SBI, liquidator team up to sell Stan Autos’ Ludhiana showroom in rare twin auction

State Bank of India and the liquidator of Stan Autos Private Limited will auction a Ludhiana auto showroom together next month. The land and the building on it will be sold under two different laws, and a buyer must win both.

SBI’s Stressed Assets Management Branch in Chandigarh will auction the land under the SARFAESI Act on December 14. The 2,363.50 sq yd commercial plot at Sahnewal Kalan-I is owned by Anil Kumar Malhotra and Seema Malhotra, personal guarantors to Stan Autos. Its reserve price is ₹4.52 crore.

On the same day, liquidator Vijay Kishore Saxena will auction the structures on the plot under the Insolvency and Bankruptcy Code (IBC). The reserve price for the building is ₹18.27 lakh. The building earlier housed a “True Value” showroom and has since closed, SBI’s notice says.

Both notices appeared in newspapers on Wednesday. They say the sale will be confirmed only if one bidder places the highest (H1) bid in both e-auctions at the same time. The two auctions run on Baanknet, the public sector banks’ auction platform, between 11 am and 4 pm.

The arrangement is unusual. Under the IBC, a liquidator sells assets that belong to the company. The land here belongs to the promoters in their personal capacity and is mortgaged only to SBI. That leaves the building and the land under separate sellers and separate laws, and neither is easy to sell without the other.

₹42 crore claim, ₹4.7 crore floor

SBI is seeking to recover ₹41.99 crore from Stan Autos and its guarantors. That figure is as on August 27, 2021, under a demand notice issued the next day, and excludes later interest. The guarantors named are Anil Kumar Malhotra, Seema Malhotra, Raghav Malhotra, Prashant Malhotra and Stan Cars Private Limited.

At the reserve prices, the two auctions would raise ₹4.70 crore. That is about 11% of SBI’s dues as stated in the notice. The bank holds only symbolic possession of the land; the liquidator holds physical possession of the building.

Bidders must deposit an earnest money of ₹45.20 lakh for the land and ₹1.83 lakh for the building. For the IBC sale, bidders must also meet the eligibility conditions under Section 29A, which bar promoters and connected persons of defaulting firms.

Three years in liquidation

The National Company Law Tribunal’s Principal Bench in New Delhi admitted Stan Autos into insolvency on February 18, 2022, on a petition by Mahindra & Mahindra Financial Services. The National Company Law Appellate Tribunal dismissed an appeal by Anil Kumar Malhotra in April 2022. The NCLT ordered liquidation on April 11, 2023, on the recommendation of the committee of creditors.

Creditors’ admitted claims stood at ₹129.40 crore as of June 2023, according to the liquidator’s stakeholder list on the IBBI website. Secured financial creditors accounted for ₹92.82 crore of that.

The liquidator has tried several routes since. IBBI records show auctions of plant and machinery in 2023, a sale of the Sahnewal showroom structure in April 2024 at a reserve of ₹14.25 lakh, and attempts to sell the company as a going concern in January 2025 (reserve ₹3.78 crore) and April 2025 (reserve ₹3.40 crore). The April 2025 notice offered the business without land ownership.

The building is back on the block now, this time paired with the land.

Inspection of the property is open from November 12 to December 11. For the IBC auction, the last date to submit earnest money and Section 29A documents is December 12.

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