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2011 (3) TMI 1466 - HC - Companies LawWinding up - whether an order can be made permitting the purchaser of an immovable property of the company-in-liquidation to obtain the conveyance in favour of its nominee - Held that - bid was not made by any nominee or for and on behalf of another person. The full consideration was paid by the purchaser. The provision in the terms and conditions of sale that conveyance is to be executed in favour of the purchaser is the standard provision in an agreement for sale. There will be no provision for a division of the property in C.A. No. 50 of 2011 and then execution of separate conveyances is in favour of the purchaser and his nominee. There will be one conveyance of the property in favour of the purchaser and his nominee as co-purchasers
Issues Involved:
1. Whether an order can be made permitting the purchaser of an immovable property of the company-in-liquidation to obtain the conveyance in favor of its nominee. Issue-wise Detailed Analysis: 1. Sudipta Traders Case: Facts: - The sale of the immovable property was confirmed at 13.5 crores by an order of the Hon'ble Supreme Court of India on 20-6-2008. - The terms and conditions governing the sale stipulated that intending purchasers could not bid in the name of any nominee (Clause 7) and that the deed of conveyance should be executed in favor of the purchaser (Clause 11). - The applicant paid the entire consideration and took possession of the property on 19-8-2008. - The applicant later sought to have the conveyance executed in favor of its 100% subsidiary, Blackberry Properties Private Limited. Objections by Official Liquidator: - The terms and conditions of the sale prohibit making an offer by a nominee. - Sale by the Official Liquidator is a court sale, and such sale is complete at the time of confirmation by the court. Hence, executing a conveyance in the name of the nominee would alter the order confirming the sale. 2. Rajesh Ispat Case: Facts: - The sale of the assets of M/s. Kero Rajendra Monolithics Limited was confirmed in favor of the applicant by an order of the court dated 1-10-2010. - The applicant paid the entire consideration and took possession of the property. - The applicant sought execution of conveyance in favor of itself jointly with its sister concern, Vijayshree Laminates Pvt. Ltd. Objections by Official Liquidator: - The terms and conditions of sale are identical to those in the Sudipta Traders case, prohibiting offers in the name of nominees and requiring conveyance to be executed in favor of the purchaser. Discussion: Confirmation of Sale and Vesting of Property: - The sale is confirmed by the court, but it does not become absolute until the full consideration is paid, and a conveyance is executed and registered. - The sale becomes absolute upon the issuance and registration of a sale certificate, as per the provisions of the Code of Civil Procedure and the Transfer of Property Act. Execution of Conveyance in Favor of Nominee: - Under section 55(1)(d) of the Transfer of Property Act, the seller is obligated to execute a proper conveyance of the property when the buyer tenders it for execution. - Established practice in conveyancing allows the purchaser to direct the conveyance to be made to a nominee unless specifically prohibited by the terms of the contract. - The Bombay High Court in Rahimtulla Lowji Damani v. Official Assignee and other cases recognized the right of a purchaser to demand conveyance in favor of a nominee. Judgment: - The terms and conditions of sale do not specifically prohibit the right to demand conveyance in favor of a nominee. - The nominee in both cases is either a group company or a subsidiary whose shareholding is held by the purchaser company. - Therefore, the conveyance will be executed by joining the nominee as a co-purchaser. Orders: - In the case of Sudipta Traders, the Official Liquidator is directed to join Blackberry Properties Private Limited as a co-purchaser and execute the conveyance within four weeks. - In the case of Rajesh Ispat, the Official Liquidator is directed to execute the conveyance in favor of the applicant and its nominee, Vijayshree Laminates Pvt. Ltd., as co-purchasers within four weeks.
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