2022 (12) TMI 478 - AT - Insolvency and Bankruptcy

Approval of resolution plan - Agreement to Sell between the Corporate Debtor and the Appellant vested ownership rights on the Appellant in respect of the project land over which leasehold rights had been obtained by the Corporate Debtor from Noida authority after executing a Lease deed on 22.10.2008 - project land in the pool of assets of the Corporate Debtor - within the scope of statutory framework of IBC or not. Whether the Agreement to Sell dated 14.04.2015 between the Corporate Debtor and the Appellant vested ownership rights on the Appellant in respect of the project land over which leasehold rights had been obtained by the Corporate Debtor from Noida authority after executing a Lease deed on 22.10.2008? - HELD THAT - It is a settled proposition of law that an Agreement to sell does not convey a property from one person to another, either in present or even in future. Agreement to sell is a promise of a future transfer of property ownership which outlines the terms and conditions under which the property will be transferred. An agreement to sell an immovable property is therefore a bilateral contract under which the two parties, i.e. the buyer and the seller, agree to certain terms and conditions, subject to which the property in question would be transferred by the seller to the buyer for a decided sale consideration. It is only after such bilateral obligations are discharged that the execution of the sale deed kicks in and it is this sale deed, which is compulsorily registrable under the Registration Act, 1908, which upon being registered, would transfer the right, title and interest in the property in question on to the purchaser. In the present factual matrix, the agreement to sell was yet to culminate into a registered sale deed and therefore not ripe for transfer of the title of property in question from the Corporate Debtor to the Appellant. It is held in negative the claim of the Appellant that upon execution of the Agreement to Sell, the ownership of the project land stood transferred from the Corporate Debtor to the Appellant. Whether the Resolution Professional/Respondent No.1 by including the project land in the pool of assets of the Corporate Debtor had acted beyond the statutory framework of IBC? - HELD THAT - It is incumbent upon the Resolution Professional under Section 18 of IBC to embark upon necessary steps to take control and custody of the assets of the Corporate Debtor and under Section 20 of IBC to protect and preserve the value of the property of the Corporate Debtor. Thus in having included the project land in the pool of assets of the Corporate Debtor, the Resolution Professional cannot be held to be remiss in the performance of his duties - there are no cogent grounds to agree with the Appellant s contention that Resolution Professional had acted in a manner that transgressed the statutory framework of IBC or that his conduct did not inspire confidence in the credibility of the insolvency process undertaken by him. Whether the approval of the Resolution Plan of the Corporate Debtor by the Adjudicating Authority without deciding the two IAs filed by the Appellant suffered from impropriety? - HELD THAT - The Adjudicating Authority has noted in the impugned order while approving the Resolution Plan submitted by M/s Wing Constructions Developers Private Limited and Consortium of Mr. Rajbir Goyat M/s. Antriksh Infradesign Private Limited that the plan was approved by the CoC in its 15th meeting with 99.12% voting share. The Adjudicating Authority had also noted that the resolution plan filed with the Application met the requirements of Section 30 and 31 of IBC, 2016 and Regulations 37, 38, 38(IA) and 39(4) of the IBBI(CIRP) Regulations, 2016; that the provisions of Section 29A of IBC were not attracted and that the Resolution Plan approved by the CoC does not contravene any of the provisions of the law for the time being in force. There are no convincing reasons to interfere with the order of the Adjudicating Authority approving the Resolution Plan of the Corporate Debtor under Section 31(1) of the IBC - Appeal dismissed.

Issues Involved:
1. Whether the Agreement to Sell dated 14.04.2015 between the Corporate Debtor and the Appellant vested ownership rights on the Appellant in respect of the project land.
2. Whether the Resolution Professional/Respondent No.1 by including the project land in the pool of assets of the Corporate Debtor had acted beyond the statutory framework of IBC.
3. Whether the approval of the Resolution Plan of the Corporate Debtor by the Adjudicating Authority without deciding the two IAs filed by the Appellant suffered from impropriety.

Detailed Analysis:

Point No. (i): Ownership Rights under the Agreement to Sell

The Appellant contended that by entering into the Agreement to Sell with the Corporate Debtor and making payments to the Noida Authority, ownership of the project land was transferred to them. However, the Resolution Professional argued that mere signing of the Agreement to Sell does not confer ownership rights, and any transfer of the plot required prior approval from the Noida Authority as per the Lease Deed.

The Tribunal noted that the Lease Deed between the Corporate Debtor and the Noida Authority stipulated that sub-leasing or transferring the plot required prior approval from the Noida Authority, which was not obtained. The Agreement to Sell also acknowledged the overriding provisions of the Lease Deed, making any transfer of ownership without Noida Authority's approval null and void. The Tribunal cited Supreme Court judgments affirming that an Agreement to Sell does not amount to ownership transfer until a registered sale deed is executed.

Therefore, the Tribunal concluded that the Agreement to Sell did not confer ownership rights on the Appellant.

Point No. (ii): Inclusion of Project Land in the Pool of Assets

The Appellant argued that the Resolution Professional acted illegally by including the project land in the pool of assets of the Corporate Debtor, disregarding their legal rights under the Agreement to Sell. The Resolution Professional contended that the project land was rightfully included as it was an asset of the Corporate Debtor, and the Agreement to Sell did not confer ownership rights on the Appellant.

The Tribunal referred to Section 18 of the IBC, which requires the Resolution Professional to take control of the assets of the Corporate Debtor, excluding assets owned by third parties under trust or contractual arrangements. Since the Agreement to Sell did not confer ownership rights, the project land was correctly included in the pool of assets.

The Tribunal held that the Resolution Professional acted within the statutory framework of the IBC by including the project land in the pool of assets.

Point No. (iii): Approval of Resolution Plan without Deciding Pending IAs

The Appellant claimed that the Adjudicating Authority erred by approving the Resolution Plan without deciding their pending IAs, violating principles of natural justice. The Respondent argued that the IAs were filed after the approval of the Resolution Plan by the CoC and raised similar grounds as other dismissed IAs.

The Tribunal noted that the IAs filed by the Appellant sought exclusion of the project land from the CIRP, similar to the grounds raised in other dismissed IAs. The Tribunal found that the Appellant had not filed any claim before the Resolution Professional during the CIRP and raised their grievances at a belated stage. The Adjudicating Authority had already noted that the Resolution Plan met the requirements of Sections 30 and 31 of the IBC and did not contravene any legal provisions.

The Tribunal concluded that the approval of the Resolution Plan without disposing of the pending IAs did not vitiate the CIRP.

Conclusion:

The Tribunal dismissed the appeal, finding no convincing reasons to interfere with the order of the Adjudicating Authority approving the Resolution Plan of the Corporate Debtor. The appeal was deemed devoid of merit, and no order as to costs was made.

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