2021 (10) TMI 387 - Tri - Insolvency and Bankruptcy

Tribunal Orders Counsel to Present NCLAT Order, Suspended Directors to Cooperate, Rejects Property Registration

Modern Credit Pvt. Ltd. Versus KPG International Pvt. Ltd.

The Tribunal directed the counsel to place the NCLAT's order on record, instructed suspended directors to cooperate in the CIRP process, and rejected the ... Seeking direction to respondents/Suspended Directors to assist and cooperate with the IRP and completing the CIRP process under the Code - seeking to direct the Suspended Directors not to leave country for any purpose till completion of CIRP and assist and cooperate with the IRP and completing the CIRP process under the Code - seeking to direct the Transport Department of NCT of Delhi Government not to transfer Car BMW in any other person name without approval from NCLT as both card belong to Corporate Debtor - seeking to direct Ministry of External affairs to revoke passport issued in the name Gauarav Mahendru, suspended Director and not to issue any Visa to him - HELD THAT:- In the case in hand, admittedly, the possession of the property has never been taken up by the Oriental Bank (Punjab National Bank). Rather, the prayer of the applicant is based on the basis of an agreement executed in between the parties. It is seen the present application is filed with a prayer to direct the District Sub-Registrar, Respondent no. 1 to execute and register the sale deed, on the basis of an agreement dated 16.12.2016. A bare perusal of the provisions of Section 54 of the Transfer of Property Act, shows that a contract for sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not of itself create any interest in or charge on such property and this has also been decided by the Hon'ble Supreme Court in MEGHMALA & ORS. VERSUS G. NARASIMHA REDDY & ORS. [2010 (8) TMI 922 - SUPREME COURT] that an agreement does not create any right or title in favor of intending buyer, therefore, in view of the aforesaid decisions and provision of law, it is concluded that merely there was an agreement to transfer the property, it does not create any right or any interest in favor of the Corporate Debtors. Therefore, merely this property is shown as an asset of the Corporate Debtor and it is included under the Resolution Plan submitted by the Resolution Applicant, on this ground alone, it cannot be directed that the District sub-Registrar, Respondent no. 1 to execute and register a sale deed in favor of the Corporate Debtor. The remedy available to the Resolution Professional is to file an application before Competent Court for the specific performance of contract. The prayer of the applicant is hereby rejected. Issues:1. Order to place the order passed by NCLAT on record2. Relief sought in IA/2715/2020 regarding cooperation in CIRP process and car ownership3. Relief sought in IA-565/2021 regarding property registrationIssue 1: Order to place the order passed by NCLAT on recordIn this issue, the Tribunal directed the counsel for respondent no. 1 to 3 to place the order passed by the Hon'ble NCLAT in Company Appeal No. 693/2021 on record within one week. This direction was given as the respondents had preferred an appeal against the closure of the right to file a reply, and the NCLAT had allowed the appeal, instructing the NCLT to place the reply on record.Issue 2: Relief sought in IA/2715/2020 regarding cooperation in CIRP process and car ownershipThe applicant in IA/2715/2020 sought various reliefs, including directing the suspended directors to cooperate in the CIRP process and not to leave the country until completion. The Tribunal noted that the cars mentioned in the application had already been handed over, and the respondents had left the country. The Tribunal directed the respondents to furnish all required information within 15 days, failing which criminal proceedings would be initiated. The application was disposed of based on these considerations.Issue 3: Relief sought in IA-565/2021 regarding property registrationIn IA-565/2021, the Resolution Professional sought directions for property registration in favor of the Corporate Debtor. The Tribunal considered submissions regarding an agreement dated 16.12.2016 and the property's inclusion in the Resolution Plan. It was highlighted that the property was not taken possession of by the bank under the SARFAESI Act. The Tribunal referred to Section 54 of the TP Act, emphasizing that an agreement alone does not create any right or interest in the property. Therefore, the Tribunal rejected the prayer, suggesting the Resolution Professional seek specific performance of the contract through the Competent Court.In conclusion, the Tribunal's judgment addressed issues related to NCLAT order placement, cooperation in CIRP process, car ownership, and property registration, providing detailed analysis and legal reasoning for each matter.