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TMI Blog2023 (8) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor , gave the key of the Villa to the Appellants / Petitioners , so as to enable them to start the Interior Work , and that the Appellants / Petitioners , had incurred an Expenditure of Rs.4,63,000/-, in this regard - It cannot be gainsaid that only the Assets , that are charged as Security Interest(s) , will fall outside the ambit of Liquidation Proceedings . Furthermore, this Tribunal , bears in mind that the Ownership of the Subject Property , rests with the Corporate Debtor . Also, it cannot be brushed aside the Appellants / Petitioners , had in Form G , preferred a Claim of Rs.6,65,191/- for the remaining work , to be completed in the Subject Property . It cannot be gainsaid that in respect of a Sale of an Immovable Property , which is in Value of more than Rs.100/- , it is to be compulsorily Registered , as per Section 17(1)(b) of the Registration Act, 1908, in the considered opinion of this Tribunal . One cannot remain in oblivion of the primordial fact that the term Conveys in Section 5 of the Transfer of Property Act, 1882 , only meant for conveying Ownership , which visualises a Completion , only in respect of an Execution a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person. However, in this present case no such security interest is created in favour of the applicants since there is no such document and the sale deed was not executed. Hence the prayer for excluding the Schedule B property from the Liquidation estate of the Corporate Debtor is not tenable. 11. Hence, this Tribunal is of the considered opinion that that since no Sale Deed is registered and no security interest is created in favour of Applicants the said property falls within the purview of Liquidation Estates of the Corporate Debtor. and finally Dismissed , the Application . Appellants Submissions: 3. Challenging the impugned order , dated 25.05.2023 in IA No. 343 / BB / 2021 in CP (IB) No. 189 / BB / 2018, passed by the Adjudicating Authority / Tribunal , the Learned Senior Counsel for the Appellants contends that the Appellants , are the Bona fide Home Buyers of the Villa, Bearing Plot No.51 of Schedule A Property, having purchased the same, by me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For a clarity, let us see the following examples: i. In case of a real estate company - (Ram Mohan Company), if House No. 'A' is sold to Mr. 'X' at a value of Rs. 20 lacs, the cost of construction of Rs. 15 lakhs then in the profit and loss account of the 'Ram Mohan Company', sale of House will come in the income side of the profit and loss accounts as Rs. 20 lakhs-Revenue from operations. The materials etc. consumed will appear at Rs. 15 lakhs in the Part-II - profit and loss account of the same year under caption (Expenses-IV) if both start and completion of the house 'A' is in the same year. Otherwise, if it is completed in the previous year's then these costs of this house which will be appearing in the inventory will get reduced. ii. If 'Ram Mohan Company' is an industrial Company then the profit and loss account will reflect an income of Rs. 5 lakhs in the profit and loss account (under the heading - Part II - other income) and the value of the assets appearing at Rs.15 lakhs in the books in the assets side of the Balance Sheet will be reduced. iii. In the short and the summary, the houses so constructed is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects as it has not been invested in projects. Homebuyers money has been diverted fraudulently, thus, fraud cannot be perpetuated against them by selling the flats and depriving them of hard-earned money and savings of entire life. They cannot be cheated once over again by sale of the projects raised by their funds. The Noida and Greater Noida Authorities have to issue the Completion/ Part Completion Certificate, as the case may be, to execute tripartite agreement and registered deeds in favour of the buyers on part-completion or completion of the buildings, as the case may be or where the inhabitants are residing, within a period of one month. j. This Tribunal has also held in Flat Buyer's Association Winter Hills - 77 Gurgaon Vs. Umang Realtech Pvt. Ltd. through the Resolution Professional - CA(AT) (Ins) No. 926 of 2019 which notes as under: 2. During the pendency of the appeal, the Company was kept as a going concern out of investment made by the Promoters of 'Umang Realtech Private Limited' but under the supervision of the 'Interim Resolution Professional . 3. It is submitted that many of the apartments/ flats have been completed, possession has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other project(s) of the same real estate company (Corporate Debtor) in other places where separate plan(s) are approved by different authorities, land and its owner may be different and mainly the allottees (financial creditors), financial institutions (financial creditors, operational creditors are different for such separate project. Therefore, all the asset of the company (Corporate Debtor) are not to be maximized. The asset of the company (Corporate Debtor - real estate) of that particular project is to be maximized for balancing the creditors such as allottees, financial institutions and operational creditors of that particular project. Corporate Insolvency Resolution Process should be project basis, as per approved plan by the Competent Authority. Any other allottees (financial creditors) or financial institutions/ banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained. 9. It is the version of the Appellants that they cannot be dispossessed, in respect of the B Schedule Property, just because the Sale Deed , was not Registered , i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor , had taken physical possession of the Schedule B Property, since 2016. Moreover, the Appellants , under the Possession , had incurred expenses , at their own costs , towards the completion of the Interior Work of the Residential Unit . 15. According to the Appellants, they had made regular Quarterly payments, in respect of the Maintenance Charges , and by being the Members of the Owners Association , much earlier to the Commencement of the Corporate Insolvency Resolution Process of the Corporate Debtor . 16. In this connection, the Learned Counsel for the Appellants, refers to the Clause 22 of the Agreement of Sale , which mentions that, they are entitled to the Possession of the Schedule B Property, upon Payment of all Dues , under the Agreement of Sale Construction Agreement . 17. The Learned Counsel for the Appellants, points out that the Appellants cannot be made to suffer, for their failure, on the part of the Corporate Debtor and the Respondent , to Register the Schedule B Property. 18. The Learned Counsel for the Appellants, points out that the Adjudicating Authority , had incorrectly held that the Schedule B Prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s observed as under: A contract of sale does not of itself create any interest in, or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act. See Rambaran Prasad v. Ram Mohit Hazra 1967 1 SCR 293. The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Relief Act, 1963 and in section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein. 23. The Learned Counsel for the Respondent, places reliance upon the Judgment of the Hon ble Supreme Court of India in Suraj Lamp Industries Pvt. Ltd. v. State of Haryana Ors., reported in AIR 2012, at Page 206, wherein, it is observed as under: Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of Sections 54 and 55 of Transfer of Property Act and will not confer any title nor transfer any interest in an immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Respondent / Liquidator, brings to the notice of this Tribunal , that the Appellants / Petitioners , were directed to prefer the Claim in Form D , for the whole Sum , which they have paid to the Corporate Debtor . Later, the Appellants / Petitioners , have filed their Claim in Form D , dated 28.05.2020, for a Sum of Rs.1,39,72,756/-, which was admitted by the Liquidator , and the Appellants , were directed to handover the control and custody of the Subject Property , as per the ingredients of the I B Code, 2016. 28. The Learned Counsel for the Respondent / Liquidator, points out that the Relief , prayed for the Appellants / Petitioners , to keep the Asset of the Corporate Debtor , outside the Liquidation Process , is neither maintainable nor the same is tenable , under the I B Code, 2016. Further, there is no such provision, to carve out an exception, as prayed for, by the Appellants / Petitioners , to exclude the Property , from the Liquidation Estate . 29. Added further, according to the Respondent / Liquidator, only an Asset , being a Security Interest , charged to a Secured Creditor , can be left outside the Liquidati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt) Act, 2016? (iii) As to whether the resolution plan is violative of the requirements of CIRP Regulations? (iv) As to whether any housing project which has been completed or is nearing completion ought to be kept out of the purview of the resolution plan? 158. The relevant aspect for the present point for determination is that apart from such dissenting financial creditors, a few of the associations of homebuyers and some of the individual homebuyers carry their own grievances against the resolution plan and seek to submit that their interests have not been safeguarded and they are being denied of their legal rights. These dissatisfied associations and individual homebuyers seek to contend that the resolution plan is lacking in various requisite arrangements; is violative of the CIRP Regulations; and is also violative of the provisions of RERA and therefore, it could not have been approved. One block of such objectors is rather differently dissatisfied for the reason that according to them, the housing projects which have been completed or are nearing completion ought to be kept out of the purview of this plan of resolution. In counter, it is contended on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution of the Sale Proceeds , shall be made as per Section 53 of the I B Code, 2016. Moreover, according to the Respondent / Liquidator, the Ownership of the Subject Property , lies with the Corporate Debtor , in the absence of any Registered Sale Deed , which is a requirement, for Transfer of Right, Title and Ownership of the Property , and further that the Appellants / Petitioners , are not entitled to any relief , as prayed for, by them. Assessment: 32. Before the Adjudicating Authority , the Appellants / Petitioners in IA No. 343 / BB / 2021 in CP (IB) No. 189 / BB / 2018 (Filed under Section 60 (5) (c) of the I B Code, 2016, read with Rule 11 of the NCLT Rules, 2016), had prayed for the relief of (i) in directing the Liquidator to exclude Schedule B Property, from the Liquidation Estate of the Corporate Debtor (ii) in directing the Liquidator , to execute the Sale Deed , and Register Schedule B Property, in favour of the Appellants , as per the Agreement of Sale Construction Agreement , dated 12.07.2011, (iii) in directing the Liquidator (Respondent in Appeal), to complete the remaining works, in respect of Schedule B Property, as ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) of the Registration Act, 1908, in the considered opinion of this Tribunal . 39. One cannot remain in oblivion of the primordial fact that the term Conveys in Section 5 of the Transfer of Property Act, 1882 , only meant for conveying Ownership , which visualises a Completion , only in respect of an Execution and Registration of the valid Deed of Conveyance . 40. Be that as it may, in the light of the foregoing detailed discussions, this Tribunal , keeping in mind of the surrounding facts and circumstances of the instant case, on a careful consideration of respective contentions, advanced on either side, without haziness , comes to a resultant conclusion, that to and in favour of the Appellants / Petitioners , No Security Interest , is created, especially, the admitted fact being, no Registered Sale Deed , was executed , and as such, no relief(s) , can be granted to the Appellants / Petitioners , as prayed for, by them in IA No. 343 / BB / 2021 in CP (IB) No. 189 / BB / 2018. Viewed in that perspective, the dismissal of IA No. 343 / BB / 2021 in CP (IB) No. 189 / BB / 2018 (Filed by the Appellants / Petitioners ), by the Adjudicating Authority ( Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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