The Tribunal affirmed the Liquidator's authority to sell Corporate Debtor's assets while emphasizing the necessity of timely liquidation actions to maximize asset values, dismissing the applicant's claims of ownership over disputed third-party lands.

1. The above Interlocutory Application bearing I.A. No. 883 of 2022 is filed by Stressed Assets Stabilisation Fund (hereinafter referred to as the “Applicant”) seeking direction against Ms. Rekha Kantilal Shah (hereinafter referred to as the “Respondent”) under Section 60 (5) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) praying for following reliefs:

“This Hon’ble Tribunal may be pleased to

i. To restrain the liquidator from selling the assets of the Corporate Debtor more particularly land parcels bearing Block Nos. 77 and 79 till the disposal of Interlocutory Application No. 1305 of 2020 and such other applications that the Liquidator may prefer in order to restore the original status of all land parcels;

ii. To Restrain the Liquidator from deletion of assets of the Corporate Debtor from the Liquidation estate and subsequent amendment of the asset memorandum; and

iii. To quash and set aside such deletion of assets of the Corporate Debtor from the Liquidation estate and subsequent amendment of the asset memorandum already done by the Liquidator.

iv. Pending the hearing and disposal of the present application stay the liquidation process till the disposal of Interlocutory Application No. 1305 of 2020 and all other such applications as may be preferred by the Liquidator for restoring the original status of the land parcels;

v. To direct the Liquidator to take appropriate steps against the promoters /erstwhile management and all such other persons who were involved in conducting the business of the Corporate Debtor with an intent to defraud the creditors for recovery of losses caused to the Corporate Debtor and to restore the original status of the land parcels;

vi. Costs of this interlocutory application;

vii. Any other order that this Hon’ble Tribunal may deem fit in the facts and circumstances of this case.”

Brief Facts of the Case

2. This application is preferred by the Applicant i.e. Stressed Assets Stabilisation Fund to restrain the Liquidator from deletion of all assets of the Corporate Debtor from the Liquidation estate and subsequent amendment of the asset memorandum and also to restrain the Liquidator from selling the assets of the Corporate Debtor i.e. land parcels bearing block Nos. 77 and 79 till the disposal of I.A.1305 of 2020.

3. The case of the Applicant is that IDBI had sanctioned a term loan of Rs. 7 Crores to the Corporate Debtor in December, 1998 by securing a first charge on the immovable properties of the Corporate Debtor situated at block No. 81 & 83 to 87 admeasuring in aggregate 21.68 bighas or thereabouts at Manglej Karjan Taluka, Sub-district Baroda, Gujarat. The said loan was also secured by personal guarantee of S/Shri Janardhan Prasad Chaturvedi, Rajendra Prasad Chaturvedi, Sudhir Chaturvedi and Samir Chaturvedi and a Pledge of 15.33 lakh number of equity shares of the Corporate Debtor held by Shri Sudhir Chaturvedi, Smt. Kalpana Chaturvedi, Shri Samir Chaturvedi, Modi Exim Pvt. Ltd and Bansibat Finance & Investment Pvt. Ltd.

4. The Applicant being a Special Purpose Vehicle (SPV) was assigned the debt of IDBI vide Trust Deed dated 24.09.2004. The Applicant submits that various attempts were made by promoters of Corporate Debtor to settle the said debt. Under the settlement proposal, an amount of Rs. 2.18 Crores was paid to the Applicant by the Corporate Debtor but in view of the defaults committed by the Corporate Debtor, the settlement proposal came to be revoked. It further submits that in March 2016, the Corporate Debtor produced