TMI Blog2011 (3) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Official Liquidator. JUDGMENT 1. The question to be answered in each of the two applications above is whether an order can be made permitting the purchaser of an immovable property of the company-in-liquidation to obtain the conveyance in favour of its nominee? Since identical questions of law and more or less identical facts are involved in these two applications, they are being disposed of by a common judgment and order. Sudipta Traders 2. Let me take the facts of Sudipta Traders first. Sale of its immovable property was confirmed at 13.5 crores by an order of the Hon'ble Supreme Court of India made on 20-6-2008. That order said that upon the balance of the said consideration being deposited by the purchaser "the sale in favour of the petitioner shall be confirmed". Upon payment of the balance consideration by them possession was handed over to the applicant by the Official Liquidator on 19-8-2008. The terms and conditions governing the sale, inter alia stipulated under clause 7 that intending purchasers could not bid in the name of any nominee (clause 7). Furthermore, clause 11 provided that the deed of conveyance should be executed in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thermore, the conveyance was to be executed in favour of the purchaser. The Official Liquidator objects to execution of conveyance in favour of the applicant and its sister concern on the same grounds of objection as it made in the case of Sudipta Traders. 12. In the case of Rajesh Ispat Private Limited submissions were made by Mrs. Ruma Sikdar, on his behalf. The detail submissions will appear as I discuss the merits of this matter. Discussion: 13. There is no dispute whatsoever, that in each of the above two applications the entire consideration was paid by the purchaser in whose favour the sale was confirmed. I had specifically put this question to the learned counsel representing the Official Liquidator. The purpose of asking the question was to ascertain whether the nominee had directly or indirectly paid the consideration, without disclosing its identity and thereafter claiming conveyance at the final stage of the sale. But, it was confirmed by the learned counsel that such consideration had been paid in its entirety by the purchaser. 14. The only substantial point, to my mind in the arguments advanced on behalf of the Official Liquidator is that the sale took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sale becomes absolute." 19. The detailed provisions regarding sale in execution are contained in Order XXI. Rule 65 enacts that sale in execution of a decree shall be conducted by an officer of the court or such other person as the court may appoint. Order XXI Rule 65 is as follows: "O.XXI R.65. Sales by whom conducted and how made. Save as otherwise prescribed, every sale in execution of a decree shall be conducted by an officer of the court or by such other person as the court may appoint in this behalf, and shall be made by public auction in manner prescribed." 20. Rule 66 enjoins that the sale has to be made by public auction. In case of immovable property the full purchase money has to be paid within fifteen days from the date of sale of the property. Then there are provisions like Rules 90 and 91 for making applications to set aside the sale. Order XXI Rule 92 provides that where no such application is made or made and disallowed the court shall make an order confirming the sale and thereupon the sale shall become absolute. Rule 94 says when the sale becomes absolute the court will grant a certificate to that effect. Order XXI Rule 92 and Order XXI Rule 94 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. Now, according to section 65 property is to vest in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. 22. Therefore, if and when the sale becomes absolute the property vests from the date of the sale. In the instant sale the question to be asked is has the sale become absolute? 23. The aforesaid provisions of the Code of Civil Procedure plainly provide that the sale is ordered by the court but conducted by its officer. There are various stages in this sale. One of the stages is confirmation or acceptance of the offer in a public auction, by the court. At that point of time, the sale is confirmed in favour of the purchaser. But the sale does not become absolute. The purchaser has to pay the full consideration. Time has to be given to invite objections to such sale as provided in the rules set out above. After expiry of such time period the sale certificate has to be issued. Section 17 of the Registration Act plainly provides that any instrument of sale has to be registered. Therefore, the certificate of sale also has to be registered. Similar is the procedure in the conduct of sale by the Official Liquidator. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 289 placed by Mr. S.K. Kapoor, Senior Advocate, it is noted that it is a common practice in England for a purchaser to direct conveyance of the property to be made to his nominee. This practice was also recognised in India, inter alia by the judgment of the Division Bench of the Bombay High Court in Rahimtulla Lowji Damani v. Official Assignee AIR 1935 Bom. 340, cited by Mr. S.K. Kapoor, learned Senior Advocate. In that case the appeal court of the Bombay High Court pronounced the following dictum: " .The short point we have to consider is whether the learned Judge was right in saying that the Official Assignee is not bound to execute a conveyance in favour of a nominee of the purchaser. The right of a purchaser in England to require the conveyance to be made in his own name or in that of a nominee does not depend on his equitable interest under the contract; it depends on the terms of the contract. I have no doubt that the terms of the contract could negative that right, and the equitable interest which the purchaser takes would not override any express provision in the contract. In India the rights of the vendor are governed by section 55, T.P. Act, and sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mself without the vendor's consent, and in such a case the nominee must not be a person under disability." "para 559. When the purchaser has disposed of the land before the completion of the contract, it is usual, for the purpose of saving the expense of the second conveyance and double stamp duty, to take the assurance direct to the second purchaser. The disposition may be either by assignment of the contract or resale of the land. Upon an assignment of the contract the original purchaser is not usually a necessary party to the conveyance, nor is he a necessary party where there is a resale without increase of price." In such a course there is no additional burden cast on the vendor as he receives full consideration and goes out of the scene. It is not urged in this case that the purchaser had to perform any other obligation or that any personal qualification of the purchaser was a material element of the contract of sale, or that there was any special contract which would override the general rights of the parties." 29. The principles in these decisions were applied and followed in the case of Umrah Developers v. Deputy Commissioner AIR 2010 Kar. 186. The case of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a well established practice in conveyancing. 34. In this case the bid was not made by any nominee or for and on behalf of another person. The full consideration was paid by the purchaser. The provision in the terms and conditions of sale that conveyance is to be executed in favour of the purchaser is the standard provision in an agreement for sale. There is nothing in those terms and conditions to exclude the right to demand conveyance in favour of a nominee, recognised by our common law. Particularly so, when the purchaser has paid the entire consideration and the nominee is a group company, as in the case of Rajesh Ispat or a subsidiary whose shareholding is held by the purchaser company, as in the case of Sudipta Traders. But in the facts and circumstances of the case, the conveyance will be executed by joining the nominee as a co-purchaser. 35. The habendum of the conveyance will remain the same. There will be no provision for a division of the property in C.A. No. 50 of 2011 and then execution of separate conveyances is in favour of the purchaser and his nominee. There will be one conveyance of the property in favour of the purchaser and his nominee as co-purchasers ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
