Resolution Professional is not bound to execute Registered Sale Deeds in favour of Applicants who had entered into an ‘agreement of sale’ with the Corporate Debtor prior to CIRP admission – Palapala Ankamma Rao Vs. Punjab National Bank – NCLT Hyderabad Bench

In this important case, the Applicants have agreed to purchase a land and in token of acceptance have paid 10% margin money. Corporate Debtor entered into Agreements of Sale with the Applicants and extended the time for deposit of balance amount by 8 weeks. While it was so, NCLT on 24.06.2022 admitted the petition filed under Section 7 of IBC.
The Applicants informed the IRP are ready to pay the balance sale consideration and requested for completing the registration of subject land in their favour. However, the same did not evoke any response.
NCLT Hyderabad Bench observed that the property covered under the agreements of sale in the absence of execution of a Registered Sale Deed continue to remain as the property of the corporate debtor, hence Section 18 of IBC shall apply to the entire property of the corporate debtor, hence, the submissions of the Ld. Sr. Counsel that, since the Applicants have entered into an “agreement of sale” with the corporate debtor prior to the admission of the corporate debtor into CIRP, which sale has been permitted by the Financial Creditor, and prior to and post admission of the Corporate Debtor into CIRP the financial creditor has extended the time to deposit the balance amount under the OTS by the Vendor of the Applicants, therefore, the RP is bound under law to execute registered sale deeds in favour of the Applicants, by no stretch of imagination be countenanced.
The Bench held that the plea of the applicants for execution of the registered sale deed by the resolution professional being unsustainable and untenable under law cannot be held to be a remiss in the performance of duties by the resolution professional, as such the same does not call for our interference.

Resolution Professional is not bound to execute Registered Sale Deeds in favour of Applicants who had entered into an ‘agreement of sale’ with the Corporate Debtor prior to CIRP admission – Palapala Ankamma Rao Vs. Punjab National Bank – NCLT Hyderabad Bench Read Post »