Unregistered sale agreement may support a financial debt claim when corroborated by written acknowledgement and company seal.

An unregistered sale agreement concerning immovable property was treated as admissible for collateral purposes under the Registration Act, 1908, where it was supported by a contemporaneous acknowledgement letter signed by authorised company officers and bearing the corporate seal. The documents were sufficient to prove payment and acknowledgement of liability, even though the transaction was not reflected in the corporate debtor's books of account. The absence of a board resolution and the omission from the accounts were not decisive on the facts, particularly where the company's contrary case was unsupported by reliable evidence and the resolution professional could not reject the claim on merits. The claim was therefore admissible as a financial debt and the rejection letters were set aside.

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Issues: Whether the claim based on an unregistered sale agreement and a claim acknowledgement letter was admissible in evidence and could sustain admission of the applicants' claim despite the absence of an entry in the corporate debtor's books of account.

Analysis: The agreement and the acknowledgement letter were signed by the then managing director and director and bore the corporate seal. The sale agreement, though unregistered, related to immovable property and was held admissible for collateral purpose under the Registration Act, 1908, especially to prove the payment and acknowledgement of the debt, and not as evidence of completed transfer of property. The documentary record was supported by the contemporaneous acknowledgement letter and the bank communication showing an identified investor willing to settle dues. The absence of a board resolution and omission from the books of account were not treated as decisive, particularly when the resolution professional had itself noted deficiencies in the company's accounts and the company's directors had not substantiated their contrary plea with reliable evidence. The resolution professional was also held not to possess adjudicatory power to reject a claim on merits when the documents supported the liability.

Conclusion: The claim was held admissible as a financial debt, and the rejection letters were set aside; the applicants' claim for Rs. 15 crores stood admitted.

Final Conclusion: The applicants succeeded in establishing a provable financial claim on the strength of the acknowledged documents, and the rejection of their claim could not be sustained.

Ratio Decidendi: An unregistered instrument affecting immovable property may still be relied on for collateral purposes, and where such document is corroborated by an express acknowledgement of liability signed by authorised company officers, the claim cannot be rejected merely for want of registration or for non-entry in the books of account.

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