2024 (12) TMI 1313 - AT - IBC

Ownership of property - Validity of the Slump Sale Agreement between the Corporate Debtor and the Appellant - no detail of the loan placed on record - dubious and preferential transaction, carried out to defraud the Creditors - HELD THAT - Although Appellant has vehemently argued that the amount of Rs. 42.86 Crores was an unsecured loan towards the Corporate Debtor, but there is no documentary evidence that the Corporate Debtor has availed such a huge loan from the Appellant. The Tribunal has also categorically observed that there was no registered Sale/Conveyance Deed, executed between the Parties of the Immovable Property, which as per Section 17 of the Registration Act is a mandatory condition as has been held by the Hon ble Supreme Court in the matter of Suraj Lamp Industries Pvt. Ltd. Vs. State of Haryana Anr. 2011 (10) TMI 8 - SUPREME COURT , held that an Immovable Property cannot be transferred merely on the Agreement of Sale, rather there has to be registered Sale Deed in that regard. Also, the Appellant is asked to refer to the Agreement between the Parties on the basis of which the said loan of Rs. 42.86 Crores has been obtained by the Corporate Debtor to which he could only answer that CA Certificate has been attached in this regard which cannot be taken into consideration to hold that the Corporate Debtor has been given such a huge loan by the Appellant and the said advance has been adjusted as a sale consideration on the basis of a mere Agreement to sell and without a Sale Deed. There are no error in the Impugned Order and thus the present Appeal is hereby dismissed.

Summary

Issues:
1. Validity of the Slump Sale Agreement between the Corporate Debtor and the Appellant.
2. Allegations of preferential and undervalued transaction under the IBC.
3. Existence of unsecured loan from the Appellant to the Corporate Debtor.
4. Requirement of a registered Sale/Conveyance Deed for property transfer.
5. Compliance with clauses of the Slump Sale Agreement for executing the Sale Deed.

Analysis:
The judgment by the National Company Law Appellate Tribunal addressed the validity of a Slump Sale Agreement between the Corporate Debtor and the Appellant. The RP found the agreement to be preferential and undervalued under Sections 43 and 49 of the IBC. The RP, supported by Respondent No. 4, filed applications seeking to vest the property back to the Corporate Debtor and restore previous transfers as per the agreement. The Tribunal noted the absence of evidence supporting the existence of a substantial unsecured loan from the Appellant to the Corporate Debtor, casting doubt on the transaction's legitimacy and intention to defraud creditors.

The Tribunal emphasized the necessity of a registered Sale/Conveyance Deed for property transfer, citing the mandatory requirement under Section 17 of the Registration Act. It referenced a Supreme Court ruling emphasizing the importance of a registered Sale Deed for the transfer of immovable property. The judgment highlighted specific clauses in the Slump Sale Agreement outlining conditions for executing the Sale Deed, emphasizing the need for compliance with these clauses for the transfer to be legally valid.

Despite the Appellant's arguments regarding the unsecured loan and ownership claim based on the agreement, the Tribunal found no documentary evidence supporting the loan amount or the execution of a Sale Deed. The absence of a registered Sale/Conveyance Deed and the failure to provide concrete evidence of the alleged loan led the Tribunal to dismiss the appeal. The judgment concluded that the Impugned Order was appropriate, resulting in the dismissal of the appeal without costs.