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Uncovering Forged Documents and Resolving Ownership Disputes: A Liquidator’s Challenge in Asset Sale

Sandeep Chitkara

Liquidation

Problem faced: In my case I took control of the CD as Liquidator having a sole FC. Erstwhile management is not cooperating. No documents are made available. As per the records made available by RP and FC, I could find out there is one big vacant plot of land whose title deeds are submitted to the FC for mortgage purpose against loans availed by CD. This plot of land belongs to one other entity of erstwhile management.

 

Here, the erstwhile management as a unique case, submitted, a non-signed, without Board Resolution MOA, of the CD to FC showing its main objective as the takeover of this other entity, a partnership concern, along with all the assets and liabilities. Accordingly, FC took custody of the title deed of the plot of land and entered the same in their records. FC themselves were of the view that MOA submitted to them is forged so Liquidator can’t sell the same.

 

When ROC inspection was done it was found out that the MOA available on the MCA website did not show any main objective clause of taking over this other entity by CD. So, the MOA submitted with FC was a forged document on which the FC relied.

 

So, I as Liquidator was not in a position to sell this plot of land in name of CD. Moreover, I did not get any other record signifying takeover of this other entity by CD. Moreover, I got to know that erstwhile management had vehemently objected to this piece of land being owned by the CD before IRP/RP.

 

How it was resolved?: I pulled out Original application documents from DRT including pleadings, exhibits, replies and rejoinders wherein I could lay my hands on some of the documents showing intention of the erstwhile management to mortgage this plot of land against loans taken by the CD wherein the management had given their consent for the equitable mortgage of this piece of land under the stamp and seal of the CD.

 

Moreover, I got the Title deed register of FC showing entry of the Title deed of this other entity in name of CD only.

 

Finally, I got a firm legal opinion basis the Mortgage letter of the CD, title deed register and mortgage deed of FC and finally MOA submitted by CD, and duly entered in the records of FC. This legal opinion is in my favor to sell this asset as part of CD.

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