Unregistered sale agreement cannot invoke part-performance protection, while liquidation claims must follow the insolvency distribution mechanism.

An unregistered agreement to sell executed after the registration requirement could not be relied on to invoke section 53A protection, because such a contract does not create any interest in the property and the plea of part performance therefore failed; the direction to vacate the secured asset was upheld. A purchaser's claim lodged in insolvency and liquidation had to be admitted and dealt with under the statutory claim-admission and distribution framework, and could not be rejected merely on delay without considering substantive entitlement. The Adjudicating Authority could not bypass the insolvency distribution mechanism by ordering direct payment to one stakeholder, so the direct-payment direction was set aside.

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Issues: (i) Whether an unregistered agreement to sell could be relied upon to claim protection under the part-performance doctrine and resist eviction from the secured asset; (ii) whether the claim lodged by the purchaser in the insolvency/liquidation process ought to be admitted and considered in distribution; (iii) whether the Adjudicating Authority could direct direct payment of part sale consideration outside the distribution mechanism under the insolvency law.

Issue (i): Whether an unregistered agreement to sell could be relied upon to claim protection under the part-performance doctrine and resist eviction from the secured asset.

Analysis: The agreement to sell was unregistered and was executed after the amendment requiring registration of documents intended to be used for the purposes of section 53A. In view of section 17(1-A) of the Registration Act, an unregistered contract of this kind has no effect for invoking section 53A. The agreement also stated that no right would accrue until execution and registration of the sale deed. A contract for sale does not by itself create any interest or charge in the property.

Conclusion: The plea based on part performance failed, and the direction to vacate the premises was upheld.

Issue (ii): Whether the claim lodged by the purchaser in the insolvency/liquidation process ought to be admitted and considered in distribution.

Analysis: The purchaser had filed a claim in the insolvency process as well as in liquidation. The rejection of the later claim merely on delay did not address the substantive entitlement to have the claim considered in accordance with the insolvency framework. Once a claim is lodged by a stakeholder, it must be dealt with under the scheme of the Code and, in liquidation, in accordance with the prescribed distribution mechanism.

Conclusion: The claim was directed to be admitted in the appropriate category and dealt with under the liquidation distribution provisions.

Issue (iii): Whether the Adjudicating Authority could direct direct payment of part sale consideration outside the distribution mechanism under the insolvency law.

Analysis: The insolvency regime requires stakeholders' claims to be resolved through the statutory process of admission and distribution. The Adjudicating Authority could not bypass that mechanism by ordering payment of a fixed sum directly to one stakeholder. The amount already deposited pursuant to an interim order was also directed to be returned.

Conclusion: The direction for direct payment of Rs. 2.01 crores was set aside.

Final Conclusion: The appeals were disposed of with mixed results: the challenge to eviction failed, the claim was ordered to be admitted for distribution in accordance with law, and the direction for direct payment outside the insolvency distribution framework was removed.

Ratio Decidendi: An unregistered agreement to sell executed after the registration requirement cannot sustain a claim under section 53A, and any stakeholder claim in liquidation must be resolved only through the statutory admission and distribution mechanism under the insolvency code, without a court-ordered direct payment dehors that framework.

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