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TMI Blog2019 (9) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... the Applicant/Financial Creditor to the Corporate Debtor. This fact is also corroborated by the 'claim acknowledgement letter' dated 02.08.2016. Moreover, this authority has also noted that a communication dated 22.07.2016 was sent by the Managing Director to Indian overseas Bank, which goes to state that the Managing Director has identified an investor, who is willing to pay bank dues and immediately thereafter on 02.08.2016 the sale agreement was executed between the Applicant/Financial creditor and the Corporate Debtor represented by the Managing Director and Director. The signatures of the above mentioned Directors and the seal of the Corporate Debtor on the sale agreement and claim acknowledgement letter are genuine, whereas the recitals in the said documents are disputed. However, the said suspended Directors or the Resolution Professional(s) of the Corporate Debtor have failed to substantiate their reasoning with any documentary evidence on the basis of which the claim of the Applicant/Financial Creditor was rejected. The exercise under taken by the Resolution Professionals to reject the claim of the Applicants/Financial Creditors is without any basis. Moreove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated and one Mr. V. Venkata Siva Kumar was appointed as Interim Resolution Professional, subsequently Mr. Ebenezar Inbaraj was appointed as Interim Resolution Professional. 4, The Interim Resolution Professional issued 'Public Announcement' calling for submission of the claims by the creditors with respect to the debts due from the Corporate Debtor. In response to that, the Applicant (deceased) had filed his claim for a sum of ₹ 15,00,00,000/-in Form 'C' as a Financial Creditor on 29.08.2018 before the Interim Resolution Professional which was rejected vide commination dated 17.09.2018. 5. It is noted that the Resolution Professional viz. Ebenezar Inbaraj was replaced by Mr. S. Rajendran by the order of this authority, and he was directed to re-consider the claim of the Applicant. The newly appointed RP has also rejected the claim of the Applicant by letter of rejection dated 27.04.2019. The reasons stated by the resolution professional for rejection of the claim of the applicant(s) are as follows: There are no documentary evidence for having paid the amount of ₹ 15 Crores to the Corporate Debtor. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 the amount due by the Corporate Debtor came up to ₹ 15,00,00,000/- the same was acknowledged, admitted by the Managing Director and Director on behalf of the Corporate Debtor vide letter dated 02.08.2016. The Applicants have also referred to a sale agreement entered into between the Applicants and the Corporate Debtor represented by its Managing Director and the other Director, on 02.08.2016 with respect to the sale of the property i.e., Hotel Legend, situated at No. 37, North Boag Road, T. Nagar (schedule property), wherein the Corporate Debtor has admitted, acknowledged the borrowing and adjusted ₹ 15,00,00,000/- i.e. total liability payable to the Applicants till 02.08.2016 towards the said sale agreement and fixed the sale price of the schedule property at ₹ 35,00,00,000/-: 8. The Applicants have submitted that as per the sale agreement 02.08.2016, the Corporate Debtor had availed a loan of ₹ 15,00,00,000/- from Indian Overseas Bank, which the Applicants had undertaken to clear and settle the bank up to the sum of ₹ 15,00,00,000/-, after such deduction, there will be balance of ₹ 5,00,00,000/- that will be payable by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of any interest in the property and creation of any charge upon such property. 11. The Applicants have also placed on record a letter dated, 22.07.2016, sent by the Corporate Debtor to the bank stating that the Corporate Debtor has found an Investor who is willing to settle the banks dues. 12. The Applicants have also referred to the agenda of 6th CoC meeting, wherein at page No. 6, Para No. A-05, it is mentioned that the RP was of the view that the audit of the accounts of the Company was not conducted properly and many material facts were not disclosed in the auditor's report. RP also stated that the accounts of the Company were not audited for the financial year ended 31st March 2018. The provisional accounts for the period 1st April 2018 to 24th July 2018 have not been signed by any of the Directors of the company. RP strongly opined that the accounts needed to be urgently complied for 2017-18 and an independent auditor/firm should be appointed immediately for auditing of accounts. 13. Counsel for the Resolution Professional has submitted that the purported sale agreement, relates to the sale of substantial asset of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed the interim order is already terminated by operation of law and thus Applicant cannot rely on the same and there is no need for challenging the said order now. Counsel for the Resolution Professional has further submitted that as per the CD's Directors, Applicant converted the blank signed stamp paper and blank signed documents, as sale agreement and there is no contract for sale entered by the CD. Therefore CD's Directors have also filed a complaint on 21.07.2017 and the Applicants were arrested under the Crime Number 233 of 2017, which is under investigation. 17. From the pleadings of the parties the only issue that arises for consideration is as follows: Whether the claim of the Applicants based on an unregistered sale agreement dated 02.08.2016 and claim acknowledgement letter dated 02.08.2016 is admissible as evidence in the absence of entry in the Books of Account of the Corporate Debtor? 18. The factual detail is already recorded in the preceding paragraphs, therefore, for the sake of brevity the detail is not reiterated. The sale agreement dated 02.08.2016 provides for total consideration of the schedule propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty and is unregistered. In order to note the effect of an unregistered document pertaining to immovable property, which is compulsorily required to be registered under Section 17 of the Registration Act, 1908 we refer to the provisions of the Section 49 the Registration Act, which provide as follows:- The Registration Act, 1908 49. Effect of non-registration of documents required to be registered. No document required by section 17 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: [Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the provision of Section 49 of the Registration Act. Hence, the document sought to be marked by the revision petitioner/1st defendant can be admitted in evidence for collateral transaction under Section 49 of the Registration Act... (Emphasis is supplied) 22. There are catena of judgments on the issue framed hereinabove and the opinion that has been formed by the Hon'ble High Court of Madras in the above noted case is a well settled proposition of law. In the case on hand the sale agreement dated 02.08.2016 is written on the non-judicial stamp paper of ₹ 100/- which as per Article 5 (j) of Schedule I of the Indian Stamp Act, 1899 is held to be sufficiently stamped and even if the same is unregistered, it is admissible in evidence for collateral purpose i.e. for proving the payment of ₹ 15,00,00,000 (15 Crores) by the Applicant/Financial Creditor to the Corporate Debtor. This fact is also corroborated by the 'claim acknowledgement letter' dated 02.08.2016. Moreover, this authority has also noted that a communication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documentary evidence i.e. the Sale Agreement dated 02.08.2016 and the claim acknowledgement letter dated 02.08.2016, with regard to the claim of the Applicant/Financial Creditors for an amount of ₹ 15,00,00,000/- (15 crores) is admissible. It is also noted that in case the managing Director and the Director of the Corporate Debtor were forced to sign and give the blank documents i.e., the Sale Agreement dated 02.08.2016 and the claim acknowledgement letter dated 02.08.2016, as is pleaded by them, then as to why no appropriate remedial measures were taken for almost a year by the Director of the Corporate Debtor till 21.07.2017 i.e., the date of filing the complaint against the Applicants. This creates serious doubt about the genuineness of the plea taken by the suspended Directors of the Corporate Debtors. 25. In connection with the plea taken by the Resolution Professional that the payments made by the Applicants/Financial Creditors have not been entered in the books of account and there is no Board Resolution authorizing the Directors to enter into sale agreement, it is worthwhile to mention that in 6th meeting of the CoC held on 11th March 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re habitual of making the allegations that blank signed stamp papers and blank signed documents were given by them. A similar plea has earlier been taken by the suspended Director(s) in the matter of Inderchand D. Kochar v. Puratchidasan AIR 2003 Mad 8 , wherein a suit for a decree and judgment for ₹ 43,79,775/- together with further interest at 30% per annum on the said amount till the date of realization, was filed against the Defendant(s) (herein suspended Directors) by a third party (plaintiff). In the said matter the defendant(s) have taken the plea, ... at the time of entering into the agreement of sale, the respondent (plaintiff) obtained from the first defendant signed blank, pro-notes, cheques leave, blank signed stamp papers, green bond papers, etc., as a condition precedent for advancing the loan and now he (plaintiff) had misused the same to lend colour to his false case. The Hon'ble High Court of Madras has termed the attitude of the defendants (suspended Directors) as abhorrent and directed them to deposit into the court a sum of ₹ 20 lakhs within six weeks from the date of the order, failing which an advocate-receiver was to be app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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