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2021 (11) TMI 121 - Tri - Insolvency and BankruptcyExecution of conveyance deed - moratorium under effect - Whether the RP can be directed to Execute the conveyance deed in respect of property in question as prayed by the Applicant or the RP can be directed to join in the execution of the conveyance deed and other required documents to sell, transfer, convey and assign the decreed property to the applicant in the pending Execution Application before the Hon'ble High Court of Bombay in spite of enforcement of moratorium? - HELD THAT - The Property in question cannot be considered as an asset of the Corporate Debtor where the court of competent Jurisdiction has directed to transfer the title in favour of the Applicant. Section 14(1)(b) is not applicable on the property which are not the assets of the Corporate Debtor. Further the same property cannot be included as an estate of the Corporate Debtor by the RP - although there is a bar on continuation of proceedings against the Corporate Debtor, including the execution proceedings. However, when we see the real intent of enforcing the moratorium, we observe that the same is introduced with the intention to preserve the assets of the Corporate Debtor. The moratorium cannot be used as a shield by the Corporate Debtor to make its illegal acts as legal. The bar under Section 14(1)(a) shall not be applicable here and the moratorium enforced shall nowhere come in way of the Applicant for executing the Arbitral award. Since the property in question has already been declared that it is not the asset of the Corporate Debtor, therefore, any proceeding which does not concern the asset of the Corporate Debtor can be continued against the Corporate Debtor - Since, the execution proceeding is already sub-judice before the Hon'ble High Court of Bombay and this Adjudicating Authority has already held that the moratorium shall not come in between the proceedings which does not relates to the Assets of the Corporate Debtor. Application disposed off.
Issues Involved:
1. Execution of the conveyance deed for the Decreed Property. 2. Applicability of Section 14 of the Insolvency and Bankruptcy Code (IBC), 2016. 3. Ownership and status of the Decreed Property. 4. Role and obligations of the Resolution Professional (RP) and Official Liquidator (OL). 5. Intervention by Vijay Infrastructure Technologies Pvt. Ltd. (VIT). Detailed Analysis: 1. Execution of the Conveyance Deed for the Decreed Property: The Applicant, a Private Limited Company, sought the execution of the conveyance deed for the Decreed Property, which was initially agreed upon in a Memorandum of Understanding (MoU) dated 28.06.2004 and an Addendum dated 10.12.2004. The Corporate Debtor failed to complete the sale transaction, leading to arbitration. The Arbitral Tribunal awarded in favor of the Applicant, directing the Corporate Debtor to sell, transfer, and assign the Decreed Property. This award was upheld by the Bombay High Court and the Supreme Court of India. The Applicant requested the Tribunal to direct the RP to execute the conveyance deed and transfer the property against payment of the balance consideration of ?75.30 crores. 2. Applicability of Section 14 of the Insolvency and Bankruptcy Code (IBC), 2016: The RP opposed the Applicant’s prayer, citing the moratorium under Section 14 of the IBC, which prohibits the transfer or sale of assets and the continuation of proceedings against the Corporate Debtor during the Corporate Insolvency Resolution Process (CIRP). However, the Tribunal observed that Section 14(1)(b) only applies to the assets of the Corporate Debtor. Since the Decreed Property was not considered an asset of the Corporate Debtor, the moratorium did not apply. 3. Ownership and Status of the Decreed Property: The Tribunal examined the ownership of the Decreed Property, referencing the Arbitration Award, which directed the Corporate Debtor to transfer the property to the Applicant. The Tribunal concluded that the Corporate Debtor was merely an occupier of the property, holding it in trust for the Applicant. Therefore, the Decreed Property was excluded from the estate of the Corporate Debtor. 4. Role and Obligations of the Resolution Professional (RP) and Official Liquidator (OL): The RP acknowledged the Applicant’s right to the Decreed Property and the balance sale consideration. The RP stated that completing the transaction would benefit the CIRP by providing valuable funds. The Tribunal directed the RP to join in the execution of the conveyance deed and other required documents to sell, transfer, and assign the Decreed Property to the Applicant. The RP was also directed to apply to the Bombay High Court for further orders and directions. 5. Intervention by Vijay Infrastructure Technologies Pvt. Ltd. (VIT): VIT, a sister concern of the Corporate Debtor, attempted to intervene in the proceedings. However, the Tribunal noted that all challenges to the Arbitral Award had been rejected up to the Supreme Court. The Bombay High Court had also rejected VIT’s intervention, stating that VIT had no right. Consequently, the Tribunal dismissed VIT’s intervention as a futile attempt by the Ex-Directors of the Corporate Debtor to obstruct the proceedings. Conclusion: The Tribunal allowed the Applicant’s prayers, directing the RP to join in the execution of the conveyance deed and other required documents to transfer the Decreed Property to the Applicant. The Tribunal also authorized the RP and the Applicant to seek further orders from the Bombay High Court for the removal of obstructions and compliance with previous court orders. The Tribunal concluded that the moratorium under Section 14 of the IBC did not apply to the Decreed Property, as it was not an asset of the Corporate Debtor. The application was disposed of with the aforementioned directions.
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