Worldlink Finance Ltd. v. Regency Industries Ltd.

1. Mr. K.K. Rai, learned Senior counsel appearing for the Ghaziabad Development Authority (‘GDA’) refers to the counter affidavit dated 2nd 2013:DHC:197 November 2012 filed by the GDA, in which in para 18, it states as under: “18. In reply of para 18, it is stated that scheme of arrangement as shown in Annexure P-7 provided by the Applicant, that is statement, is not acceptable to the answering Respondent. The fact is that allotment in favour of M/s. Regency Industries Limited by Ghaziabad Development Authority, had been cancelled and eviction order has been passed by the competent authority under the U.P. Public Premises (Eviction of Unauthorized Occupant, 1972), this fact was brought to the notice of this Hon’ble Court in deponent’s earlier affidavit and if company wants to get allotment of this land after revival then as per the Government Order No. 4049/9-aa-1-99/16 committee/98 dated 20th November 1999, will be done on the 75 per cent of the prevailing market rate or authority sector rate which one is higher. Answering Respondent authority is working under the supervisory control of State Government under Section 41 of U.P. Urban Planning & Development Act, 1973 so that authority can only restore the allotment in accordance with the Government Orders. There have been number of such cases where allotment has been restored as mentioned above.”

2. In a reply the above counter affidavit of the GDA, the propounders of Scheme, Mr. Vinod Pal Singh and Deep Sons, point out that there were earlier two affidavits filed by the GDA, on 5th February 2007 and 27th June 2008, wherein GDA informed the Court that it had no objection to the property in question, Plot No. 12, Vaishali Yojna, being sold by way of public auction as long as the outstanding dues of the GDA are repaid together with penal interest @ 18% per annum till the actual date of payment. The reply affidavit also refers to the letter dated 29th March 1991 written by GDA to the Allahabad Bank conveying it no objection to mortgaging of rights and interest of the plot in favour of the Allahabad Bank “provided the total amount of the premium together with interest thereon, if any and 10% of the premium as lease rent of the plot for 90 years is paid to the authority.”

3. It is seen that in para 18 of the counter affidavit of GDA dated 2nd November 2012 GDA made a reference to the Government Order (‘GO’) dated 20th November 1999 which requires it to recover at least 75% of the current market rate value of the plot or the value arrived at by applying the sector rate notified by the GDA itself. However, it is seen that both the affidavits dated 5th June 2008 were filed subsequent to the said GO. In para 16 of its affidavit dated 5th February 2007 GD was categorically stated that it had no objection to the sale of the property by public auction as long as it was able to recover the dues together with penal interest at 18% per annum. The said stand was reiterated by the GDA in its subsequent affidavit 27th June 2008. It is on the basis of the above affidavits that further orders were be passed by the Court for valuation of the property. Several steps have been taken in respect of the company which is already in liquidation. GDA must be presumed to have filed two consecutive affidavits in 207 and 2008 after considering the aforementioned GO. In that view of the matter, GDA’s attempt to resile from that stand, five years later, cannot be permitted. GDA’s objections to the propounded scheme in para 18 of its affidavit dated 2nd November 2012 are rejected and GDA is held bound by the stand conveyed in the earlier affidavits dated 5th June 2008.

4. Mr. Vibhu Bakhru, learned Senior counsel appearing for the propounders, states that the payment will now be paid to the GDA of the outstanding amount together with 18% as panel interest within a period of two weeks.

5. Mr. Rajeev Arora, husband of the one of the investors, who is present in person states that her claim has been adjudicated by the OL. The OL has left the question of payment of interest to the Court.

6. Mr. Bakhru states, on instructions, that the propounder will pay 8% simple interest on the principal amount deposited by the investors up to the date of payment. The payment of the principal and interest amount will be made in four equal quarterly instalments, commencing from 30th day of the effective date. The investors who are in Categories ‘C’ and ‘D’ of the Nainital Project will also be paid similar rate of interest. The propounded scheme will now stand modified in the above terms.

7. The State Bank of Patiala (‘SBOP’), one of the secured creditors, has filed an application before the Debts Recovery Tribunal (‘DRT’)-II in Delhi against the Respondent company. Mr. Bakhru states that dues of the SBOP will be dealt with independent of the present proceedings. Learned counsel for the SBOP submits likewise. The said statements are placed n record.

8. With the above modification, the scheme propounded by Mr. Vinod Pal Singh and Deep Sons is sanctioned. It is however made clear that this is subject to the propounded paying the GDA its dues as stated above and the investors the amounts due it in terms of the above modification. The application is disposed of. Co. Application Nos. 2167, 2169 and 2170 of 2012 (filed by Mr. M.V. Singh, Mrs. Geetanjali Singh and Mr. Anuj Singh)

9. These are applications by individual investors in the Vaishali project. It is seen that in para 5.[2] (e) (A) of the Scheme of Arrangement, the Propounder proposes to repay to the flat allottees at Vaishali the principal amount originally invested in four quarterly instalments, commencing from 30th day of the effective date.

10. The applicants in Co. Application Nos. 2167, 2169, 2170 of 2012 are also investors in the Vaishali Yojna. However, these three applicants have not yet filed their claims before the OL. Considering that they are individual investors who have not filed their claims yet for bonafide reasons, the delay in their filing their respective claims is condoned and they are now permitted to file their respective claims with the OL positively within two weeks from today. The claims when filed will be decided by the OL in accordance with law and the decision communicated to the Propounders. Payments of the sums found due will be made by the Propounders in terms of the Scheme as sanctioned above. The applications are disposed of. With the completion of the above exercise, the OL will stand discharged. Co. Application No. 1177 of 2012 (filed by Ms. Nidhi Dayal)

11. This application stands covered by the order dated 9th November 2012 passed by this Court. The application is disposed of. Co. Application No. 1466 of 2012 (filed by Propounder)

12. Mr. Bakhru, learned Senior counsel for the Applicant/Propounder seeks permission to withdraw the application with liberty to file a fresh application if the circumstances so warrant. Accordingly, this application is dismissed as withdrawn with liberty as prayed for. Co. Application No. 2036 of 2012 (filed by OL)

13. Payment be made to the security agencies as proposed by the OL from the fund of the Common Pool Fund, OL. The application is disposed of. Co. Application No. 2234 of 2011 (filed by Mrs. Meera Sen)

14. This is an application filed by Mrs. Meera Sen stating that she had applied for an allotment of flat in Nainital project. Her claim has been examined by the Nainital Committee and her claim has been adjudicated for a sum of Rs. 2,64,525. The applicant states that she should be paid Rs. 8,20,712 that had been ordered in her favour by the District Consumer Disputes Redressal Forum, Lucknow.

15. Mrs. Sen is a claimant in the liquidation proceedings and cannot be expected to be treated differently for other similarly placed claimants notwithstanding she has an order in her favour from the DCDRF, Lucknow. Accordingly, the application is disposed of by directing that the OL will adjudicate her claim in terms of the Scheme that has been sanctioned. She will be entitled to simple interest at 8% per annum till the date of payment. Co. Application No. 2182 of 2012