DINESH MITTAL & ORS. vs M/S TRIVENI INFRASTRUCTURE DEVELOPMENT CO. LTD
$~C1 & C2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 10th May, 2024
+ CO.PET. 39/2009
DINESH MITTAL & ORS. ….. Petitioners
Through: Mr. Abhimanyu Bhandari, Ms. Nattasha Garg, Mr. Raghav Alok, Mr. Thakur Ankit Singh & Ms. Ayushi Mishra Advs. for applicants in CA/659/2021, CA/655/2020, CA/444/2022. (M: 9654998650)
Mr. Sharender Batra, Adv. for applicants in CA 480/ 2024.
versus
M/S TRIVENI INFRASTRUCTURE
DEVELOPMENT CO. LTD. ….. Respondent
Through: Mr. Apoorv Kurup, CGSC with Ms. Nidhi Mittal, Adv. for UOI.
Mr. Gaurav Gupta, Adv. for ZION. (M: 9958444233)
Mr. Akhil Sibal, Sr. Adv. with Mr. Deepak Agarwal, Ms. Aarohi Mikkilineni, Adv. with Mr. Madhur Mittal in person. (M: 9650290474)
Mr Ujjwal Malhotra and Mr Arjun Nanda, Advs. for Manasvi Security Service. (M: 9811533855)
Mr. Rajeev Saxena, Adv. for Applicant in CA 756/2023.
Mr. Abhishek Gupta, Adv. for CA 27/2024. (M: 9871032872)
Ms. Ruchi Sindhwani and Ms. Megha Bharara, Advs for OL.
C2 AND
+ CO.PET. 333/2010
SH. SAMEER SHARMA ….. Petitioner
Through:
versus
M/S TRIVENI INFRASTRUCTURE
DEVELOPMENT CO. LTD. ….. Respondent
Through: Mr. Akhil Sibal, Sr. Adv. with Mr. Deepak Agarwal, Ms. Aarohi Mikkilineni, Adv. with Mr. Madhur Mittal in person.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
Background and procedural history
2. A fresh OLR being OLR 48/2024 has been filed by the Official Liquidator (hereinafter, OL) in respect of the lands of TIDCO situated in Sector 78, Faridabad. In respect of this sector, various orders have been passed by this Court since 10th October, 2023, wherein the lands relating to ZION and PAL were bifurcated. On 19th October, 2023, it was clarified that the sale, if any, would only be of the beneficial interest and not the land, inasmuch as the DTCP license is attached to the land in question. The matter has been pending before this Court in respect of the land situated in Sector 78, Faridabad for renewal of DTCP license.
3. The short background is that the present petition was filed seeking winding up of the Respondent company-TIDCO. Vide order dated 22nd March, 2012, this Court appointed the Official Liquidator (hereinafter, OL) as Provisional Liquidator of TIDCO, and thereafter, on 22nd April, 2019, the OL was appointed as the Liquidator of TIDCO. The proceedings primarily relate to the properties of TIDCO, namely, Triveni Galaxy situated at Sector-78 and Triveni Signature situated at Sector-89, Faridabad, Haryana.
Sector-78, Faridabad
4. In the present petition, vide judgment dated 10th October, 2023, this Court directed as follows:
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 buyers 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 OLs 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 OLs 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.
5. On 19th October, 2023, it was submitted by the officials of the DTCP that beneficial interest in the said project is transferable, but the land cannot be sold. On the next date, i.e. 11th December, 2023, it was submitted that the total land area owned by TIDCO in Sector-78 is approximately 37.344 acres. Following the order dated 10th October, 2023, lands claimed by ZION and PAL were delineated, leaving a total of 30.254 acres (26.296 + 3.958 acres) available for sale.
6. On the said date, the OLs counsel placed three valuation reports on record. After perusing the valuation reports, this Court was of the opinion that the land’s valuation should now be accepted and sale of the land at Sector-78, Faridabad should proceed. Following this, DTCP highlighted that the DTCP license for the land expired in 2009 and needs renewal. It was mentioned that the said license could be renewed upon payment of DTCP dues. Mr. Madhur Mittal, Ex-Director of TIDCO, mentioned a Scheme that allowed for resolving the DTCP license issue at a reduced cost, subject to payment of External Development Charges (EDC) and Infrastructure Development Charges (IDC). Thus, on 11th December, 2023 this Court directed as follows:
54. Ms. Ruchi Sindhwani, ld. Counsel for the OL points out that a letter dated 27th September, 2023 has been written to the DTCP, Haryana for consideration under the said scheme.
55. The Court is of the opinion that the correct approach at this stage would be to proceed by the value of the land per acre, inasmuch as a large amount of the land is still not yet constructed and most of the towers are partly constructed. The Court is, therefore, inclined to accept the valuation provided by M/s Nagpal & Associates vide the valuation report dated 7th November, 2023. Going by the conservative estimate as per the said report, this Court is of the opinion that the first attempt to sell off this land of Triveni Galaxy Project at Sector 78, Faridabad ought to be with a reserve price of Rs.550 crores.
56. Insofar as the issue of DTCP license is concerned, since the towers are already partly constructed and the land at Sector 78, Faridabad is no longer a simple agricultural land, the DTCP license in favour of TIDCO is liable to be renewed subject to payment of any renewal fees that is due. This would also be in the interest of the hundreds of investors who are anxiously awaiting the resolution of these disputes and some relief.
57. Accordingly, the DTCP, Haryana shall consider the letter dated 27th September, 2023 sent by the OL and determine the amount to be paid for renewal of the DTCP license under the Samadhan Se Vikas Scheme Haryana, 2022 and place an affidavit before this Court within two weeks.
58. For the said purpose, Mr. Kataria from the OL’s office shall hold a meeting with the officials from the DTCP i.e. Mr. Suraj Katiyal Planning Assistant and Mr. Lalit Bazad, DTP (HQ) at their office in Chandigarh on 14th December, 2023 at 11 :30 am. Between 14th/15th December, 2023, the amount for renewal shall be computed and resolved and the same shall be placed on record by way of an affidavit by 20th December, 2023.
59. The said amount shall also be payable from the sale consideration, which would be received after putting the land at Sector 78, Faridabad to sale.
60. List on 20th December, 2023 along with all pending applications listed today.
7. On 20th December, 2023, this Court noted that for the land located in Sector-78, the renewal of DTCP license no. 37-39 of 2007 required, among other things, the payment of license fees and EDC charges. The initial calculation of the required amount was provided in an affidavit by Mr. Amit Khatri, Director of DTCP. However, upon perusing the same, this Court directed DTCP officials to recalculate the amounts in collaboration with the counsel for the OL and the officials from the OL’s office.
8. Upon being informed by the DTCP by way of an affidavit, this Court, on 21st December, 2023, directed OL to pay Rs. 5,59,27,151/- for the renewal of license No. 37-39/2007. Certain timelines were also put in place. Further, it was directed that the draft sale notice published by the OL for selling the development rights of the Sector-78, Faridabad project shall include conditions regarding the payment of EDC, enhanced EDC, and renewal of bank guarantees, which are to be fulfilled by the new developer. Further, given TIDCO’s liquidation status, this Court directed that the DTCP would not insist on the compliance of remaining conditions upon the payment of the license renewal fee. Vide order dated 21st December, 2023, this Court directed as under:
11. The Court is of the opinion that the DTCP license is a crucial component, which would attract better bids for the land at sector 78, Faridabad. Considering this position and the fact that there should not be any further delay in enabling the sale notice being published by the OL for exploring the possibility of a new developer taking over the said land, the following interim arrangement is put in place:
i) A sum of Rs.5,59,27,151/- shall be paid by the OL towards renewal of license No.37-39/2007 and the same shall be renewed till 22nd January, 2025. Upon the said deposit being made, the renewal shall be communicated to the OL within two weeks. The renewal of the license shall also be reported to the Court.
ii) The said renewal amount shall be deposited with DTCP by 10th January, 2024 and the DTCP license renewal shall be completed by 25th January, 2024.
iii) Insofar as EDC, enhanced EDC and the renewal of bank guarantees are concerned, the same would be one of the conditions that would be put in the draft sale notice which is to be published by the OL for the purpose of sale of the development rights in the Triveni Galaxy Project at Sector 78, Faridabad. The sale notice shall also clarify that the obligations relating to renewal of bank guarantees and other formalities would have to be complied with by the new developer.
12. Insofar as EWS plots on the said land are concerned, as on date, the status is that the allotment of EWS plots and construction of community services has not commenced. The obligation to construct the same shall also be that of the new developer.
13. Subject to the payment of the DTCP license renewal fee, the license shall be renewed. For the time being, compliance of remaining conditions shall not be insisted upon by the DTCP as TIDCO is in liquidation. 14. Upon the renewal of the DTCP license, the OL’s office shall put up a draft sale notice for the approval of sale of the land at sector 78, Faridabad.
15. Insofar as any outstanding amounts to be collected from Land Acquisition Collector in respect of the three land acquisition awards in favour of TIDCO are concerned, the OL office shall contact the office of the concerned Land Acquisition Collector and ensure that the said amounts are duly credited in the name of TIDCO. If any directions are required in this regard, let an application be moved with an advance copy to the Land Acquisition Collector’s office so that it can be represented before the Court.
16. The ex-management of TIDCO shall assist the OL’ s office in obtaining the release of the said amounts so that the fund position in respect of TIDCO can be secured.
17. Ld. counsel for Maximal Infrastructure Pvt. Ltd. has also handed over the no objection certificate (NOC) to the OL’s office for transfer of the four towers in favour of BSF Family Welfare Society and TIDCO as directed yesterday i.e. on 20th December, 2023.
9. On 27th February, 2024, ld. Counsel for the DTCP appeared and OLR 20/2024, filed by the OL, was also considered. It was submitted that a draft sale notice concerning the development rights of Sector 78, Faridabad, was included with OLR 20/2024. The DTCP had some concerns regarding the language of the draft sale notice. Subsequently, the Office of the OL and the DTCP coordinated with each other, leading to the DTCP writing a letter dated 28th March, 2024, to the OL expressing the conditions that needed to be incorporated. Pursuant thereto, the modified sale notice has been attached to the present report OLR 48/2024, over which submissions have been heard. The ld. Counsel for the DTCP made several additional suggestions, which are acceptable to the OL, and the finalised sale notice has been handed over to the Court.
Submissions on behalf of ld. Counsels
10. The submission on behalf of the Triveni Faridabad Allottees Association (hereinafter, TFAA) in CA No. 659/2021, CA No. 655/2020, CA No. 444/2022 is that TFAA represents 800 allottees and that the rights associated with the land situated in Sector 78, Faridabad ought not be sold. Instead, any developer intending to bid for the said development rights in the Sector 78, Faridabad, should accommodate all the rights of TFAA and allot flats in their favour.
11. In response to a query from the Court, ld. Counsel for TFAA, Mr. Abhimanyu Bhandari submitted that most of the allottees have already filed their respective claims before the OL. To the demands of TFAA, the Ex-Management pointed out that the allottees demand to be allotted units/apartments now is completely contrary to the decision of the ld. Division Bench made back in 2013. Mr. Akhil Sibal, ld. Senior Counsel, has handed over the said decision to the Court and has refuted TFAAs stance, arguing that the land, under the control of the OL, must be liquidated to satisfy the claims of all allottees. The allottees cannot insist on being allotted apartments. It is his submission that given that the total number of allottees ranges from 1800 to 2000, and the TFAA, which represents about 800 of them, should not be allowed to dictate the terms of how the land in Sector 78, Faridabad is to be utilised to satisfy the claims of the remaining allottees.
12. Ms. Sindhwani, ld. Counsel for the OL submits that the association members of TFAA are only claimants before the OL, not allottees, and hence they now cannot claim to receive apartment units. It is further submitted that the powers of the Court in a winding-up petition have been settled way back since 1968 by the Supreme Court in J.K. (Bombay) Pvt. Ltd. v. New Kaiser-I-Hind Spg. & Wvg. Co. Ltd. and Ors., (AIR 1970 SC 1041), where the Supreme Court observed as follows:
33. It is thus well established that once a winding-up order is passed the undertaking and the assets of the company pass under the control of the liquidator whose statutory duty is to realise them and to pay from out of the sale-proceeds its creditors. Such creditors acquire on such order being passed the right to have the assets realised and distributed among them pari passu. No new rights can thereafter be created and no uncompleted rights can be completed, for doing so would be contrary to the creditors’ right to have the proceeds of the assets distributed among them pari passu. But Mr. Sen’s argument was that the appellants had acquired under the scheme a vested right to have a second mortgage which could not be nullified by the court passing the winding-up order. We cannot accede to this contention for the scheme vested no such right. What it did provide was that in consideration of the company agreeing to execute a second mortgage the appellants and the other Schedule ‘B’ creditors agreed to receive repayment of debts due to them in the manner provided in the scheme and the agreement of August 16, 1965. On failure of the company to execute the mortgage the consideration for postponement of repayment failed and the monies due to those creditors became immediately payable. It is also not correct to say that the scheme gave any priority to those creditors. Such a priority could result only on the execution of the mortgage which would make them secured creditors.
Analysis
13. After having heard ld. Counsels for the parties, it ought to be noted that the sale of TIDCOs assets has been pending for several decades. Specifically, regarding the land situated at Sector 78, Faridabad, it has taken a long time to renew the DTCP license necessary to make the assets of the said company marketable and to obtain the best possible value for the sale, in the interest of the creditors. The DTCP has now renewed the license in terms of the order dated 21st December, 2023, and the said project, on an as is and where is whatever there is basis, is proposed to be sold by the OL. The valuation has already been undertaken, and based on this, the reserve price of this asset has been fixed at Rs. 550 crores.
14. The ld. Division Bench in its order dated 11th February, 2013 was dealing with this very matter almost more 10 years ago and had observed as under:
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.
15. Against the above order, a review was filed by the TFAA, seeking review of the said order, wherein the ld. Division Bench, vide order dated 11th July, 2013, categorically observed as under:
In view of the order passed above, many apprehensions/aspects have been answered and dealt with. We note that flat buyers are unsecured creditors and many of them may have different view points, some of them may want possession of their unconstructed flat. someone may want unconstructed flat to be sold, some others may want that their liabilities should be paid by a purchaser or a third party should be directed to complete the construction. It will be difficult to reconcile everyone’s interest which may be conflicting. It was in these circumstances, at the first stage it was suggested that let the properties at Faridabad i.e. the under construction flats should be sold so that the money is paid to the flat buyers expeditiously and at the earliest point in time. This may not satisfy everyone or all the unsecured creditors. Given the situation, this was the best possible solution available at that time and even today. As noted in the order dated 11th February, 2013, it has been stated that part payments have been made for land at Daruhera, Rewari and Ghaziabad. We also note that winding up petition has been only admitted and final winding up order has not been passed. Sale of properties under law requires consent of the directors etc. We do not think it will be proper or to completely withdraw and unwrite the order dated 11 February, 2013 and record that the properties at Faridabad should not be sold. Steps for valuation etc. have been taken by the Company Judge. With the consent of the parties, it was directed that the properties at Faridabad should be sold. Consent given was informed consent. With the aforesaid observations. we dismiss the review applications.
16. The matter was again challenged before the Supreme Court in SLP Nos. 1777-78/2014 titled BSF Family Welfare Society v. Madhur Mittal & Ors.. Vide order dated 29th September, 2015, the Supreme Court observed as under:
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.
17. A conjoint reading of the orders leaves no doubt that the assets must be sold and the sale proceeds distributed among all the claimants. Under such circumstances, it is not feasible to reverse the decision and give the allottees of TFAA hope that apartments would be built and allotted to them. The best outcome in the present winding-up petition is for the payment of their claims, hopefully with some interest in accordance with the law. The assets in question in Sector 78, Faridabad are valuable, and the sale of these assets would provide relief to all the allottees, who have invested significant amounts in this project long ago.
18. In the overall scheme of things, therefore, this Court is of the opinion that the OLs proposal for selling the land situated in Sector 78, Faridabad, in terms of the finalised draft sale notice, which is submitted to the Court, ought to be permitted to go forward. The same is, accordingly, approved. The OL is free to publish the same.
19. Let the finalised draft sale notice be published and the e-auction be conducted through RailTel Ltd. The said draft sale notice shall be given adequate publicity, so that sufficient number of bidders may be allowed to bid for the same, including in various newspapers in Hindi, English as also in regions languages in Delhi, Calcutta, Hyderabad and Mumbai. The finalised draft sale notice is annexed to the present order as Annexure-A
20. The present OLR 48/2024 is disposed of accordingly.
21. Insofar as the draft sale notice for the unsold inventory of the ZION flats are concerned, let the draft sale notice be finalized within two weeks and the same be placed on record.
22. If there are any further claimants in respect of any of the projects, including allottees, they may file their claims with the OL. Delay, if any, is condoned. The claims shall be filed within a period of four weeks with the OL. In the above terms, the applications CO.APPLs.476/2024 to 480/2024 are also disposed of.
23. List the matter in respect of Sector 78, Faridabad on 18th July, 2024.
Sector 89, Faridabad
24. In respect of the directions given in paragraph 6 of the previous order dated 5th April, 2024, it is submitted by ld. Counsel for DTCP that the approval in favour of BSF Family Welfare Society has been given, transferring the beneficial interest in respect of Towers Nos. B1, B2, B3 and B4 in favour of the said society.
25. Insofar as the in-principle approval given by DTCP for the remaining towers in Sector 89, Faridabad are concerned, the said approval expires on 28th June, 2024. DTCP shall extend the in-principle approval as no further time is left today to hear the said matter. Let the extension be given for another three months.
26. In view of the beneficial interest being transferred in favor of the BSF Family Welfare Society, the directions given in paragraphs 27 and 28 of the order dated 20th December 2023 shall now be binding on the members of the BSF Family Welfare Society as well as the Ex-Management. For the sake of ready reference, the said two paragraphs are extracted below:
27. Regarding the 10 allottees in tower S8, their claims shall continue to be against the company. The Applicant-Society agrees, upon the beneficial interest being transferred, to withdraw all complaints and other proceedings which they may have filed against the ex-management before various authorities or Courts.
28. The ex-management shall also withdraw any complaints before any authority or Court against any members of the Applicant-Society.
27. The respective complaints and other proceedings against each other shall be withdrawn by both the BSF Family Welfare Society as also the Ex-Management. However, both shall be bound by the terms and conditions imposed in the letter dated 8th May, 2024 issued by DTCP, Haryana, which has handed over today to the Court, as also to BSF Family Welfare Society and to the Ex-Management. The said letter is also extracted hereinbelow:
Your request for grant of permission for assignment of joint development and / or marketing rights under policy dated 18.02.2015 part of licences area measuring 10.335 acres (1/3 rd ) qua the four Towers i.e. B1, B2, B3 & B4 in licence no. 34-36 of 2007 dated 23.01.2007 granted for development of Group Housing Colony in Section-89, Faridabad has been considered after payment of requisite administrative charges, receipts of undertakings and compliance of conditions on in-principle approval. The permission for assignment of join development and / or marketing rights is hereby allowed subject to the following terms & conditions-
1. That the land owning company shall not transfer the land for which assignment of joint development and / or marketing rights have been assigned to you and not violate any condition of license.
2. Maximal Infrastructure Pvt. Ltd. shall be solely responsible for compliance of all the provisions of the Haryana Development and Regulation of Urban Area Act, 1975 & Rules, 1976, and also abide by all the terms & conditions of license as well as agreements executed at the time of grant of license till the final completion of the project.
3. In case of any advertisement for the sale of flats, in the said colony, the name of colonizer must be prominently displayed.
28. The DTCP officials shall be present on the next date.
29. In addition, let the Registry place a report as to whether service of the orders dated 27th February, 2024 and 5th April, 2024 was made on dcfbd@hry.nic.in and eosbdhuda12@gmail.com. In addition, let notice be issued to Mr. Jagdish Sharma, ld. Counsel (+91-9811297224) appearing for the State of Haryana for the purpose of effecting service upon LAC, Faridabad.
30. For the above purpose, list the matter relating to Sector 89, Faridabad on 21st May, 2024.
31. In addition, let an intimation be given to Mr. Yeeshu Jain, ld. Counsel as also to Ms. Hethu Arora Sethi, ASC in order to ascertain the manner in which LAC, Faridabad, can be served if they do not appear on the next date.
PRATHIBA M. SINGH
JUDGE
MAY 10, 2024/dk/dn
(corrected & released on 13th May, 2024)
Annexure -A
CO.PET. 39/2009 & CO.PET.333/2010 Page 2 of 2