Unregistered sale agreement and possession do not exclude property from liquidation estate without a valid conveyance or security interest.

An unregistered agreement to sell, coupled with possession for interior works, did not create ownership rights or a security interest, so the property remained part of the liquidation estate. The Tribunal held that exclusion from liquidation requires a legally recognised encumbrance or conveyance, and that compulsory registration is necessary for transfer of immovable property of the relevant value. The plea based on part performance could not override the absence of a registered sale deed in the insolvency context. The appellants were therefore not entitled to exclude the property from the liquidation estate or to compel registration of title in their favour, and the dismissal was upheld.

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Issues: Whether the appellants, in the absence of a registered sale deed and a created security interest, could seek exclusion of the subject property from the liquidation estate and compel conveyance in their favour.

Analysis: The property was held to remain within the liquidation estate because no security interest had been created in favour of the appellants and no registered sale deed had been executed. The possession given for interior works and the agreement to sell did not amount to ownership or transfer of title. The Tribunal also noted that liquidation estate comprises assets over which the corporate debtor has ownership rights, and that only assets charged by way of security interest may fall outside liquidation proceedings. A sale of immovable property of the relevant value requires compulsory registration, and an unregistered arrangement could not confer the ownership claimed. The plea based on part performance did not displace the absence of registered conveyance in the insolvency context.

Conclusion: The appellants were not entitled to exclusion of the property from the liquidation estate or to any direction for registration of title in their favour; the impugned dismissal was upheld.

Final Conclusion: The appeal failed, and the liquidation treatment of the property was left undisturbed.

Ratio Decidendi: In liquidation, an unregistered agreement to sell coupled with possession does not create ownership rights or a security interest, and such property remains part of the corporate debtor's liquidation estate unless a legally recognized encumbrance or conveyance exists.

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