Realty slump hits firms’ liquidation

Vijay C Roy

Tribune News Service

Chandigarh, July 19

The slump in the real estate sector has cast shadow over the liquidation of assets of defaulting industrial units in the region. According to statistics, there are over 100 properties worth over several hundred crores lying with official liquidators of Punjab, Haryana and Himachal Pradesh which are struggling to find buyers.

The official liquidator is appointed by the Central government under the Companies Act, 1956 attached to the high court of the state for the purpose of conducting liquidation proceedings of those companies which are ordered to be wound up by the court. The primary function of the liquidator is to administrate the assets of companies under liquidation, sale of the assets and realisation of all debts of companies in liquidation for the purpose of distributing the same among various creditors and other shareholders of the companies and to finally dissolve such companies.

Recently, the official liquidator for Punjab and Haryana was unable to sell the assets of Mohali-based Electronic Systems Punjab Ltd. (ESPL), as not even a single buyer turned up. The reserve price for the land and building measuring 26,142 square yards was Rs 27.27 crore. The Board for Industrial and Financial Reconstruction (BIFR) recommended for winding up of the company in 2004 under The Sick Industrial Companies (Special Provisions) Act, 1985. The Punjab Financial Corporation and Punjab State Industrial Corporation Ltd were secured creditors of the company besides banks.

“There are over 100 properties spread across Ludhiana, Mohali, Amritsar, Jalandhar in Punjab, Haryana and Himachal Pradesh which are struggling to find buyers. As a result, the money of creditors is stuck,” said sources.

According to sources, the valuation of the asset to be sold is calculated on the basis of circle rate. “There has been slowdown in the real estate sector, with prices falling beyond expectation. Since, in the majority of cases circle rates are high, the reserve price is higher than the actual market price of the property and that is acting as a deterrent to the buyers,” the sources added.

“In Himachal Pradesh, there are assets of defaulting companies spread across Baddi, Solan, Nalagarh, but we are unable to liquidate it in the absence of buyers because of slump in the realty sector,” said Dr Raj Singh, official liquidator for Himachal Pradesh.