Full Text
HIGH COURT OF DELHI
Order reserved on : 04 April 2024
Order pronounced on: 06 May 2024
1312/2015, CO.APPL. 2174/2015, CO.APPL. 2886/2015, CO.APPL. 4160/2016, OLR 9/2016, OLR 28/2020
LORD KRISHNA BANK LTD. ..... Petitioner
Through:
Through: Ms. Ruchi Sindhwani, Sr.
Standing Counsel
Mr. Pawanjit Singh Bindra, Sr.
Adv.
Mr. Arjun Nanda, Adv. for applicant in CA No. 1019/2017
15/2024
ORDER
1. The CO.APPL. 1019/2017 dated 01.05.2017 has been moved by the applicant - Mr. Sachin Jain, who is a third party objector (hereinafter referred as applicant/third party objector), under Section 460 of the Companies Act, 1956 read with Rules 6 and 9 of the Companies (Court) Rules, 1959, praying that the Official Liquidator be directed to refund the amount of Rs. 57.50 Lacs deposited by the applicant pursuant to the directions/order dated 03.06.2009 by the learned DRT, Delhi[1] along with due interest @ 18% per annum from the date of deposit. The other application being CO.APPL. 211/2024 has been moved on behalf of the Official Liquidator seeking condonation of delay in filing the OLR/Status Report bearing NO. 15/2024. The same is condoned and OLR No. 15/2024 taken on record. Accordingly, the application bearing CO. APPL. 211/2024 stands disposed of.
2. Shorn of unnecessary details, the movable and immovable assets of the company (in liquidation) were ordered to be auctioned by the DRT in an OA bearing No. 148/2002, filed by the IFCI[2] being a Secured Creditor in terms of order dated 20.04.2006, and consequent thereto recovery proceedings were initiated. It is borne out from the record that since only the movable assets of the company (in liquidation) were mortgaged with the Secured Creditor, on the commencement of the winding up proceedings, IFCI was directed vide orders of this Court dated 01.08.2013 and 11.11.2014 to deposit the proceeds/funds realised from the sale/auction of as many as seventy six immovable assets of the company (in liquidation) with the Official Liquidator.
3. It further borne out from the record that pursuant to the abovenoted orders of this Court, IFCI deposited a total sum of Rs. 13,10,19,293/- with the Official Liquidator during the period 13.01.2009 to 06.02.2012 in the following truncated manner - Rs 4,89,64,150/- on 22.10.2013; Rs.2,20,90,173/- on 27.11.2013; 1 Debt Recovery Tribunal Industrial Financial Corporation of India Rs.88,66,077/- on 27.02.2015 and Rs.5,10,98,893/- on 10.04.2015.
4. However, a stalemate arose since the IFCI did not provide a break-up or bifurcation of the amounts received with respect to the properties sold/auctioned under the aegis of the learned DRT.
5. At this juncture, it is apposite to note that the present application pertains to the sale of the property of the company (in liquidation) viz., the Microwave Tower as well as the Land situated at Aligarh, Western Uttar Pradesh, which sale was conducted vide the orders of the learned DRT dated 23.04.2009. It is the case of the applicant/third party objector that they were willing to purchase the property in question for an amount of Rs. 57,50,000/-, which was in excess of the bid amount of Rs. 56,50,000/- put forth by the highest bidder – Ms. Asha Gautam. Pursuant to the same, the applicant filed certain objections before the learned DRT against the order permitting the sale of the subject property, which objections came to be considered by the learned Recovery Officer, DRT-I, Delhi and the applicant was directed to deposit the entire proposed amount of Rs. 57,50,000/- vide order of the DRT dated 03.06.2009, which was evidently deposited on 10.07.2009 with the Recovery Officer. Later vide order dated 06.04.2011 the entire auction was set aside and the auction of the property was ordered to be done afresh and it was also directed that the amount deposited by the applicant/third party objector be refunded.
6. Aggrieved thereof, Ms. Asha Gautam instituted an appeal before the DRAT[3], contesting that her bid be confirmed and vide order dated 14.01.2013, the learned DRAT allowed her appeal, and eventually the sale of the aforesaid property at Aligarh was confirmed in her favour. Although, the applicant challenged such order in a Writ Petition bearing No. 2752/2013, the same was dismissed by this Court vide order dated 30.04.2013.
7. In the said backdrop, the applicant/third party objector herein sought a refund of the amount deposited in compliance with the order dated 03.06.2009, firstly by moving before the DRT; but based on the submissions of the learned counsel for IFCI, that such amount had already been deposited with the OL on 26.02.2015 comprised in remittance of Rs. 88.66 Lacs, the DRT declined his request giving him liberty to approach the Official Liquidator vide order dated 06.05.2015 and 23.05.2015 for the refund.
8. It is evident that the amount deposited with the DRT stood transferred to the IFCI on 19.03.2010, and the latter has claimed that the said amount subsequently stood transferred to the Official Liquidator in compliance with the orders of this Court dated 01.08.2013 and 11.11.2014. However, the issue which has arisen is that although IFCI has deposited a sum of Rs. 13,10,19,293/- with the Official Liquidator, it has failed to render/provide an account of the bifurcation of the monies realised from the sale of various assets, and as a result the Official Liquidator is unable to discern whether or not the said amount deposited by IFCI included the Applicant‟s deposit, which is sought to be refunded.
9. It is submitted on behalf of the applicant/third party objector, that the present application is predicated on the affidavit filed by the IFCI on 05.03.2015 before the learned DRT, wherein it is stated that the sum of money, which is to be refunded to the applicant herein, stands deposited with the Official Liquidator. The relevant portion of the affidavit dated 05.03.2015, filed on behalf of the IFCI, is reproduced hereinbelow: "the deponent submits that in compliance of Hon 'ble High Court's order dated 01.08.2013 & 11.11.2014, IFCI has deposited Rs.4,89,64,510/- on 22.10.2013, Rs. 2, 20, 90, 173/- on 27.11.2013 and Rs.88,66,077/- on 02.03.2015 with the OL which was received against the auction of the land only and therefore, money belonging to objector Shri Sachin Jain has also been deposited with the OL.".
10. A reply to the instant application, dated 04.04.2022 has been filed by IFCI, wherein it is canvassed that the amount payable to the applicant has already been deposited by IFCI with the Official Liquidator. In this regard, it is brought forth that the amount of Rs. 88,66,077/- transmitted by IFCI on 26.02.2015 to the Official Liquidator included the amount of Rs. 57,50,000/-, which had been deposited by the applicant to the learned DRT. Therefore, it is stated on behalf of IFCI that the refund of Rs. 57,50,000/-sought by the applicant, is payable by the Official Liquidator out of the amount of Rs. 13,10,19,653/- deposited by IFCI in the period from 22.10.2013 to 10.04.2015.
11. Per contra, the Official Liquidator has moved two status reports being No. 28/2023 and 15/2024, in respect of the present application, which are taken on the record and suffice to state that it is lamented therein that IFCI has repeatedly failed to provide sufficient details regarding the bifurcation of the amount deposited with the Official Liquidator in the above-mentioned affidavit. Pursuant thereto, IFCI has been directed to place on the record an affidavit providing the requisite details/necessary break-up of the sum deposited with the Official Liquidator, vide order of this Court dated 28.01.2022.
12. In compliance thereto, IFCI filed an affidavit dated 04.02.2022 and the property wise details and break-up of the amounts was provided in Annexure ‘C’ of the affidavit. In response to said affidavit, the Official Liquidator placed on the record a status report bearing No. 28/2023, wherein it is pointed out that the said affidavit does not mention the name of the applicant, either in the table which provides the details of the sale considerations of each of the assets/properties, or in the table enumerating the amounts refunded to the unsuccessful bidders. It is further urged that although IFCI has stated that the amount of Rs. 88,66,077/- deposited with the Official Liquidator on 26.02.2015, includes the amount payable to the applicant herein. However, in the absence of a property wise break-up of the amount, the averment of the applicant remains unsubstantiated.
13. A new twist in the tale came forth when IFCI subsequently filed an affidavit dated 12.05.2023, by which it sought to withdraw Annexure ‘C’ to its earlier affidavit dated 04.02.2022, claiming an inadvertent error in the same. In this regard, on behalf of the Official Liquidator it is urged that in case Annexure ‘C’ is withdrawn, the IFCI must comply with the directions of this Court and file a fresh break-up of the amounts realised from the sale of the properties of the company (in liquidation). On behalf of the Official Liquidator an alternate plea is also canvassed that in case IFCI is unable to provide a detailed break-up, it should place on the record the sale deeds of each of the properties auctioned so as to bring a quietus to the controversy.
ANALYSIS & DECISION:
14. I have given my thoughtful consideration to the submissions advanced by the learned counsels for the rival parties at the Bar. I have perused the relevant record of the case.
15. At the outset, ICFI is cutting an extremely sorry figure in demonstrating that the amount of Rs. 57.50 Lacs received from the applicant/third party objector was remitted to the Official Liquidator comprised in the payment made on 26.02.2015/27.02.2015 amounting to Rs. 88,66,077/-. First things first, evidently the amount of Rs.
57.50 Lacs, which was deposited by the applicant/third party objector with the DRT was remitted to the ICFI and received by it on 19.03.2010. The applicant/third party objector was constrained to move the instant CO. APPL. 1019/2017 before this Court on 01.05.2017 and the matter has lingered on for want of submission of better particulars on the part of IFCI. The matter came up for consideration before this Court on 28.01.2022 and it would be apposite to refer to the detailed directions that where passed by this Court, which are as follows: “CO.APPL. 1019/2071 (for directions)
1. The applicant in this application claims to be one of the bidders with respect to properties which were auctioned by the IFCI. Consequent thereupon, the IFCI is stated to have remitted certain moneys to the Official Liquidator, claiming to be proceeds of the auction. Several applications on this aspect are pending before this Court.
2. As far back as on 27 th February, 2018, this Court had directed the IFCI in OLR 9/2016 and Co Appl 2174/2015 to file a statement giving the details and breakup of payments which have been deposited with the Official Liquidator.
3. On 22 nd May, 2018, the IFCI sought further time to comply with the said direction. The matter was re-notified on 28 th September,
2018.
4. On the said date, i.e. 22 nd May, 2018, the present application also came up for hearing. The Official Liquidator was directed to file a reply within four weeks.
5. On 28 th September, 2018, the IFCI sought ten days time to file reply to the present application (Co Appl 1019/2017) and was also directed to furnish the necessary breakup as stated in the order dated 27 th February, 2018 passed in OLR 9/2016.
6. IFCI was granted further time to file a reply to the present application on 30 th April, 2019.
7. On 23 rd July, 2019, when the present application again came up for hearing, IFCI was once again directed to file a breakup of the payment proceeds pursuant to auction and to file a reply to the present application.
8. On 12 th February, 2020, the IFCI was again directed to file a reply to the present application. The IFCI requested for time, yet again, to file the breakup of the amounts collected from the DRT and deposited with the Official Liquidator and was granted one week to do so.
9. Till date, neither has the IFCI filed a reply to the present application nor has the breakup of the amount received from the DRT been filed to this Court.
10. This is rank disobedience of the order passed by this court and may invite initiation of contempt proceedings against the IFCI.
11. Before doing so, the IFCI is granted, at request of Ms. Priyal Modi, learned Counsel for the IFCI, a further and final opportunity of ten days and no more to file the breakup of the amounts received from the DRT and furnished to the Official Liquidator, specifically stating the breakup property-wise, with respect to the properties which have been auctioned through the DRT.
12. The IFCI would also file its reply to the present application with an advance copy to the applicant and a copy to the Official Liquidator who may file response thereto, if any, before the next date of hearing.
13. In the event of the IFCI failing to file the breakup and the reply within ten days from today, the IFCI shall deposit costs of Rs.[1] lakh with the Registrar General of this Court within one week from the next date, failing which this Court would initiate contempt proceedings against the IFCI.
14. The IFCI shall further explain, in both the breakup as well as the affidavit filed in reply to the present application, the delay in complying with the orders passed by this Court despite repeated orders having been passed as already noted hereinabove. The officer/officers responsible for such delay shall also be named in the said affidavit so that, should necessity arise, this Court can proceed against the said officers.
15. Re-notify on 24 th February, 2022.”
16. Pursuant to the aforesaid directions, the first affidavit was filed by Ms. Pooja Singla, Deputy General Manager (Law) on behalf of ICFI on 04.02.2022, in which inter alia it was deposed that a copy of statements separately showing details of payments from sale of movable and immovable assets of the company (in liquidation) had been submitted with the Official Liquidator forming Annexure ‘C’ wherein it is canvassed that the Official Liquidator had been paid a sum of Rs. 10,12,63,537/- towards the sale proceed of immovable properties and a sum of Rs. 2,97,55,756/- towards the interest on the sale process of immovable properties, aggregating to a total of Rs. 13,10,19,653/-.
17. However, since the contents of the affidavit and the documents disclosed were objected to by the Official Liquidator, Ms. Pooja Singla, Deputy General Manager (Law) on behalf of IFCI, filed another affidavit dated 12.05.2023 bringing out that in terms of the directions of this Court, the officials of IFCI had meetings with the Official Liquidator on 09.03.2023, 13.03.2023 13.04.2023 and vide letter dated 28.03.2013 a fresh affidavit had been filed dated 12.05.2023 inter alia reiterating that a sum of Rs. 64,34,923/- with regards to the payment received from the applicant/third party objector had been paid to the Official Liquidator which was comprised in the amount of Rs. 88,66,077/- paid on 27.02.2015.
18. However, the controversy still stood unresolved and thereafter a third affidavit dated 28.02.2024 came to be filed by the Deputy General Manager (Law) of IFIC consequent to the OLR No.28/2023 in which inter alia it was submitted that Annexure „C‟ filed with the first affidavit dated 04.02.2022 contained an incorrect figure inasmuch as the amount refunded to S.K. Trading, the highest bidder of the Haldwani property was wrongly also included and that the Haldwani property was entangled in litigation before the learned Civil Judge, Nainital, and thus, possession of the same could not be handed over by the DRT to the Auction Purchaser, and hence, such amount had already been refunded to the auction bidder.
19. By way of the third affidavit, IFCI sought permission to withdraw Annexure „C‟ to the affidavit dated 04.02.2022 bringing out that it required deletion of the entry pertaining to the Haldwani property, of an amount of Rs. 26,91,010/-, which was refunded to S.K. Trading in terms of the DRT order dated 13.04.2010. By way of the third affidavit dated 28.02.2024, a fresh Annexure „A‟ is submitted whereby certain details are given with regard to the entire land and towers/movable properties sold by the DRT/Recovery Officer.
20. A careful perusal of the Annexure „A‟ titled “DETAILS OF ALL THE LAND/TOWERE SOLD BY THE DRT” would show that the respective columns are containing abridged information/data about the location of the property of the company (in liquidation), the first name of the Auction Purchaser and the amount of sale consideration. I am afraid that the said Tabulated statement does not account for the amount of Rs. 57.50 Lacs received by IFCI and deposited by the present applicant/third party objector. As per IFCI, there were seven unsuccessful bidders whose amounts were to be returned. There is no mention of the applicant/third party objector therein too.
21. The long and short of the aforesaid discussion is that even in Annexure ‘C’, filed with the affidavit dated 04.02.2022, the receipt of Rs. 57.50 Lacs from Mr. Sachin Jain i.e. the applicant/third party objector is not accounted for. There is no covering letter accompanied with the remittances that have been made on 26/27.02.2015 so as to suggest that the amount of Rs. 88,66,077/- included the refund of amount of Rs. 57.50 Lacs with interest payable to the applicant/third party objector. The tabulated statement, which has been submitted with the aforesaid affidavit is not accompanied with the copies of sale deeds or letters for confirmation of sale to various Auction Purchasers when the matter was alive before the DRT and it does not account for the date of receipt of the said proceeds either. Even assuming the deposition in the affidavit dated 28.02.2024 to be correct for the sake of convenience and it is true that the amount, which was refunded to the S.K. Trading with regard to the property at Haldwani, had been refunded, by the same very logic the tabulated statement should have shown the amount which is due to the applicant/third party objector.
22. The upshot of the aforesaid discussion is that IFCI has not duly accounted for the amount payable to the applicant/third party objector. The details of the remittances made by IFCI to the Official Liquidator are yet to be verified and their claims as to the secured creditor are yet to be adjudicated upon by the Official Liquidator, apart from the other secured creditor, which is IDBI. Therefore, unhesitatingly, this Court finds that IFCI remains accountable and liable to make payment of Rs.
57.50 Lacs to the applicant/third party objector and the said amount should be refunded along with interest.
23. In view of the foregoing discussion, the present application moved by Mr. Sachin Jain i.e. applicant/third party objector is allowed. The same is to the effect that IFCI is directed to make payment/refund the amount of Rs. 57.50 Lacs to the applicant/third party objector along with interest @ 18% per annum from the date of deposit i.e., 19.03.2010 till its realization. The amount be paid within six weeks from today, failing which IFCI shall be liable to pay penal interest @ 24% from the date of this judgment till realization.
24. The present application bearing CO. APPL. 1019/2017 stands disposed of accordingly.
DHARMESH SHARMA, J. MAY 06, 2024