Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLAT) 452

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan, J
Atul Paper Pvt. Ltd. – Appellant
Versus
Rakesh Kumar Jain, Liquidator for RG Infra Build Pvt. Ltd. – Respondent
Company Appeal (AT) (Insolvency) Nos.1100 & 1101 of 2024 | Comp. App. (AT) (Ins) No. 1311 of 2024 | Comp. App. (AT) (Ins) No. 2137 of 2024

Advocates:
For the Appellants/Petitioners: Mr. Kumar Anurag Singh, Mr. Zain A. Khan, Mr. Vijay Mathur
For the Respondents: Mr. Mohit Nandwani

Unregistered agreements do not confer rights under the Transfer of Property Act; claims in insolvency must follow IBC regulations.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 42 - Appeal challenging rejection of claims - Liquidator’s direction for vacating premises upheld; however, direction to refund an amount contrary to IBC set aside - Held, Liquidator must admit claims in accordance with IBC distribution mechanism. (Paras 16, 18, 20)

(B) Transfer of Property Act, 1882 - Section 53A - Unregistered Agreement to Sell - No rights conferred upon purchaser without registration - Claim for possession denied as no enforceable interest exists. (Paras 11, 12, 14)

Facts of the case:
The appeals arise from orders regarding claims and possession related to a commercial unit under insolvency proceedings, highlighting the dispute over claimed amounts and legal entitlements as a stakeholder in liquidation proceedings.

Findings of Court:
Appeals by Atul Paper Pvt. Ltd. directed to vacate premises dismissed; claim to be admitted by Liquidator, but direction for specific payment set aside.

Issues: Whether the direction to pay Rs.2.01 crores to Atul Paper Pvt. Ltd. was in accordance with the IBC.

Ratio Decidendi: Court determined unregistered agreements do not confer rights under Section 53A; claims processing must follow IBC regulations.

Result: Appeals dismissed and partially allowed based on merits, with costs borne by parties.

Table of Content
1. overview of appeals filed (Para 1 , 2)
2. court’s considerations on the matter (Para 3 , 8 , 9 , 10 , 13 , 15 , 16)
3. arguments presented by parties (Para 5 , 6 , 7)
4. court's reasoning on rights and claims (Para 12 , 14 , 18)
5. final decision and directions (Para 20)

JUDGMENT

Ashok Bhushan, J.

These three Appeal(s) have been filed challenging the same order dated 06.05.2024 passed by National Company Law Tribunal, New Delhi Bench (Court – II) in IA No.355 of 2021 and CA No.26/2023 in CP (IB)- 917(ND) 2019. Company Appeal (AT) (Ins.) Nos.1100 & 1101 of 2024 have been filed by M/s Atul Paper Pvt. Ltd., who is in possession of B-101, First Floor at RG City Centre and has filed claim before the Liquidator of the Corporate Debtor (“CD”) – M/s RG Infra Build Pvt. Ltd. Company Appeal (AT) (Ins.) Nos.1311 of 2024 has been filed by the Liquidator of the CD, challenging the part of direction issued by Adjudicating Authority in IA No.355 of 2021, whereas Company Appeal (AT) (Ins.) Nos.2137 of 2024 has been filed by Punjab National Bank, a Financial Creditor of the CD, challenging part of the order passed in IA No.355 of 2021.

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:

(i) The Appellant entered into an Agreement to Sell dated 24.04.2018 with the CD – RG Infra Build Pvt. Ltd. for sale of commercial unit B-101, First Floor at RG City Centre, admeasuring built up area of 301.75 meters, for a total sale consideration of Rs.2.70 crores. Atul Paper Pvt. Ltd. paid an amount of Rs.2.01 crores towards sale consideration and possession of the unit was also handed over to the Atul Paper Pvt. Ltd. on 25.04.2018. However, no Sale Deed could be executed in favour of Atul Paper Pvt. Ltd.

(ii) The Corporate Insolvency Resolution Process (“CIRP”) against the CD commenced on 25.09.2019 on an Application filed by M/s Ved Contracts Pvt. Ltd. The Respondent – Rakesh Kumar Jain was appointed as the Resolution Professional (“RP”).

(iii) Atul Paper Pvt. Ltd. along with its two Directors filed a claim of Rs.2.51 crores before the RP. The claim of the Appellant was rejected by the RP on 27.08.2021.

(iv) The RP after coming to know that Atul Paper Pvt. Ltd. is in possession of the commercial unit owned by the CD, filed an IA No.355 of 2021 seeking a direction to Atul Paper Pvt. Ltd. to vacate the premises.

(v) On 16.03.2023, an order was passed by the Adjudicating Authority, directing initiation of liquidation proceedings against the CD.

(vi) On 27.04.2023, Atul Paper Pvt. Ltd. filed a claim of Rs.2.51 crores before the Liquidator, which claim was rejected by the Liquidator on 30.04.2023 on account of claim having been filed with delay. Atul Paper Pvt. Ltd. filed an Appeal under Section 42 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) being CA No.26 of 2023.

(vii) The Adjudicating Authority permitted the Liquidator to pursue the IA, which was filed by the RP being IA No.355 of 2021. The Adjudicating Authority heard the Liquidator and Atul Paper Pvt. Ltd. along with two Directors, i.e. Atul Kumar Garg and Sachin Kumar Garg and by the impugned order, disposed of IA No.355 of 2021, directing the Atul Paper Pvt. Ltd. to vacate the commercial unit. The Adjudicating Authority also while issuing the said direction, directed the Liquidator to pay an amount of Rs.2.01 crores to the Atul Paper Pvt. Ltd., in event of sale of the above unit by the Liquidator. CA No.26 of 2023, which was an Appeal filed by Atul Paper Pvt. Ltd. challenging the rejection of its claim, was disposed of as having become infructuous.

(viii) Aggrieved by the order passed in IA No.355 of 2021 and CA No.26 of 2023, Company Appeal (AT) (Ins.) Nos.1100 & 1101 of 2024 have been filed by Atul Paper Pvt. Ltd.; Company Appeal (AT) (Ins.) Nos.1311 of 2024 has been filed by the Liquidator, challenging the impugned order insofar as it directed the Liquidator to pay an amount of Rs.2.01 crores. Punjab National Bank – Financial Cred

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