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Judgment
Per: JUSTICE (RETD.) S. RAMATHILAGAM, MEMBER (JUDICIAL)
Under Consideration is an application filed by the Liquidator one Mr. M. Murugesan of M/s. Velohar Infra Private Limited under Section 35 (1) (f) & 35 (1) (n) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (in short 'I&B Code, 2016').
The prayers made by the Applicant in the Application are as follows:-
a)To permit the Applicant to sell the vehicle Registration No: TN 22 DF 9290 by way of private sale;
b)As the realizable value is small, permit the applicant to dispose vehicle without any paper advertisements for private sale if any, as it would add additional costs;
c)Direct the RTO to remove the hypothecation charges in favour of Mahindra and Mahindra Financial Services Ltd, Porur Branch, Chennai and register the vehicle in the name of the proposed buyer as identified by the liquidator;
d)In case no buyer is forthcoming, permit the liquidator to distribute to the stakeholders in conformity with Regulation 38 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016; and
e)pass other or further orders which may deem fit and thus render justice.
It is averred by the learned counsel for the applicant that CIRP against M/s. Velohar infra Private Limited was initiated vide order dated 29.08.2018 in IBA/114/2018 by this Adjudicating Authority in which the applicant herein was appointed as the Interim Resolution Professional of Corporate Debtor. It is further averred that an order of liquidation against the Corporate Debtor along with appointment of the Applicant as Liquidator was also passed vide order dated 12.06.2019 in MA No. 524A of 2019 in IBA/114/2018.
It is averred that the Applicant, after having been appointed as the Liquidator, by exercising his powers under Section 35 of IBC, 2016 has obtained the custody and control of some of the assets of the Corporate Debtor. One among such is an immovable property i.e., a land measuring an extent of 2705 Sq. Ft. as per document and 2691 Sq. Ft. as per patta, along with Building having a built-up area of 5,525 Sq. Ft. situated at 1F, Th Cross Street, Wood Creek County, Nandambakkam Village, Chennai 600 016 standing in the name of the Corporate Debtor. It is further averred that e-auction was announced for the said property, which was a failure for want of buyers even after conducting three e-auctions.
It is further averred that under the above said circumstances, the Applicant/Liquidator herein had moved an application before this Adjudicating Authority vide IA No. 1295 of 2020 seeking permission for private sale of the above mentioned property and that the Liquidator vide daily order dated 23.09.2021 was directed to explore the possibility of private sale and to submit the finalized sale before this Adjudicating Authority for approval.
Subsequently, the applicant came to know that a Light Goods vehicle (TN22DF9290) is under the custody of Sri City Police Station, Andhra Pradesh without any FIR or case pending; the details of the said vehicle which is hypothecated to Mahindra and Mahindra Financial Services Ltd./Respondent are described in pg. no. 5 of the Application. It is further averred that the liquidator had shifted the said vehicle to Ambattur Industrial Estate, Chennai with the help of M/s. Zulaika Motors Pvt. Ltd. with due permission from the said police station.
It is averred in the application that the applicant herein has not received any claim from the Respondent/ Mahindra and Mahindra Financial Services Ltd. despite multiple letters sent and personal visit once by the Liquidator/Applicant. It is averred that neither a claim nor a NOC or a closure certificate has been issued by the respondent herein. Subsequently, the liquidator upon exercise of his power under Section 35(b) of the Insolvency and Bankruptcy Code, 2016 has taken the said vehicle into his custody and has also obtained Valuation report from two registered valuers whose valuation is tabulated at pg. no. 7 of the application.
It is further averred that the vehicle was under police custody since 2017 and that it is not in a running Condition, owing to which the applicant has sought permission to either sell the vehicle by way of a private sale or to sell the said vehicle in accordance with Regulation 38 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
Heard the submission made by the Learned Counsel for the Applicant and perused the documents placed on record, when the matter was taken upon for hearing upon notice to both the parties, the respondent in the instant matter neither appeared nor has filed vakalath. Accordingly, this matter was taken upon in the absence of the said respondent. The prayer sought in the instant application as to direction for private sale without any paper advertisement is permitted considering the condition of the vehicle and the valuation report submitted. This Adjudicating Authority is of this view, by application of Regulation 21-A (3) the IBBI (Liquidation Process) Regulations, 2016, which describes that where a secured creditor fails to comply with Regulation 21-A(2) of the IBBI (Liquidation Process) Regulations, 2016, the assets, which are subject to security interest shall become part of the liquidation estate.
Accordingly, Prayer (i), (ii) and (iii) is Allowed, and that the Applicant/ Liquidator is directed to explore the possibilities of the sale and finalize the sale in accordance with Schedule 1 (Private Sale) of the IBBI (Liquidation Process) Regulations, 2016. The applicant is accordingly allowed to approach the RTO concerned for removal of hypothecation charges and for issuance of a fresh RC in the name of the prospective buyer by payment of necessary fee, if any. The applicant is directed to file an Asset Sale Report in accordance with Regulation 36 of the IBBI (Liquidation Process) Regulations, 2016 before this Adjudicating Authority upon successful completion of the sale.