Case Details:Saurabh Jhunjhunwala v. Pegasus Assets Reconstruction Company (P.) Ltd. - [2025] 176 taxmann.com 739 (NCLAT- New Delhi)
Judiciary and Counsel Details
- Justice Ashok Bhushan, Chairperson and
- Barun Mitra, Technical Member
- Krishnendu Datta, Abhijit Sinha, Sr. Advs., Ms. Aditi Sharma and Kaushik Banerjee, Advs. for the Appellant.
- Amar Dave, Sr. Adv., Dinkar Singh, Rohit Singh, Gaurav H. Sethi, Bijay Murmuria, Rahul Kapoor, Vipin Jai, Monish Surendran, Rahul Panwar and Vipul Jai, Advs. for the Respondent.
Fact of the Case
- In the instant case, the corporate debtor had obtained financial facilities from Allahabad Bank to purchase a property at Coimbatore, Tamil Nadu. The Bank declared the account of the corporate debtor NPA and assigned its debt to the respondent, the financial creditor, by a registered assignment deed.
The financial creditor filed an application under Section 7 of the IBC against the corporate debtor. The Adjudicating Authority, by the impugned order, admitted the section 7 application.
The appellant suspended director of the corporate debtor filed an appeal contending that assignment agreement was claimed to be executed in Mumbai, Maharashtra and had been registered in Kolkata, which was in contravention of provisions of section 28 of the Registration Act, 1908 as applicable in the State of Tamil Nadu, hence, was void and, therefore, application under section 7 filed by financial creditor on basis of such assignment agreement was not maintainable.
However, as per provisions of section 28 of Registration Act, 1908 as applicable in the State of Tamil Nadu, every document affecting immovable property shall be presented for registration in the office of Sub-Registrar within whose sub-district whole or some portion of property to which such document relates is situated in the State of Tamil Nadu and any document registered outside the State of Tamil Nadu in contravention of provisions of clause (a) shall be deemed to be null and void.
It was noted that the assignment agreement qua immovable property, i.e., land situated in Coimbatore, was void and no right could be claimed by the financial creditor with respect to the said land.
However, there were a large number of other accounts and other financial assets which were dealt in an assignment agreement and, thus, the entire assignment could not be declared as null and void.
NCLAT Held
- The NCLAT held that the assignment deed could be held to be void insofar as creating any mortgage in land situated in Coimbatore, and no rights in said land by virtue of the assignment could be claimed by the financial creditor, but that itself was not sufficient to hold the entire assignment void so as to make the CIRP application not maintainable. Thus, the appeal against the order of the Adjudicating Authority was to be dismissed.
List of Cases Reviewed
- Order of NCLT -Kolkata, in CP No.308/KB/2012, dated 19.03.2024 (para 35) affirmed.
List of Cases Referred to
- Veena Textile Ltd. v. Authorised Officer, IFCI Ltd. (2014) 5 CPC 2009 (para 19),
- Mattapalli Chelamayya v. Mattapalli Venkataratnam (1972) 3 SCC 799 (para24)
- Loramitra Rath v. JM Financial Asset Reconstruction Co. Ltd. [2024] 163 taxmann.com 485 (NCLAT- New Delhi) (para 29).
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