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DINESH MITTAL & ORS. vs M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. LTD

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$~C2, C36 & 27SB
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:-10th October, 2023.
+ CO.PET. 39/2009 and CO.APPL. 543/2013, 1585/2013, 2568/2015, 3278/2015, 765/2016, 2966/2016, 75/2018, 441/2018, 689/2018, 830/2018, 1357/2018, 545/2020, 655/2020, 5/2021, 444/2022, 445/2022, 734/2022, 735/2022, 36/2023, 50/2023, 69/2023, 70/2023, 513/2023, 582/2023, 634/2023, 713/2023,OLR 114/2018
DINESH MITTAL & ORS. ….. Petitioner
Through:
versus

M/S TRIVENI INFRASTRUCTURE DEVELOPMENT
CO. LTD ….. Respondent
Through: Mr. Pratima N Lakra CGSC with Ms. Vanya Bajaj, Advocate for UOI (M: 9968324260).
Mr. Abhimanyu Bhandari, Ms. Nattasha Garg, Mr. Thakur Ankit Singh, Mr. Abhay K Das, Mr. Raghav Alok, Advocates for Applicant in CA 655/20 and CA/545/20 (M: 96549 98650).
Mr. Gaurav Gupta, and Mr. Devraj Bhattacharjee, Advocates for Applicant – Zion Promoters and Developers Pvt Ltd.
Mr. Apoorv Kurup and Ms. Gauri Goburdhun, Advocates for UOI (M: 9910200994).
Mr. Satyajit Sarna and Mr. Devashish Marwah, Advocates for OARC (M: 7042492843).
Mr. Jay Savla Sr. Adv. with Mr. Prabhat ChauraApplisia and Mr. Rajpal Singh Advocates for Applicant\Sicom Ltd. CA 50/2033, CA 634/2023 (M: 9873849435).
Mr. Sanghram Singh and Mr. Himanshu Singhal, Advocates.
Ms. Ruchi Sindhwani, Standing Counsel with Ms. Megha Bharara, Advocate (M: 9811533510).
Mr. Aditya Gauri, Mr. Vivek and Mr. Akhand Pratap Singh Gaur, Advocates for Applicant in 713/2023 (M: 9654701932).
C36 WITH
+ CO.PET. 333/2010 & CO.APPL. 2375/2011, 1843/2013, 905/2016, 4542/2016, 4587/2016, 1113/2017, 1664/2017, 315/2018, 384/2019, 1082/2019, 659/2021, 749/2022, OLR 255/2017
SH. SAMEER SHARMA ….. Petitioner
Through:

versus

M/S TRIVENI INFRASTRUCTURE DEVELOPMENT
CO LTD ….. Respondent
Through: Mr. Abhimanyu Bhandari, Ms. Nattasha Garg, Mr. Thakur Ankit Singh, Mr. Abhay K Das, Mr.Ragahv Alok, Advocates for Applicant in CA 659/21 & CA/749/22 (M: 96549 98650).
Ms. Ruchi Sindhwani, Standing Counsel with Ms. Megha Bharara, Advocate (M: 9811533510).
27SB AND
+ W.P.(C) 2709/2021&CM APPL. 8081/2021, 36818/2021
GANGA RAM AGARWAL ….. Petitioner
Through:
versus

TRIVENI INFRASTRUCTURE DEVELOPMENT COMPANY LIMITED THROUGH ITS OFFICIAL LIQUIDATOR MR.D.KSINGH ….. Respondent
Through:
CORAM:
JUSTICE PRATHIBA M. SINGH

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.
CO.APPL. 1357/2018 ( for delay) in CO.PET.-39/2009
2. This is an application seeking condonation of delay. In view of the reasons stated in the application. The delay is condoned.
3. Application is disposed of.
CO.APPL. 445/2022, CO.APPL. 735/2022, CO.APPL. 70/2023 (exemption) in CO.PET.-39/2009
4. These are applications seeking exemptionfrom filing the certified copies of annexures and true type copies.
5. Exemption allowed subject to all just exceptions. Applications are disposed of.
CO.APPL. 582/2023 ( for early hearing) in CO.PET.-39/2009
6. This is an application for early hearing of CA. NO. 72/2021. The application has now become infructuous.
7. Accordingly, application is disposed of.
CO APPLs. 330/2016, 695/2016, 72/2021, 476/2013, 89/2021, 181/2021, 180/2021 in CO.PET.-39/2009
8. These applications are filed by two Applicants namely Zion Promoters and Developers Pvt. Ltd. (hereinafter, ‘ZION’) and M/s Zion Sector 78, Allottees Association. The promoters of ZION are Mr. Narender Hooda, Mr. Kuldeep Singh and Mr. Anil Kumar Munjal.
9. The present petition has been filed seeking winding up of the Respondent company – M/s Triveni Infrastructure Development Company . Ltd. (hereinafter, ‘TIDCO’).
10. The promoters of TIDCO are Mr. Madur Mittal and Mr. Sumit Mittal. TIDCO is the owner of a large parcel of land admeasuring 37.34 acres at Sector 78, Faridabad, Haryana.
11. On 19th December, 2007, an unregistered MoU was executed between TIDCO and ZION. Vide the said agreement TIDCO conveyed and transferred to ZION all its rights, title and interest in the construction and sale of part of the group housing for 3,00,000 sq.ft. Floor Space Index (FSI) admeasuring 2.463 acres situated at Sector 78, Faridabad, Haryana. The agreement also contemplated execution and registration of an irrevocable power of attorney in favour of ZION. The relevant clauses of the agreement are extracted below:
“
xxx
3.1 That for the consideration as agreed in this Agreement, Owner hereby agree to grant, convey and transfer to the second party all their rights, titles interest in the construction and sale of the part of group housing for the area of 3,00,000/- (Three Lacs) sq. ft. (FSI) over land measuring 2.463 acres situated at Sector -78 of Faridabad. detailed in Annexure-C (details of land as per Rect. No. Killa No., Musli No. and Area) and more specifically shown in colour yellow in Annexure-D comprising of 3,00,000/- sq. ft. (approximately) of sanctioned FSI without any compounding rights on the 3,00,000/- (Three Lacs) sq. ft. (FSI), which includes FSI area for EWS on the said property (hereinafter referred to as the said area) and the second party hereby agrees and undertakes to develop and construct the said area in accordance with the sanctioned plans/revised sanctioned plan from time to time, approvals and licenses subject to the terms and conditions of this Agreement. The second party shall be liable to construct the EWS flat and to dispose them in accordance with law within the group housing for the area of 3,00,000/- (Three lace) sq. ft. (FSI) over land measuring 2.463 acres situated at Sector-78 of Faridabad detailed in Annexure-C.

3.2 That it is hereby clarified that the second party shall be responsible for construction of EWS flat proportionate to the said area on the portion marked in blue in Annexure-G annexed to this Agreement. The second party shall construct the club at its own expenses on the said and (if required), which shall primarily be used by prospective buyers. The community services including the club required shall also be provided by the second party, for which no extra FSI would be provided. The owner have No Objection if the second party approaches, negotiates and gets approval/sanction from the bank or any other financial institutions so as to enable its customers to obtain home loans pertaining to the said land/flats to be constructed thereupon. The Second party shall not mortgage the said property during the pendency of this agreement. The Owner will cooperate so as to ensure that is prospective Buyers of the constructed flats can get Home Loan bank or financial institute,

3.3 That the second party shall develop and construct at its cost the said area as per the sanctioned/revised plan, furnished and obtained by the second party/owner at the cost of the second party and which may be modified from time to time after obtaining such permission from the Owner or its nominated appointed authority as stipulated in this Agreement. In case the plans/map is applied for sanctions in respect of the said land then the cost of obtaining the said approvals/sanctions shall be borne by second party only.

3.4 That the Owner shall execute and register irrevocable Power of Attorney in favour of the nominees of the second party containing such powers as may be agreed and needed by the second party for the purposes of construction and sale of the scheduled area including but not limited to right to booking, sale, transfer, lease, only in respect of the said area or any part thereof.
xxx

3.9 That it is hereby agreed and confirmed by the parties that the second party shall be responsible and liable for payment of all charges, cesses, duties and levies including but not limited to external development charges that may be leviable from the date of execution of this Agreement in respect of the said property in proportion to the entire area of the project.”

12. Pursuant to the said agreement, a general power of attorney dated 24th December, 2007was also executed in favour of Mr. Narender Hooda by which, the power of attorney holder was given the right to negotiate and enter into agreements for sell and transfer the said property in a whole, by way of lease, sale, to execute, sign and present sale deeds, release deeds, etc. The details of powers which were given to the power of attorney holder are set out below:
“ANNEXURE A/3
NOW THIS POWER OF ATTORNEY WITNESSETH as Under:
That we, the above named Executants, do hereby (Jointly and Severally) constitute, appoint, authorize and nominate Shri Narender Hoods S/o Shri DC. Hooda resident of 997, Sector -15, Sonipat (Haryana) and Shri Anil Kumar Munjal S/o Shri Kishan Chand Munjal resident of 901, GH-25, Sector 2/G III, Faridabad (Haryana) and on behalf of the company, as our true and lawful General Attorneys in respect of the said property (fully described above) and we do hereby empower our said Attorneys (Jointly and Severally) to do the following acts, deeds and things in our names and on our behalf.
To manage, control, supervise the said property in all respects and to represent us before the concerned authority in this behalf.
To obtain the permits and quotas of the building materials, to appoint any employees, executives and engage any contractors, architects, labour contractors, workmen, electricians, plumbers, engineers and any other person(s) for completion of the construction, additions, alterations, to sign any contracts, appointment letters, representations, furnish any indemnities, guarantees, to deposit securities and obtain discharge thereof including making applications and obtaining any Forms, sewerage connections, Completion Certificate and to pay any compounding fee, composition fee. regularization fee, betterment charges on such terms and conditions as our attorneys shall lawfully deem fit and proper.
To get the water, electric gas power, sever telephone, connection/metersinstaled or changed including enhancement of load in the said property and for the purpose to sign and submit any applications affidavits, undertakings, declarations, Indemnity bonds etc to deposit any securities, obtain discharge, the papers/documents and withdraw the same from/before appropriate authorities and to make representations before the concerned officers/authorities.
To get the said property assessed for House Tax, to pay the House Tax and to get the refund thereof, if paid in excess.
To pay all moneys and charges payable in respect of the said property. to pay all Municipal and local taxes, rates, charges, expenses and other outgoing whatsoever payable for and on account of the said property.
To let out and or give on license the said property in full or in parts to my intending tenant(s)/licenses(s), to receive the rents, license fees. advances, security deposits, to issue receipts, to deal with the tenant(s)/licenses(s) in any lawful manner, to get the tenant(s)/licensee(s) evicted either through negotiation or through the process of law
To apply for any permission/clearance required for the sale/transfer of the said property under the provisions of Income Tax Act, 1961 or any other statute, to sign any form, to give any statement, affidavit, application, undertaking, indemnity bond on our behalf to receive the permission/ clearance in any form.
To negotiate, enter into Agreement(s) for sale, transfer, the said property or any part thereof Including offices/shops/flats/ showrooms/ storage spaces /garages/parking spaces etc to such person(s) or body and for such consideration and upon such terms and conditions and for such purposes, as our said attorneys may deem fit and proper.
To transfer the said property in whole or in parts by way of sale, lease or to enter into any construction agreement, agreement for sale, Supplementary agreement, to receive advances, part payment, balance, consideration, to issue receipt, to execute and sign any agreement to sell, writings, letters or any other document, to receive the consideration amount. to issue receipt, to hand over the possession to the said purchaser(s)/transferee(s), etc.
To execute, sign and present the Sale Deed(s), Release Deed(s). Lease Deed(s), Settlement Doed(s), Agreement to Sell(s), or any other such Document(s) in respect of the said property before the Registrar or Sub- Registrar or any other competent registering authority and get the same registered on our behalf, to receive back the document(s), to receive the consideration amount, to issue receipt, to admit the receipt of the amount already received by us, to hand over the possession to the purchaser(s)/ transference(s), to get the mutation effected.
To sign, seal, execute, deliver and perfect as our act and deed all such deeds, douments and indentures whatsoever concerning the said property or any part thereof as the said attorneys shall or may deem fit and to present for registration, register are receive back duly registered or otherwise any deed(s), document(s) or indenture(s) aforesaid and to do all other acts, deeds, matters and things as shall or may be necessary for the registration thereof.
To execute, sign and present the Rectification Deed/Supplemental Dead in respect of the said property before the proper registering authority and get the same registered on our behalf.
To appoint further attorney and to cancel or revoke the powers conferred upon such attorney.
And Generally to do all other acts, deeds, matters and things whatsoever as our said attorneys shall deem fit for and Incidental to the exercise of any of the above powers or for and incidental to the proper development of the Project and safeguarding the rights of the executants in the said property or the affair’s relative thereto, even if they are not covered by the above clauses.”

13. After the execution of the above MoU and the Power of Attorney, the present petition was filed by Mr. Dinesh Mittal and others on 22nd December 2008, seeking winding up of TIDCO. Notice was issued in this petition on 30th January, 2009 and, thereafter, vide order dated 22nd March, 2012, the Provisional Liquidator came to be appointed. Vide order dated 22nd March, 2012 the Official Liquidator (OL) was appointed as the Provisional Liquidator. Thereafter, vide order dated 22nd April, 2019, the OL was appointed as the Liquidator of TIDCO.
14. In the meantime, during the pendency of this petition a supplementary agreement dated 13th September, 2010 was executed between TIDCO and Zion vide which additional land measuring 18618 sq. ft. of FSI in the same sector was given to ZION. Thus, in effect, the total area with ZION is 3,18,618 sq. ft. of FSI admeasuring 4.18 acres in Sector 78, Faridabad.
15. ZION constructed four residential towers in a group housing project on the said land and, sometime in November, 2010 started entering into flat buyer’s agreements with various allottees for the flats in the said towers. To purchase the flats, allottees who belonged to the middle income group obtained loans from LIC and tripartite loan agreements were also entered into between LIC, ZION and the flat buyers/Allotees.
16. Parallelly, in this petition, the promoter of TIDCO – Mr. Madur Mittal was called upon vide orders dated 24th September 2012 and 17th October, 2012 to deposit a sum of Rs.10 crores to establish his bona fides. The relevant portion of the said order reads as under:
“On 24.09.2012, this Court had noted that the hard earned money running into several hundreds of crores of the investors had been invested into the company and the fear of the investors that they have not seen the colour of the money and their apprehension that these monies would be siphoned off by the ex-management was noted. The conditional bail order passed by a coordinate Bench of this Court on 25.05.2010 had also been highlighted; submission being that on all counts, it was clear that the scheme propounded by Madhur Mittal who is none other than the ex-director of the company smacks of malafides and his only intent was to buy time for which purpose alone this facade of a scheme had been propounded.
In this background, to test their bonafides the ex-management had been directed to deposit an initial amount of Rs.10 crores with the Registrar General of this Court which amount had to be deposited within two weeks. The said amount has not been deposited.
Today CA No. 2008/2012 has been filed by Madhur Mittal seeking waiver of the direction directing him to make payment of the aforenoted amount. Submission being that since his property stands attached, he is not in a position to pay the aforenoted amount and as such is not in a position to honour the aforenoted commitment.
Averments made in the said application have been perused. They are all submissions which have already been considered in the previous orders passed by this Court; on 24.09.2012, a specific direction had been given to pay the aforenoted amount and there was no objection of any such kind raised by the propounders on that date; they were duly represented. That apart as noted supra, the amounts involved in this case run into more than several thousand of crores and as pointed by the learned senior amicus curiae, this is only a tip of the iceberg; the amounts may be well greater.
In this background, no ground is made to grant the prayer of the applicant. This application is dismissed.”

17. The aforementioned order was challenged by Mr. Madur Mittal before the ld. Division Bench in CO.APP. 94/2012 titled Madhur Mittal &Anr. v. Dinesh Mittal &Ors. The ld. Division Bench vide order dated 8th February, 2013 explored sale of TIDCO’s entire land in Faridabad, including the 4.18 acres of land in Sector 78, Faridabad qua which rights were allegedly transferred to Zion. The relevant part of the said order is as under:

“During the course of hearing, it is pointed out that the company has land at Faridabad, Ghaziabad, Dharuhera and Rewari. Mr. Harish Malhotra, learned Sr. Advocate states that part payments have to be made to the farmers in respect of the lands at Ghaziabad, Dharuhera and Rewari. It is stated that about Rs.5 crores each have to be paid to the farmers of the lands at Ghaziabad and Dharuhera but the market value of the said land is substantially higher. Mr. Malhotra states that in respect of the licenced land at Faridabad, no payment is due to pay to the farmers and the company is absolute and complete owner, though said land has been mortgaged to financial institutions/Banks. The mortgaged charge is about Rs.41.38 crores. With regard to the plotted development at Faridabad, sale deeds for part land have been registered on payment of full amount to the farmers but in respect of some land, part payments have been made to the farmers. The amount payable to the farmers in respect of the plotted development at Faridabad land has to be ascertained.
Mr. Jitender Gupta, Advocate however states that the land at Faridabad, which is subject to the plotted development, has been acquired by the Government and compensation has to be paid by the Government. The said factum will be verified.
Mr. Malhotra states that he will take instructions whether the licenced land in Sector 78 and 89 at Faridabad can be sold out in a public action to be conducted by the Court on as is where is basis and the sale proceeds be thereafter distributed amongst the secured creditors and unsecured creditors as per the provisions of the Company Act. Out of the said sale proceeds, payments can also be made to the farmers at Ghaziabad and Dharuhera and thereafter the said land can also be sold and the money collected can be distributed amongst the secured and unsecured creditors.
Mr. Malhotra states that market value of the land is much higher than the pending claims and the balance amount can be distributed amongst the promoters/contributors.
Relist on 11.02.2013 to enable counsel for the appellants to obtain instructions. A copy of this order be given dasti under signature of Court Master to learned counsel for the appellant and Ms. Suruchi Aggarwal, Advocate.”

18. An affidavit was filed by Mr. Madhur Mittal to the effect that the propertiesTriveni Galaxy and Triveni Signature situated at Sector 78 and Sector 89 at Faridabad, Haryana can be sold to pay off the creditors and other dues of farmers. After perusing the said affidavit of Mr. Mittal, vide order dated 11th February, 2013, the ld. Division Bench permitted the sale of the land in Sector 78 and Sector 89 on ‘as is where is basis’, through the Company Court. The relevant portion of the said order reads as under:
“Mr. Madhur Mittal, the propounder has filed an affidavit in the Court. The matter was passed over to enable the respondents to consider and examine it.
On the last date of hearing, Mr. Harish Malhotra, senior counsel, had stated that he would like to take instructions as to whether the licensed land in Sector 78 and 89 in Faridabad can be sold out in a public auction to be conducted by the court on ‘as is where as basis’ and the sale proceeds can be distributed amongst the secured creditors and unsecured creditors, as per the provisions of the Company Act.
The company which is under provisional liquidation, namely, Triveni Infrastructure Development Company Limited has other lands in Ghaziabad, Dharuhera and Rewari. Mr. Malhotra, on instructions, states that substantial part payments have been made and Rs.5.41 crores, Rs.10.51 crores and Rs.5 crores have to be paid to the farmers for the land at Dharuhera, Rewari and Ghaziabad. respectively. He avers that an amount of Rs.13.29 crores has to be paid to the farmers for the plotted land at Faridabad but, as recorded in the last order, the said land has been acquired by the Government and compensation is to be received. The Official Liquidator will take that aspect in mind and proceed accordingly in respect of plotted land at Faridabad.
In the affidavit filed today, copy of which has been made available to the counsel for the respondents. the appellants herein Mr. Madhur Mittal and Mr. Sumit Mittal have agreed that the licensed properties of the project ‘Triveni Galaxy’ and ‘Triveni Signature’ situated at Sector-78 and Section-89, respectively, may be sold by the Company Court on ‘as is where is’ basis and the sale proceeds should be used to pay the creditors, as per the provision of the Company Act, 1956. Mr. Malhotra has apprised that the total acreage of the project of ‘Triveni Galaxy’ is 37 acres and total acreage of ‘Triveni Signature’ is 14 acres. The affidavit points out that payment in tune of Rs.39.28 crores to the financial institutions with whom land is mortgaged and the former owners.
Mr. Madhur Mittal’s affidavit sets out the mode, manner and terms for the sale of the two properties to take place. We are not inclined to dwell into the said aspect and it is for the Company Judge to examine and decide terms, manner and mode of the sale. We notice that there is an opposition raised by the respondents regarding the contended total FSI area and the projects undertaken by Triveni Ferrous Infrastructure Pvt. Ltd. Mr. Malhotra submits that M/s Triveni Ferrous Infrastructure Pvt. Ltd. is no longer a group company of Madhur Mittal. He claims that Triveni Ferrous Infrastructure Pvt. Ltd was a joint venture with Ferrous Group. This fact is seriously contested by Ms. Suruchi Aggarwal who relied upon the affidavit dated 24.08.2011. This and related aspects can be examined by the Company Judge.
Subject to the aforesaid, all the respondents counsel agree to the sale of licensed properties of project ‘Triveni Galaxy at Sector-78 and ‘Triveni Signature at Sector-89, Faridabad to ensure a prompt initial payment to the flat buyers who have taken loans and/or invested life savings in hope that they would be allotted possession of the flat.
We clarify that we have not quantified amount due and payable to secured and unsecured creditors, including the flat buyers and nor have we determined which other properties are owned by the Company Triveni Infrastructure Development Company Ltd.
We may, at this stage, record that there can be a possible difficulty in procuring consent of the secured creditors to whom the two licensed properties at Faridabad are mortgaged. This compliance and consent will have to be ensured by the Company Judge. The amounts due and payable to the secured creditors as noticed is only about Rs.40 crores but the amount payable to the unsecured creditors and the appellants is more than Rs.637 crores. (This figure is not accepted/admitted by the respondents). The value of the two properties appears to be substantial and, therefore, a workable/acceptable solution with secured creditors is possible. The attachment order under Section 281 passed by the Income Tax Department and the order passed under Section 102 CrPC will have to be kept in mind by the Company Judge. Identification of the “unsecured creditors” is required and the said exercise should be undertaken by the Company Court expeditiously with determination on the exact claim of all the unsecured creditors, to ensure payment to them.
Decision on any of these aspects should not however become an impediment in the sale of the two projects.
The interim order and directions issued in the order dated 20.11.2012 shall continue, except to the extent it has been directed that the two projects, namely, ‘Triveni Galaxy’ situated at Sector-78 and ‘Triveni Signature’ situated at Sector-89, Faridabad should be sold in a public auction by the Company Court.
It is clarified that it will be open for the BSF Welfare Society to bid at the said suction sale.
In view of the aforesaid, Mr. Malhotra, on instructions, seeks leave to withdraw this appeal. The appeal is accordingly disposed of.
Dasti under the signatures of the Court master.
Parties to appear before the Company Court on 14.02.2013.”

19. It was at this stage ZION claims to have become aware of the orders for sale and the alleged misrepresentation made by Mr. Madur Mittal. In view thereof, ZION and the association of allottees of the said flats i.e. M/s Zion Sector 78 Allottees Association initially, sought clarification before the ld. Division Bench, and thereafter, challenged the order dated 11th February, 2013 before the Hon’ble Supreme Court. In the challenge raised by Zion and other allottees of Zion, order dated before 29th September, 2015 was passed by the Supreme Court. The same reads as under:
“Upon hearing the learned counsel for the parties, we find that M/s. Triveni Infrastructure Development Company Ltd. (for short “the TIDCO”) which is in Liquidation.
We hope that the Company Judge who is conducting the liquidation proceedings, shall look into the case and pass an appropriate order so that the assets of the company can be sold and the sale proceeds can be paid to the creditors in accordance with law. We are sure that the Company Judge shall look into the claims of the petitioners and decide the claims.
The Official Liquidator will examine the assets of the company and sell the assets as per directions of the learned Company Judge and the sale proceeds shall be distributed among the creditors in accordance with law.
The special leave petitions are accordingly, disposed of.
No orders on Application for Impleadment.
Learned counsel appearing for applicant in I.A. No. 7 in SLP (Civil) No. 1774-1775/2014 seeks permission to withdraw the I.A. Permission is granted. I.A. is accordingly dismissed as withdrawn.
Permission to file SLP is rejected in SLP (Civil)…CC Nos.3185-3186, 9475-9477 and 18164-18166 of 2014, 3163-3164, 8010-8011, 8215-8216 and 8005-8006 of 2015.”

20. A reading of the above order of the Hon’ble Supreme Court makes it clear that the Company Court is to look into all the claims of the Petitioners and decide the same after hearing the parties. The Company Court is also to look into the question as to whether the assets of the company can be sold and the sale proceeds have to be paid to the creditors in accordance with law.
21. Today, Mr. Gaurav Gupta, ld. Counsel appearing for ZION submits that Mr. Madhur Mittal had filed an incorrect affidavit before the ld. Division Bench claiming that the lands which were with ZION belong to TIDCO.
22. This position is disputed by Mr. Akhil Sibal, ld. Sr. counsel for the Ex-Management who submits that in the application filed by ZION seeking modification of the initial order dated 11th February, 2013 passed by the ld. Division Bench the stand of Zion is that Mr. Mittal had made the correct representation and the same has been recorded in the said order dated 11th February, 2013.
23. Be that as it may, as on date, the sale of the entire land has been held up due to the pending applications by Zion and other allottees. Despite passage of so much time, all creditors continue to await for their money to be paid. Thus, there is a need to remove all impediments for sale of the land.
24. Today, it is submitted by ld. Counsel for ZION thatit has constructed a total of four towers in which 302 flats stand constructed. Out of the said flats, 252 flats have already been allotted and flat buyer’s agreements have been executed. Allotees and their families are also stated to be residing in the said flats. In respect of the remaining 50 flats, sale has not yet taken place. In view thereof, permission is sough on behalf of ZION to make sale of the remaining 50 flats and for clarifying the rights of ZION qua the land admeasuring 4.13 acres in Sector 78, Faridabad, Haryana.
25. The submission of Ms. Sindhwani, ld. Counsel appearing for the Official Liquidator (OL) is that TIDCO is in liquidation proceedings. The Director Town & Country Planning, Haryana (DTCP) license exists in the name of TIDCO and there is no DTCP license in favour of ZION. Ld. Counsel, submits that in the absence of any bifurcation of the DTCP license in favour of ZION, the rights in the Sector 78, Faridabad property continue to vest in TIDCO. It is also the submission of Ms. Sindhwani, ld. Counsel appearing for the OL and Mr. Akhil Sibal, ld. Sr. counsel appearing for the ex-management, that the MoU dated 19th December, 2007 is not a registered document and, even the flat buyers’ agreements between the Allottees and ZION are yet to be registered – thus, no title has passed in law to these Allottees.
26. Ld. Counsel for ZION states that there are applications pending before the DTCP for bifurcation of the license. However, clearly, till date, no decision has been taken by DTCP on the bifurcation.
27. It is also noticed that as per Clause 3.1 of the MoU dated 19th December, 2007, ZION has an obligation to construct 54 EWS apartments. However, Mr. Gupta, ld. Counsel, upon instructions from Mr. Narender Hooda, Managing Director, ZION, submits that the said EWS apartments have not been constructed and the portion of land earmarked of the same is in possession of the OL.
28. In view of the aforementioned discussion the, following aspects warrant consideration of this Court:
(i) The manner in which Zion’s portion of the land at Sector 78, Faridabad is to be dealt with;
(ii) The manner in which the interests of the Allotees of Zion’s group housing project are to be safeguarded;
(iii) The manner in the EWSapartmentsare to be constructed.
29. Admittedly, the MoU between Zion and TIDCO is of 2007 and at that time, the winding up petition was not filed. A perusal of clause 3.1 of the MoU, clearly shows that the right title interest in the construction and sale of the part of the group housing is vested with Zion. The reason why the MoU was not registered at that time was not clear to the Court inasmuch as clause 3.1 of the said MoU contemplates that the entire right, title and interest in the construction and sale would vest with ZION. The sale consideration in terms of the said MoU have also been fully received by TIDCO in 2007 itself and it is only in 2010 that the winding up petition has come to be filed before this Court. Thus, from 2007 to 2010 no disputes existed between ZION and TIDCO.
30. Considering that fact that the MoU dated 19th December, 2007 preceded the present winding up proceedings, the flats have all been constructed by ZION at its own cost and allottees have been given the allotments of the flats, this Court is not inclined to put the clock back and vest the entire project back to the Company (in liqd)i.e. TIDCO merely, on the ground that the MoU was not registered at the relevant point of time.
31. Further, since the Allottees have come into the possession of the flats, the Court is inclined to, protect their interests, as the Allottees are innocent purchasers who have invested their hard earned money into purchasing these flats. Thus, exercising jurisdiction under the provisions of the Companies Act, 1956, this Court is of the opinion that a mechanism has to be put in place in order to ensure that the title of the Allottees is perfected and no Allottee is put to any difficulty insofar as the investment made by them is concerned.
32. Insofar as the construction of the EWS flats is concerned, Mr. Gupta, ld. Counsel, on instructions from Mr. Narender Hooda, Managing Director, ZION submits that he wishes to be relieved of the said obligation in view of the fact that the land for construction EWS flats is not available. Further, ZION is willing to pay the cost of construction of the EWS flats if it is discharged from the obligation from constructing and selling the said flats. Ld. Counsel submits that ZIONshall deposit a sum of Rs. 2 Crores with the OL for the same.
33. Accordingly, the following arrangement/mechanism is put in place in order to ensure that the title of the Allottees is not disputed in future and the obligation relating to EWS flats is also safeguarded:
i) All the flats buyers/ Allottees, who have entered into flat buyer’s agreements with ZION shall now be entitled to get sale deeds executed in their favour.
ii) Since the DTCP licence continues to vest in the name of TIDCO, the OL and ZION shall jointly execute sale deeds in favour of 252 Allottees. The said Allottees shall, at the time of registration of the sale deeds, deposit the requisite stamp duty with the concerned Sub-Registrar.
iii) ZION shall deposit a sum of Rs. 2 Crores with the OL within three months subject to which ZION would be permitted to put up the remaining 50 unsold flats for sale. The said amount of Rs.2 crore would not be refundable and shall be utilised for either construction of EWS flats or for paying of the creditors of TIDCO.
iv) Subject to payment of the aforementioned amount of Rs. 2 crores, ZION is permitted to put up the 50 flats for sale and upon any flat buyers agreements which have to be executed henceforth, with new purchasers shall be jointly signed by the Official Liquidator and by ZION. The entire sale consideration shall be divided into 25:75 between the OL and ZION respectively. The new allottees shall then be entitled to get the sale deeds executed in their favour before the concerned Sub-Registrar after paying the requisite stamp duty.
v) ZION shall place before the Court a draft sale notice which shall require the proposed purchasers to deposit 25% of the sale consideration directly into the OL’s account and 75% in favour of ZION. The said 25% shall be retained by the OL in a separate account in FDR.
vi) Upon the stamp duty being paid and the sale deeds being executed, the 25% sale consideration lying with the OL shall be released in favour of the Zion, after deducting OL’s expenses.
vii) The time limit for execution of the sale deeds in favour of the existing Allottees is a period of three months so that the Allottees can arrange the stamp duty. The entire process of execution of sale deeds for the allottees shall be concluded by 31st January, 2024 for all the 252 flats.
viii) If any of the flats remain unsold, the details of the same shall be placed on record by way of an affidavit so that further orders can be passed in respect of the unsold flats.
34. The Management of ZION has today assured the Court that they have already deposited the EDC and IDC charges. If there are any other statutory dues in respect of the parcel of land at Sector 78, Faridabad the same shall be the sole responsibility of ZION.
35. The OL has handed over a valuation report in respect of the land at Sector 78, Faridabad. As per the said valuation report, the said land is valued at Rs.550 Crore. However, Ms. Sindhwani, ld. Counsel for OL submits that the valuation report is not accurate and she wishes to obtain a proper valuation report once more in terms of the orders passed by this Court.
36. Let a fresh valuation report be obtained from another agency. The OL is free to also obtain a clarification from the valuers i.e. M/s Nagpal and Associates as well.
37. The original valuation report is returned to Ms. Sindhwani, ld. Counsel to place it on record in the Registry.
38. For all these applications, the matter shall be treated as part-heard.
CO.APPL. 5/2021 in CO.PET.-39/2009
39. A new ld. Counsel has appeared for the Applicant and seeks time to file its Vakalatnama.
40. List on 19th October, 2023. If there is no appearance on the next date, the matter would proceed further.
W.P.(C) 2709/2021
41. This is a writ petition filed by M/s Pal Infrastructure and Developers Pvt. Ltd. (hereinafter, ‘Pal Infrastructure’)through the Resolution Professional (RP) – Mr. Ganga Ram Aggarwal seeking direction to the Respondent not to include the equivalent land to the extent of 4,30,000 sq.ft. FSI over land located at Sector 78, Faridabad, Haryana in the Auction sale or liquidation estate.
42. Pal Infrastructure is under resolution process in terms of the order dated 5th September, 2019 and 26th June, 2020 passed by the NCLT. The said company had entered into an agreement with TIDCO on 9th April, 2008.
43. Ms. Sindhwani, ld. Counsel for OL has taken preliminary objection as to the maintainability of this writ. She submits that this writ petition would not be maintainable against TIDCO as the said company is in liquidation.
44. Pal Infrastructure had earlier also filed applications in CO. PET. 39/2009.
45. The stand of Pal Infrastructure is that it had entered into an agreement dated 9th April, 2008 with TIDCO in respect of 4,30,000 sq. ft. (FSI) in Sector-78, Faridabad for the creation of a group housing project by the name ‘PAL GREEN’. In terms of the said agreement, a consideration of Rs.27,71,50,000/- was paid by Pal Infrastructure to TIDCO. These facts are not disputed.
46. The construction qua the said project was to be completed by 22nd January, 2009. However, the construction was not completed and Pal Infrastructure went into insolvency on 5th September, 2019. In the meantime, 324 Allottees booked their flats in ‘PAL GREENS’.
47. In the present petition, vide order dated 1st March, 2021, TIDCO was restricted from creating any third party interest in the land/space belonging to the Petitioner. The relevant part of the said order is as under:
“4. The Petitioner is being represented by the Resolution professional. The Respondent, on the other hand, is already under liquidation and an Official Liquidator (hereinafter, “OL”) has been appointed.
5. Let notice be issued to the OL, returnable on 22nd July, 2021. The respondent TIDCO shall refrain from creating any third party interest in the land/space belonging to the Petitioner. The Petitioner is directed to contact the OL and communicate today’s order, so that the OL does not create any third party interest in respect of the part of the land situated at sector 78, Faridabad, Haryana stated to be belonging to the Petitioner.”

48. The said Allottees and home buyers are represented before this Court by Ms. Veena Gupta, ld. Counsel.
49. The issue that has been raised on behalf of ld. Counsel for Pal Infrastructure is that in view of Section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016, the OL cannot claim any right or put this parcel of land to sale in respect of which Pal Infrastructure has rights.
50. This position is disputed by the OL on the ground that the MoU which has been entered into between Pal Infrastructure and TIDCO did not transfer any title to the property as the same was unregistered and unstamped. In addition, the DTCP license is also not bifurcated and the land continues to vest with TIDCO.
51. Pal Infrastructure which is now under resolution process has a total of four separate projects including ‘PAL GREENS’. The land in question which is in Sector-78, Faridabad over which rights are claimed by Pal Infrastructure are well depicted in the green portion in the map set out below.

52. In view of the application which is pending and the claims filed by Pal Infrastructure before this Court, the Court/the OL is unable to proceed further for sale of this land until the rights of Pal Infrastructure are determined. The said land being in one delineated area in Sector-78, Faridabad, this Court is of the opinion that the resolution process ought not to be tinkered with at this stage. The rights which Pal Infrastructure enjoys in terms of the agreement dated 9th April, 2008 would be a subject matter of adjudication inasmuch as the said agreement is not even yet registered but the entire sale consideration has been paid.
53. The interests of a large number of Allottees who have paid the money to purchase homes in the ‘PAL GREENS’ project have been jeopardized considerably. This is a case where two companies i.e. TIDCO as also Pal Infrastructure are in financial difficulties. Thus, in the opinion of this Court, the land of TIDCO in Sector-78, Faridabad over which Pal Infrastructure claims rights ought to be segregated.
54. Since NCLT is now dealing with the resolution process of Pal Infrastructure, it is directed that the said resolution process shall continue.
55. If the OL proceeds to value the property in Sector-78, Faridabad, for the time being, the land to the extent of 4,30,000 sq. ft. (FSI) shall not be included in the valuation or sale. Depending upon the further developments in the resolution process which takes place before the NCLT, either in the form of resolution or in the form of liquidation, further orders would be passed in respect of this parcel of land by this Court.
56. The interim order dated 1st March, 2021 is modified to this effect.
57. The above direction is without prejudice to the rights and contentions of all the parties concerned including TIDCO, Pal Infrastructure, the home buyers of ‘PAL GREENS’ and the ex-Management.
58. In view of the facts and circumstances of this case as also the stand taken by Pal Infrastructure today, the present writ petition shall be treated as an application in CO. PET. 39/2009.
59. Let the Registry renumber W.P.(C) 2709/2021 as a CO. APPL. in CO. PET. 39/2009. W.P.(C) 2709/2021 is disposed of.
60. The RP is free to proceed with the resolution process. The land over which Pal claims rights shall however not be disposed of or sold by the RP or by anyone, without permission of this Court. The RP shall continue to appear regularly before this Court and continue to appraise the Court on the development in the NCLT in respect of Pal Infrastructure.
61. It is clarified that this Court is only dealt with the property at Sector 78, Faridabad and no other parcel of land.
CO.APPL. 1664/2017 (for delay) in CO.PET.-333/2010
62. This is an application seeking condonation of delay. In view of the reasons stated in the application. The delay is condoned.
63. Application is disposed of.
CO.APPL. 384/2019 ( for exemption) in CO.PET.-333/2010
64. This is an application seeking exemption from personal appearance of the Applicant. Exemption is allowed.
65. Application is disposed of.
CO.APPL. 1082/2019 (for summoning) in CO.PET.-333/2010
66. This is an application for summoning of ex-directors of TIDCO.
67. In view of the facts that Mr. Madhur Mittal is already appearing before this Court, this application is infructuous.
68. Accordingly, this application is disposed of.
CO.APPL. 749/2022 ( for additional documents) in CO.PET.-333/2010
69. This is an application for placing additional documents on record. The same is allowed.
70. Application is disposed of.
CO.PET.-333/2010 and pending applications
71. The present petition has been filed seeking winding up of TIDCO.
72. Ms. Nupur Singhal, ld. Counsel has entered appearance for DTCP and submits that she has received instructions to file an affidavit in this matter and the same is under preparation. Ld. Counsel submits that the affidavit would be filed within a week.
73. Mr. Madhur Mittal has clarified that Maximal Infrastructure Pvt. Ltd. is an entity which is owned by himself and Mr. Sumit Mittal.
74. The question that has arisen in the CO. APPL. 659/2021 is as to whether the DTCP license can be bifurcated qua the 10.335 acres and if so, in what manner.
75. The said issue shall be addressed by the DTCP in its affidavit. Let a responsible officer of DTCP who is aware of the facts of this case also be present.
76. Mr. Madhur Mittal and Mr. Sumit Mittal, ex-directors of TIDCO shall also remain present in Court on the next date.
77. The matter be taken up as the first item on board.
78. List on 19th October, 2023.

PRATHIBA M. SINGH, J
OCTOBER 10, 2023
dj/mr/rahul/kt

CO.PET. 39/2009& connected matters Page 1 of 28