2021 (6) TMI 241 - Tri - Insolvency and Bankruptcy

Seeking direction to the Respondent to perform his duty under Section 17 and Section 18 of IBC and not to act arbitrarily - time barred agreement for sale - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case, it is seen that payment for sale consideration is not supported by valid documentary proof for payment of sale consideration. The Applicant having paid more than 98% of the total consideration in the year 1995, waited till 2016 for enactment of IBC, thereafter in the OA admission and belatedly submits the Claim Form to RP/Respondent herein. Other than the photo copy of list of allottees and unregistered agreement for sale, there is no other proof. As per the Agreement, the construction ought to be completed within 24 months i.e. on or before 19.08.1997. The unregistered Sale Agreement states that total sale consideration is sum of ₹ 2,53,84,000/- out of total sale consideration, as per the sale agreement, a sum of ₹ 2,50,00,000/- was paid. In other words, major portion of sale consideration has been paid before execution of unregistered Agreement for Sale. However, the mode of payment has not been mentioned in the said agreement. Further, the Applicant has not furnished details and documentary evidence regarding payment. Having paid more than 98% of the sale consideration, the Applicant has not obtained registration of Sale Deed for Undivided Share of Land. The construction ought to have been completed within 24 months as per the said agreement. The Agreement for Sale is not valid since it is time-barred, no proof of payment of sale consideration, the Agreement for Sale itself is hopelessly time-barred and delay in submission of claims is not substantiated by valid reason. Hence, the Respondent has rightly rejected the claim - application dismissed.

Summary

Issues:
- Validity of claim under Section 60(5) of the Insolvency and Bankruptcy Code, 2016
- Rejection of claim by the Respondent
- Time-barred nature of the claim
- Documentary proof of payment for sale consideration
- Adjudicatory powers of the Resolution Professional

Validity of Claim:
The Applicant sought direction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, to compel the Respondent to fulfill obligations under Sections 17 and 18 of the IBC. The Applicant's claim stemmed from an Agreement of Sale dated 20.08.1995 with the Corporate Debtor(s) for the purchase of a property. The Applicant alleged non-completion of construction by the Corporate Debtor and sought recovery of dues amounting to ?9,43,04,110. The Respondent rejected the claim citing old dues, lack of evidence, and delayed submission. The Applicant argued continuous cause of action due to incomplete construction and reliance on legal precedents to support claim validity.

Rejection of Claim:
The Respondent contended that the claim was time-barred, originating from an unregistered Agreement of Sale dated 20.08.1995. The Respondent highlighted the absence of records confirming payment by the Applicant and questioned the delay in taking legal action. Referring to the Limitation Act, the Respondent argued that the claim was invalid and could not be revived. Lack of documentary evidence, registration proof, and delayed submission were key reasons for rejecting the claim.

Time-barred Nature of Claim:
The Tribunal found the claim hopelessly time-barred, emphasizing the lack of valid documentary proof for payment of sale consideration. Despite a significant payment made in 1995, the Applicant delayed action until 2016, raising doubts about the claim's authenticity. The unregistered Agreement for Sale stipulated completion within 24 months, but no concrete steps were taken by the Applicant over the years. The Tribunal concluded that the claim was time-barred, lacking payment proof and delayed submission justification.

Documentary Proof of Payment:
The Tribunal scrutinized the Applicant's claim, noting the absence of substantial evidence supporting the payment of ?2,50,00,000 as sale consideration. The Applicant failed to provide convincing proof of payment, registration of the land share, or initiation of legal action. Despite paying a substantial amount, the Applicant's inaction over 25 years raised doubts about the claim's validity and authenticity.

Adjudicatory Powers of Resolution Professional:
The Applicant referenced legal judgments to support the Resolution Professional's adjudicatory powers. However, the Tribunal focused on the lack of concrete evidence and delayed submission, ultimately dismissing the claim. The Tribunal upheld the Respondent's rejection based on the time-barred nature of the Agreement for Sale, absence of payment proof, and delayed claim submission.

In conclusion, the Tribunal dismissed the application, highlighting the time-barred nature of the claim, lack of documentary evidence for payment, and delayed submission as key factors leading to the rejection of the Applicant's claim.