TMI Blog2019 (9) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp duty for the sale agreement is ₹ 20/- and unregistered sale agreement was written on ₹ 20/- stamp paper, which was held to be sufficiently stamped. In the case on hand the sale agreement dated 02.08.2016 is written on the non- judicial stamp paper of ₹ 100/- which as per Article 5 (j) of Schedule I of the Indian Stamp Act, 1899 is held to be sufficiently stamped and even if the same is unregistered, it is admissible in evidence for collateral purpose i.e. for proving the payment of ₹ 15,00,00,000 (15 Crores) by the Applicant/ Financial Creditor to the Corporate Debtor. This fact is also corroborated by the 'claim acknowledgement letter' dated 02.08.2016. Moreover, this authority has also noted that a communication dated 22.07.2016 was sent by the Managing Director to Indian overseas Bank, which goes to state that the Managing Director has identified an investor, who is willing to pay bank dues and immediately thereafter on 02.08.2016 the sale agreement was executed between the Applicant/finical creditor and the Corporate Debtor represented by the Managing Director and Director. This fact seems to have co-relation with the purpose of execution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the Applicant S. Mukanchand Bothra (Deceased) after filing the application, died on 18.04.2019. The Applicants 2 to 4 are his legal heirs who have been impleaded as Applicants by this Tribunal vide its order dated 03.05.2019 passed in M.A No. 441 of 2019. 3. In another matter, the Corporate Debtor had availed loan from one Mr. M. Gagan Bothra, in repayment of which, the Corporate Debtor had defaulted. Consequently, Mr. M. Gagan Bothra filed CP/540/(IB)/CB/2018 under Section 7 of the I B Code, 2016 wherein, this Authority vide its Order dated 24.07.2018 admitted the Application, CIR Process was initiated and one Mr. V. Venkata Siva Kumar was appointed as Interim Resolution Professional, subsequently Mr. Ebenezar Inbaraj was appointed as Interim Resolution Professional. 4. The Interim Resolution Professional issued 'Public Announcement' calling for submission of the claims by the creditors with respect to the debts due from the Corporate Debtor. In response to that, the Applicant (deceased) had filed his claim for a sum of ₹ 15,00,00,000/-in Form 'C' as a Financial Creditor on 29.08.2018 before the Interim Resolution Professional which was rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even as other creditor also, his claim is not admissible as there is no evidence of money being drawn by the corporate debtor? (Emphasis supplied) 6. The Applicants have submitted that the Corporate Debtor had business transaction with them since 2014 and used to borrow money from them as and when needed for the business purpose of the Corporate Debtor and for such business transactions, the Corporate Debtor executed documents in their favour. 7. The Applicants have further submitted that as on 02.08.2016 the amount due by the Corporate Debtor came up to ₹ 15,00,00,000/-. the same was acknowledged, admitted by the Managing Director and Director on behalf of the Corporate Debtor vide letter dated 02.08.2016. The Applicants have also referred to a sale agreement entered into between the Applicants and the Corporate Debtor represented by its Managing Director and the other Director, on 02.08.2016 with respect to the sale of the property i.e., Hotel Legend, situated at No. 37, North Boag road, T. Nagar (schedule property), wherein the Corporate Debtor has admitted, acknowledged the borrowing and adjusted ₹ 15,00,00,000/-. i.e. total liability payable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code, it includes an agreement or arrangement in writing for the transfer of assets, or funds, goods or services, from or to the Corporate Debtor; Section 3(34) further defines the word 'transfer' which includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien. The Applicants have also referred to Section 3(35) of the Code, which defines transfer of property as transfer of any property and includes a transfer of any interest in the property and creation of any charge upon such property. 11. The Applicants have also placed on record a letter dated, 22.07.2016, sent by the Corporate Debtor to the bank stating that the Corporate Debtor has found an Investor who is willing to settle the banks dues. 12. The Applicants have also referred to the agenda of 6th COC meeting, wherein at page no. 6, Para No.A-05, it is mentioned that the RP was of the view that the audit of the accounts of the Company was not conducted properly and many material facts were not disclosed in the auditor's report. RP also stated that the accounts of the Company were not audited for the financial year ended 31st March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Counsel for the Resolution Professional has submitted that as per the Arbitration and Conciliation Act, if the award is not made within specified period or extended period, the mandate of the Arbitrator shall terminate unless the time is extended by the court and the claim of the Applicant that the Arbitral proceedings are pending, is against the law. It is further submitted that mandate of the Arbitrator that passed the interim order is already terminated by operation of law and thus Applicant cannot rely on the same and there is no need for challenging the said order now. Counsel for the Resolution Professional has further submitted that as per the CD's Directors Applicant converted the blank signed stamp paper and blank signed documents, as sale agreement and there is no contract for sale entered by the CD. Therefore CD's Directors have also filed a complaint on 21.07.2017 and the Applicants were arrested under the Crime Number 233 of 2017, which is under investigation. 17. From the pleadings of the parties the only issue that arises for consideration is as follows: Whether the claim of the Applicants based on an unregistered sale agreement dated 02.08.2016 and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the then Managing Director Mr. Senthil Kumar and Director Mr. kanaka Subbu Ganapathy along with seal of the Corporate Debtor Viz., M/S. PRC International Hotels Private Limited. NOW, in view of the above noted background this authority proceeds to examine the issue framed above. The sale agreement dated 02.08.2016 pertains to subject immovable property and is unregistered. In order to note the effect of an unregistered document pertaining to immoveable property, which is compulsorily required to be registered under Section 17 of the Registration Act, 1908 we refer to the provisions of the Section 49 the Registration Act, which provide as follows:. The Registration Act, 1908 49. Effect of non-registration of documents required to be registered. No document required by section 1 7 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: [Provided that an unregistered document affecting immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received as evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the provision of Section of the Registration Act. Hence, the document sought to be marked by the revision petitioner / 1st defendant can be admitted in evidence for collateral transaction under Section 49 of the Registration Act... (Emphasis is supplied) 22. There are catena of judgements on the issue framed hereinabove and the opinion that has been formed by the Honble High Court of Madras in the above noted case is a well settled proposition of law. In the case on hand the sale agreement dated 02.08.2016 is written on the non- judicial stamp paper of ₹ 100/- which as per Article 5 (j) of Schedule I of the Indian Stamp Act, 1899 is held to be sufficiently stamped and even if the same is unregistered, it is admissible in evidence for collateral purpose i.e. for proving the payment of ₹ 15,00,00,000 (15 Crores) by the Applicant/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale agreement and the claim acknowledgement letter. Thus, the language used in the documents itself is plain which applies accurately to the existing facts. Therefore, the documentary evidence i.e. the Sale Agreement dated 02.08.2016 and the claim acknowledgement letter dated 02.08.2016, with regard to the claim of the ApplicanY/Financia1 Creditor; for (%- an amount of ₹ 15,00,00,000/- (15 crores) is admissible. It is also noted that in case the managing Director and the Director of the Corporate Debtor were forced to sign and give the blank documents i.e., the Sale Agreement dated 02.08.2016 and the claim acknowledgement letter dated 02.08.2016, as is pleaded by them, then as to why no appropriate remedial measures were taken for almost a year by the Director of the Corporate Debtor till 21.07.2017 i.e., the date of filing the complaint against the Applicants. This creates serious doubt about the genuineness of the plea taken by the suspended Directors of the Corporate Debtors. 25. In connection with the plea taken by the Resolution Professional that the payments made by the Applicants/ Financial Creditors have not been entered in the books of accounts and there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suspended Directors whose names are mentioned in the sale agreement and claim acknowledgement letter referred to herein above, are habitual of making the allegations that blank signed stamp papers and blank signed documents were given by them. A similar plea has earlier been taken by the suspended Director(s) in the matter of Inderchand D. Kochar vs Puratchidasan (S. Ganapathy Puratchidasan) and Anr., Reported in AIR 2003 Mad 8, wherein a suit for a decree and judgement for ₹ 43,79,775/- together with further interest at 30% per annum on the said amount till the date of realization, was filed against the Defendant(s) (herein suspended Directors) by a third party (plaintiff). In the said matter the defendant(s) have taken the plea, at the time of entering into the agreement of sale, the respondent (plaintiff) obtained from the first defendant signed blank, pro-notes, cheques leave, blank signed stamp papers, green bond papers, etc., as a condition precedent for advancing the loan and now he (plaintiff had misused the same to lend colour to his false case. The Hon'ble High Court of Madras has termed the attitude of the defendants (suspended Directors) as abhorrent and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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