AA Correctly Dismissed Appellant’s Plea to Exclude Plot from Liquidation Estate as it Remained in CD’s Ownership | NCLAT

Case Details: K. Jayant Prabhu v. Pankaj Srivastava - [2023] 156 taxmann.com 351 (NCLAT-Chennai)

Judiciary and Counsel Details

• • M. Venugopal, Judicial Member & Shreesha Merla, Technical Member
  • Sriranga Subbanna, Sr. Adv. & Ms Sumana Naganand, Adv. for the Appellant.
  • Abhishek Anand & Ms Shriraja S., Advs. for the Respondent.

Facts of the Case

In the instant case, the Appellant/homebuyer entered into a sale agreement with corporate debtor for purchase of a plot in schedule ‘A’ property and booked a villa to be constructed on said plot developed by corporate debtor (referred as schedule B property).

Since corporate debtor was delaying completion of pending work in schedule A property, it permitted appellant to take possession of villa and start interior work. Corporate debtor went under liquidation and a liquidator was appointed.

Subsequently, the Appellant filed its claim requesting liquidator to register schedule B property in favour of appellant and to execute said sale deed. Appellant also filed a claim of an amount which was incurred by appellant on unfinished work of schedule A property.

Further, the Claim of appellant for amount incurred was admitted by liquidator but appellant was directed to handover control and custody of schedule B property to liquidator.

Also, the Appellant filed an application before NCLT praying for direction to liquidator to exclude schedule ‘B’ property from liquidation estate of corporate debtor, however, NCLT dismissed the same vide impugned order.

Further, it was noted that neither security interest was created in favour of appellant nor a registered sale deed was executed between appellant and corporate debtor, and only being in possession of an immovable property would not have conferred any ownership right upon a person.

NCLAT Held

Since in instant case, ownership of said property rested with corporate debtor, the NCLAT held that impugned order was free from legal flaws.

List of Cases Reviewed

• • K. Jayant Prabhu v. Pankaj Srivastava [2023] 156 taxmann.com 350 (NCLT – Beng.) (para 40) affirmed [See Annex].

List of Cases Referred to

• • Alok Sharma v. IP Construction (P.) Ltd. [2022] 142 taxmann.com 298 (NCLAT – New Delhi) (para 5)
  • Flat Buyer’s Association Winter Hills-77, Gurgaon v. Umang Realtech (P.) Ltd. [2020] 119 taxmann.com 50 (NCLAT) (para 8)
  • Narayan Das Khettry v. Jatindra Nath Roy Chowdhury 1927 IA 218 (para 11)
  • Dr. K.A. Dhairyawan v. J.R. Thakur AIR 1958 SC 789 (para 12)
  • Narandas Karsondas v. S.A. Kamtam [1977] 3 SCC 247 (para 22)
  • Suraj Lamp & Industries (P.) Ltd. v. State of Haryana [2011] 14 taxmann.com 103/202 Taxman 607/[2012] 340 ITR 1 (SC) (para 23)
  • Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd. [2021] 125 taxmann.com 360/166 SCL 78 (SC) (para 30).