permitted to be present on the date so fixed, and to see that the valuation done properly by the Valuer.
Furthermore, considering the valuation report prepared by the Official Liquidator, and the valuation report prepared under the supervision of the applicant, the Official Liquidator and the applicant are directed to fix a reserve price for the sale of the property in question. The Official Liquidator is further directed to issue an advertisement, for placing the property in question, on auction block. However, it is hereby clarified that the date for auction shall be intimated to the applicant, and the applicant shall be present on the date of auction. Before the finalization of the auction can be done, the bid offered by the bidders shall be brought to the notice of this court as required under the Act, and the Company Court Rules. An endeavour shall be made by both the parties to ensure that the auction is carried out efficiently.
The applicant is permitted to appoint a Valuer within a period of one week from the date of receipt of certified copy of this order. The Valuer so appointed is directed to assess the valuation of the property in dispute within a period of fifteen days from the date of visiting the property. The Official Liquidator is directed to permit the Valuer, along with the applicant, for having assess to the property in question, on the date and the time fixed by the applicant.
Once the valuation report is prepared by the Valuer appointed by the applicant, the applicant and the Official Liquidator shall declare "the reserve price" of the assets within fifteen days thereafter. The Official Liquidator is directed to issue an advertisement within a period of fifteen days from the date the reserve price is agreed upon by the parties. The auction shall be held after a period of thirty days from the date of advertisement; the report with regard to the bids offered shall be submitted before this Court within two weeks from the date of holding of the auction.
The application filed by the applicant is disposed of in terms of directions issued above.