Liquidator's appeal challenging sale deed as fraudulent under Section 66 of Insolvency & Bankruptcy Code dismissed.

The Liquidator's appeal challenging the validity of a sale deed as a fraudulent transaction under Section 66 of the Insolvency and Bankruptcy Code was dismissed. The Adjudicating Authority found the Liquidator failed to prove the sale was fraudulent, emphasizing the payment evidence and recitals in the sale deed as sufficient to uphold the transaction's validity. The Tribunal concluded that the delay in registration was justified due to prior encumbrances, and the respondent's continuous possession of the property since 1989 was deemed evidence of a genuine transaction, leading to the dismissal of the appeal.

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Issues involved:
The judgment involves the dismissal of an appeal by the Liquidator of a company, challenging the validity of a sale deed as a fraudulent transaction under Section 66 of the Insolvency and Bankruptcy Code.

Summary:
1. The Liquidator of the company appealed against the dismissal of the application seeking to declare a sale deed as a fraudulent transaction. The Adjudicating Authority found the Liquidator failed to prove the sale was fraudulent.

2. The Liquidator argued that the sale deed, executed between the company and the respondent, was fraudulent due to lack of valid parties and delayed execution. The parties were related, and no consideration flow was proven, challenging the validity of the sale.

3. The Liquidator contended the sale deed was executed by an unauthorized person, Mr. R.N. Yadav, and lacked proof of payment or appreciation of property value. Allegations of siphoning assets and lack of consideration were raised, questioning the validity of the sale.

4. The Liquidator referenced a Supreme Court judgment on essential elements of a valid sale, emphasizing the need for payment. The delay in registration was attributed to tenancy issues, and reliance was placed on the company's financial records.

5. The respondent argued that the sale consideration was paid through a registered sale deed and financial records. The balance sheet for 2008 was filed, and payment details were recorded in the company's books, disputing the fraudulent transaction claim.

6. Encroachments on the property were cleared in 2003, and the respondent maintained peaceful possession since the sale in 1989. The respondent's continuous possession was highlighted as evidence of the genuine transaction.

Appraisal:
7. The Tribunal evaluated the evidence and concluded that the delay in registration was justified due to prior encumbrances. The sale deed's recitals and payment evidence supported the validity of the transaction, dismissing the fraud claim.

8. The Tribunal addressed the lack of tangible reasons for delay and found no evidence to establish the transaction as fraudulent. The payment evidence and recitals in the sale deed were deemed sufficient to uphold the validity of the sale.

9. Citing a NCLAT judgment, the Tribunal emphasized the Liquidator's responsibilities and the need for substantial evidence to prove fraudulent transactions. The payment evidence and bank statements supported the validity of the sale, leading to the dismissal of the appeal.

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