TMI Blog2023 (4) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor long back in the year 1998. In terms of the agreement after payment of certain amount within a specified time, possession of land property of Igatpuri Unit was to be handed over to the Corporate Debtor i.e. Kitply Inds Ltd. It was clarified in the agreement as to how rest of amount was to be paid; in which manner and within what time. It is specific case of the appellant that the respondent failed to honour agreement and as such number of communications were made to the respondent/corporate debtor either to make payment or the appellant will take back possession of the property in question. The record reflects that several opportunities were given for payment of the consideration amount failing which the appellant had communicated that it will terminate the agreement and take back possession of the property in question. However, it continued for several years. Even OTS was also offered. The appellant claims that as per OTS the entire consideration amount was not paid whereas the respondent has taken a plea that though there were two OTS i.e. dated 19.02.2008 and 20.02.2008, the respondent settled the dispute by making payment of Rs. 2 crore and by issuance of NCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Company Law Tribunal, Guwahati Bench, Guwahati in IA No.47/2020 in IA No.73/2018 of 2020 in CP(IB) No.02/GB/2018. By the said order the Adjudicating Authority was pleased to allow the application filed by Kitply Industries Ltd, Corporate Debtor, which was filed under Section 60(5) read with Section 74(3) of IBC, 2016 and read with Rule 11 of the National Company Law Tribunal Rules, 2016. By the impugned order, in sum and substance, the appellant herein i.e. Sicom Ltd was directed to transfer Igatpuri Unit to the nominee of the Resolution Applicant M/s Kitply Industries Ltd within 45 (forty five) days. We think it appropriate to reproduce the relevant order passed by the Adjudicating Authority as follows:- 9. Heard the learned Counsels appearing for both the sides at length, perused the documents, submissions made available. We are of the considered view that the Respondent No.1 has erred in not transferring the Igatpuri Unit to the Applicant / CD which are evident from the following: 9.1 The Respondent No.1 had sanctioned a loan of Rs.1.95 Crores to one Company named M/S Crystal Laminates Ltd, and the said Company had mortgaged its property to the Respondent no 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tpuri Unit. The Respondent No.1 accepted the OTS proposal of the CD vide letter dated 20.02.2008 wherein it had agreed to accept an amount of Rs.231.00 Lakhs from the CD towards full and final settlement of all outstanding dues. In terms of the OTS, the CD was required to pay Rs.200.00 Lakhs in cash and Rs.31.00 Lakhs by way of Allotment of Non-Convertible Debentures by 29.02.2008. The deadline for payment was extended to 19.03.2008 vide letter dated 04.03.2008 by the Respondent No.1. The CD in compliance of the said OTS dated 20.02.2008 paid an amount of Rs.200.00 Lakhs vide Pay Order No.529886 dated 17.03.2008 and also issued and forwarded the Non-Convertible Debentures of Rs.31.00 Lakhs in favour of the Respondent No.1 on 18.03.2008. Thus the CD fully complied and honoured the OTS well in time as stipulated by the Respondent No.1. The Respondent No.1 as stated in clause No.2 (vi) of the OTS dated 20.02.2008 had unequivocally and unconditionally agreed to convey/transfer the Igatpuri Unit to the CD on receipt of the aforesaid amount. 9.6 This transaction of transfer of the Igatpuri Unit was complete and the Respondent 1 was required to transfer the Igatpuri Unit to the CD o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CD. 10. The Respondent had lodged total claim of Rs.40,86,47,641.00 which included the amount of ICD of Rs. 8.90 Crores, OTS interest and the same has been rejected /declined by the IRP/RP and the only provision of settlement towards the Non-Convertible Debentures of Rs.31.00 Lakhs issued by the CD Kitply Industries Ltd was made in the Resolution plan approved. The Respondent accepted the amount of provision made in the Resolution Plan and accounted for which shows that the Respondent had accepted the rejection of its claim filed by the IRP/RP which is also further clear from the fact that the Respondent had not filed any appeal against the rejection of the amount claimed or approval of Resolution Plan submitted. 10.1 The issue of claim not admitted during CIRP / not filed during the CIRP / before the approval of the approval of the Resolution Plan, is well settled. 10.2 The Hon'ble Supreme Court in the case of 'Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and others' (2020) 8 SCC 531 (famously known as Essar Judgment) settled the position of law and held in para 105 107 as under: 105. Section 31 (1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.... 10.4 In view of the above decision of the Hon'ble Supreme Court, the demand of OTS amount/claim amount of Rs.40,86,47,641.00 (Rupees Forty Crores Eighty-Six Lakhs Forty-Seven Thousand Six Hundred and Forty-One Only) [(-) Rs.31.00 lacs] by the Respondent for transfer of the Igatpuri Unit to the RA/CD is irrelevant and illogical after the approval and implementation of the Resolution Plan on 07/12/2018. The Respondents' approach of not transferring the Unit to the CD and even after the approval of the Resolution Plan is bad and not appreciated. They have erred here also. 11. Proceedings before Ld. BIFR Hon'ble AAIFR Based on its Audited Balance Sheet (ABS) as on 31.03.2012 the Applicant/ Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code. Civil court not to have jurisdiction. Section 231-Bar Jurisdiction 231. No civil court shall have jurisdiction in respect of any matter in which the [Adjudicating Authority or the Board] is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by such [Adjudicating Authority or the Board] under this Code Section 238: Provisions of this Code to override other laws 238. The provisions of this Code shall have effect, notwithstanding anything Inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Section 430 of the Companies Act 2013 reads as under: 430 Civil court not to have jurisdiction.- No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Plan and despite several communications and requests for transferring the Igatpuri Unit of the Corporate Debtor in the name of the Resolution Applicant or its nominee, the Respondents have failed to transfer the same in complete disregard of the provisions of the Resolution Plan approved by this Hon'ble Adjudicating Authority. 14. Hence, the issues raised by the Respondents and the Applicant have been heard and considering the arguments advanced by the learned Lawyers of both the sides and perusal of the documents, written submissions and the settled position of law, the Respondent SICOM is hereby directed to transfer the Igatpuri Unit to the nominee of the Resolution Applicant M/s. Kitply Industries Ltd. within 45 (forty-five) days from today. 14.1 The entire expenses towards the stamp duty etc., if any, for transferring the Unit in the name of the CD shall be borne by the Applicant / CD only. 14.2 The Respondents No.3 to 13, which include Directors, ex- Directors shall be relieved automatically from this case only on transfer of the Igatpuri Unit to the CD-Kitply Industries Ltd. and filing of the compliance report to such transfer with the Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to pay the Inter Corporate Deposit the Managing Director of Respondent No.1 approached the appellant for settlement and wrote two separate letters to appellant for one time settlement, one on behalf of M/s PK Commercial and another on behalf of the Respondent No.1 herein. In response to the request of Mr. P.K. Goenka the Managing Director of Respondent No.1 on 19.02.2008, the appellant No.1 issued letter to M/s P.K. Commercial Co (also promoted by Mr. P.K. Goenka, Managing Director of Respondent No.1) whereby appellant agreed to accept the payment of Rs.8.52 crores towards costs and other charges subject to various terms and conditions. In terms of Clause (i) it was agreed that Rs.852 lakhs has to paid on or before 27.02.2009 and out of amount of Rs.852 lakhs, Rs.31 lakhs was to be paid by way of repurchase of Non-convertible debentures (NCD) proposed to be issued by Respondent No.1. In the said communication it was stated that any settlement scheme entered shall become effective only on receipt of payment of Rs.300 lakhs and post dated cheques for the balance amount of Rs.552 lakhs on or before 29.02.2008. By another proposal dated 25.01.2008 the Managing Director of Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reminders were made by the appellant No.1. 6. Subsequently on 02.05.2008 the appellant No.1 issued a communication to Respondent No.1 informing that the Respondent No.1 had failed to make payments in terms of OTS and Respondent No.1 was asked to pay Rs.2,95,95518/- with further interest thereon @ 14% per annum from 01.12.2008 to 18.12.2008 failing which OTS shall stand cancelled and appellant No.1 may enforce his right in terms with Clause 5 of the Agreement for Sale and proceed with re-possession of the property. Thereafter reminders were issued to hand over peaceful possession of the property mentioned in the Agreement for Sale dated 03.09.1998. Finally on 25.03.2009 the appellant No.1 withdrew the OTS and enforced their right in terms of Clause 5 of the Agreement dated 03.09.2008 by cancelling the agreement and terminating the said agreement with immediate effect. By the said communication dated 25.03.2009 it was intimated that in view of cancellation of OTS the amounts which was paid till then were forfeited towards the dues. It is further case of the Appellant that the communicated dated 25.03.2009 to which agreement for sale dated 03.09.1998 was cancelled was never assail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide order dated 01.05.2018 initiated Corporate Insolvency Resolution Process (CIRP) filed by one of the financial creditor of Respondent No.1 and declared moratorium. CIRP was initiated by IDBI, one of the financial creditors on 01.05.2018, as per order of NCLT against Respondent No.1 and one Mr. Bijoy Murmuria was appointed as Interim Resolution Professional. In the CIRP pursuant to the publication of Form A under Regulation 6, the appellant No.1 filed a claim as financial creditor to Kitply Industries Ltd. This claim was filed on 18.07.2018. It is the stand of the appellant that on the same date another email was sent by the appellant to the Corporate Debtor indicating therein that Corporate Debtor does not have ownership over the land bearing Gat No.260/B/261 situated at Igatpuri, District Nashik together with building and structures thereon and plan and machinery and other instalments/equipment. It was clarified that CD/Respondent No.1 had approached for purchase of the property but failed to pay the purchase/sale consideration and as such a request was made to hand over back the property to Appellant No.1. On 17.08.2018 the RP sent an email dated 27.08.2018 to the appellant No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses 15,392 Total 40,86,47,641 5 DETAILS OF DOCUMENTS BY REFERENCE TO WHICH THE DEBT CAN BE SUBSTANTIATE D: Annexure B 6 DETAILS OF HOW AND WHEN DEBT INCURRED: Annexure C 7 DETAILS OF ANY MUTUAL CREDIT, MUTUAL DEBTS, OR OTHER MUTUAL DEALINGS BETWEEN THE CORPORATE DEBTOR AND THE CREDITOR WHICH MAY BE SET-OFF AGAINST THE CLAIM: None 8 DETAILS OF ANY SECURITY HELD, THE VALUE OF THE SECURITY, AND THE DATE IT WAS GIVEN Second charge on Land and Building, Plan Machinery and all other Assets of the Company situated at (1) Rungagora Road, Tinsukia Assam (commonly referred to as Tinsukia Property) (2) Makum Pathargaon, Mouza Makum, P.S. Margherita, Dibrugarh, Assam (Commonly referred to as Margherita Property), (3) Plot No. C-3, Gondia Industrial Area, Dist. Bhandara, Maharashtra (commonly referred to as Art Gondia Propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant No.1 reiterated its stand to the RP in respect of property of Igatpuri. Further by communication dated 27.09.2018 RP was informed by the Appellant that title of land alongwith rights of property continue to vests with the Appellant No.1 and said property should not be made part of Resolution Plan. The said email was acknowledged by the RP. The Adjudicating Authority on 07.12.2008 approved the Resolution Plan submitted by SREI Multi Asset Investment Trust Vision India Fund. It is further stand of the appellant that though appellant No.1 had claimed to be included as financial creditor it was not included within the same fold and was not made a part of Committee of Creditors and also resolution plan was not shared with the appellant. However, subsequently in the month of December, 2018 an amount of Rs.31,000/- was directly deposited in the Bank account of Appellant No.1. On 10.01.2019 RP was nominated for transfer of Igatpuri unit. It is the case of the appellant that on 25.01.2019 he had requested for copy of the resolution plan as approved by NCLT and thereafter on 05.02.2019 the IRP forwarded a portion of resolution plan submitted by SREI Multiple Asset Investment Trust Visi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing directions: (a) Para 50[b]- The Approved Resolution Plan shall come into force with immediate effect (b) Para 50(d) All relevant parties in relation to the Final Resolution Plan are bound by the terms and conditions mentioned therein in accordance with Section 31(1) of the IBC 2016 : (c) Para 50(e): All relevant parties are directed to extend full cooperation to SREI Multiple Asset Investment Trust (Vision India Fund) to carry out the terms and conditions of the Final Resolution Plan, the concerned parties/ entities will be liable for punishment as per Chapter 7 (Offences and Penalties) of the IBC, 2016; and (d) Para 500) All the concerned parties are hereby directed to strictly comply with the resolution plan approved by the Adjudicating Authority. If any deviation in implementing the resolution plan the concerned parties/entity will be liable for punishment as per Chapter 7 (Offences and Penalties). We also draw your attention to section 31 (1) which states that the approved Resolution Plan shall be binding on the corporate debtors and its employees, members, creditors, guarantors and other stakeholders. Your attention is also draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly by the impugned order the Adjudicating Authority allowed the application filed by Respondent No.1 and directed the appellant to transfer the property/land of Igatpuri to the Respondent No.1. 8. Mr Jay Savla, learned senior counsel for the appellants while assailing the impugned order has argued that once the agreement to sell which was entered in between the appellant and corporate debtor, was terminated long back, due default in payment by the Respondent, the title of the property at Igatpuri was lying with the appellant and as such the Adjudicating Authority in the IBC proceeding was not competent to direct the appellant to convey the property to the respondent. He emphasized that an agreement to sale which had already been terminated and come to end long back was beyond the jurisdiction of Learned NCLT to issue a direction for its revival. 9. Mr Savla, learned senior counsel while referring to Page 171 and onwards of the Memo of appeal i.e. copy of agreement for sale has referred to Clause 5 of the Agreement and submitted that in case of default in payment of the balance amount of the purchase price the vendor i.e. appellant was having right to cancel the agreement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there in between the parties. Taking clue from the observation in the resolution plan regarding dispute in respect of Igatpjuri property, he submits that the Learned NCLT has failed to notice the dispute as well as the fact that Corporate Debtor was never title holder of the Igatpuri property, even then the NCLT has directed the appellant to virtually execute sale deed and convey the property of Igatpuri to the Corporate Debtor. To highlight that dispute in relation to Igatpuri property was per se beyond the jurisdiction of the NCLT, however, the Learned NCLT exceeding its jurisdiction has passed the impugned order. While elaborating his submission, he has placed reliance on a case reported in (2020) 2 SCC 538 Tata Consultancy Services Ltd Vs SK Wheels Private Ltd para 16, 24, 28 to 31 and also on a case reported in (2020) 13 SCC 308 Embassy Property Developments Pvt Ltd VGs State of Karnataka and ors paras 39 and 40. By way of referring to para 11, 15 to 17 the judgement reported in (2012) 1 SCC 656 Suraj Lamp and Industries Pvt Ltd Vs Sate of Haryana and ors, in para 8 to 13 of case reported in (2004) 8 SCC 614 Rambhau Namdeo Gajre Vs Narayan Bapuji Dhotra (Dead) through LRs it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling an application under Section 60(5) of the IBC. He submits that Learned NCLT by a detailed order has directed the appellant to convey the Igatpuri property. According to him the learned NCLT has passed just and reasonable order which need no interference. Mr. Ramji Srinivasan, learned senior counsel has also raised question of locus of the applicant to maintain the present appeal. While raising the locus issue he has specifically referred to Page 16 and 17 of reply filed on behalf of Respondent No.1 and referred to para 6 and 7, 7a and 7b which reproduced hereinbelow: 6. It is submitted that as rightly held by the Learned Adjudicating Authority, the Appellants at this stage cannot raise any objection with respect to the transfer of Igatpuri Unit in favour of the Corporate Debtor as the Appellant has already given up its right/title/interest in the said Igatpuri Unit in terms of OTS dated 20.02.2008 entered between the Corporate Debtor and the Appellants. 7. It is germane herein to note the facts leading to the issuance of OTS dated 20.02.2008 by the Appellants in favour of the Corporate Debtor which are as follows: a) That an Agreement to Sell dated 03.09.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to you on Licensee basis) in your favour and release all our securities including the guarantor from his guarantee obligations. 14. He further submits that subsequently as per OTS communication dated 18th March, 2008 pay order of Rs. 2 crore and letter of allotment of Non-convertible debenture for value of Rs.31 lakh was transmitted to the appellant by the Corporate Debtor. According to learned senior counsel since the Corporate Debtor pursuant to the acceptance of OTS by the appellant had transmitted the aforesaid amount, it can be inferred that the OTS in respect of Rs.8,52,00,000/- and Rs.231 lakhs was finally settled after acceptance of aforesaid amount of Rs.2 crore and NCD of Rs. 31 lakhs. He has highlighted that the payment of aforesaid amount cannot be segregated on the basis of communications dated 19.2.2008 and 20.2.2008. It was argued by learned senior counsel that (vi) of Clause 2 of letter dated 20.02.2008 which has been quoted hereinabove makes it clear that the entire consideration amount for executing the sale deed as per agreement to sell was paid to the appellant. He submits both communication i.e. 19.2.2008 and 20.2.2008 cannot be segregated; rather bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said property wherein several investment has been done by the Corporate Debtor. According to learned senior counsel after lapse of such a long period the appellant may not be permitted to deny the execution/actual transfer of the property of the Igatpuri Unit to the Corporate Debtor. On behalf of Respondent No.1 a reference has been given to the Form C submitted by the appellant before the RP. In CIRP proceeding, by way of referring to Volume II of Memo of appeal starting from Page 256, he submits that the appellant has referred number of properties in the Form C but since the appellant was aware that the actual owner and title holder of the Igatpuri property was Corporate Debtor, the appellant purposely had not referred any fact in relation to property of Igatpuri unit. In view of the aforesaid facts and circumstances it has been argued that at once OTS was accepted and in acceptance payment was also received by the appellant the appellant, was having no option but to transfer the property of Igatpuri to the Corporate Debtor. It has been concluded that despite approval of the resolution plan since appellant was not proceeding for execution the Corporate Debtor was having no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opar (West), Mumba 400 086 (hereinafter called the Mortgagor Company ) was seized and possessed of and otherwise well and sufficiently entitled to ALL THOSE pieces or parcel of Non-Agricultural (N.A.) lands bearing (i) Gat No.260-B, admeasuring 1H-03R-90Sq.Mtrs equivalent to 10390 Sq.Mtrs or thereabouts and (ii) Gat No.261, admeasuring OH-46R, equivalent to 4600 Sq. Mts or thereabouts ; both together admeasuring 1H-49R-90 Sq. Mtrs equivalent to 14990 Sq. Mtrs or thereabouts, situate, lying and being at Village Take Ghoti, Taluka and Registration Sub District: Igatpuri, District and Registration District: Nashik and more particularly respectively described in PART-A and PART-B of the First Schedule hereunder written Together with the factory building and other buildings and structures thereon. (2) By an Indenture of Mortgage dated the 22nd day of February 1993, executed by the Mortgagor Company in favour of the Vendor land Lodged for registration in the Office of the Sub- Registrar of Assurances at Mumbai under Serial No.BBM-2592 of 1993 on the same day (hereinafter referred to as the said First Mortgage ) in consideration of the sum of Rs.1,45,00,000/- (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc are therein and hereinafter referred to as the Second Mortgaged Premises) TO HAVE AND TO HOLD the First Mortgaged premises and the Second Mortgaged Premises unto and to the use of the Vendor absolutely for ever, subject to the proviso for redemption therein contained. (3) By an Indenture of Mortgage dated the 9th day of March 1995, executed by the Mortgager Company in favour of the vendor and lodged for registration in the Office of the SubRegistrar of Assurances at Mumbai under Serial No.BBM951 of 1995 on the same day (hereinafter referred to as the said Second Mortgage ) in consideration of the sum of Rs.50,00,000/- (Rupees Fifty Lacs Only) lent and advanced/agreed to be lent and advanced by the Vendor to the Mortgagor Company, the Mortgagor Company covenanted to repay to the Vendor the said sum of Rs.50,00,000/- (Rupees Fifty Lacs Only) (hereinafter referred to as the said additional loan) by quarterly instalments Together with Interest, additional interest and compound interest as therein mentioned and as security for the repayment of the said additional loan Together with interest, additional interest and compound interest as therein mentioned and as securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interests thereon due and payable by it to the Vendor under the said Mortgages. The Mortgagor Company however, inspite of sufficient time and opportunities given to it failed and neglected to pay the same and to comply with and discharge its liabilities to the Vendor as per the terms of the said Mortgages. (6) In the circumstances aforesaid, the Vendor in exercise of the powers reserved/vested unto it under the said Mortgages and under the provisions of Section 29(1) of the State Financial Corporations Act, 1951, read with the Notification bearing No.F.N.5(9)/86-IV-II dated 11th December 1986, issued by the Government of India, Ministry of Finance, Department of Economics Affairs (Banking Divisions), after giving due Notice, to the Mortgagor Company entered into and/or took over possession of the First Mortgaged Premises described in the First Schedule hereunder written and the plant, machinery, etc particulars whereof are set out in the Second Schedule hereunder written (hereinafter collectively referred to as the said properties ) on the 24th day of January, 1998 and since then the Vendor is in possession of the said properties. (7) Further in exercise of the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.2,25,00,000/-(Rupees Two Crores Twenty Lacs Only) (hereinafter referred to as the said purchase price ) to be paid by the Purchaser to the Vendor as hereinafter mentioned. 2. Out of the said purchase price the Purchaser has paid to the Vendor the sum of Rs.10,00,000/- (Rupees Ten Lacs Only)as earnest Money which is adjusted by the Vendor towards the said purchase price and it is agreed that a further sum of Rs.56,25,200/- (Rupees Fifty Six Lacs Twenty Five Thousand Only) shall be paid by the Purchaser to the Vendor within 30 days on acceptance of the offer, i.e. from 14th August 1998 and the balance amount of Rs.1,58,75,000/- (Rupees One Crores Fifty Eight Lacs Seventy Five Thousand Only) shall be paid by the Purchaser to the Vendor in 31 (Thirty One) monthly instalments as follows: No. of Installments Amount Due Date 1. Rs.5,75,000 on or before 15/02/1999 2. Rs.5,00,000 on or before 15/03/1999 3. Rs.5,00,000 on or before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. Rs.5,00,000 on or before 15/05/2001 29. Rs.5,00,000 on or before 15/06/2001 30. Rs.5,00,000 on or before 15/07/2001 31. Rs.5,00,000 on or before 15/08/2001 Total ------------------- Rs.1,58,85,000 ------------------- Together with interest on the said balance sum of Rs.1,58,75,000/- (Rupees One Crore Fifty Eight Lacs Seventy Five Thousand Only) or the balance hereof remaining unpaid or outstanding for the time being at rate of 5.5% per annum above the Vendor's reference rate (which at present is 16% per annum), with effect from 14th August 1998, due and payable quarterly on the 28th day of February, the 31 day of May, the 31 day of August and the 30th day of November, every year for the respective periods ending on these dates and the balance at the time of payment of the last instalment of the said balance purchase price, commencing from the 31* day of Aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the First Schedule hereunder written and the plant, machinery etc described in the Second Schedule hereunder written in favour of the Purchaser or its nominee or nominees and if required shall execute any other documents/ agreements, writings etc for the same at the costs and expenses of the Purchaser including the stamp duty and registration charges payable in respect thereof. 4. It has been clearly agreed, confirmed, understood and accepted by the Purchaser that :- (a) The Purchaser has prior to the submission of the offer for purchase of the said properties, taken inspection of the same and have fully and completely satisfied itself about the state of the same. The Purchaser has taken inventory of the said plant, machinery etc described in the Second Schedule hereunder written and have fully and completely satisfied itself about the state of the same. The Purchaser shall not raise any dispute or objection of any nature whatsoever as to the right, title and interest of the Mortgagor Company to the same and/or the right of the Vendor to deal with and dispose off the same. The said properties are sold to the Purchaser in the condition in which they are on as is whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el the arrangement and to terminate this Agreement and enter upon and take possession of the said properties and forfeit the amount till then paid by the Purchaser to the Vendor and to put up the said properties for resale/ disposal in its absolute discretion and in such case the Purchaser shall hand back the peaceful possession of the said properties to the Vendor and all costs, charges and expenses incurred by the Vendor due to such default shall be borne and paid by the Purchaser. Without prejudice to the rights of the Vendor to claim damages in case of any short fall that may arise by reason of resale of the said properties and the damage suffered consequently, the Purchaser shall be bound to make good any deficiency arising on such resale by the Vendor and the Purchaser shall not be entitled to make any claim in respect of any amount in the event of the said properties on resale realizing a higher price than that offered by the defaulting Purchaser. 6. It is expressly agreed and declared that notwithstanding Section 55 of the Transfer of Property Act, 1882 or any other enactment for the time being in force in that behalf, the Vendor shall not be bound to disclose to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any covenant for production of title deeds, etc in respect of the documents of the said properties or on account of any covenant for production of title deeds is defective or insufficient. 13. The Purchaser shall make its own arrangements for getting required power connection, water and other facilities and shall pay arrears of rates and taxes of the said properties and shall meet all the costs of whatsoever nature to be incurred in that behalf. The Vendor accepts no liability in this behalf and the Vendor shall not be responsible for the loss, if any, incurred by the Purchaser on account of not being able to get the necessary, water, power and other Infrastructure. The Purchaser shall make its own inquiries about the arrears of dues for supply of power, water and other facilities, if any and the same shall be borne and paid by the Purchaser. 14. The Purchaser hereby agrees and declares that it has expressly waived all rights under the Transfer of Property Act, 1882 and more particularly the rights under Section 55 of the said Act. 15. Any notice required to be served on the Purchaser shall for the purpose of this Agreement be deemed to be sufficiently served, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forfeiting the amount till then paid by the purchaser. It is specific case of the appellant that the respondent failed to honour agreement and as such number of communications were made to the respondent/corporate debtor either to make payment or the appellant will take back possession of the property in question. The record reflects that several opportunities were given for payment of the consideration amount failing which the appellant had communicated that it will terminate the agreement and take back possession of the property in question. However, it continued for several years. Even OTS was also offered. The appellant claims that as per OTS the entire consideration amount was not paid whereas the respondent has taken a plea that though there were two OTS i.e. dated 19.02.2008 and 20.02.2008, the respondent settled the dispute by making payment of Rs. 2 crore and by issuance of NCD of Rs.31 lakhs. Learned counsel for the respondent on the one hand has argued that the aforesaid two OTS were settled by payment of Rs.2 crores and NCD of Rs.31 lakhs. However, it is stand of the appellant that as per OTS entire due was not paid. On behalf of appellant it has been asserted that OTS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed that title holder of the property in dispute is the appellant, in such situation even after initiation of CIRP neither IRP or RP was competent to control the said property in view of rider as incorporated in Section 18(f) Explanation (a). It is appropriate to quote the said provision as follows: 18. The interim resolution professional shall perform the following duties, namely: (a) xxxx (b) xxxx (c) xxxx (d) xxxx (e) xxxx (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt Ltd Vs Sate of Haryana and ors:- 11. Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. This Court in Narandas Karsondas V. S.A. Kamtamk and Anr (1977) 3 SCC 247, observed: A contract of sale does not of itself create any interest in, or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act. See Rambaran Prosad V. Ram Mohit Hazra MANU/SC/0212/1966: 1967 1 SCR 293. The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Relief Act, 1963, and in Section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein. In India, the word `transfer' is defined with reference to the word `convey'. The word `conveys' in Section 5 of Transfer of Property Act is used in the wider sense of conveying ownership .that only on executio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. 17. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship. 21. Similarly in Rambhau Namdeo Garje Vs Narayan Bapuji Dhotra (Dead) through LRs (2004) 8 SCC 614 in paras 8 to 13 the point has been settled which has been quoted below:- 8. It is seen that many a times a transferee takes possession of the property in part performance of the contract and he is willing to perform hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party. 11. The question which falls for our consideration is: Whether the doctrine of part performance could be availed of by the defendant with whom the respondent had never entered into an agreement of sale? It is an admitted case of the parties that the plaintiff/respondent had entered into an agreement of sale with Pishorrilal on 16.6.1961 and who had taken possession of the suit land in part performance thereof. Sale deed had not been executed and registered in his favour. Pishorrilal did not take any steps for getting the agreement of sale specifically enforced and obtain a registered sale deed in respect of the suit land. Within a period of 2- 1/2 months Pishorrilal executed a similar agreement of sale dated 1.9.1961 in favour of the appellant and put him in possession of the suit land. Pishorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the holding of the tenure-holder transferor on the appointed day. It is obvious that an agreement to sell creates no interest in land. As per Section 54 of the Transfer of Property Act, the property in the land gets conveyed only by registered sale deed. It is not in dispute that the lands sought to be covered were having value of more than Rs. 100. Therefore, unless there was a registered document of sale in favour of the proposed transferee agreement-holders, the title of the land would not get divested from the vendor and would remain in his ownership. There is no dispute on this aspect. However, strong reliance was placed by learned counsel for Respondent 3 on Section 53-A of the Transfer of Property Act. We fail to appreciate how that section can at all be relevant against the third party like the appellant-State. That section provides for a shield of protection to the proposed transferee to remain in possession against the original owner who has agreed to sell these lands to the transferee if the proposed transferee satisfies other conditions of Section 53-A. That protection is available as a shield only against the transferor, the proposed vendor, and would disentitle hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant that the NCLT and NCLAT have re-written the agreement changing its nature from a determinable contract to a non-terminable contract overlooking the mandate of Section 1412 of the Specific Relief Act 1963. It is a settled position of law that IBC is a complete code and Section 238 overrides all other laws. The NCLT in its residuary jurisdiction is empowered to stay the termination of the agreement if it satisfies the criteria laid down by this Court in Gujarat Urja (supra). In any event, the intervention by the NCLT and NCLAT cannot be characterized as the re-writing of the contract between the parties. The NCLT and NCLAT are vested with the responsibility of preserving corporate debtor s survival and can intervene if an action by a third party can cut the legs out from under CIRP. 28. In Gujarat Urja (supra), the contract in question was terminated by a third party based on an ipso facto clause, i.e., the fact of insolvency itself constituted an event of default. It was in that context, this Court held that the contractual dispute between the parties arose in relation to the insolvency of the corporate debtor and it was amenable to the jurisdiction of the NCLT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of electricity which was entered into by the corporate debtor. In doing so, we reiterate that NCLT would have been empowered to set aside the termination of PPA in this case because the termination took place solely on the ground of insolvency. The jurisdiction of NCLT under Section 60(5)(c) of IBC cannot be invoked in matters where a termination may take place on grounds unrelated to the insolvency of the corporate debtor. Even more crucially, it cannot even be invoked in the event of a legitimate termination of a contract based on an ipso facto clause like Article 9.2.1(e) herein, if such termination will not have the effect of making certain the death of the corporate debtor. As such, in all future cases, NCLT would have to be wary of setting aside valid contractual terminations which would merely dilute the value of the corporate debtor, and not push it to its corporate death by virtue of it being the corporate debtor's sole contract (as was the case in this matter's unique factual matrix). 177. The terms of our intervention in the present case are limited. Judicial intervention should not create a fertile ground for the revival of the regime under Section 22 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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