LLOYDS REALTY DEVELOPERS LIMITED vs RARE ASSET RECONSTRUCTION LIMITED AND ORS on 20 May 2025

J U D G E M E N T

Delivered on 20th May, 2025

1. The Appellant has challenged orders dated 28/02/2025, 04/03/2025,05/03/2025,06/03/2025 and 20/03/2025 of Recovery Officer of DRT -1 in RP/1/2022(OA/136/2001). The Appellant is one of the bidders who submitted bid in e- auction of property described in the order of 04/04/2025:

2. SCHEDULE OF THE PROPERTY City Survey No. 78, 78/1, 78/2 and 78/3, Subhas Road, Jogeshwari East, Mumbai – 400060.

3. The Appellant has contended that intending bidder on the basis of sale notice issued on 17/01/2025, submitted bid alongwith necessary documents before the Recovery officer and deposit EMD i.e. 10% of the bid i.e. Rs.5,53,35,000,.00 before the Recovery Officer DRT-1 Kolkata. Though the appellant reached along with documents, but was kept waiting and on persuasion and request, Ld. Recovery Officer received the documents at

Rina S. 1:20 p.m. and finally acknowledged the receipt of the documents. It is alleged by the appellant that on the date of auction i.e. on 05.03.2025 the Counsel of the appellant appeared before the Recovery Officer, - 1, Debts Recovery Tribunal - I Kolkata along with the documents. But the Recovery Officer, 1, Debts Recovery Tribunal - I Kolkata refused to accept the documents and did not allow the appellant to participate in the e-auction on 05/03/2025 for which the Appellant sent e-mail at around 1.17 p.m. on 05.03.2025 to the Debts Recovery Tribunal - I Kolkata which has been marked with Letter-"H'. Ld. Recovery Officer has conducted e-auction on 05/03/2025 and declared Respondent no. 4 as Successful Bidder and accepted bid amount of Rs. 58,13,36,350/-.Respondent no. 4 directed to deposit the balance 25 % on 06/03/2025 and the remaining 75% as per the proclamation of sale. The order of Recovery Officer, -1, Debts Recovery Tribunal Kolkata dated 05.03.2025 passed in RP/01/2022 is annexed marked with letter-"I". It is alleged by the Appellant that the Appellant was debarred to participate in the e-auction though his bid is proper and filed in time.

4. It is also alleged by the Appellant that Recovery Officer restricted the appellant to participate in e-auction on 05/03/2025. Recovery Officer also considered notice dated 04/03/2025 and e-mail dated 05/03/2025 alleging collusion of the Recovery Officer with the Successful Purchaser for rejection of bid on technical glitches. It is further alleged by the Appellant that on the date of e-auction outstanding amount is for a sum of Rs.437,66,23,506/-. The Recovery Officer, -1, Debts Recovery Tribunal -I Kolkata sold the

Rina S. schedule property at a price of Rs.58,13,36,350/-. It is contended by the Appellant that this Tribunal has jurisdiction to quash and/or cancel the e-auction dated 05.03.2025 by directing the Recovery Officer, -1, Debts Recovery Tribunal - I Kolkata to hold e-auction afresh to fetch maximum amount and prays for intersee bidding and stay further proceeding of the Recovery Officer until disposal of the Appeal and has filed IA/1043/2025 for interim order.

5. This Appeal first came before the Tribunal for hearing on 09/04/2025 on which IA/961 of 2025 was filed praying for waiver of deposit u/s 30A of RDB Act,1993 as the Appellant is not Borrower. As the Appellant is not borrower is not required to deposit 50% of the debt amount and the Appeal was admitted. There was question of impleadment of Invent ARC. It was brought to notice that Appellant has preferred a revisional application before the Hon’ble High Court wherein Invent Asset Securitization and Reconstruction Pvt. Ltd were parties and Invent Asset Securitization and Rare Asset Reconstruction Pvt. Ltd were also parties before the Recovery Officer.

6. Thereafter the Appeal was withdrawn from the Hon’ble High Court to proceed with the appeal. By order of this Tribunal in IA/1069/2025 Invent ARC has been impleaded as respondent no. 5 in the Appeal.

7. In the meantime Appellant has preferred Transfer petition no. 2 of 2005 before the Hon’ble DRAT, Kolkata for transfer of the Appeal. It appears from the order of the Hon’ble DRAT dated 02/05/2025 that the transfer petition was filed for transfer of the Appeal from DRT-1. Hon’ble DRAT disposed of the transfer petition

Rina S. and directed to hear the IA/1069/2025 on 02/05/2025 at 1:00 P.M. and to take up appeal on 05/05/2025 and decide the same by 07/05/2025. On 02/05/2025 at 1:00 P.M. IA/1069/2025 was heard and allowed. Invent Asset Securitization and Reconstruction Pvt. Ltd was impleaded as a necessary party to the appeal as Respondent no. 5. On 05/05/2025 at 11:30 A.M. the Appeal was taken up for hearing. Respondent no. 4 and 5 filed objection the Appeal. The matter adjourned to 2:30 P.M. on that day as the Ld. Counsel for the Appellant was served objection to appeal on the previous day. On 05/05/2025 at 2:30 P.M. Ld. Counsel for the Appellant filed affidavit with authorization letter and another IA/1275/2025 praying for amendment of the Appeal memo taking some additional grounds. Appellant filed this affidavit and another IA/1275/2025 to introduce new facts questioning jurisdiction with prayer to permit the appellant to take the additional grounds of appeal as mentioned in this IA. It is submitted by the Appellant that property situated in Mumbai sold by Recovery Officer and possession of the property was with the Official Liquidator as per order of the Hon’ble High Court,Bombay.

8. Ld. Counsel for Respondent no. 4/Auction Purchaser objected to the affidavit and IA/1275/2025 on the ground that introduction of new fact at the fag end of hearing of the Appeal is not maintainable. Ld. Counsel for Respondent no. 5 also objected to the affidavit and amendment petition. In the amendment petition Appellant challenged the jurisdiction of the Recovery Officer to sell the property situated in Mumbai. Hence, Appeal, affidavit with authorization letter and IA/1275/2025 praying for amendment of

Rina S. the Appeal memo were heard together as the Hon’ble DRAT directed to dispose of Appeal by 07/05/2025. Hearing of Appeal was concluded on 08/05/2025 and judgment was reserved. The Tribunal prayed to the Hon’ble DRAT for extension of time and Hon’ble DRAT allowed and permitted this Tribunal to dispose of the Appeal by 20/05/2025.

9. Respondent no. 4 is the Successful bidder in the auction sale conducted in respect of property at City Survey No. 78, 78/1, 78/2 and 78/3, Subhas Road, Jogeshwari East, Mumbai – 400060. Respondent no. 4 denied all the allegations made by the Appellant in the Appeal and objected to the prayer for intersee bidding. It is contended by Respondent no. 4 that the Appellant moved civil revisional petition before the Hon’ble High Court and also filed IA before the Recovery Officer on the same issue which speak ill motive of the Appellant to defeat the right of Respondent no. 4. It is contended by Respondent no. 4 that Appellant has not challenged the sale before the Recovery Officer under Rule 60 of the Income Tax Act 1961. It is further contended by Respondent no. 4 that Appellant did not submit bid within time as mentioned in the Sale Notice and Proclamation of Sale. The Appellant has submitted incomplete document i.e. bid for board resolution for participation , details of all directors i.e. KYC and MOU of the company. The Appellant claimed through e-mail that he submitted documents. It is also submitted that documents of the Appellant were incomplete and submitted after time fixed for submission of bid for which bid of the Appellant was refused by the Ld. Recovery Officer. It is submitted by Respondent no. 4

Rina S. that he is the Successful Bidder and the Sale has been Confirmed by the Recovery Officer and prayed for dismissal of the Appeal.

10. Respondent no. 5 also filed objection to Appeal that Appellant has not preferred Appeal under Rule 60 of the Income Tax Act and file Appeal u/s 30(1) of the RDB Act,1993. As the Appeal has to be filed under Rule 60 of the Income Tax Act , filing of Appeal u/s 30(1) of the RDB Act,1993 is not maintainable. It is also contended by Respondent no. 5 that Appellant has submitted bid on 28/02/2025 after time limit to file upto 1:00 P.M. The Appellant has submitted bid at 1:20 P.M. on 28/02/2025. The Appellant moved Civil Revisional application before the Hon’ble High Court Calcutta and file application before the Recovery Officer on the same ground which the Recovery Officer dismissed the application of the Appellant. It is also contended by Respondent no. 5 that bid was not submitted in time and with incomplete documents for which Ld. Recovery Officer rejected the bid. It is also contended by Respondent no. 5 that Appellant submitted bid before the Ld. Recovery Officer which consists of seven pages but in the Appeal Appellant has annexed 80 pages of bid. It is also contended by Respondent no. 5 that auction proceeding attained finality and grave injustice will be done if the sale is set aside and prayed for dismissal of the Appeal.

11. Ld. Counsel for the Respondent nos. 4 and 5 could not file any objection to the amendment petition and affidavit annexing authorization of the Board of Director of the Appellant Company. But orally argued that the said authorization is not authorization of board of directors of the Company to challenge the order of the

Rina S. Recovery officer in Appeal before the Tribunal. So far as amendment petition IA/1275/2025 is concerned Respondent nos. 4 and 5 strongly objected to such amendment that the Appellant cannot approbate and reprobate by filing bid accepting jurisdiction of the Recovery Officer and when the bid is not accepted due to insufficient documents and delayed submission of bid, then Appellant challenged the jurisdiction of the Recovery Officer to sell property situated in Mumbai.

12. The Appellant in the amendment petition alleged that property which is sold is the subject matter of property in a suit being no. 888 of 2008 before the Hon’ble High Court Bombay. It is also contended by the Appellant that Hon’ble High Court Bombay has jurisdiction of the property sold by Recovery officer and raised want of jurisdiction of the Recovery officer to sell the property when the said property is subjudice in civil suit no. 888 of 2008.

13. Ld. Sr. Counsel for Respondent no. 5 argued that RDB Act,1993 shall prevail over the Company Act 1956 and relied upon judgment of Judgment of Hon’ble Supreme Court in the case of Allahabad Bank, Vs. Canara Bank and another, AIR 2000 SUPREME COURT 1535 which has also relied by Appellant. Ld. Sr. Counsel for Respondent no. 5 objected to the amendment petition taking jurisdiction of the Recovery officer and drawn attention to section 21 of the Civil Procedure Code,1908 according to which question of jurisdiction should be made at the first chance. Appellant has not raised jurisdiction of the recovery Officer before the Recovery Officer but at the time of hearing of appeal which is not maintainable and relied upon the Judgment of Hon’ble Supreme

Rina S. Court in the case of Sneh Lata Goeal Versus Pushplata And Others (2019) 3 Supreme Court Cases 594. Ld. Sr. Counsel for the Respondent no. 5 has also relied upon judgment of Hon’ble Supreme Court in the matter of Suzuki Parasrampuria Suitings Private Limited Versus Official Liquidator of Mahendra Petrochemicals Limited (In Liquidation) And Others (2018) 10 Supreme Court Cases 707 regarding approbation and reprobation.

14. Ld. Counsel for the Respondent no. 4 has also relied upon some judgments which are as follows:

i) Hon’ble High Court of Delhi in the matter of M/s. Nibro Limited Versus National Insurance Co. Ltd. 1990 SCC Online Del 65 : ILR (1991) 2 Del 172 : (1990) 41 DLT 633 : AIR 1991 Del25 : (1991) 70 Comp Cas 388 regarding authorization of the company by Board of Directors..

ii) Hon’ble Supreme Court in the case of Sanjoy Charma Vs Kotak Mahindra Bank Ltd. SLP (C) NO. 330/2017) regarding any sale by auction or other public procurement methods once already confirmed or concluded ought not to be set-aside or interfered with lightly except on grounds that go to the core of such sale process, such as either being collusive, fraudulent or vitiated by inadequate pricing or underbidding. Judgment of Hon’ble Supreme Court in the case of Rajender Singh Versus Ramdhar Singh and others (2001) 6 Supreme Court Cases 213 : 2001 SCC Online SC 784 also regarding cancellation of sale. iii)of Hon’ble Supreme Court in the case of Valji Khimki And Company Versus Official Liquidator Of Hindustan Nitro Product (Gujarat) Limited And Others (2008) 9 Supreme Court Cases 299 :

Rina S. 2008 SCC Online SC 1226. These judgment similar to the other judgment regarding challenge of sale on the ground of fraud. Respondent no. 4 has filed similar judgment regarding ground to set aside the sale.

iv) Hon’ble Supreme Court in the case of M/S. Uttam Rice Mill, Dhamtari Versus M/S. Ashok Construction Company (CIVIL APPEAL NO. OF 2025 (@SLP (CIVIL) NO. 25511 OF 2024).

v) Hon’ble Supreme Court in the case of Mumtaz Yarud Dowla Wakf Versus Badam Balakrishna Hotel Pvt. Ltd. and others 2023 SCC Online SC 1378 and regarding approbation and reprobation,

vi) Hon’ble Supreme Court in the case of Pradip Kumar Dasgupta Versus Official Liquidator, High Court, Calcutta & Ors2004 SCC Online Cal 373 : (2004) 4 CHN 185 : (2005) 124 Comp Cas 168 : (2004) 108 CWN 916 in C.A. No. 455 of 2001 regarding sanctity of sale and

vii) Hon’ble High Court of Bombay (O.O.C.J.,Bombay)in the case SI2 Microsystems Pvt. Ltd., Bengaluru and Another Versus Bank of Baroda, Mumbai and Others.2023 SCC Online Bom 510 : (2023) 4 Mah LJ 486 : (2023) 3 AIR Bom R 142 : AIR 2023 Bom 185 : (2023) 250 AIC (Sum 6) 3 regarding sanctity of sale and Judgment of Hon’ble High Court of Bombay in the case of Tushar P. Shah Versus International Asset Reconstruction Co. P. Ltd. and ors.2012 SCC Online Bom 1201 : (2013) 2 Mah LJ 768 : (2012) 6 v) Bom CR 200 : (2013) 1 BC 502 (DB)

viii) Hon’ble High Court of Bombay in the case of GSL (India) Ltd. Versus Asset Reconstruction Co. (India) Ltd. and ors. 2015 SCC Online Bom 6073 : AIR 2016 Bom 43 : (2016) 2 AIR Bom R 291 :

Rina S. (2016) 2 Bom CR 182 : (2016) 2 BC 607 (DB) regarding jurisdiction of DRT in respect of property and situated outside the jurisdiction and Hon’ble Debts Recovery Appellate Tribunal, Kolkata (In-Charge DRAT, Allahabad) Appeal No. 81 of 2014 the Official Liquidator, High Court, Bombay as Liquidator for M/s Genelac Ltd. Vs. M/s Rare Asset Reconstruction Pvt. Ltd. & ors. this judgment related to the matter in the OA as well as in RP of this Appeal.

ix) Hon’ble Patna High Court 1996 SCC in the case of BOC India Limited Versus Zinc Products and Co. Pvt. Ltd. Online Pat 563 : (1996) 86 Comp Cas 358 : (1997) 24 CLA 119 : 1996 BBCJ 353, section 291 of the Company Act which has given power to the Board of Director exercising power of the Company. Hon’ble Patna High Court referred the judgment of Hon’ble High Court of Delhi in the matter of M/s. Nibro Limited Versus National Insurance Co. Ltd. and also relied upon Hon’ble High Court of Madras in the matter of M/s. G. M. Vyas & Company vs. M/s. National Textile Corporation (Tamil Nadu & Pondicherry Ltd. 2018 SCC Online Mad 685 : (2018) 4 BC

351. Ld. Counsel for the Respondent no. 4 has also relied upon the other decision which are not related to the issue to this Appeal.

15. Ld. Counsel for the Appellant relied upon the following judgments: i) Judgment of Hon’ble Supreme Court (2005) in the case of Rajasthan State Financial Corpn. And Another Versus Official Liquidator And Another. 8 Supreme Court Cases 190 paragraph 80. ii) Judgment of Hon’ble Supreme Court in the case of Krishna Rai (Dead) through Legal representative and ors vs. Banaras Hindu University thorugh Registrar & Ors. . (2022) 8 Supreme Court Cases 713 paragraph 32.

Rina S. iii) Judgment of Hon’ble Supreme Court in the case of Sushil Kumar Mehta V. Gobind Ram Bohra (1990) 1 Supreme Court Cases 193 contending point of jurisdiction can take at any time. iv) Judgment of Hon’ble High Court of Calcutta in the case of Bizmart Projects Private Limited and ors Versus Bank of Baroda and ors. 2024 SCC Online Cal 6310. v) Judgment of Hon’ble High Court of Delhi in the case of D. K. Modi Versus Official Liquidator & Ors. 2017 SCC Online Del 9106: (2017) 243 DLT SS (DB) : (2018) 1 BC 310 vi) Judgment of Hon’ble High Court of Punjab and Haryana in the case of Harjinder Singh S/O Waryam Singh Versus Recovery Officer- II and others 2020 SCC Online P&H 5220 : PLR (2020) 200 P& H 176 : (2021) 1 RCR (Civil) 513 (DB) regarding jurisdiction. vii) Judgment of Hon’ble Supreme Court in the case of FCS Software Solutions Ltd. Versus La Medical Devices Limited And Others 2008) 10 Supreme Court Cases 440 paragraph 28 and

29. viii) Judgment of Hon’ble Supreme Court in the case of Jagmittar Sain Bhagat and Ors vs. Director Health Services Haryana & Ors. ix) Judgment of Hon’ble Supreme Court in the case of Allahabad Bank, Appellant Vs. Canara Bank and another, Respondents AIR 2000 SUPREME COURT 1535 regarding Section 529 of the Company Act. x) Judgment of Hon’ble Allahabad High Court in the case of Kamal Kishore vs. Debts Recovery Appellate Tribunal , Allahabad & Ors. Ld. Counsel for the Respondent no. 4, Ld. Sr. Counsel for the Respondent no. 5 and Ld. Counsel for the Appellant tried to distinguish the judgment relied by the adverse parties. Respondent no. 1 and other parties are present at the time of hearing of Appeal. Official Liquidator has filed status report during hearing of Appeal. Ld. Counsel for the Official Liquidator did not challenge the order of

Rina S. the Recovery Officer in Appeal and submitted before the Tribunal at the time of hearing of appeal that Official Liquidator shall abide by the decision in the Appeal.

16. On the pleadings and argument made by the parties following issues emerge for determination:

Issues:

i) Whether Appeal is maintainable? ii) Whether the Recovery Officer has jurisdiction to sell the property situated in Mumbai and when a suit is pending in Hon’ble Bombay High Court? iii) Whether Appellant has been prevented to participate in the e-auction? iv) Whether rejection of the bid of Appellant by the Recovery Officer is valid? v) Whether sale conducted in favour of respondent no. 4 is liable to be set aside? vi) Whether amendment petition raising new grounds is maintainable? vii) What reliefs, if any Appellant is entitled to?

17. Issue No. ii) and vi) Property which has been sold by the Recovery Officer in e auction and challenged by the Appellant appertains to City Survey No. 78, 78/1, 78/2 and 78/3, Subhas Road, Jogeshwari East, Mumbai – 400060. This property has been sold by the Recovery Officer on the basis of the Recovery Certificate issued by the Presiding Officer

Rina S. DRT-1 for recovery of sum of Rs.140,70,38,206.89 and Rs.36,55,67,201.78 in respect of Respondent no. 1 Rare Asset Reconstruction Limited, Rs. 76,58,92,726.28, in respect of Invent Asset Securitization and Reconstruction Pvt. Ltd. and Rs.27,55,78,278.83 in respect of Indian Bank.

18. As per judgment of this Tribunal dated 7th February,2022 in OA/136/2001 and as per Recovery Certificate Applicants F.I. are entitled to recover from the Defendants the total amount to the tune of claimed Rs.140,70,38,206.89 (Rupees One Hundred Forty Crore Seventy Lac Thirty Eight Thousand Two Hundred Six and paise Eighty Nine only) from Official Liquidator, High Court at Bombay representing Genelac Ltd. which has gone into liquidation.

19. Official liquidator represents Genelac Ltd. which has gone into liquidation. OA was filed by Punjab National Bank, Canara Bank, State Bank of India and Indian Bank against Genelac Ltd. and Saw and Wallace Co. Ltd.. Punjab National Bank assigned the loan to Rare Asset Reconstruction Ltd, Canara Bank assigned loan to Edelweiss ARC , and State Bank of India assigned loan to Invent Asset Securitization and Reconstruction Pvt. Ltd and subsequently Edelweiss ARC assigned loan to Rare Asset Reconstruction Ltd,. During hearing of this OA Genelac Ltd. went to liquidation and Official Liquidator has been appointed by the Bombay High Court. Defendant no. 2 Saw and Wallace Co. Ltd. has been substituted by United Spirit Ltd. Order dated 19/03/2021 speaks that as per order dated 27/07/2021 in the matter of Company Petition no. 729 of 2009 with Company Petition NO. 384 of 2011 and Company Application no. 41 of 2012 which has been disposed of by the Hon’ble High Court of

Rina S. Judicature at Bombay .Accordingly the Official Liquidator represents M/S Genelec Ltd. before this Tribunal during hearing of OA/136/2001. Ultimately the O.A. was allowed. The tribunal held that the Applicants are entitled to claim Rs.140,70,38,206.89 ( Rs.36,55,67,201.78 in respect of Respondent no. 1 Rare Asset Reconstruction Limited, Rs. 76,58,92,726.28, in respect of Invent Asset Securitization and Reconstruction Pvt. Ltd. and Rs.27,55,78,278.83 in respect of Indian Bank) and RC/01/2022 dated 15/02/2022 has been issued to the Recovery officer DRT-1 for execution of the Certificate. Pursuant to the Recovery Certificate, Recovery Officer sold out different properties of the defendants situated in different place. This property involved in this matter is sold in the Recovery Proceedings where all the Certificate Holders and Official Liquidator of the company in liquidation participated and they have not challenged the sale of property situated in Mumbai.

20. It appears that the status report filed by the Official Liquidator High Court Bombay that M/s. Genelac Ltd. had been registered with the B.I.F.R. as Case(LE) No. 150 of 1990. The B.I.F.R. by order dated 23/05/2001 arrived at the conclusion that it is just and equitable in the public interest that M/s. Genelac Ltd. may be wound up in terms of Section 20(1) of Sick Industrial Companies (Special Provisions) Act, 1985 and forwarded its opinion to the Hon’ble High Court, Bombay vide its letter dated 28.06.2001. Order dated 13.08.2009, passed by the Hon’ble High Court in Company petition No. 729 of 2009 in B.I.F.R. (L) Case No. 150 of 1990, the Official Liquidator attached to this Hon’ble Court and appointed Provisional Liquidator with usual powers under the Companies Act, 1956.

Rina S. By order dated 27.07.2012 Hon’ble High Court in Company Petition No. 729 of 2009 with Company Application No. 384 of 2011 in B.I.F.R. (L) Case No. 150 of 1990, the Company was ordered to be wound up and the Official Liquidator attached to this Hon’ble Court and appointed Liquidator thereof with usual powers under the Companies Act, 1956. The Official Liquidator took steps in respect of the properties belongs to Company (In Liquidation.) given in tabular form as below : Property no. 1: Magnet House, Narottam Morarji Mard, Ballard Estate, Mumbai – 400038. Possession could not been taken as the premises does not belonged to the Company (In Liqn.) Property no. 2: Registered Office at A-404, Gokul Areade, Sahar Road, Garware Chowk, Vile Parle (East), Mumbai – 400057. Possession was taken, but handed over to the landlord on 16/08/2010 pursuant to the Hon’ble High Court Order dated 21/07/2010 passed in Company Application No. 207 of 2010. Property no. 3: Residential Flat at Mermaid Co-operative Housing Society, 6th Floor, Flat No. 601, Juhu Tara Road, Mumbai – 400054. Possession has been taken on 14/12/2011 and also the valuation been done by panel valuer. Property no. 4: Factory premises at 4/2, Chikalthana, MIDC, Aurangabad, Maharashtra. Possession has been taken on 10/09/2012 and valuation has been done by panel valuer Property no. 5: City Survey Nos. 78, 78/1, 78/2 & 78/3, Subhash Road, Jogeshwari (E), Mumbai – 400060. Possession has been taken on 14/12/2011 and also the valuation been done by panel valuer. Property no. 6: A/73, Hauz Khas Enclave, New Delhi – 110016. Possession has been taken on 12/09/2012

Rina S. By order dated 05/07/2012 Hon’ble High Court Bombay in Company Petition No. 729 of 2009 with Company Application No. 384 of 2011 and Company Application No. 41 of 2012, the Official Liquidator was directed to advertise the admission of the winding up petition in “Free Press Journal” (In English) and “Navshakti” (In Marathi) and invite claims from the workers/creditors to prove their claim. As per order Official Liquidator complied with the said directions and advertised the Admission of the winding up petition in “Free Press Journal” (In English) and “Navshakti” (In Marathi), both published from Mumbai and advertised the Notice to workers/ creditiors of the Company (In Liqn.) to prove their claims, in “Free Press Journal” (In English) and “Navshakti” (In Marathi), both published from Mumbai and “Sakal” (In Marathi) p;ublished from Aurangabad on 11/07/2012. The workers and creditors were directed to lodge their claim with the Official Liquidator on or before 25/07/2012. But official Liquidator did not receive any claims from the workers, but had received claims prior to the publication of advertisement for claim invitation and there are also various Official Liquidator expenses which are to distributed by the Official Liquidator which are as under: a)Punjab State Power Corporation Ltd(Ordinar Creditor)- Rs. 9,95,370/-. b)Brihan Mumbai Mahanagarpalika towards property tax(Ordinar reditor)- Rs.1,97,42,899/-. c)Mermaid Co-op. Housing Society Ltd.: Rs. 2,75,737/-. d)N. M. Shah Valuer Payment OLR No. 37/2023 filed before Hon’ble High Court, Bombay- Rs. 1,77,995/-. e)Legal expenses provisions for DRT matters- Rs. 5,00,000/-. Total :Rs. 2,16,92,001/-

Rina S. It is further stated that on 27/08/2013, M.s Rolex Metals filed an intervener application before Hon’ble Debt Recovery Tribunal – I Kolkata seeking direction, inter alia, for depositing a sum of Rs. 5,47,50,000/- being balance consideration of the Aurangabad property in its favour on terms of the Memorandum of Understanding dated 24/12/2007. Official Liquidator was present at the time of hearing sought time for seeking further instructions from the Official Liquidator to file reply to the Interim Application moved by M/s Rolex Metals. But without given opportunity to the Official Liquidator Learned Tribunal disposed of the application by its order dated 08/11/2013, and allowed the sale of the Aurangabad Property as prayed by M/s Rolex Metals.

21. Official Liquidator preferred an Appeal bearing no. 81 of 2014 on 06/03/2014 challenging order dated 08/11/2023, before that Debt Recovery Appellate Tribunal (DRAT) seeking direction to set aside the impugned order dated 08/11/2013 and to discharge the receiver appointed by Debt Recovery Tribunal (DRT), Kolkata. The appeal was finally heard on 13/02/2020 and order was passed as follows:

1. M/s Rolex Metals will deposit a sum of Rs. 6,62,50,000/- within three (3) months from today with interest htereon @ 7% p.a. simple from the date of order dated 08/11/2013 of DRT till payment, with the Applellant- Official Liquidator.

2. The Amount of Rs. 1,82,50,000/- deposited with the DRT in thes shape of FDR shall also be given to the Appellant Official Liquidator along with interest.

3. The Official Liquidator will appropriate the aforesaid funds in accordance with the provisions of the Liquidation procedure under the Companies Act.

4. It is informed that the receiver appointed by the DRT has since been retired the bank, therefore, considering the prayed for appointment of Receiver by this Tribunal for the purpose of execution of sale deed, Mr. N. Srinivas, Counsel is hereby appointed as Receiver to execute necessary sale deed in favour of M/S Rolex Metals after receipt of the amount by the Officaial Liquidator. For this purpose, his fee is fixed at Ra. 30,000/- to be borne by the Intervener firm. All the incidental expenses including expenses for execution of sale deed shall also be borne by the intervener.

Rina S.

5. The appeal is disposed of in the above terms. No order as to cost.”

22. Thereafter the Official Liquidator filed IA/190/2024 in RC No. 1 of 2022 in OA no. 136 of 2001 before this Hon’ble Tribunal to release an amount of Rs. 2,16,92,001/- towards the Claims of the Creditors of the Company (IN Liqn.). Accordingly, pursuant to this Hon’ble Tribunal order dated 30/01/2024 in said IA, an amount of Rs. 2,16,92,001/- was deposited with the Official Liquidator and the Official Liquidator is in process of adjudication of abovesaid claims.

23. Official Liquidator submits following dates and events for handing of Possession and status of sale of properties of the Company (In. Liqn.)which are as under: Sl. N o . Location / Address of Properties Date and events for handing over possession Status of sale of the Asset by DRT Receiver Kolkata

Residential Flat at Mermaid C o - o p e r a t i v e Housing Society, 6t Floor, Flat No. 601, Juhu Tara Road, Mumbai -400054. Pursuant to the order dated 20/09/2023 and 27/09/2023 passed by the Debt Recovery Tribunal –I at Kolkata in Recovery Proceeding No. 1 of 2022, the Official Liquidator has handed over the possession of the said flat situated at Juhu Tara Road, Mumbai – 400049 to Adv. Anirban Ghosh, DRT Receiver on 13/10/2023. Pursuant to the order dated 14/06/2024 passed in RP No. 1 of 2022 by the Learned Recovery Officer, DRT-1, Kolkata sold property in public auction and was confirmed by the Recovery Officer DRT-1

Factory premises at 4/2, C h i k a l t h a n a , M I D C , A u r a n g a b a d , Maharashtra Possession has been taken on 10/09/2012 by Official Liquidator In compliance of the order dated 13.02.020 passed in Appeal No. 81 of 2014 by the Hon’ble Debt Recovery Appellate Tribunal at Kolkata, Mr. Nemai Srinivas, DRT Receiver has executed Deed of Assignment in favour of M/s. Rolex Metals and exclusive possession of the immovable property Aurangabad has been handed over

Rina S. to Rolex Metals.

City Survey Nos. 78, 78/1, 78/2 & 78/3, Subhash R o a d , Jogeshwari (E), Mumbai – 400060. In compliance with the order dated 14.06.2024 passed by the Learned Recovery Officer-II, DRT – 1, Kolkata. DRT receiver took forceful possession of the said property on 20/08/2024 as the Official Liquidator objected for the same due to pending Official Liquidator Report No. 21 of 2020 and Suit No.

of for declaration of sale of said immovable property as null and void. Pursuant to the order dated 04.04.2025 passed in RP No.1 of 2022 by the Learned Recovery Officer, DRT – 1, Kolkata said property has been sold to Malayvrunda Creative Homemakers Pvt. LTd., for an amount of Rs.58,13,36,350/-.

A/73, Hauz Khas Enclave, New Delhi -110016 Pursuant to the order date 20.09.2023 and 27.09.2023 passed by the Debt Recovery Tribunal- I at Kolkata in Recovery Proceeding No. 1 of 2022, the Official Liquidator has handed over the possession of the said property to Adv. Anirban Ghosh, DRT Receiver on 27/10/2023. Pursuant to the order dated 15/04/2024 in RP No.

of passed by the Learned Recovery Officer, DRT -1, Kolkata property sold in public auction and was confirmed by the Recovery Officer DRT-1. Official Liquidator submits the matters pending before the Hon’ble High Court of Bombay for final orders/directions.

1. Suit bearing No. 888 of 2008 is filed by the shareholder against the Company (in Liqn.), praying for declaration that the sale of the immovable properties of Company (in Liqn) situtated at Jogeshwari to N.V.S. New Ground Technologies Pvt. Ltd. is illegal and void.

2. The Official Liquidator Report No.21 of 2020 is also filed by the Official Liquidator, praying for declaration that the sale of the immovable property of the Company (in Liqn.) situated at Jogeshwari to N.V.S. New Ground Technologies Pvt. Ltd. is void

Rina S. ab-initio since it is in violation of Section 536 (2) and 537 of the Companies Act, 1956.

3. Official Liquidator Report No. 166 of 2023 is filed by the Official Liquidator, praying to allow the Official Liquidator to retain possession of Jogeshwari Property till disposal of Suit No. 888 of 2008 and OLR No. 21 of 2020.

4. Official Liquidator Report No. 54 of 2023 is filed by the Official Liquidator, praying for direction to Vinod Faria to explain in which capacity he has filed the Vakalatnama before DRT Kolkata in OA, permission for appointment and payment of Counsel Debjani Mitra before DRT Kolkata matters and ors.

5. Interim Application (L) No. 20183 of 2023 filed by Invent Asset Securitization and Reconstruction Pvt. Limited direction to the Official Liquidator to handover Jogeshwari property, Juhu Tara Road Property and Hauz Khaz Enclave Property.

6. Interim Application (L) No. 33262 of 2023 filed by Liyaqat Ali Mandal (claiming to be Shareholder) to declare that the registered deed of assignment dated 11.04.2023 is void and unenforceable in law in respect of Aurangabad Property and ors., prayers

7. Interim Application (L) No. 3733 of 2025 filed by Hundwara Finance and Investment Company Pvt. Limited (claiming to be shareholder) seeking permission of the auction/sale of the company assets must only be conduct by High Court Bombay and also distribute the sale proceeds u/s 529(a) of the Companies Act, 1956 and stay any auction of Jogeshwari Property and ors prayers.

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24. All these applications are pending before the Hon’ble Bombay High Court. Official Liquidator in this report submitted that property at City Survey No. 78, 78/1, 78/2 and 78/3, Subhas Road, Jogeshwari East, Mumbai – 400060 has been taken possession forcibly by the Receiver appointed by the Recovery Officer. As per report of the Ld. Receiver appointed by Recovery officer –DRT-1 Kolkata he took possession of the Jogeshwari property in Mumbai on the basis of the order of Chief Judicial Magistrate ,Andhari with police help on 20/08/2024. Official liquidator’s report says that a shareholder of Genelac Ltd filed Suit before the Bombay High Court but no order has been filed by the Official Liquidator. It appears from the report that the Official Liquidator has voluntarily given possession of the properties to some of the creditors but objected to give possession of Jogeshwari property. Ld. Receiver appointed by the Recovery officer by order of the Recovery Officer and Magistrate of Mumbai took possession of the property.

25. Ld. Counsel for the Appellant submitted argument that property involved in this Appeal cannot be sold by Recovery Officer as suit being no. 888 of 2008 is pending before the Hon’ble High Court Bombay under the Company Act 1956. Ld. Counsel for the Appellant has relied upon the judgment of Hon’ble Supreme Court of India in the case of Rajasthan Financial Corpn. & Anr vs The Official Liquidator & Anr wherein Hon’ble Supreme Court of India at paragraph 14 observed as follows: “14. In Allahabad Bank Vs. Canara Bank & anr. (supra), the question of jurisdiction of the Debts Recovery Tribunal under

Rina S. the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, vis-`-vis the company court arose for decision. This Court held that even where a winding up petition is pending, or a winding up order has been passed against the debtor Company, the adjudication of liability and execution of the certificate in respect of debts payable to banks and financial institutions, are respectively within the exclusive jurisdiction of the Debts Recovery Tribunal and the Recovery Officer under that Act and in such a case, the company court's jurisdiction under Sections 442, 537 and 446 of the Companies Act stood ousted. Hence, no leave of the company court was necessary for initiating proceedings under the Recovery of Debts Act. Even the priorities among various creditors, could be decided only by the Debts Recovery Tribunal in accordance with Section 19(19) of the Recovery of Debts Act read with Section 529- A of the Companies Act and in no other manner. The Court took into account the fact that Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was a legislation subsequent in point of time to the introduction of Section 529A of the Companies Act by Act 35 of 1985 and it had overriding effect. But it noticed that by virtue of Section 19(19) of the Recovery of Debts Act, the priorities among various creditors had to be decided by the Recovery Tribunal only in terms of Section 529A of the Companies Act and Section 19(19) did not give priority to all secured creditors. Hence, it was necessary to identify the limited class of secured creditors who have priority over all others in accordance with Section 529-A of the Companies Act. The Court also held that the occasion for a claim by a secured creditor against the realization by other creditors of the debtor under Section 529A read with proviso (c) to Section 529(1) of the Companies Act could arise before the Debts Recovery Tribunal only if the concerned creditor had stood outside the winding up and realized amounts and if it is shown that out of the amounts privately realized by it, some portion had been rateably taken away by the liquidator under clauses (a) and (b) of the proviso to Section 529(1). The Court has not held that Section 529-A of the Companies Act will have no application in a case where a proceeding under the Recovery of Debts Act has been set in motion by a financial institution. The Court here was

Rina S. essentially dealing with the jurisdiction of the Debts Recovery Tribunal in the face of Sections 442, 537 and 466 of the Companies Act.” Hon’ble Supreme Court at paragraph 18 observed some of the legal position In the light of the discussion as above, we think it proper to sum up the legal position thus:-

i) A Debt Recovery Tribunal acting under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 would be entitled to order the sale and to sell the properties of the debtor, even if a company-in-liquidation, through its Recovery Officer but only after notice to the Official Liquidaliquidation, through its Recovery Officer but only after notice to the Official Liquidator or the liquidator appointed by the Company Court and after hearing him.

ii) A District Court entertaining an application under Section 31 of the SFC Act will have the power to order sale of the assets of a borrower company-in-liquidation, but only after notice to the Official Liquidator or the liquidator appointed by the Company Court and after hearing him.

iii) If a financial corporation acting under Section 29 of the SFC Act seeks to sell or otherwise transfer the assets of a debtor company-in-liquidation, the said power could be exercised by it only after obtaining the appropriate permission from the company court and acting in terms of the directions issued by that court as regards associating the Official Liquidator with the sale, the fixing of the upset price or the reserve price, confirmation of the sale, holding of the sale proceeds and the distribution thereof among the creditors in terms of Section 529A and Section 529 of the Companies Act.

iv) In a case where proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or the SFC Act are not set in motion, the concerned creditor is to approach the company court for appropriate directions regarding the realization of its securities consistent with the relevant provisions of the Companies Act regarding distribution of the assets of the company-in-liquidation.”

26. In OA/136/2001 Official Liquidator was a party at the time of hearing of OA and the OA was allowed in presence of the Official Liquidator.

Rina S. Section 19(19) of the Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 provides that: Where a certificate of recovery is issued against a company as defined under the Companies Act, 2013 and such company is under liquidation, the Tribunal may by an order direct that the sale proceeds of secured assets of such company be distributed in the same manner as provided in section 326 of the Companies Act, 2013 or under any other law for the time being in force. Section 529A of The Companies Act, 1956 was the similar provision which speaks:

(1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company-(a)workmen's dues; and (b)debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts. Recovery Officer even after sale of the property kept the sale proceeds for distribution amongst the creditor and the claim of the workers. Therefore Recovery Officer is within its jurisdiction and as per provision of RDB Act.1993 conduced the sale of the property situated in Mumbai and kept the sale proceeds as per 19(19) of the RDB Act, 1993. Sale conducted by the Recovery Officer of the property of Company in liquidation cannot be said to be out of jurisdiction. Recovery Officer is well within its jurisdiction.

27. Ld. Counsel for the Appellant has relied upon the Judgment of Hon’ble Supreme Court in the case of Sushil Kumar Mehta V. Gobind Ram Bohra (1990) 1 Supreme Court Cases 193. At paragraph 26 Hon’ble Supreme Court has observed that :

Rina S. “26 Thus it is settled law that normally a decree passed by a Court of competent jurisdiction, after adjudication on merits of the rights of the parties, operates as res judica- ta in a subsequent suit or proceedings and binds the parties or the persons claiming right, title or interest from the parties. Its validity should be assailed only in an appeal or revision as the case may be. In subsequent proceedings its validity cannot be questioned. A decree passed by a Court without jurisdiction over the subject matter or on other grounds which goes to the root of its exercise or jurisdiction, lacks inherent jurisdiction. It is a corum non judice. A decree passed by such a Court is a nullity and is nonest.” Hon’ble Supreme Court has given this judgment in respect of dispute in Suit for eviction when the Civil Court has no jurisdiction to entertain any application for eviction when the Rent Court is available. The Hon’ble Supreme Court held that Civil Court lack jurisdiction to entertain suit for eviction. This situation is not present in the Appeal DRT passed Recovery Certificate has jurisdiction and after hearing application under the RDB Act,1993 issued Recovery Certificate which was under execution before the Recovery Officer -1, Kolkata. Recovery Officer -1, Kolkata has jurisdiction to execute the Recovery Certificate which is held by Hon’ble Supreme Court in the case of Rajasthan State Financial Corpn. And Another Versus Official Liquidator and Another. 8 Supreme Court Cases 190.

28. Ld. Counsel for the Appellant raised territorial jurisdiction of the Recovery Officer as the property sold is situated in Mumbai. It is argued that Ld. Recovery Officer has no jurisdiction to sell the property outside Kolkata and relied upon Judgment of Hon’ble High Court of Calcutta in the case of Bizmart Projects Private Limited and ors Versus Bank of Baroda and ors. 2024 SCC Online Cal 6310, wherein Hon’ble High Court

Rina S. referring to Section 19(23) of the RDB Act,1993 held that learned Recovery Officer, Debts Recovery Tribunal, Siliguri in R.C No. 4 of 2021 is hereby set aside. The Debts Recovery Tribunal, Siliguri is directed to send the „Certificate of Recovery" for execution to the Tribunal within jurisdiction the property is situated. In this case before the Hon’ble High Court, the Borrower has challenged the jurisdiction of Recovery Officer of Siliguri under article 227 but in this Appeal Appellant challenged the sale of property of Defendant Genelac Ltd represented by Official Liquidator on the ground of lack jurisdiction of the Recovery Officer to sell the property situated in Mumbai. Appellant is an intending bidder who submitted bid. When the bid was rejected due to insufficient documents and delayed submission of bid, preferred Appeal before the DRT-1, Kolkata and at the time of hearing Appellant, filed amendment petition taking lack of territorial jurisdiction of the Recovery Officer as the property is situated in Mumbai.

29. Ld. Counsel for the Respondent no. 4 has relied Judgment of Hon’ble High Court of Bombay in the case of GSL (India) Ltd. Versus Asset Reconstruction Co. (India) Ltd. and ors. wherein Hon’ble High Court observed as follows: “we are unable to agree with the reasoning of the Delhi High Court that under section 19(23) of the RDDB Act, the DRT is required to send a copy of the Recovery Certificate for execution to the DRT within whose jurisdiction the property is situated. As mentioned earlier, section 19(23) clearly stipulates that where the tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more tribunals, it may send copies of the Recovery

Rina S. Certificate for execution to such other tribunals where the property is situated. The word "may" clearly indicates that this provision is discretionary and not mandatory in nature. Under section 19(23), discretion is given to the DRT to either itself execute the Recovery Certificate issued by it against a property not within its jurisdiction, or to send it to the concerned DRT where the property is situated”.

30. Ld. Sr. Counsel for the Respondent no. 5 has relied upon the Judgment of Hon’ble Supreme Court in the case of Sneh Lata Goeal Versus Pushplata And Others (2019) 3 Supreme Court Cases 594. Hon’ble Supreme Court at paragraph 20 refer to their own judgment Harshad Chiman Lal Modi v DLF Universal Ltd.9, and held that an objection to territorial and pecuniary jurisdiction has to be taken at the earliest possible opportunity. If it is not raised at the earliest, it cannot be allowed to be taken at a subsequent stage. This Court held thus: “30. The jurisdiction of a court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject-matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a nullity.”

Rina S.

31. In this case Appellant is neither a Certificate Holder, nor borrower. He is an intending bidder submitted bid which was rejected due to insufficient documents and delayed submission. At the time of hearing of Appeal filed amendment petition taking additional ground that the Recovery Officer has no jurisdiction to sell the property situated outside it’s territorial jurisdiction. The Appellant filed application before the Recovery Officer to allow him to participate in the e-auction and subjected himself to the jurisdiction of the Recovery Officer. When his application was rejected he files Appeal challenging rejection of his bid and prayed intersee bidding with Respondent no. 4. At a belated stage the Appellant files application to take additional ground of lack of territorial jurisdiction of the Recovery Officer.

32. Ld. Advocate for the Respondent no. 4 cited judgment of Hon’ble Supreme Court in the case of Mumtaz Yarud Dowla Wakf Versus Badam Balakrishna Hotel Pvt. Ltd. and others 2023 SCC Online SC 1378 and regarding approbation and reprobation. By referring authority of 27.3.Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd. [(2013) 5 SCC 470 : (2013) 3 SCC (Civ) 153] : (SCC pp. 480-81, paras 15-16) observed as under: “I. Approbate and reprobate

15. A party cannot be permitted to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity, however, it must not be applied in such a manner so as to violate the

Rina S. principles of what is right and of good conscience. [Vide Nagubai Ammal v. B. Shama Rao [1956 SCR 451 :AIR 1956 SC 593] , CIT v. V. MR. P. Firm Muar [ AIR 1965 SC 1216] , Ramesh Chandra Sankla v. Vikram Cement [(2008) 14 SCC 58 : (2009) 1 SCC (L&S) 706] , Pradeep Oil Corpn. v. MCD [(2011) 5 SCC 270 : (2011) 2 SCC (Civ) 712] , Cauvery Coffee Traders v. Hornor Resources (International) Co. Ltd. [(2011) 10 SCC 420 : (2012) 3 SCC (Civ) 685] and V. Chandrasekaran v. Administrative Officer [(2012) 12 SCC 133 : (2013) 2 SCC (Civ) 136 : (2013) 4 SCC (Cri) 587 : (2013) 3 SCC (L&S) 416].

16. Thus, it is evident that the doctrine of election is based on the rule of estoppel—the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppel in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had.”

33. Appellant has submitted bid of seven pages before the Recovery Officer but in the appeal he annexed 80 pages bid. the Appellant has not annexed bid consisting seven pages which the Appellant filed before the Recovery Officer. This conduct of the Appellant shows that Appellant filed incomplete bid before the Recovery Officer and covered up the deficiency by filing 80 pages bid in the Appeal Memo. Thus in view of the authority of Hon’ble Supreme Court regarding jurisdiction stated above, the Appellant has no locus to challenge the territorial jurisdiction of Recovery Officer when the parties of the Recovery Proceedings did not challenge. The conduct of the Appellant while submitting bid to participate in the e-auction subjected to the jurisdiction of the Recovery Officer, when his bid was rejected due

Rina S. to insufficient documents he challenged the jurisdiction of the Recovery Officer at belated stage, is nothing but Approbate and reprobate attitude of the Appellant which cannot be permitted. Hence , challenge to the territorial jurisdiction of the Recovery Officer is not sustainable. In view of the decision of Hon’ble Supreme Court and conduct of the Appellant issue no. ii) is answered in affirmative. Recovery Officer has jurisdiction to sell the property in Mumbai and he has jurisdiction to sell the property even though pending of Company suit in Hon’ble Bombay High Court. Issue no. vi) is answered negative. Amendment petition (IA/1275/2025) is not maintainable.

34. Issue nos. iii), iv) and v): The Recovery Officer has issued Sale Notice dated 17/01/2025 inviting bids from intending bidders to register their names for participating in the auction with earnest money through Demand Draft in the office of the Recovery Officer DRT-1,Kokata payable at Kolkata on or before 28/02/2025 before 1:00 P.M. Appellant submitted bid and documents of seven pages before the Recovery Officer on 28/02/2025 at 1:20 P.M. The bid of the Appellant was incomplete and filed in delay. The bid was filed without Board Resolution, KYC of the Board of Directors. Order of the Recovery Officer dated 05/03/2025 speaks that there are three bidders: 1) Malayvrunda Creative Homemakers Pvt. Ltd. 58,13,36,350/- 2. Swananda Developers 57,59,03,300/- 3. Jitendra Madhusudan Patel 57,04,70,250/-. As per report received from Auction Tiger, e-auction service provider that Malayvrunda Creative Homemakers Pvt. Ltd. is the Highest Bidder quoted Rs. 58,13,36,350

Rina S. and he was declared as highest bidder. Malayvrunda Creative Homemakers Pvt. Ltd. was directed to deposit 25% of 58,13,36,350/- i.e. {14,53,34,088 - 5,43,30,500 (10% EMD)} = 9,10,03,588/- by tomorrow (06.03.25) on or before 3.00 P.M. and the rest 75% will be deposit as per proclamation of sale. The Highest Bidder, Malayvrunda Creative Homemakers Pvt. Ltd. already deposited (Rs. 5,43,30,500/- + Rs. 12,00,00,000) = 17,43,30,500/- and the remaining amount is Rs. 40,70,05,850/- which is 75% of the sale proceeds (i.e. 75% of 58,13,36,350/-) The Highest Bidder, Malayvrunda Creative Homemakers Pvt. Ltd. depositing of the rest of the sale amount i.e. Rs. 40,70,05,850/- through RTGS in the account of Recovery Officer of Indian Bank, Main Branch, Kolkata. The sale proceeds deposited by The Highest Bidder, Malayvrunda Creative Homemakers Pvt. Ltd. through DD or RTGS in the a/c of Indian Bank name of Recovery Officer, DRT-I, Ld. Recovery Officer by detailed order dated 04/04/2025 rejected the application of Appellant IA/100/2025 raising same objection. Ld. Recovery Officer on 04/04/2025 directed Ld. Receiver Mr. Anirban Ghosh to execute the deed of conveyance in favour of Auction Purchaser before the Sub Registrar of Assurance, Mumbai covering Mumbai Subarban and Mumbai City strictly on the lines of Sale Certificate. The entire legal expenses in respect to the execution of deed of conveyance in favour of Auction Purchaser will have to be borne by the Auction Purchaser. Ld. Receiver and CHI's are directed to provide the physical possession of the property to the Auction Purchaser and file report on the next date. i.e. on 08/05/2025. Both the CHI's are also directed to file details of their accounts by way of a petition through affidavit for distribution of the sale proceeds of the sold property.

Rina S. The bid of the Appellant was rejected due to insufficient documents and delay in submission of bid and the auction held is valid. Respondent No. 1 sent a letter to defer the sale which was received by the Recovery Officer after sale has been conducted and Recovery Officer has rejected the application. Respondent no 5 has not filed petition challenging the sale before the Recovery Officer nor filed Appeal before the DRT. Therefore, rejection of bid of the Appellant appears to be proper. Ld. Counsel for the Respondent no. 4 has relied upon judgment of Judgment of Hon’ble Supreme Court in the case of Sanjoy Charma Vs Kotak Mahindra Bank Ltd. SLP (C) NO. 330/2017). Hon’ble Supreme Court at paragraph 33 observed as follows:

33. It is now a well-settled principle that a sale by way of public auction cannot be set aside until there is any material irregularity and/or illegality committed in holding the auction or if such auction was vitiated by any fraud or collusion. This Court in V.S. Palanivel vs. P. Sriram reported in 2024 INSC 659 held that unless there are some serious flaws in the conduct of the auction as for example perpetration of a fraud/collusion, grave irregularities that go to the root of such an auction, courts must ordinarily refrain from setting them aside keeping in mind the 14 domino effect such an order would have. Recently, this Court in Celir LLP vs. Ms Sumati Prasad Bafna and others Contempt Petition (C) Nos.158-159 of 2024 in Civil Appeal Nos. 5542-5543 of 2023 held as follows: “218.Any sale by auction or other public procurement methods once already confirmed or concluded ought not to be set-aside or interfered with lightly except on grounds that go to the core of such sale process, such as either being collusive, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or

Rina S. deviation from a rule that does not have any fundamental procedural error does not take away the foundation of authority for such a proceeding. In such cases, courts, in particular, should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity.”

In view of the above evidence, discussion and position of law held by the Hon’ble Supreme Court rejection of bid of the appellant is valid. Appellant was not prevented to participate in the e- auction. Appellant filed bid after the date and time of acceptance of bid with insufficient documents which caused rejection of bid. Three bidders participated in the bid and highest bid submitted by Malayvrunda Creative Homemakers Pvt. Ltd. has been declared successful purchaser. Therefore sale in favour of Respondent no. 4 cannot be set aside as the Appellant has not proved any fraud, collusion or material irregularities. Issue no. iii) is answered in negative. Issue no iv) is answered in affirmative and Issue no v) is answered in negative.

35. Issue no. i) and vii)

On the date of hearing on 05/05/2025 one affidavit filed by one Murari Krishna annexing copy of Board Resolution. The Appellant has not filed Board Resolution of the Company to challenge the orders of the Recovery Officer in Appeal. In the board resolution it is certified by the Board of Directors that Murari Krishna is authorized to file reply on behalf of the Company before the Hon’ble High Court and Hon’ble DRAT

Rina S. and DRT. On perusal of this letter it appears that it is not a Board resolution of Directors of the Appellant Company. Ld. Counsel for the Respondent no. 4 has also relied upon judgment of Hon’ble High Court of Delhi in the matter of M/s. Nibro Limited Versus National Insurance Co. Ltd. Hon’ble High Court at paragraph 25 held as follows: “Chapter IV of the Delhi High Court (Original Side) Rules deals with the question of presentation of suits. Under this rule, a suit can be presented by a duly authorised agent or by an advocate duly appointed by him for the purpose. This authorization, in my view, in the case of a company can be given only after a decision to institute a suit is taken by the board of directors of the company. Th board of directors may in turn authorise a particular director, principal officer or the secretary to institute a suit.” In this case Appeal has been filed without Board resolution of the Appellant Company to challenge the order of the Recovery Officer in appeal before DRT-1. The document which is filed at the time of hearing of Appeal by affidavit is not the resolution of the Board of Directors. Section 291 of the Companies Act,1956 speaks that decision of a Company in any matter has to be taken by Board Resolution. Therefore this Appeal is not maintainable due to want of the resolution of Board of Directors to challenge the order of the Recovery Officer before DRT-1 in Appeal u/s 30 of the RDB Act. The Appellant is not entitled to get any other relief.

Rina S. The Appellant has prayed for interse bidding which is not permissible as the auction has been completed and the right of the Successful Purchaser has been established. The Auction cannot be set aside, to allow unsuccessful bidder to make interse bidding. Issue no. i) is answered in negative and Issue no. vii) is answered in negative. Hence, the Appeal 1 of 2025 is not maintainable and is liable to be dismissed. It is ordered:

O R D E R

i) Appeal 1 of 2025 and IA/1275/2025 are dismissed on contest against the Respondents. ii) IA/1043/2025 is disposed of. Copy of the Judgment/Final Order be uploaded in the Tribunal’s website. File is consigned to the Record Room. (Dictated to P.S., transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 20th May, 2025. Place : Kolkata (Ambuja Mohan Das) Date : 20th May 2025 Presiding Officer Order Sheet (continuation) Case No. APPEAL/01/2025 LLOYDS REALITY DEVELOPERS LIMITED

Rina S. VS. RARE ASSET RECONSTRUCTION LIMITED & ORS Date of the Order Order with Signature Office action date and da Signature Parties whe necessary 20/05/2025 Present: For Applicant : Mr. Nimesh Mishra, Mr. Debabrata Basu Roy, Mr. Gourav Singh, and Mr. Ajit Keshari,Ld. Counsels

For Respondent no 1: Mr. D. Chakraborty, Ld. Counsel For Respondent no 2: Mr. Ranjeev Carvalho(virtually) and Ms. Debjani Mitra, Official Liquidator, Ld. Counsels For Respondent no 4: Mr. Debasish Karmakar and Mr. Rabindra Kr. Mitra, Ld. Counsels For Respondent no 5 Mr. Maloy Kumar Ghosh, Ld. Sr. Counsel and Mr. Basudev Mukherjee Ld. Counsel Matter was heard in open Court on from 05/05/2025 to 08/05/2025. The detailed order in 36 pages annexed separately. The gist of the order is as follows:

O R D E R

i) Appeal 1 of 2025 and IA/1275/2025 are dismissed on contest against the Respondents. ii) IA/1043/2025 is disposed of. Copy of the Judgment/Final Order be uploaded in the Tribunal’s website.

File is consigned to the Record Room. (Dictated to P.S., transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 20th May, 2025. Place : Kolkata (Ambuja Mohan Das) Date : 20th May 2025 Presiding Officer

Rina S. Order Sheet (continuation) Case No. APPEAL/01/2025 LLOYDS REALITY DEVELOPERS LIMITED VS. RARE ASSET RECONSTRUCTION LIMITED & ORS Date of the Order Order with Signature Office action date and da Signature Parties whe necessary 20/05/2025 At 3:10 P.M. After pronouncement of judgment in Appeal/01/2025, Ld. Advocate for the Appellant prays for stay of the judgment for 15 days which is objected by Ld. Advocates for Respondent nos. 4 and 5. After pronouncement of judgment there is no provision under law to stay the judgment. The submission made by Ld. Advocate for the Appellant is rejected. Place : Kolkata (Ambuja Mohan Das) Date : 20th May 2025 Presiding Officer