January 4, 2022 10:13:46 pm
The Bombay High Court recently pulled up a developer, Orbit Ventures, which had violated court orders that restrained it from creating third party rights to sell flats that were claimed by Axis Finance Ltd, a Non-Banking Finance Company (NBFC) against over Rs 100 crore worth pending receivables from the developer.
The petitioner told the court that the flats had been devalued as the developer had created third party rights in some of them by force. The court warned the developer that suo motu contempt proceedings would be issued against it and asked the police to assist the court receiver to take possession of the flats.
A division bench of Justice S J Kathawalla and Justice M N Jadhav on Monday was hearing an interim application in a commercial appeal by Axis Finance Ltd.
In September 2017, Axis Finance Ltd had lent nearly Rs 130 crore to the respondent developers and against the amount disbursed by Axis Finance, the securities including 12 unsold flats in a project in Andheri (West) and receivables from 54 identified flats were created in favour of lender Axis Finance.
Senior Advocate Venkatesh Dhond for the petitioner, Axis Finance Ltd, told the bench that it was informed that of the 12 flats, three had been sold and possession of five flats was handed over to the owner for the purpose of fit-outs. Moreover, the receivables for 54 flats had also been reduced by the developer from Rs 107.78 crore to Rs 47.36 crore and the same was arbitrary and uncalled for.
He added that the petitioner’s security and interest was compromised and nullified as the receivables were systematically siphoned out or pocketed by the respondent developers.
“It appears that there is a complete violation of law and order in the complex where the subject project is coming up. We are aghast to note that some of the so-called flat purchasers who are themselves builders are moving around in the complex with revolver/s with a view to threaten those who are obstructing their entry in the subject complex,” the bench observed.
The bench directed the court receiver to take “forcible possession” of all the flats marked by the petitioner and seal them, and asked Manjunath Singe, Deputy Commissioner of Police, Zone IX, to ensure “law and order is maintained in the complex and extend protection/assistance to the court receiver and his officers in sealing the flats and taking possession of the same”.
Coming down heavily on one of the the partners of the developer firm, who was present before the court through videoconferencing for misleading the court, the bench warned him and his family members of suo motu contempt proceedings if necessary cooperation is not provided to the court receiver and chartered accountant appointed by him.
Restraining the developer from creating third party rights in their properties or taking loans against assets that have been secured to the petitioner, the court posted the matter for further hearing to January 5.
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