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2011 (3) TMI 1466

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....ration being deposited by the purchaser "the sale in favour of the petitioner shall be confirmed". Upon payment of the balance consideration by them possession was handed over to the applicant by the Official Liquidator on 19-8-2008. The terms and conditions governing the sale, inter alia stipulated under clause 7 that intending purchasers could not bid in the name of any nominee (clause 7). Furthermore, clause 11 provided that the deed of conveyance should be executed in favour of the purchaser. 3. Sometime in December 2008 a draft conveyance was sent by the purchaser to the Official Liquidator. 4. A 100 per cent subsidiary of the applicant was incorporated on 19-7-2010 by the name of Blackberry Properties Private Limited. 5. Now, by this application, the applicant wants the conveyance to be executed in favour of its subsidiary as a co-purchaser. 6. There is absolutely no dispute about the fact that the entire consideration was paid by the applicant. 7. This application was resisted by the Official Liquidator. Mr. Tilak Kumar Bose, learned Senior Advocate, appearing for him said that the terms and conditions of the sale prohibit making of an offer by a nominee. Consequently ....

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....ng the question was to ascertain whether the nominee had directly or indirectly paid the consideration, without disclosing its identity and thereafter claiming conveyance at the final stage of the sale. But, it was confirmed by the learned counsel that such consideration had been paid in its entirety by the purchaser. 14. The only substantial point, to my mind in the arguments advanced on behalf of the Official Liquidator is that the sale took place when it was confirmed by the court. The property vested at that point of time. Now, to execute a conveyance in favour of the nominee of the purchaser as a co-vendor would be to make a resale of the property already sold which cannot be done in law. At any rate that would amount to divesting a transferee of the property already transferred to it. 15. The foundation for this argument is in Megha Enterprises (P.) Ltd. v. Official Liquidator AIR 2008 Raj. 138, which relies on Bishan Paul v. Mothu Ram AIR 1965 SC 1994. 16. In my opinion, the case of Bishan Paul ( supra) is to be examined first. 17. In that case property was being transferred under the provisions of section 20 of the Displaced Persons (Compensation and Rehabilitation) Act....

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....e provisions like Rules 90 and 91 for making applications to set aside the sale. Order XXI Rule 92 provides that where no such application is made or made and disallowed the court shall make an order confirming the sale and thereupon the sale shall become absolute. Rule 94 says when the sale becomes absolute the court will grant a certificate to that effect. Order XXI Rule 92 and Order XXI Rule 94 are reproduced below: "O.XXI, R. 92. Sale when to become absolute or be set aside.-(1) Where no application is made under rule 89, rule 90 or rule 91, or where such application is made and disallowed, the Court shall made an order confirming the sale, and thereupon the sale shall become absolute: Provided that, where any property is sold in execution of a decree pending the final disposal of any claim to, or any objection to the attachment of, such property, the Court shall not confirm such sale until the final disposal of such claim or objection. (2) Where such application is made and allowed, and where, in the case of an application under rule 89, the deposit required by that rule is made within from the date of sale, or in cases where the amount deposited under rule 89 is found to b....

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....ctions to such sale as provided in the rules set out above. After expiry of such time period the sale certificate has to be issued. Section 17 of the Registration Act plainly provides that any instrument of sale has to be registered. Therefore, the certificate of sale also has to be registered. Similar is the procedure in the conduct of sale by the Official Liquidator. 24. In the case of Bishan Paul (supra) after the sale became absolute by registration of the conveyance the property was deemed to vest in the purchaser when the entire consideration was paid. The Supreme Court decision does not say that before or without the sale becoming absolute, the property would vest in the purchaser from the date of his making over the full payment, irrespective of fulfilment of other conditions. In my opinion, there is not much difference between the sale which was before the Supreme Court under the Displaced Persons (Compensation and Rehabilitation) Act and the sale under the Code of Civil Procedure. Sale in both cases became absolute inter alia upon issuance of certificate and registration of such certificate. Only upon registration of certificate does the date of sale relate back. In the ....

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....end on his equitable interest under the contract; it depends on the terms of the contract. I have no doubt that the terms of the contract could negative that right, and the equitable interest which the purchaser takes would not override any express provision in the contract. In India the rights of the vendor are governed by section 55, T.P. Act, and sub-clause (1)(d) of that section provides that the seller is bound, on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place. The obligation under that sub-section is merely to execute a proper conveyance, the section being silent as to the person in whose favour that conveyance is to be executed. But the words "proper conveyance" must be used in the sense in which they would be understood in English law as meaning a proper conveyance in favour of the purchaser or as he shall direct." 28. It was also recognised in B. Himantharaju Setty v. Corporation of the City of Bangalore AIR 1954 Mysore 145 cited by the said learned Counsel. In paragraph 7, their lordships held as follows: "(7) ......In a case decided b....

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....alification of the purchaser was a material element of the contract of sale, or that there was any special contract which would override the general rights of the parties." 29. The principles in these decisions were applied and followed in the case of Umrah Developers v. Deputy Commissioner AIR 2010 Kar. 186. The case of Hans Raj Banga v. Ram Chander Aggarwal [2005] 4 SCC 572 cited by Mr. Tilak Kumar Bose, learned Senior Advocate appearing for the Official Liquidator was not placed in its proper perspective. In paragraph 14 of that report the Hon'ble Supreme Court noted the facts and the law in this way: "14. The bid by way of tender given by the appellant being the highest was accepted. He paid the entire sale consideration. The sale was confirmed in his favour and the sale certificate was issued. Since the property was sold on leasehold basis, the lease deed was executed on 17-10-1963 which was registered on 22-2-1964. The appellant became the owner of the property, the moment full price of the property was paid and the title of the property passed on to him from the day of the confirmation of the sale and the issuance of sale certificate................the view taken by the H....