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TMI Blog2011 (7) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant having obtained possession of the property in question in part performance of the agreement to sale dated 21.2.2000 is entitle to protect his possession and use of the same and the official liquidator cannot interfere with his right to use and occupy the same or even to realize rent which he had been realizing from the very beginning - Application disposed of - Co. Petition No. 88 of 1999 - - - Dated:- 8-7-2011 - Pankaj Mithal, J. Tarun Agrawal for the Applicant. Arnab Banerji for the Official Liquidator. ORDER 1. The respondent Krishi Export Com. Corporation Limited incorporated under the Companies Act and registered with the Registrar of companies, Kanpur as a non Banking financial company having its registered office at Krishi Export Plaza, Sigra, Varanasi was ordered to be wound up vide order dated 27.4.2007 under Section 45 MC of the RBI Act, 1934 and the official liquidator was directed to take over the assets of the company from the Ex-Directors. The relevant portion of the order dated 27.4.2007 is reproduced herein below:- "In the facts and circumstances, the Court find that the Reserve Bank of India has made out a case for winding up of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permission of the Company Law Board and in ignorance of the interim order of the High Court dated 27.10.1999, the applicant bonafidely in good faith agreed to purchase the rights in the said property vide registered agreement dated 21.2.2000 from the Ex-Managing Director K.K Gupta for a consideration of Rs. 8 lacs. The applicant was handed over constructive possession of the said property on 21.2.2000 itself in respect whereof a possession memo was duly executed. The delivery of possession to the applicant was acknowledged in the sale agreement dated 21.2.2000. The Ex-Managing Director K.K Gupta had submitted affidavit dated 21.2.2000 as required by the Company Law Board accepting the execution of the agreement to sale; receiving of full and final sale consideration; delivery of possession to the applicant; no objection with regard to mutation of the name of the applicant or its nominee in the relevant records; execution of irrevocable power of attorney in favour of the applicant and also a Will bequeathing the same to the applicant and also an undertaking that he shall utilize the sale consideration only for discharging the liabilities of the company. 5. On the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at under a 'Will' intention of the testator has to be carried out after his death and as such has no legal sanctity during his life time. 10. Section 3 (64) of the General Clauses Act, 1897 also defines a 'Will' to include a codicil and every writing making a voluntary posthumous disposition of property. Here also the disposition of property has to be posthumous. 11. A 'Will' as such has no force till the death of the testator or the person making it. 12. In Brijraj Singh v. Sheodan Singh [1913] ILR 35 All. 337, the PC held that a document intended to operate from the date of its execution is not a 'Will'. 13. Similarly, in Namburi Basava Subrahmanyam v. Alapati Hymavathi AIR 1996 SC 2220 it was declared that a deed creating right and interest in prasenti would be a deed of settlement and not a 'Will'. 14. In view of the above, a will operates only on the death of the testator and not in prasenti during the life time of the testator 15. A 'Will' is a sacred document which is personal to the person executing the Will. It is accepted to the parties that the property in question was not the personal property of K.K. Gupta, the Ex Managing Director. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p was passed and the official liquidator had assumed all powers of the company and the functions of the Directors. On the passing of the winding up order the Ex-Managing Director and also his attorney ceased to have any power to deal with the properties of the company. Admittedly, the above power of attorney was not acted upon. The said power of attorney automatically came to an end and is of no use as on date even if it is irrevocable and has not been specifically revoked. 23. The agreement dated 21.2.2000 is the principal document on which the claim of the applicant is dependent. 24. The aforesaid agreement is an agreement to sell an immovable property which is in the nature of a contract to sale. 'Sale' of immovable property is defined in Section 54 of the T. P. Act. It specifically lays down that a contract of sale does not, of itself, create any interest in or charge on property which may be a subject matter of the contract of sale. 25. The T. P. Act is more than a century old enactment. Its provisions specially Section 54 have very often been interpreted by the superior Courts. The Privy Council in a case from Burma Manna Shwe Goh v. Mong In AIR 1916 PC 139 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Delhi High Court itself in the case of Asha M. Jain v. Canara Bank 94 (2001) DLT 841 holding that the agreement to sell with payment of full consideration and possession with irrevocable power of attorney and other ancillary documents is a transaction to sell even though sale deed has not been executed does not find favour with me. 32. The view so taken by their lordships of the Delhi High Court does not appear to be in consonance with the legal position which emanates from the plain reading of Section 54 of the T. P. Act as has been interpreted time and again by the superior Courts. 33. The aforesaid two decisions of the Delhi High Court ignores the above precedents and on the basis of Section 53-A of the T. P. Act read with Section 202 of the Contract Act proceeds to protect the right and interest of the prospective purchasers on the strength of the agreement to sell with irrevocable power of attorney. 34. Granting of protection in view of Section 53-A of the T. P. Act and Section 202 of the Contract Act to such person is altogether a different thing than in holding that the agreement to sell is virtually a transaction of sale. 35. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable property but the prospective purchaser therein having acted bonafidely , performed his part of the contract and having been put in possession is entitle to enforce the obligation under the agreement. 40. Section 53 A of the T.P. Act enshrines the doctrine of part performance of a contract and envisages that where any person contracts to transfer for consideration any immovable property in writing signed by him or on his behalf and the transferee in part performance of such a contract has taken possession of the property and of the contract, even if, no instrument of transfer has been executed finally, the transferor or any person claiming under him shall be debarred from claiming any right in respect of the said property against the transferee. 41. The aforesaid provision protects the proposed purchaser of an immovable property with possession who has performed his part of the contract from invasion by the transferor or any person claiming under him. In other words, the possession and the right to use and occupy the immovable property by the transferee under contract of sale of immovable property cannot be disturbed by the transferor. 42. There is another way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15.9.1999. In these circumstances, the Court is not inclined to hold the agreement to be void even though it was executed after the commencement of winding up proceedings. 50. As far as Section 537(1) is concerned, it does not get attracted for the simple reason that it talks about the sale to be void. There is no sale of any property so far. Therefore it would not be applicable and the agreement which is not a sale cannot be held to be void. The decision reported in Sarita Devi v. Civil Judge, Sr. Division 2003 (51) ALJ 369 would not not be applicable to render the agreement to be void. 51. The applicant has been put in possession pursuant to the above agreement which fact is duly acknowledged and is not disputed. The applicant being in possession of the property and armed with the agreement in his favour is entitle to protection provided under Section 53-A of the T.P. Act. Accordingly, his possession or use of the said property cannot be objected to or interfered with by the owner of the property i.e., company in liquidation or the official liquidator who may have stepped into the shoes of the Ex Managing Director for the purposes of managing the company till its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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