2023 (2) TMI 283 - HC - Companies Law

Court Upholds Decision on Property Transactions, Emphasizes Legal Compliance

The Court upheld the Company Court's decision, dismissing the appeals and confirming the rejection of the applications. The judgment emphasized the ... Claim of title in respect of the land - purchase of all rights in respect of the property from Cogent Ventures (India) Ltd., or not - HELD THAT:- Indisputably, title in the property did not vest with Cogent Ventures (India) Ltd. as there was no registered document conveying the said title of any part of the subject land in its favour - Admittedly, Cogent Ventures (India) Ltd. had not challenged the One-Man Committee report rejecting its claim. The appellant claims to derive its interest in the property from Cogent Ventures (India) Ltd. and since the claims of Cogent Ventures (India) Ltd. have been rejected, the appellant cannot claim a better right. Secondly, there is no registered document conveying the property in favour of the appellant. As noted above, the appellant claims right on the basis of the Agreement of Sale-cum-Power of Attorney. The said document does not convey the title of the property to the appellant - Thirdly, the appellant cannot derive any benefit from registration of the Agreement of Sale-cum-Power of Attorney dated 22.06.2006. The said document does not convey any title to the property and as stated hereinbefore, Cogent Ventures (India) Ltd. could not convey title to the property as it did not have any. It is also material to note that although the appellant claims to derive its interest in the property from documents executed in the year 2006, he had taken no steps for execution of the conveyance in his favour. The appellant claims that he was unaware of the orders passed by this Court. The learned Company Court has rightly disbelieved the same. The Official Liquidator has, on repeated occasions, taken steps for protection of the subject land and properties owned by the JVG companies. It is difficult for this Court to accept that the appellant would not have been aware of the same. According to the Official Liquidator, it had taken possession of the subject land, which included the property, on 13.10.2020. The impugned order, rejecting the applications filed by the appellant, cannot be faulted - Appeal dismissed. Issues:1. Title claim over land admeasuring 3 acres and 27 Guntas.2. Validity of Agreement of Sale and possession rights.3. Dispute regarding property ownership between the appellant and Official Liquidator.4. Rejection of applications by the Company Court.Analysis:Issue 1: Title claim over land admeasuring 3 acres and 27 GuntasThe appellant claimed title over the property acquired from Cogent Ventures (India) Ltd., previously known as Bhupendra Capital & Finance Ltd. The appellant argued that the property was transferred to him through a valid Agreement of Sale-cum-General Power of Attorney, disputing the Company Court's decision that he lacked title or interest in the property.Issue 2: Validity of Agreement of Sale and possession rightsThe appellant contended that he had paid the full consideration for the property through banking channels, establishing himself as a bona fide purchaser. He also highlighted letters from the Official Liquidator confirming possession details and the validity of certain deeds. However, the Company Court raised concerns over the lack of registered documents conveying property rights to the appellant, casting doubt on the validity of his claims.Issue 3: Dispute regarding property ownership between the appellant and Official LiquidatorThe Official Liquidator, appointed after winding up proceedings, disputed the appellant's possession claims and asserted control over the property. The Company Court restrained registration of documents related to the property, emphasizing the need for permission from the Court for any dealings with the land under liquidation.Issue 4: Rejection of applications by the Company CourtThe Company Court rejected the appellant's claims based on various grounds, including the lack of registered documents transferring property rights, failure to challenge the One-Man Committee's report, and non-compliance with court orders regarding property transactions. The Court concurred with the Company Court's decision, dismissing the appeals and upholding the rejection of the applications.In conclusion, the judgment underscores the importance of registered documents for property transactions, the significance of court orders in property dealings during liquidation proceedings, and the need for compliance with legal procedures to establish valid property rights.