National Company Law Appellate Tribunal
Manjeera Majestic Commercial Owners ... vs Manjeera Retail Holdings Private ... on 21 April, 2025
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
Comp App(AT)(CH)(Ins) No.406/2024
IA Nos.1105,1106,1107/2024
In the matter of:
Manjeera Majestic Commercial Owners Association
Being represented by its General Secretary
Mr. P. Premananda Reddy
60B, Manjeera Majestic Commercial,
JNTU-Hitech City Road, Kukatpally,
Hyderabad-500072 ...Appellant
V
Manjeera Retail Holdings Private
Limited
with its registered office at:
#711, Manjeera Trinity Corporate,
Beside Manjeera Mall,
JNTU-Hitech City Road, Kukatpally,
Hyderabad- 500072
Represented by its Resolution Professional
Mr. Birendra Kumar Agarwal ...Respondent No. 1
Mr. Birendra Kumar Agrawal
Resolution Professional of Manjeera
Retail Holdings Private Limited
402, Corporate Annexe, Sonawala Lane
Near Udyog Bhavan,
Goregaon East, Mumbai City,
Maharashtra - 400063 ...Respondent No. 2/RP
Present :
For Appellant : Mr. Venkatavaradan for
Mr. Sriram Venkatavarathan &
Ms. Varshini A, Advocates
For Respondent : Mr. VVSN Raju &
Mr. Srikant Rathi, Advocates for R2
Ms. Aishwarya Nandiwada, Advocate
Comp App (AT)(CH)(Ins) No.406 /2024 Page 1 of 24
JUDGMENT
(Hybrid Mode) [Per: Justice Sharad Kumar Sharma, Member (Judicial)] The brief facts of the case are, that the Appellant herein by virtue of invocation of the Appellate Jurisdiction of this Tribunal, under Section 61 of I & B Code, 2016, questions the propriety of the Impugned Order of 04.10.2024, as it was passed by the Ld. NCLT, Hyderabad Bench, in two interlocutory applications, being IA No. 625/2024 and IA 16/2024 as preferred in IA(IBC)(Plan) No. 8/2024 in CP (IB)No. 296/7/2022. As a consequence of the Impugned Order of 04.10.2024, some of the claims, which were raised by the Appellant in the application being IA (IBC)/625/2024, were rejected and consequent to dismissal of IA(IBC)/625/2024, IA No.16/2024 (Intervention) preferred by him was held as infructuous and was disposed accordingly.
2. The brief facts of the interlocutory applications which were preferred before the Ld. Adjudicating Authority, had been that the Appellant "(Manjeera Majestic Commercial Owners Association)", (herein after to be called as the Appellant), being an association of purchasers of unit in Manjeera Majestic Commercial, a building developed by M/s. Manjeera Retail Holding Private Limited, the Corporate Debtor (CD) claims its status to be that of the registered society, which has been said to be registered in accordance to the provisions of the Societies Registration Act, 1860, as Comp App (AT)(CH)(Ins) No.406 /2024 Page 2 of 24 applicable with the Government of Telangana. Consequent to the registration of the Appellant Association, it has been accorded with Registration No. 175/2019, and it is on acquiring that aforesaid legal status, that the Appellant had instituted the aforesaid interlocutory applications preferred under Section 60 (5) of I & B Code, 2016.
3. The facts of the case have been, as the Appellant has contended that the "Manjeera Retail Holdings Private Limited", Respondent No. 1 is the developer and GPA holder of Telangana Housing Board, that it had acquired a land of 15,560 Square Yards of S3 in Survey No. 1051 (P), 1060 (P) situated at Kukatpally Village, Balanagar Mandal, Rangareddy District and that, over the aforesaid land, it has carried out a development project and as a consequence of the completion of the said project, the various commercial units developed therein, have been allotted to the various Applicants, including members of the Appellant Association, that the members of the Appellant are in possession of 199 commercial units (out of a total 206 units) in the project based on agreement, for sale executed by the Corporate Debtor (Respondent No. 1) in their favor and the payment made towards the sale consideration as mentioned in the schedule of such agreements, and the registered sale deeds could not be executed purportedly because dispute between the Corporate Debtor and Telangana Housing Board. It is contended by the Appellant, that subsequently, the Corporate Debtor owing to certain apparent defaults and establishment of an admitted debt was admitted into Comp App (AT)(CH)(Ins) No.406 /2024 Page 3 of 24 the CIRP (Corporate Insolvency Resolution Process) proceedings by the Ld. Adjudicating Authority vide its order of 18.07.2023, and an Interim Resolution Professional (IRP) was appointed.
Subsequent to it, Respondent No. 2 was appointed as Resolution Professional (RP) by the Tribunal's Order dated 14.09.2023, as rendered in IA (IBC) 1481/2023 and he is presently discharging his responsibilities, as a Resolution Professional of Respondent No. 1, the Corporate Debtor.
4. The case of the Appellant before the Ld. Adjudicating Authority was that, the IRP made a public announcement in Form A on 19.07.2023, and invited claims from the creditors of the Corporate Debtor, that in response, the Appellant submitted seven claims with supporting documents on 31.07.2023 that as per IRP's advice it again submitted the claims before the IRP with supporting documents in Form F on 09.09.2023 and that despite several correspondence, the RP on 22.01.2024 partially admitted claim No. 1 relating to corpus fund and did not admit the other claims on grounds that they were never admitted by the Corporate Debtor, and that the act of rejection of its claims by the Resolution Professional is not correct as the Corporate Debtor failed to comply with the obligations which it was to discharge in line with the covenants of the agreements for sale entered into, with each of the buyer members of the Applicant society, and since there was an apparent breach of a contractual obligation referred to, on the basis of the agreement for sale the claims arising thereof should have been admitted. The Comp App (AT)(CH)(Ins) No.406 /2024 Page 4 of 24 Appellant contended that they are entitled for certain respective genuine claims, which remained unsatisfied and which should be paid to them by the Corporate Debtor.
5. The Appellant contended, that despite various opportunities, and several reminders given by them to the Corporate Debtor to provide the services to which they were entitled to, the Corporate Debtor did not provide the services and remit the amount due and therefore it had claimed the same by recording them in Form-F along with the proof of claim which was not considered by the Resolution Professional. The claims thus submitted by the Appellant in Form F is extracted hereunder: -
"i. Pending amount of Corpus Fund Principal along with interest- INR 1,75,83,503/- including the entire corpus fund amount for the entirety of chargeable area i.e., INR 1,66,01,100/- along with interest of INR 9,82,403/-
ii. Reimbursement of GHMC Property Tax paid by the Applicant for the temporary office accommodation provided by the Corporate Debtor- INR 4,47,161/-
iii. Costs of Integrated Building Management System- INR 50,00,000/-
iv. Reimbursement of Salaries paid to housekeeping staff, security staff & electricity charges, replaced fused bulbs etc. regarding B1 Basement parking since June, 2019- INR 10,09,106/-
v. Costs incurred towards installation of Exhaust Pipes for Diesel Generators in the Project- INR 1,84,080/-Comp App (AT)(CH)(Ins) No.406 /2024 Page 5 of 24
vi. Pending permanent accommodation cost to the maintenance office- INR 2,00,00,000/-
vii. Execution of registered sale deeds in favour of the members of the Applicant association."
6. The case of the Appellant was that, in relation to all the claims, which have been extracted herein above, as prayed for, in Form-F, they have filed all the documentary evidence in support thereto and that they have also filed a representation on 31.07.2023 before the Interim Resolution Professional (IRP) and made e-mail communications from time to time for the purposes to substantiate their claim, that according to the e-mail communications made by the Corporate Debtor on 06.11.2023, the claim submitted by the Applicant is said to have been admitted and approved by the Corporate Debtor, and it has to be read in harmony with other multiple e-mail communications, made to the Resolution Professional, which will substantiate, the claims thus raised by the Applicant. However, the Resolution Professional in his e-mail communication of the Corporate Debtor dated 22.01.2024, has only admitted the claim of INR of Rs. 1,23,31,078/-(One Crore twenty-Three Lakh thirty-One Thousand Seventy- Eight only) pertaining to Claim No. 1 of the Corpus Fund, and has denied to admit, the other claims made by the Applicant on the ground that, there was no approval of the same by the Corporate Debtor and has further stated that in respect of Claim No. 7 i.e., execution of registered sale deed on the Comp App (AT)(CH)(Ins) No.406 /2024 Page 6 of 24 basis of the alleged unregistered agreement for sale, the matter can be resolved only when the sale deed is executed in favour of the purchasers qua the members of the Appellants Association as per prevailing laws of execution of deed of conveyance.
7. The copies of such e-mails of the Corporate Debtor, has been filed by the Appellant on record to substantiate the claims raised by it in the IA No. 625/2024, which were not considered for inclusion by the Resolution Professional during the CIRP proceedings and he had submitted before the Ld. Adjudicating Authority that non-consideration of such e-mails, for the purposes of establishment and determination of the liability of the Corporate Debtor to the members of the Appellant's Association, made it necessary to file the application before Ld. Adjudicating Authority.
8. It is seen that the claims raised by the Appellant have their genesis and foundation on the alleged unregistered agreement for sale. It is not in controversy and rather admitted that, the alleged agreement for sale was not a registered document, whereas as per Section 17 of the Registration Act, 1908, the said agreement which seeks to create rights, in relation to an immovable commercial property, ought to have been registered as per the law of Registration Act, 1908. Now the question that would arise for consideration is, as to whether at all, exclusively based upon the unregistered agreement for sale, the claim raised by the Appellant in their claim Comp App (AT)(CH)(Ins) No.406 /2024 Page 7 of 24 application could be permitted to be considered and enforced in a court of law. Each of the claims and particularly Claim No. 1, herein that, is the amount payable towards the Corpus Fund, will have to be examined from the aforesaid point of view.
9. The Appellant has raised a claim of Corpus Fund of INR 1,75,83,503/- (One Crore Seventy-Five Lakh eighty-Three Thousand Five hundred Three only) contending thereof that the amount is to be calculated for the entire chargeable area along with the interest which was due to be payable on it. But however the Resolution Professional has only admitted an amount of INR 1,23,31,078/- (One Crore twenty-Three Lakh thirty-One Thousand Seventy-Eight only) which include the Corpus Fund balance, as on 18.07.2023, being the principal amount of INR 1,16,92,950/- (One Crore Sixteen Lakh Ninety-Two Thousand Nine hundred fifty only) along with the interest of INR 6,38,128/- (Six Lakh thirty-Eight Thousand One hundred twenty-Eight only) payable on it. This is not a disputed fact by either of the parties to their proceedings.
10. The controversy, which would now emerge for consideration is, with regards to other claims. As regards, the claim for the reimbursement of the property tax paid by the Appellant (claim No. 2) for the alleged temporary office accommodation said to have been provided by the Corporate Debtor for the office purpose of the Appellant, no right would accrue in favor of the Comp App (AT)(CH)(Ins) No.406 /2024 Page 8 of 24 Appellant, for the reason being that if the unregistered agreement for sale, which has been placed on record and relied by the Ld. Counsel for the Appellant, before this Appellate Tribunal, as well as before the Ld. Adjudicating Authority is taken into consideration and scrutinized, Ld. Adjudicating Authority did not find any reference to any specific observation which has been made in the said agreement towards parting over the rights over any of the area for the purpose of being utilized, as the office of the appellant society. In the absence of there being any specific observation made in the said agreement for providing space for the office of the appellant society, there arises no legal liability to reimburse the amount paid by the Appellant towards GHMC property tax for the temporary office accommodation.
11. Apart from it, nothing on record has been brought by the appellant to establish that a right was created in favor of the Appellant society by execution of a sale deed for the alleged office space for Appellant society. In fact, the Appellant had attempted to make a plea for the purposes of the remittance of the balance claims, by referring to the unregistered agreement for sale, as though it is a registered document. The agreement for sale, dated 05.08.2010, which is placed on record is not a document which has been registered in the eyes of the law, so as to make it to be read in evidence; for determining of a claim or any right arising from it. The terms of agreement therein reads as under: -
Comp App (AT)(CH)(Ins) No.406 /2024 Page 9 of 24
"6. The PURCHASER shall also deposit a sum of Rs.50/- per sqf amounting to Rs.1,68,100/- (Rupees One Lakh Sixty Eight Thousand One Hundred Only) at the time of taking possession of the SCHEDULE PROPERTY with the DEVELOPER and the same shall form part of Corpus Fund as a deposit of the PURCHASER and the interest accrued on such deposits shall be entitled for the capital expenditure like maintenance of the Building Pipe Lines, External Paintings, Replacement of Motors, Repairs to the Generators etc."
12. The alleged area for the use of office of Appellant is not the scheduled area nor possession is shown to have been handed over after payment to consideration. Thus, there could not be any established Tax liability. Further, if a document which, by law, is required to be registered under the provisions of the Registration Act, 1908, and the same is proved to not have been registered in accordance with law, no legally created right whatsoever would flow to the Appellant from the said document, since it relates to an immovable property having a value of over and above of Rs. 100/- for which the registration has been made mandatory as per Section 17 of the Registration Act, 1908.
13. The provisions contained under Section 17 of the Registration Act, 1908, has classified certain documents, where conferring of a right over an immovable property, over and above value of Rs. 100/- is required to be Comp App (AT)(CH)(Ins) No.406 /2024 Page 10 of 24 mandatorily registered. Section 17 Clause (a) & (b) of Registration Act, 1908 is extracted hereunder: -
"17. Documents of which registration is compulsory. --(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:--
(a) instruments of gift of immovable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;"
14. That being the situation, if the document which is the source of claims of a right, is not registered, which is mandated under Section 17 of the Registration Act, 1908, and the fact of its non-registration is an admitted fact by the Appellant, during the course of argument though pleaded to the contrary in the Memorandum of Appeal, the question would be that as to whether at all, the said document could be read in evidence for the purposes of honouring the claim raised by the Appellant in IA No. 625/2024.
15. Owing to the embargo which is created by Section 49 of the Registration Act, 1908, which provides for, that any document which is mandatorily required to be registered as per law under Section 17 of the Comp App (AT)(CH)(Ins) No.406 /2024 Page 11 of 24 Registration Act, has had to be registered and in the absence of its registration, it cannot be received and read in evidence for any transaction affecting such proper property or conferring such rights unless it is registered. Section 49 is extracted hereunder: -
"49. Effect of non-registration of documents required to be registered.--No document required by section 17 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall--
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
[Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument.]"
16. Accordingly, we are of the view that the claim raised by the Appellant in the application thus preferred for a sum of Rs. 4,47,161/- (Four Lakh forty- Seven Thousand One hundred Sixty one only) payable towards the reimbursement of the property tax as alleged to have been paid by the Applicant based on the unregistered agreement for sale dated 05.10.2010 Comp App (AT)(CH)(Ins) No.406 /2024 Page 12 of 24 would not be sustainable, and that when creation of right and handing of possession is not proved, there cannot be any tax liability.
17. There is yet another logic for not accepting the claim, which has been rightly denied by the impugned order, for the reason being that for the purposes of imposition of a tax liability, which is penal in nature, there has had to be a validly conferred right over an immovable property. The reference of the word "validly conferred right" herein would amount to, that there has had to be a valid execution of a sale deed of conveyance by the seller in favor of the members of the Appellant Association or Appellant itself and until and unless the deed of conveyance/sale deed is crystallized and individually executed in favor of the members of the society or the Appellant itself as society for an office accommodation, it cannot be said that they have derived a valid title over an immovable property where a tax liability could have at all been imposed upon them, which could have been directed to be reimbursed by virtue of a claim in the proceedings under Section 7 of I & B Code, 2016. For the purposes of determination as to what would be sale, we will have to have reference to the provisions contained under Section 54 of the Transfer of Property Act, 1882, which means that the sale is a transfer of ownership in exchange for "price" paid, promised, or part-paid and part-promised. Section 54 of Transfer of Property Act, 1882, is extracted hereunder: -
Comp App (AT)(CH)(Ins) No.406 /2024 Page 13 of 24
"54. "Sale" defined.--"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made.--Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale.--A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
18. It is not the case of the Appellant in its pleadings or at any stage, that at the behest of the unregistered agreement for sale, any sale deed was ever executed after the exchange of sale consideration, which is a mandatory condition as per Section 54 of the Transfer of Property Act, 1882, referred to herein above. The transfer in itself is defined under the Transfer of Property Act, 1882. It would be an exchange of title or a right in favor of the purchaser, upon an exchange of consideration. The term transfer has been Comp App (AT)(CH)(Ins) No.406 /2024 Page 14 of 24 defined under Section 5 of the Transfer Property Act, 1882, the same is extracted hereunder: -
"5. "Transfer of property" defined.--In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, [or to himself] and one or more other living persons; and "to transfer property" is to perform such act.
[In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]"
19. None of the covenants as extracted above stood satisfied so as to bring the alleged unregistered agreement for sale to be read as a sale deed. It cannot be said nor established that there was a valid transfer, which owing to the bar created by Section 49 of the Registration Act, 1908, could be read in evidence for the purposes of remittance of the claim raised by the Appellant on the basis of the agreement for sale, which was an unregistered document for the purposes of Claim No. 2 for reimbursement of the property tax. Thus, the denial of the same by the Ld. Adjudicating Authority by the impugned judgment does not suffer from any legal vices.
20. There is another reason for not to accept the argument extended by the Ld. Counsel for the Appellant, because the alleged unregistered agreement Comp App (AT)(CH)(Ins) No.406 /2024 Page 15 of 24 for sale dated 05.08.2010, had only made reference to the part of the commercial property which has been alleged to have been agreed to be sold to the members of Appellant association, but not to Association itself for office use. However, the agreement for sale ever refers to, a transfer of an a commercial space/unit to be utilized by the appellant society as an office of the society itself. In that eventuality, when according to the case of the Appellant himself, if the so-called allotment of space/unit for the society was not contained in the agreement for sale, there could not have been fastening of any tax liability on the society in the absence of transfer of title, and there could not have been any claim to, for the remittance of the aforesaid amount.
21. The other claims which have been raised by the Appellant, also have their germination from the said unregistered agreement for sale itself. For example, the claim towards the installation of the integrated building management system for which they have claimed a sum of Rs. 63,09,500/- (Sixty-Three Lakh Nine Thousand Five hundred only) and the Claim of Rs. 9,15,447/- (Nine Lakh fifteen Thousand Four hundred forty-Seven only) towards the reimbursement of the amount incurred by the Appellant for maintenance and management of the basement parking projects and other such claims pertaining to the installations of exhaust pipes and diesel generators and damages for non-providing permanent accommodation, cannot become a valid claim to be raised before the Resolution Professional, under the provisions of I & B Code, 2016, during CIRP proceedings as the Comp App (AT)(CH)(Ins) No.406 /2024 Page 16 of 24 very foundation of the claim itself is not based upon a legally sustainable ground. Therefore, the claim thus prayed for, could not have been granted.
22. If the pleadings raised by the Appellant in the Memorandum of Appeal itself are taken into consideration, the fact as reported in the impugned order that, the Appellant, has failed to show that the Corporate Debtor has admitted the claim of the Appellant, is quite justified as a claim under Form-F could only be considered once, it is sustained and substantiated to be due by the documents on record, which was the responsibility casted upon the Appellant to establish the same by filing it before the Resolution Professional/Ld. Adjudicating Authority, as burden to establish the same was casted upon the Appellant, which it has failed to establish.
23. The Ld. Counsel for the Appellant has heavily relied upon, the implication of Regulation 9 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, wherein he has submitted that, the claims are to be accepted based on the documentary evidence subject to its satisfaction to be recorded by the Resolution Professional and subsequently by the Ld. Adjudicating Authority.
24. The contention raised by the Appellant in the instant appeal, that the said aspect was not taken into consideration while rejecting its claims by the impugned order, is not sustainable owing to the findings, which have been Comp App (AT)(CH)(Ins) No.406 /2024 Page 17 of 24 recorded by the Ld. Adjudicating Authority. In order to appreciate further, the arguments which had been extended by the Ld. Counsel for the Appellant, in fact, the Burden of proof to collate the claim by virtue of evidence is a responsibility, which is cast upon the claimant itself who submits Form-F before the Resolution Professional for the verification of the claim by receiving all the claims submitted by the creditors, which is supported by the documents, which are to be submitted in compliance with the provisions contained under Section 18 (b) of I & B Code, 2016. If the regulation itself is taken into consideration, submission of the claim and its establishment is the responsibility of the claimant as per Regulation 7 (1) by submission of admissible proof of claim, by making it as to be part of Form- F submitted in order to establish the existence of a debt due to the Operation Creditor. What is relevant herein is to point out that, the entire basis of the claim did not satisfy the parameters as prescribed under Regulation 7(1) to be read with Regulation 7(2), as they were contrary to the records, which were made available before the Resolution Professional. Hence, the Appellants were not entitled to any amount for which they could claim as defined under Section 3 (6) of the Regulations, where accrual of the right of payment is only subject to when the amount is fixed, undisputed, and legally established to equitable secured debt.
25. The claim raised by the Appellant did not satisfy any of the parameters prescribed in the definition of "debt" as provided under Section 3(11) of the Comp App (AT)(CH)(Ins) No.406 /2024 Page 18 of 24 I & B Code, 2016. Out of the total claim raised, it would not be in controversy, that according to the finding recorded, by the Ld. Adjudicating Authority so far it relates to Claim No. 1, pertaining to the Corpus Fund, the Ld. Adjudicating Authority after considering the books of accounts of the Corporate Debtor had recorded a finding that according to the entries made therein, a sum of Rs. 1,16,92,750/- (One Crore Sixteen Lakh Ninety-Two Thousand Seven hundred fifty only) along with interest Rs. 6,38,328/- (Six Lakh Thirty-Eight Thousand Three hundred twenty-Eight only) totaling to Rs. 1,23,31,078/-(One Crore twenty-Three Lakh thirty-One Thousand Seventy-Eight only) was found to be admitted by the Resolution Professional. And for the aforesaid amount under the head of Corporate Fund, even the Appellant, while arguing the instant appeal, does not raise any question, for the claim of Corpus Fund, which was admitted to the extent of Rs. 1,23,31,078/- (One Crore twenty-Three Lakh thirty-One Thousand Seventy-Eight only), hence we are not required to venture into and record any finding on the said claim.
26. As far as the claim of reimbursement of property taxes, which we have already dealt with above, the Ld. Adjudicating Authority has deduced that the reimbursement of the tax liability Could only be made, under the following points:
i. Subject to a valid execution of a registered agreement for sale, Comp App (AT)(CH)(Ins) No.406 /2024 Page 19 of 24 ii. Subject to subsequent execution of a valid registered sale deed, iii. Subject to handing over of possession of the premises for the purposes for, which it was agreed in the registered agreement for sale.
iv. The liability of a tax would only be levied by the local authorities, only when there is a valid conferment of title and not otherwise.
v. There should have been proof of payment of local taxes as they are statutory dues paid by the occupant, which was not present.
27. The Ld. Adjudicating Authority has rightly observed, that the Resolution Profession has rightly denied the claim the Appellant, as it has failed to place any acknowledgment of having remitted the amount towards the alleged tax, and that in the absence of conferment of title and possession of the so-called premises for the society by the Corporate Debtor for office purposes, the claim raised therein would not be tenable.
28. The Ld. Adjudicating Authority has taken a view that in respect of the claim towards the integrated building management system, being Rs. 63,09,500/- the claim of Rs. 9,15,442/- towards maintenance expense, the claim of Rs. 1,84,080/- towards exhaust pipes and Rs. 2,00,00,000/- for office cost, there cannot be any admission of the same as they are mere Comp App (AT)(CH)(Ins) No.406 /2024 Page 20 of 24 demands made to the Corporate Debtor which was never agreed upon and the Appellants have failed to adduce any evidence.
29. There are two-fold observations which have been made in the impugned order, which do not suffer from any apparent error. According to the Appellant himself, as per the pleading raised by him in the Memorandum of Appeal, as extracted hereunder: -
"The members of the Appellant are in possession of 199 commercial units (out of a total of 206 units) in the Project pursuant to agreement of sales executed by the Corporate Debtor. The Corporate Debtor has handed over the management of Manjeera Majestic Commercial to the Appellant with effect from 22.06.2019. The registered sale deeds could not be executed in favour of the members of the Appellant purportedly because of disputes between the Telangana Housing Board and the Corporate Debtor. The Telangana Housing Board claims that an amount of about 32 crores is due and payable by the Corporate Debtor to it vide letter dated 13.09.2022 addressed by Telanga Housing Board."
30. The appellant admits in para VII (c) of the said memorandum that out of the total 206 units, the allotment has been made with regard to 199 commercial units, and that the registered sale deed, could not be executed in favor of the members of the Appellant society, owing to a certain dispute, raised by Telangana Housing Board. That being the situation when the sale deed itself has not been executed, when the so-called office premises for which the claims was raised was never allotted, when the Appellant has not been able to prove the handing over of possession of the so-called allotment Comp App (AT)(CH)(Ins) No.406 /2024 Page 21 of 24 of the office premises for being utilized for the office of the Society of the Appellant, in the absence of any sale deed having being placed on record without proof of possession, the claim towards the integrated building system was rightly denied because it will not amount to fall to be a "debt due" to be paid by the Corporate Debtor to the Appellant or its members as per the definition of "debt" provided under the I & B Code.
31. Similar would be an answer to the claim raised towards the maintenance expenses; question of maintenance would yet again only accrue, subject to the condition that the Appellant proves that he had a valid title conferred by virtue of a valid sale deed and possession. In the absence of what has been observed above, since the disputed property has not been allotted to the society for being utilized as an official accommodation, there is no question of reimbursement of the maintenance as claimed by way of claim-4, as it will not fall to be due be paid. Similar will be the situation with regards to claim-5 pertaining to the cost of installation of exhaust pipes.
32. Lastly, the claim raised by the Appellant by way of Claim No. 7 runs contrary to the very foundation of other claims filed by the Appellant before the Ld. Adjudicating Authority by way of IA No. 625/2024. As per claim No. 7 the Appellant themselves have prayed for that an appropriate direction may be issued for the purposes of execution of the sale deed, which is an admission of fact, that there is no sale deed so far, conferring any right over Comp App (AT)(CH)(Ins) No.406 /2024 Page 22 of 24 an immovable property. Thus, it becomes a tacit admission made by the Appellant society that, there was no validly executed sale deed in favor of the society and its members. If that be the situation, the other preceding claims except for the claim of corpus fund cannot be admitted, as grant of those claims would have arisen only when there was a valid sale deed executed, without which the debt due cannot be established.
33. The direction for seeking the execution of a sale deed would not fall to be within the ambit of a claim under the proceeding under Section 7 of I & B Code, 2016, for the reason being that,
i) The alleged agreement for sale which was unregistered
ii) The so-called premises of the office of the society of the appellant does not find any reference in the contents of the sale deed itself.
iii) The sale deed being unregistered, no right would accrue to the Appellant.
iv) If at all, they had any right to get the sale deed executed, it will be exclusively a civil dispute, and it cannot be sought for, under I & B Code, 2016, by virtue of raising of a claim by filing IA No. 625/2024.
34. Consequent to the observations made as above on the claims raised by the Appellant in IA(IBC) No. 625/2024, the said application stood dismissed Comp App (AT)(CH)(Ins) No.406 /2024 Page 23 of 24 by the impugned judgment. The consequential effect of the same was that the intervention application being IA No. 16/2024 preferred in IA(IBC)/(Plan)/8/2024 was bound to be dismissed since having not been able to substantiate the claim based on credible material which could have been sustained in the eyes of law.
35. In our view, the application was an ill-conceived attempt of the Appellant to circumvent the correct legal remedy of preference of a suit for specific performance, which owing to the above circumstances would have been otherwise barred by law, in the absence of the agreement for sale, being registered, and in the absence of the so-called property finding a reference in the agreement for sale deed.
36. Owing to the above, the 'appeal' lacks merit, and the same is accordingly 'dismissed'.
[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical) 21/04/2025 SN/MS Comp App (AT)(CH)(Ins) No.406 /2024 Page 24 of 24