The Karnataka Excessive Courtroom has quashed the 2012 sale of a Bengaluru property by the UB Group, directing that or not it’s auctioned off by the liquidator.
The order was handed on March 14 by a bench of Justice Suraj Govindaraj and was lately made accessible.
In 2023, Brunton Builders had approached the excessive courtroom with an utility relating to their buy of a property on the third ground of Canberra Block of UB Metropolis in Bengaluru from UB Group for a sum of Rs 3 crore. The corporate argued that it was a transaction at truthful market value that was over the steerage worth and thus was binding with out curiosity to defraud the collectors of UB Group. Nonetheless, the corporate stated, the khata or authorized property doc remained with UB Group, which is within the strategy of liquidation, and sought switch of the identical.
The official liquidator, nevertheless, objected to the identical on the grounds that the sale was fraudulent because it was made after the establishment of winding-up proceedings. It additionally argued in opposition to the valuation report submitted by the corporate in favour of its buy value, stating that it was not contemporaneous with the time of the sale and that it was based mostly on the rule of thumb worth and never the market worth. The liquidator thus argued that it was intentionally undervalued and bought at a throwaway value.
The courtroom agreed with the liquidator on the place to begin of the sale, stating, “ ..the sale of the property by the Firm in liquidation, having occurred publish the graduation of the winding up proceedings, is statutorily void by way of Part 536 and 537 of the [Companies] Act of 1956, 334 and 335 of the [Companies] Act of 2013, and as such, the identical can’t be validated by this Courtroom”.
The bona fides of the transaction have been additionally not accepted by the decide, each concerning the worth and the truth that the son of one of many companions within the applicant firm was a managing director at UB Group.
Amongst different observations, the decide rejected the applying and declared the property sale void, ordering, “On taking possession of the stated premises, the official liquidator is directed to carry the stated property for public sale after taking obligatory permission from this Courtroom and full the public sale course of in accordance with legislation by acquiring such orders from this Courtroom as and when are obligatory.”
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