2026 Supreme(Online)(NCLT) 2070

NATIONAL COMPANY LAW TRIBUNAL
Lakshmi Gurung, Member (Judicial), Hariharan Neelakanta Iyer, Member (Technical)
Akme Sarvodaya Dreamventures LLP – Appellant
Versus
Megha Agrawal – Respondent
Company Appeal 10/2024 | C.P. No. 3683/2018

A buyer who pays purchase money obtains a statutory charge over the seller's property under Section 55(6)(b) of the Transfer of Property Act, making them a secured creditor under the IBC.

Headnote:

(A) Insolvency and Bankruptcy Code, 2016 - Sections 3(30), 3(31), 42, 52 - Transfer of Property Act, 1882 - Sections 55(6)(b), 100 - IBBI (Liquidation Process) Regulations, 2016 - Regulations 21 and 30 - Limitation Act, 1963 - Section 5 - Statutory charge - Security interest - Buyer's charge - Whether a buyer who has paid purchase money in anticipation of delivery obtains a 'security interest' under the IBC - Held, Yes, a buyer's statutory charge under Section 55(6)(b) of the Transfer of Property Act, 1882, constitutes a 'charge' and therefore a 'security interest' under Section 3(31) of the IBC, making the buyer a secured creditor of the corporate debtor for the amount of purchase money paid. (Paras 24, 25, 28, 29, 30, 33, 37)

(B) Insolvency and Bankruptcy Code, 2016 - Section 42 - Limitation - Condonation of delay - Delay in filing an appeal under Section 42 of the Code is condonable by exercising power under Section 5 of the Limitation Act. (Para 9)

Facts of the case:
Three appellants ('the buyers') entered into an agreement to sell with a company ('the corporate debtor') to purchase a plot of land (the subject property) for a total consideration of Rs. 17.5 crores. The property was mortgaged to a housing finance company (DHFL). As part of the arrangement, the appellants paid Rs. 9.5 crores by the date of the agreement and later paid the balance Rs. 8 crores directly to the mortgagee (DHFL) to clear a one-time settlement (OTS) of the corporate debtor's loan. DHFL issued a full and final settlement letter and released the property documents. However, before the sale deed could be executed in their favor, the corporate debtor was admitted into the Corporate Insolvency Resolution Process (CIRP) on 31.01.2019, and subsequently went into liquidation. The appellants filed claims before the liquidator as secured creditors, but the liquidator admitted their claims only as unsecured creditors and rejected their claim for interest. Aggrieved, the appellants appealed under Section 42 of the IBC.

Findings of Court:
The appeal was partly allowed. The court condoned the delay in filing the appeal. It held that the appellants, as buyers who had paid the entire purchase money, had a 'statutory charge' over the seller's interest in the property under Section 55(6)(b) of the Transfer of Property Act. This 'charge' is included within the definition of 'security interest' under Section 3(31) of the IBC. Therefore, the appellants are secured creditors of the corporate debtor to the extent of Rs. 17.5 crores (the total amount paid). However, the court rejected the appellants' claim for interest, noting that no contract provided for such interest, and the appellants themselves admitted no such contractual term existed. The liquidator was directed to update the list of stakeholders accordingly.

Issues: (i) Whether the appellants can be treated as secured creditors in view of Section 55(6)(b) of the Transfer of Property Act? If yes, to what extent? (ii) Whether the appellants are entitled to interest?

Ratio Decidendi: The court reasoned that a 'statutory charge' created by Section 55(6)(b) of the Transfer of Property Act in favor of a buyer for purchase money paid is a 'charge' as defined in Section 100 of the same Act. As per the definition of 'security interest' under Section 3(31) of the IBC, a 'charge' is explicitly included. The Supreme Court's decisions in *Delhi Development Authority vs. Skipper Constructions* and *Videocon Properties Ltd. vs. Dr. Bhalchandra Laboratories* establish that a buyer's statutory charge is akin to a mortgage and is enforceable against the seller and all persons claiming under him. Following this principle, and the NCLAT's own precedent in *Kolkata Municipal Corporation vs. Gajesh Labhchand Jain*, the statutory charge qualifies as a security interest under the IBC, making the buyer a secured creditor. The claim for interest was denied due to the absence of any contractual provision for such payment.

Result : Company Appeal (AT) (Insolvency) No. 10 of 2024 was partly allowed. The liquidator was directed to treat the appellants as secured creditors for Rs. 17.5 crores. The claim for interest was rejected. The appeal was disposed of accordingly (Paras 37, 38, 39).

Table of Content
1. the parties and reliefs sought in the appeal are identified. (Para 1)
2. factual background of the ots, sale agreement, and payment to dhfl is established. (Para 2 , 4 , 5)
3. the core dispute regarding classification as secured creditor and interest is presented. (Para 6 , 7)
4. procedural issues including delay condonation and summary of liquidator's decisions are addressed. (Para 8 , 9 , 10 , 11 , 12)
5. statutory charge under section 55(6)(b) tpa makes buyers secured creditors to the extent of paid consideration, but no interest is allowed. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36)
6. the appeal is partly allowed and directions are issued to the liquidator. (Para 37)

ORDER

1. This appeal has been filed by Akme Sarvodaya Dream ventures LLP (‘Appellant No.1’), Hiraman Developers Private Limited (‘HDPL’/ Appellant No.2’), HDL Housing Development Company (‘Appellant No.3’) hereinafter (Collectively referred as ‘the Appellants’) under Section 42 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’), seeking following reliefs: -

a) This Tribunal may be pleased to condone the delay in filing the present appeal.

b) This Tribunal may be pleased to allow the present Appeal under Section 42 of the Code.

c) This Tribunal may be pleased to set aside and reverse the decision of the Liquidator dated 24.07.2023 and 04.12.2023 in so far as she has:

i. not admitted the Appellants claim to be considered as secured creditors, only admitted their claim as unsecured creditors.

ii. Rejected the Appellants claim for interest.

d) This Tribunal may be pleased to allow the Appellants claim in its entirety i.e.

i. Declare and hold the Appellants are secured financial creditors.

ii. Declare and hold that the Appellants are entitle to admission of their claim for interest at 18% p.a. or such other rate of interest as this Tribunal deems fit.

e) This Tribunal may be pleased to direct the Respondent, Liquidator to amend and publish an updated list of stakeholders to reflect the Appellants' claim as a secured creditor, along with interest and take all such consequential steps including updating /reconstituting the Stakeholders' Consultation Committee.

f) Pending the hearing and final disposal of this Appeal, this Tribunal may be pleased to:

i. Restrain the Liquidator from taking any steps towards the sale of the Subject Property (described in Ex. A herein).

ii. Restrain the Liquidator from taking any material decision in the liquidation process of the Corporate Debtor.

g) For such other reliefs as this Tribunal may deem fit in the facts and circumstances of this case.

Brief Facts

2. Following are the relevant facts set out in the application and required to be noticed for the adjudication of the present application.

2.1. M/s Brajesh Construction Pvt Ltd (‘Corporate Debtor’) owns piece of land described as Plot No. 1-A, situated at Revenue Village Tithardi, Tahasil Girva, District Udaipur (Rajasthan) under Khasra No. 2507 to 2509, 2510 M, 2475, 2476, 3556/2510. The total area of the said plot No. 1A is 4,22,150 sq. ft. (approx. 42,000 sq. meters) by the name of AVL Tivona City (‘Subject Property’)

2.2. The Corporate Debtor had mortgaged the subject property in favour of Dewan Housing Finance Limited (‘DHFL’). Due to default in repayment of loan by the Corporate Debtor, in 2018, DHFL initiated proceedings under the SARFAESI Act to take possession and to sell the subject property.

2.3. On 01.05.2018, the Corporate Debtor, sent a letter to DHFL seeking one-time settlement (‘OTS’) and stating that HDPL had agreed to purchase the subject property and pay Rs. 22 crores as OTS. Some of relevant excerpts from the said letter are reproduced below:

“As you are aware that real estate sector is passing through a very bad phase and we are not in the position to raise fund for completing the Project “Trivona City on our own and hence we have negotiated with a very reputed Developer M/s Hira

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