Javed Ahmed vs Hdfc Bank Ltd. & Ors

[Arising out of order dated 25.08.2021 in C.P. (IB) No. 1018(ND)/2018 IA/3103/2020 IA/4695/2020 IA/532/2021, IA/1402/2021 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Court-II.)]

IN THE MATTER OF:

Javed Ahmed S/O Sh. Kabir Ahmad, R/O House No. 224, Ward No. 8, Sohna, Tehsil Sohna, District Gurugram, Haryana. ...... Appellant. Versus

1. HDFC Bank Ltd. First Floor, Tower-A, Plot No. 31, Najafgarh Road Industrial Area, Shivaji Marg, Moti Nagar, New Delhi-110015. 2. Mr. Jitesh Gupta Resolution Professional 257, Vardhman City center-II, Near Shakti Nagar Railway Under Bridge, New Delhi-110052. 3. Mr. Rajan Goyal Ex. Director, M/S Homestead Infrastructure Development Privat Limited (Corporate Debtor) House No. 83, Ward No. 7, Mohalla Sogiyan, Kaithal, Haryana-136034. 2

4. Mr. Sunil Kumar Ex. Director, M/S Homestead Infrastructure Development Privat Limited (Corporate Debtor) 2723, Indra Colony, Tehsil Camp, Near Vishnu Mandir, Panipat, Haryana-132103. ....... Respondents.

Present: For Appellant: Mr. Ishpreet Singh, Advocate. For Respondent:- Ms. Gurmeet Bindra, Advocate for HDFC Bank.

JUDGMENT

(21st October, 2022)

Justice Anant Bijay Singh;

The appellant preferred this Appeal being aggrieved and dissatisfied by the

order dated 25.08.2021 passed by the Adjudicating Authority (National

Company Law Tribunal, New Delhi, Court-II) in IA-3103/2020 in Company

Petition No. (IB)-1018(ND)/2018 whereby and whereunder the Adjudicating

Authority directed the Respondent No. 4 under whose possession the vehicle is

at present, is directed to hand over the vehicle i.e. Mercedes Benz GL 350 CDI

EXE, Chassis No. WDC 1668236M007698 Engine No. 64282641701034 with

Registration No. HR26CQ0196 within a week from today to the Resolution

Professional, who is directed to take the possession of the said vehicle, failing

which the Resolution Professional is at liberty to take the legal recourse and the

said IA was disposed off.

2. The facts giving rise to this Appeal are as follows:

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i) The Corporate Debtor - M/s Homestead Infrastructure Development Pvt.

Ltd is a company dealing in the real estate business and in the year 2014, a

Joint Development Agreement (for short JDA) dated 11.07.2014 was executed

and registered vide Vasika No. 1886 dated 11.07.2014 between the Appellant

and the Corporate Debtor. In the said Joint Development Agreement, the

Corporate Debtor had undertaken the development regarding land measuring

138.54 acre of Village Khanpur and Barota, Tehsil Nuh, District Nuh, Haryana.

The terms and condition of the said JDA is binding upon the Appellant as well

as the Corporate Debtor.

ii) Further case is that pursuant to the said Agreement the Corporate Debtor

had handed over a Vehicle i.e. Vehicle bearing no. HR 26 CQ 0196, Mercedes

Benz GL 350 CDI EXE, Chassis No. WDC 1668236M007698 Engine No.

64282641701034, Black Colour, manufacturing date 20.06.2015 to the extent

of Rs. 87,50,000/-. The Corporate Debtor duly executed an Undertaking cum

Agreement dated 28.07.2015 at Nuh, Haryana for the transfer of the said Vehicle.

The terms and conditions of the said Undertaking is binding upon the Corporate

Debtor.

iii) Further case is that as per terms and conditions of the said undertaking,

it was agreed by the Corporate Debtor that it undertakes to pay the balance

finance amount, if any, due against the loan over along with interest and other

charges thereof and it will be the sole liability of the Corporate Debtor to pay all

liabilities. Pursuant to the said agreement the Appellant is regularly using the

said Vehicle as its owner and is in possession of the same till date.

Company Appeal (AT) (Insolvency) No. 763 of 2021 4

iv) In the year 2018, certain disputes have arisen between the Appellant and

other land owners with the Corporate Debtor and the Corporate Debtor had filed

a suit for injunction before the Court of Ld. Civil Judge, Nuh, Haryana. Due to

pendency of the said suit, the Corporate Debtor had not shown any interest in

the transfer of the said Vehicle in favour of the Appellant.

v) Further case is that the Appellant got to know that the Corporate Debtor

had not paid the instalments to the Respondent No. 1 - HDFC Bank and the

Respondent No. 1is claiming back the said Vehicle from the Appellant and in the

meanwhile, the Corporate Debtor has gone into Insolvency Proceedings and as

such, it is not possible to get the said Vehicle transferred in the name of the

Appellant. Thereafter, the Respondent no. 1 had filed an application bearing I.A.

No. 3103 of 2020 in CP (IB) No. 1018(ND) of 2018 before the NCLT under Section

60(5) and 68 of the Insolvency and Bankruptcy Code, 2016 for direction to the

Appellant to handover the said Vehicle to the Respondent No. 2 - Resolution

Professional within the period as directed by the Tribunal and after hearing the

parties impugned order was passed. Hence this Appeal.

Submissions on behalf of the Appellant

3. The Ld. Counsel for the Appellant during the course of argument and in

his memo of Appeal along with written submissions submitted that the

Adjudicating Authority without considering the arguments, submissions and

documents filed by the Appellant has allowed the application of the Respondent

No. 1 and directed the Appellant to handover the possession of the said Vehicle

Company Appeal (AT) (Insolvency) No. 763 of 2021 5

to the Respondent No. 2, which is totally illegal and contrary to the provisions of

law and is against the principles of Natural Justice.

4. It is further submitted that the Appellant is the owner of the Vehicle in

question and has right and title on the same as on the basis of Agreement dated

28.07.2015 which has not been denied by the Respondent No. 3 and 4 at any

point of time. Further submitted that while passing the impugned order the

Adjudicating Authority has failed to consider the judgment passed by the

"Hon'ble Punjab and Haryana High Court in the case of Munni Ram V.

Fakir Chand and ors. reported in MANU/PH/1118/2009" held hereunder:

"5. The sale of motor vehicle is governed by the provisions of the Sale of Goods Act, 1930 (for short "the Goods Act") and not by the Transfer of Property Act, 1882. In Vasantha Viswanathan and others vs. V.K. Elayalwar and others, (2001) 8 SCC 133, Supreme Court has interpreted Section 19 of the Goods Act. It was held that if there is a contract for sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. While considering Section 31 of the Motor Vehicles Act, 1939 (for short "MV Act 1939"), it was held that it prescribes the procedure for entering the factum of transfer in the registration certificate which is an act prosterior to the transfer but the transfer of the vehicle would be governed by the provisions of Section 19 of the Goods Act. Similar is the judgment in Panna Lal vs. Chand Mal and others, AIR 1980 SC 871, when after considering section 31 of the MV Act, 1939, it was held that the statute casts an obligation on the transferee to report to the registering authority concerned regarding the transfer of the vehicle along with a certificate of

Company Appeal (AT) (Insolvency) No. 763 of 2021 6

R.S.A. No. 262 of 2007[3] registration and then get the registration transferred in his name but if the purchaser has not chosen to move the registering authority, he cannot be heard to say that he is entitled for refund of the purchase money or claim damages. It was the duty of the plaintiff to have applied to the registering authority under Section 31 of the MV Act, 1939 and got the registration transferred in his name......

18. From the judgments aforesaid, it transpires that the act of transfer of owner in the registration certificate in terms of Section 31 of the MV Act, 1939 or in terms of Section 50 of the MV Act, 1988 is required to be performed by the transferee. If the transferee does not effect the ownership transferred in the registration certificate in his name, it may liable him for punishment in terms of Section 112 of the MV Act, 1939 and 177 of the MV Act, 1988 but the property in the vehicle will stand transferred in terms of Section 19 of the Goods Act, when it was intended, it being movable property....."

5. It is further submitted that in view of the above law settled by the Punjab

and Haryana High Court, the impugned order is fit to be set aside and the Appeal

be allowed.

Submissions on behalf of the Respondent No. 2 / RP

6. The Ld. Counsel for the Respondent during the course of argument and

relying on his reply affidavit, submitted that the Respondent No. 2 is the

Resolution Professional appointed for the Corporate Debtor vide order dated

14.01.2019 and after going through the records / documents of Corporate

Debtor got to know about the Vehicle bearing no. HR 26 CQ 0196, Mercedes

Company Appeal (AT) (Insolvency) No. 763 of 2021 7

Benz GL 350 CDI EXE, Chassis No. WDC 1668236M007698 Engine No.

64282641701034, registered in the name of Corporate Debtor.

7. It is further submitted that the Respondent No. 2 enquired about the said

vehicle from Respondent No. 3, who informed Respondent No. 2, through email

dated 27.02.2020 that the sail Vehicle is in possession of Appellant Mr. Javed

Ahmed Hussain, S/O Sh. Kabir Ahmed, although, the said vehicle is still

registered in the name of Corporate Debtor.

8. It is further submitted that the said vehicle was purchased by the

Corporate Debtor on 27.07.2015 and the Respondent No. 2 made all efforts to

take possession of the said vehicle, thereafter, moved the application before the

Adjudicating Authority and passed the impugned order, therefore, there is no

illegality in the impugned order. The instant appeal is fit to be dismissed.

Submissions on behalf of the Respondent No. 1 / HDFC Bank

9. The Ld. Counsel for the Respondent No. 1 during the course of argument

and in his reply affidavit along with written submissions submitted that the

Respondent No. 1 supported the facts of the Respondent No. 2. It is an admitted

fact that the subject vehicle bearing no. HR 26 CQ 0196, Mercedes Benz GL 350

CDI EXE, Chassis No. WDC 1668236M007698 Engine No. 64282641701034 is

hypothecated with the HDFC Bank against the auto loan facility of Rs. 69 Lacs

availed by the Corporate Debtor- Homestead Infrastructure Development Pvt.

Ltd. After adjustment of the payments made by the Corporate Debtor to the

Respondent Bank, a sum of Rs. 25,84,123 submitted by the Bank as its claim

Company Appeal (AT) (Insolvency) No. 763 of 2021 8

payable by the Corporate Debtor as on 23.02.2019 which has been admitted by

the Resolution Professional. Therefore, apparently, Respondent Bank has

exclusive charge in the nature of hypothecation over the said vehicle.

10. It is further submitted that as without obtaining No Due Certificate from

the Respondent Bank, which had lien on the aforesaid vehicle, the Appellant

cannot make any claim of purchase of the said vehicle, therefore, the

Adjudicating Authority has rightly passed the impugned order. There is no merit

in the Appeal, the instant Appeal is fit to be dismissed.

FINDINGS

11. After hearing the parties and going through the pleadings made on behalf

of the parties and also in view of the admitted facts that the vehicle in question

was taken on loan granted by HDFC Bank - Respondent No. 1 by Corporate

Debtor - Homestead Infrastructure Development Pvt. Ltd. and said vehicle used

by the Appellant and further taking into fact that the loan amounting of Rs.

25,84,123/- has not been paid and the claim of the Bank - Respondent No. 1

which is admitted by the Resolution Professional - Respondent No. 2, therefore,

the Adjudicating Authority has rightly passed the impugned order.

• Taking all the facts aforenoted, we agree with the reasons given by the

Adjudicating Authority. The impugned order dated 25.08.2021 passed by

the Adjudicating Authority (National Company Law Tribunal, New Delhi,

Court-II) in IA-3103/2020 in Company Petition No. (IB)-1018(ND)/2018 is

hereby affirmed. The instant Appeal is hereby dismissed.

Company Appeal (AT) (Insolvency) No. 763 of 2021 9

12. Registry to upload the Judgment on the website of this Appellate Tribunal

and send the copy of this Judgment to the Adjudicating Authority (National

Company Law Tribunal, New Delhi, Court-II), forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical)

New Delhi 21st October, 2022 Ram Nath.

Company Appeal (AT) (Insolvency) No. 763 of 2021