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2024 Supreme(Online)(NCLT) 1599
NATIONAL COMPANY LAW TRIBUNAL
SANJIV JAIN, MEMBER (JUDICIAL), VENKATARAMAN SUBRAMANIAM, MEMBER (TECHNICAL)
M/s. Hotel Milestonnez India Private Limited – Appellant
Versus
State Bank of India – Respondent
IA(IBC)/530(CHE)2023 IN CP/243/2021
For the Applicant:E. Om Prakash, Senior Advocate, Ms. Jayanti K Shah
For the Respondent:Shri. Raghavalu Naidu, Advocate, Ms. Rishita Kishan, Advocate
A liquidator cannot add assets belonging to guarantors to the liquidation estate as current provisions do not permit such intermingling.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5) and 36 - Liquidation proceedings against Corporate Debtor - Liquidator requested to add mortgaged land to the liquidation estate - Court ruled that as per current provisions, intermingling of assets is impermissible as they do not conform to the Code - Joint sale recommended to maximize asset value. (Paras 29, 30)
(B) Security Interest - Rights of Guarantors - Respondents were estopped from opposing the intermingling of assets given their prior participation in discussions - Legal possibilities analyzed with respect to joint sale and security interests. (Paras 25, 27, 30)
| Table of Content |
|---|
| 1. basics of the insolvency resolution process. (Para 2 , 3 , 4 , 5 , 7 , 10) |
| 2. arguments concerning mortgage and land ownership. (Para 8 , 15 , 16) |
| 3. analysis of legal provisions relevant to liquidation. (Para 22 , 23 , 24) |
| 4. legal findings regarding intermingling of assets. (Para 29) |
| 5. final directions and outcome of the case. (Para 30 , 31) |
ORDER
(Heard through video conferencing mode)
This application under Section 60 (5) and Section 36 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has been filed by the Applicant/Liquidator, Mr. Amier Hamsa Ali Abbas Rawther seeking following reliefs:
A) To pass an order directing the respondents to handover the physical possession of the mortgaged leasehold land of the Corporate Debtor ( both Express Lease, period since expired & implied lease) lands vide MOD dated 04.10.2023 registered as document No 3672 of 2013 & 3673 of 2013 used by Corporate Debtor into the Liquidation Estate of the Corporate Debtor.
B) To pass and order directing the Liquidator-Applicant to add the mortgaged land ( Express lease since expired – 146 cents and implied lease – 132 cents ) vide MOD dated 04.10.2013 registered as document No 3672 of 2013 & 3673 of 2013 into the liquidation estate of Corporate Debtor and C) To pass any other order/orders that this Hon’ble Tribunal may deem fit and proper.
BRIEF FACTS
2. The Corporate Insolvency Resolution Process involving Hotel Milestonnez India Private Limited (Corporate Debtor) was initiated pursuant to a petition under Section 7 of the Code filed by State Bank of India (Respondent 1), the financial creditor before NCLT Chennai. The Corporate Debtor was admitted into CIRP on 19th April 2022 vide order No. CP IB 243 of 2021 of the Adjudicating Authority. Public announcement was made on 22.04.2022.
3. The applicant was appointed as IRP and later confirmed as RP. The COC was formed with State Bank of India as the sole financial creditor. Form G was published on 04.07.22 and 01.08.22. Last date for submission of resolution plan was fixed on 10.10.22 which was subsequently revised to 26.10.22. No resolution plan was received by R.P. On 15.11.22 in the 8th COC meeting, it was resolved by COC with 100% majority to liquidate the Corporate Debtor. Adjudicating Authority on 15th Feb 2023 in IA 1425 CHE 2022 in IBA 243 CHE 2021 ordered for the liquidation and appointed the applicant as liquidator.
SUBMISSIONS BY APPLICANT
4. It is stated that State Bank of India (Respondent 1) holds, among other securities, mortgage of landed properties owned by the Respondents 2 and 3, wherein the hotel owned by the Corporate Debtor is constructed, by availing credit facilities from SBI. It is stated that SBI had initiated SARFAESI proceedings and took possession of the land premises in exercise of its power under Section13 (4) of SARFAESI Act on 15.09.2015.
5. It is stated that as SBI had relinquished the rights of the property to Resolution Estate and consented to add the entire assets in the resolution estate. Accordingly, Form G was published adding the land in the names of the guarantors as resolution estate. It is stated that paper publication calling for Expression of Interest was made and there were 9 entities expressing the interest. It is stated that even though 9 EOIs were received, because of the landed properties in the name of suspended directors and hotel complex in the name of the Corporate Debtor, none of them was ready to provide EMD and submit the resolution plan, even though all of them carried out the due diligence.
6. It is stated that in the 3rd CoC meeting dated 25.07.2022 and 4th CoC meeting dated 05.09.2022, the issue of intermingling of assets of Corporate Debtor and the promoters into the resolution estate and thereby incorporating the same in Information Memorandum was discussed and it was decided by the CoC to send a letter to the personal guarantors, seeking their cooperation in conducting CIRP process by including the land parcels mortgaged by them to
