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TMI Blog2024 (11) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Learned Adjudicating Authority in IA No. 167/2024 and IA No. 417/2024 in CP (IB)197/BB/2022. In CA(AT)(CH)(Ins) No. 394/2024, challenge is put to rejection of IA No. 167/2024 while in CA(AT)(CH)(Ins) No. 395/2024, rejection of IA No. 417/2024 is being challenged. With the consent of the counsels for the parties, though the appeals have been listed as fresh, they are being taken up together for consideration on merits. 2. Brief facts which are involved in consideration in the two appeals are that admittedly the Appellant is a third party to the Corporate Insolvency Resolution Process (CIRP) proceedings which was conducted in relation to the Corporate Debtor M/s. Sovereign Industries Limited. The Appellant contends and claims that he is the owner of the land in dispute and has been in continuous possession of the same. As far as the Respondents are concerned, Respondent No. 1 is the Resolution Professional and Respondent No. 2 is the Corporate Debtor (CD). A proceeding under Section 7 was initiated against the Corporate Debtor and as a consequence thereto, the Corporate Debtor was admitted to the CIRP proceedings by an order of 28.03.2023 and Respondent No. 1 was appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Rule 11 NCLT Rules, 2016, the relief was sought that, the direction may be issued to the Resolution Professional to supply the information memorandum, resolution plan of the SRA and minutes of CoC meeting to the Adjudicating Authority with copy to be given to the Appellant herein. Both these applications stood rejected by the Impugned Order under challenge i.e., the order dated 22.10.2024. Few relevant dates in chronological order which are required to be considered are that: - i. CIRP proceedings against the Corporate Debtor, M/s. Sovereign Industries Limited was initiated on October 2022. ii. The subject land was sold by Mr. Basavaraj Ningappa Arekeri, Suspended Director of the Corporate Debtor to Mr. Chidanand Sangappa Patil on 23.01.2023. iii. The order was reserved on Section 7 application on 06.02.2023 and; iv. Mr. Chidanand Sangappa Patil sold the said land to the Appellant herein on 24.02.2023 vide a registered Sale Deed. v. The Corporate Debtor was admitted into CIRP on 28.03.2023. vi. The Appellant filed a Civil Suit being O.S. No. 16/2024, seeking grant of a decree of Permanent Injunction on 16.01.2024. 6. On the initiation of the Civil Suit, the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, prior to the execution of the Sale Deed, that the property proposed to be purchased is free from all encumbrances. The 'Explanation I to Section 3' of Transfer Property Act is extracted hereunder: "Explanation I.- Where any transaction relating to immovable property is required by lay to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of Section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated." 10. The argument of the Learned Counsel for the Appellant is that owing to the provisions contended under Section 18 of the I & B Code, 2016 since the property was not the part of the property of the Corporate Debtor, it could not have been included as an asset in the assets of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Temporary Injunction on 17.01.2024. But if the claim of the Appellant is considered in the light of the contentions raised by the Resolution Professional, the aspects pertaining to question of title and right over the property is a subject matter which has been objected by the Resolution Professional owing to the peculiar facts of the case which is pending consideration before the Civil Court, and even the grant of injunction by the Civil Court on 17.01.2024, has been obtained by the Appellant by misleading the trial court without informing the implications of Section 14 of I & B Code, which has already been enforced by putting the Corporate Debtor into the CIRP, by an order of 28.03.2023. 11. Another important aspect which has to be taken into consideration with regards to the bonafides of the Appellant is that, the land in dispute which is subject matter of the suit has been, at all stages, the part and parcel of the factory premises and it had been under the ownership of one Mr. Basavraj Ningappa Arekeri, who happens to be the suspended director and shareholder of the Corporate debtor, if this be so the property would fall to be part and parcel of the assets of the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights of the respondent in a regular Civil Suit, and his rights over the property are yet to be determined by the competent Civil Court, which he himself has invoked at this stage the pendency of the Civil Suit cannot be taken as a reason for interference in the CIRP proceedings. Further, the resolution plan as filed through IA No. 02/2024 in its Clause 5, describes the assets of the Corporate Debtor, which also refers to the ensuing litigation being Suit O.S. No. 16/2024. The apprehension expressed on the basis of the written submissions is without basis, as the Resolution Plan since it does not in any manner transfer or affect the title of the subject property and there is no immediate change of ownership or the Applicant's right. In view of the discussions as above, it does not call for any interference at this stage and that too, while exercising the inherent powers under Rule 11 of the NCLT Rules, 2016. 12. After having heard the Counsels of the parties at length and having scrutinised the reasons which has been assigned by the Learned Adjudicating Authority in relation to the status of the property and the effect of the pendency of the Civil Suit filed by the Appellant, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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