Dispute Over Ownership of Property during Liquidation Process under Company Law: Madras HC directs Official Liquidator to value building through ITCOT within 60 days [Read Order]
It was further ruled that the official liquidator will subsequently give the applicants vacant ownership of the 0.84 acres in S.F. No. 79/1 and the structures by signing a sale certificate or deed.
In a recent case, the Madras High Court directsed the official liquidator to value the building through ITCOT within 60 days while a dispute over the ownership of property arose during the liquidation process under company law.
Sale notice dated 15.07.2012 was issued by the Official Liquidator for sale of six lots of property (Lot-A to Lot- F) of Pioneer Feeds & Poultry Products (P) Ltd., the company in provisional liquidation. Lot-E pertained inter alia to an extent of 4.79 acres of land in S.F.Nos.79/1, 79/2, 79/3 and 79/4 (corresponding to old Survey No.196 and Re-survey No.79) at Modachur Village, Gopi Taluk, Erode District, and forms the subject of these applications.
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M/s.Vangili Feeds and M/s.Team Associates, the applicants submitted a joint bid and were declared as the highest bidders for the Lot-E property by order dated 01.08.2012. Consequently, the property was directed to be sold to the highest bidders for a total sale consideration of Rs.5.88 crore. They discovered that M/s. Provimi Products Pvt. Ltd. (Third Respondent) controlled the land when they tried to take possession, claiming a rival ownership claim.
The 0.84-acre land's title dispute was at the core of the dispute. Mr. G.V. Viswanathan, who had signed documents as Managing Director/Director for Viswa Agro Enterprises, Provimi Products, and KRV Feeds (a company involved in Provimi's claimed chain of title), was the subject of a special examination by the Court, which also looked at the various documents and the connections between the entities involved. The Court determined that Viswanathan's pivotal role and these solid connections were essential to its ruling.
Judge Senthilkumar Ramamoorthy's single bench ruled that the Official Liquidator had sixty days to value the building on S.F. No. 79/1 using ITCOT. Within 30 days of obtaining the valuation report, the applicants (Team Associates & Vangili Feeds) must give the Official Liquidator the building's worth.
Furthermore, Provimi Products was instructed to give the Official Liquidator vacant possession of the entire 0.84-acre plot of land in S.F. No. 79/1, including the buildings, within 30 days of receiving notification of the Applicants' payment. The official liquidator will then pay Provimi Products the building's value.
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It was further ruled that the Official Liquidator will subsequently give the Applicants vacant ownership of the 0.84 acres in S.F. No. 79/1 and the structures by signing a sale certificate or deed. The Court allowed Provimi Products and the Applicants to come to a mutually agreeable agreement whereby Provimi would buy the land in S.F. No. 79/1 from the Applicants with the approval of the Court.
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