Unregistered sale agreements lack enforceability under Section 53A of the Transfer of Property Act, and the Liquidator must verify claims of payments made during insolvency proceedings.

ORDER

1. Both IA Nos. IA(IBC)/508 of 2021 and IA(IBC)/641 of 2021 are taken up together for decision as they are interlinked and interconnected.

2. Background

a) Khaitan Electricals Ltd., the Corporate Debtor (CD), entered the Corporate Insolvency Resolution Process (CIRP) pursuant to an order dated 28th November 2018, in CP No.326/7/HDB/2018 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). As no Resolution Plan was received, the Liquidation process was initiated against the CD vide order dated 23rd August 2019.

b) Prior to the CIRP, Mr. Akhil Ahmed (Respondent No.4 in IA No.508 of 2021) and his wife, Ms. Tarannum (Applicant No.2 in IA No.641 of 2021), executed an agreement dated 23.12.2013 for the purchase of land comprised in Khasra Nos. 800KA, 890KH, 889, 891KH, 891KA, and 892KH, measuring 1.36 hectares, situated at Mauza Chharba Pacchwa, Doon-Langa Road, Dehradun (hereinafter referred to as the "disputed property"). The agreement was executed with Mr. R. Lohariwala (now deceased), erstwhile Chief Executive Officer of the CD, for a consideration of ₹1.81 crores. The entire amount was to be paid on or before July 2014, failing which the agreement would be deemed cancelled, null, and void.

c) Mr. Akhil Ahmed, through a letter dated 16.07.2014, informed the CD that the final payment, along with interest, would be made by October 2014. He further stated that if the entire payment was not made by 31.12.2014, the agreement should be treated as cancelled.

d) A loan of ₹10,00,00,000/- was sanctioned by Religare Finvest Limited (Respondent No.5 in IA No.508 of 2021) vide sanction letter dated 26.12.2013, and a facility agreement was executed on 11.01.2014. The CD handed over the original title deeds of the disputed property to Religare Finvest Limited vide letter dated 23.01.2014.

e) In the light of the above background, IA(IBC)/508 of 2021 and IA(IBC)/641 of 2021 have been filed concerning the disputed property.

I. IA No.508 of 2021

3. Application

a) The Liquidator has asserted that Mr. Akhil Ahmed failed to pay the entire amount within the stipulated period, resulting in the agreement being deemed cancelled, null, and void.

b) It is claimed that when the property of the CD situated at Faridabad was auctioned on 15.02.2021, the Liquidator found a letter dated 28.10.2018 along with a post-dated cheque dated 28.02.2019 for an amount of Rs. 28,91,700/- in the desk of Mr. R. Lohariwala, the erstwhile Chief Executive Officer of the CD. However, the said cheque was never encashed.

c) The sale agreement was executed on 23.12.2013, just three days before the sanction of the loan by Religare Fintech Ltd. (RFL), which has raised doubts about the legality of the agreement. Additionally, a portion of the balance payment was made while the CD was under CIRP/liquidation, without the knowledge of the Liquidator. On the other hand, the erstwhile Directors and management of the CD received a payment of Rs. 1.77 crores out of Rs.1.81 crores in respect of the agreement dated 23.12.2013.

d) In these circumstances, the Liquidator of the Applicant in IA No.508 of 2021 has prayed for the following reliefs :

i. Issue necessary orders/directions on the Respondents Nos.1, 2 and 3 herein, being the erstwhile Directors of the CD to pay Rs.1.81 crores along with an interest of 18% per annum for the period starting from 01.12.2013 till date in the liquidation account of the CD, as compensation for the loss caused to the value of the assets of the CD and to the stakeholders of the CD.

ii. Issue necessary orders/directions on the Respondent No.4 herein to handover the premises of the CD in Dehradun being land admeasuring 1.36 hectares situated at Mauzsa Chharba Pacchwa Doon Langa R