Case Note & Summary
Background: The petitioner, a company incorporated under the Companies Act engaged in paper pulp activities, purchased leasehold rights in Plot No. D-40, MIDC Butibori, Nagpur, in an auction conducted by the Liquidator of M/s Varun Sacks Pvt. Ltd., which was in liquidation under the Insolvency and Bankruptcy Code, 2016. The petitioner's bid of Rs.2.36 Crores was the highest and was accepted. After receiving the full amount, the Official Liquidator issued a sale certificate dated 23.08.2022 and handed over possession on the same day. The property originally belonged to the Maharashtra Industrial Development Corporation (MIDC). The petitioner approached MIDC for transfer of the leasehold property in its favour based on the sale certificate. MIDC refused to act on the request, contending that the sale certificate was not registered under Section 17 of the Registration Act, 1908. Aggrieved, the petitioner filed the writ petition seeking a direction to MIDC to transfer the property without insisting on registration. Legal Issues: The core question was whether a sale certificate issued pursuant to an NCLT auction requires compulsory registration under Section 17(1) of the Registration Act, 1908. Arguments: The petitioner argued that Section 17(2)(xii) exempts certificates of sale granted to a purchaser of property sold by public auction by a Civil or Revenue Officer, and that the sale certificate issued by the Liquidator was covered by this exemption. The petitioner also relied on Supreme Court decisions holding that a sale certificate is merely evidence of title and no further deed of transfer is required. MIDC, on the other hand, insisted that the sale certificate needed registration under Section 17 before it could effect transfer. Court's Analysis: The High Court examined Section 17(2)(xii) of the Registration Act, 1908, which provides that nothing in clauses (b) and (c) of sub-section (1) applies to any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer. The court observed that the language of this provision, read with the facts, made it clear that the sale certificate in respect of property purchased by the petitioner in an auction held by NCLT was not subject to Section 17(1). The court also referred to Section 89(4) of the Registration Act, which requires revenue officers granting certificates of sale to send copies to the registering officer for filing in Book No. 1, indicating that mere filing, not registration, is contemplated for such certificates. The court relied on the Supreme Court's decision in State of Punjab v. Ferrous Alloy Forgings P Ltd, [2024 SCC Online SC 3377], which held that a sale certificate issued by an authorised officer is not compulsorily registrable and that mere filing under Section 89(4) is sufficient. The court also cited B. Arvindkumar v. Govt. of India, (2007) 5 SCC 745, where the Supreme Court held that a sale certificate is evidence of title and no further deed of transfer from the court is required. Decision: The court answered the formulated question in the negative, holding that the sale certificate issued by the Liquidator in an NCLT auction was not compulsorily registrable under Section 17(1) of the Registration Act, 1908. Rule was made returnable forthwith and the petition was heard finally. The court held that the exemption under Section 17(2)(xii) applied, and MIDC could not insist on registration of the sale certificate before effecting transfer.
Headnote
A) Registration Law - Compulsory Registration Exemptions - Sale certificate issued by NCLT Liquidator not compulsorily registrable - Registration Act, 1908, Section 17(2)(xii) - The petitioner purchased leasehold rights in an auction conducted by the Liquidator appointed under the Insolvency and Bankruptcy Code, 2016, and obtained a sale certificate dated 23.08.2022 - The court held that Section 17(2)(xii) exempts certificates of sale granted to any purchaser of property sold by public auction by a Civil or Revenue Officer, and the NCLT auction fell within the exemption - Held that provisions of Section 17(1) of the Registration Act, 1908 did not apply to the sale certificate (Paras 4-5). B) Registration Law - Filing of Sale Certificate - Mere filing under Section 89(4) sufficient - Registration Act, 1908, Section 89(4) - The court referred to Section 89 which requires officers granting certificates of sale to send copies to the registering officer for filing in Book No. 1 - The Supreme Court in State of Punjab v. Ferrous Alloy Forgings P Ltd held that sale certificate issued by authorised officer is not compulsorily registrable and mere filing under Section 89(4) is sufficient - Held that no further deed of transfer is required (Paras 6-8).
Issue of Consideration
Whether property purchased under auction held by National Company Law Tribunal (NCLT), sale certificate is required registration under Section 17 of the Registration Act, 1908?
Final Decision
The court answered the formulated question in the negative, holding that the sale certificate issued by the Liquidator in an NCLT auction was not compulsorily registrable under Section 17(1) of the Registration Act, 1908. Rule was made returnable forthwith and the petition was heard finally. The exemption under Section 17(2)(xii) applied.
Law Points
- Sale certificate issued by NCLT Liquidator is not compulsorily registrable under Section 17(1) of Registration Act 1908
- Section 17(2)(xii) exempts certificates of sale granted by public auction by Civil or Revenue Officer
- Mere filing under Section 89(4) sufficient when copy forwarded to registering authority
- Sale certificate is evidence of title and no further deed of transfer required
