NCLT Can Direct Legal Heirs & Power Of Attorney Holders To Execute Sale Deeds To Perfect Title Of Corporate Debtor's Asset: NCLAT

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the adjudicating authority can direct the legal heirs and the power of attorney holders to execute the sale deeds to perfect the title of the corporate debtor's asset under section 60(5) of the IBC, 2016. The appeal was filed against the order passed by the NCLT Chandigarh. The adjudicating authority ordered the legal heirs and the person holding the power of attorney of the original land seller to sign the sale deed for the Successful Resolution Applicant (SRA). Brief Background of the Case Late Babu Lal and his sons executed an agreement to sell and power of attorney to transfer some agricultural land to an entity, which later assigned its right to the corporate debtor (Educomp Infrastructure). Later on, the corporate debtor went into CIRP, and the SRA discovered that the formal sale deeds had not been executed by the appellants. Therefore, the SRA approached the NCLT u/s 60(5) of the IBC seeking execution of the sale deeds, and the NCLT admitted the application. Hence, the present appeal was preferred by the legal heir of the late Babu Lal. Contention of the Appellant The appellant contended that he was not impleaded as a party by the NCLT, which violates the principles of natural justice. Also, upon the death of Mr. Babu Lal, the power of attorney became void by virtue of section 201 of the Contract Act. Further, it argued that the unregistered agreement to sell and deed of assignment prevent transfer of ownership under the Registration Act, 1908. For its submission, it relied on the ruling of Suraj Lamps v. State of Haryana (2021) 1 SCC 656. It also submitted that the NCLT lacked jurisdiction to direct the specific performance of the matter reserved for the civil courts. It also took the plea of limitation. Observations of the NCLAT The tribunal observed that the consideration was paid to the sellers and possession was transferred to the corporate debtor; therefore, it gives the right, entitlement, and interest to the corporate debtor in the concerned land. Further, the bench observed that the power of attorney was executed after payment of full consideration and remained valid as forming part of the commercial transaction. Thus, the same cannot be revoked by reason of the death of Mr. Babu Lal. Considering the contention of the appellant with regard to the validity of the agreement to sell and the assignment deed, the bench observed that the ruling of Suraj Lamp (Supra) can be applied only prospectively. Furthermore, the bench discussed the ruling of Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209 and reiterated that u/s 60(5), the NCLT may determine the disputes arising from or related to the insolvency process. Therefore, the adjudication on the execution of the sale deed was within its jurisdiction, as it was necessary for the implementation of the resolution plan. Lastly, the bench directed the legal heirs to execute the sale deed within 30 days in favor of the corporate debtor/SRA. Case Name: Late Babu Lal Through its legal heir, Mr. Sunder Lal v. Jasrati Education Solution Limited and Anr. Case No.: Company Appeal (AT) (Insolvency) No. 1293 of 2025 Coram: Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical) Judgment Date: 15.10.2025 Click Here To Read/Download The Order

NCLT Can Direct Legal Heirs & Power Of Attorney Holders To Execute Sale Deeds To Perfect Title Of Corporate Debtor's Asset: NCLAT

Mohd.Rehan Ali

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