# In the matter of K. Jayant Prabhu vs. Juhi Santani & Ors.

> NCLAT judgment dated 2023-08-28. Citation: TCN-2023-NCLAT-00248. This case involves an appeal against an order by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 28 Aug 2023
- **Citation:** TCN-2023-NCLAT-00248
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/k-jayant-prabhu-vs-juhi-santani-ors-ad613e1c

## Summary

### Background

This case involves an appeal against an order by the National Company Law Tribunal (NCLT), Bengaluru Bench, which dismissed an application filed by the Appellants/Petitioners. The Appellants, who are bona fide home buyers, challenged the NCLT's order dated 25.05.2023, which pertained to IA No. 343 of 2021 in CP (IB) No. 189 / BB / 2018. The NCLT had observed that the applicant has prayed to exclude Schedule B property from the Liquidation Estate of the Corporate Debtor. However, it is pertinent to note that only the assets which is charged as security interest will fall outside the purview of Liquidation proceedings. Section 3 (31) of the IBC defines security interest as right, title or interest or a claim to property, created in favour of, or provided for a secured

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## Facts

Mr. K. Jayant Prabhu and Mrs. Juhi Santani (Appellants/Petitioners) filed an appeal against the order of the National Company Law Tribunal (NCLT), Bengaluru Bench, dated 25.05.2023. The Appellants claimed to be bona fide home buyers of a villa (Plot No. 51 of Schedule A Property) in the 'Samruddhi Lake Drive' project developed by M/s. Samruddhi Realty Limited (Corporate Debtor). They had entered into an Agreement of Sale and Construction Agreement dated 12.07.2011, paid the full sale consideration, and secured possession of the property. However, a registered sale deed was not executed in their favor. The NCLT dismissed their application to exclude the property from the liquidation estate of the Corporate Debtor, stating that no security interest was created in favor

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in dismissing the application to exclude Schedule B …

**Ratio:** Section 3(31) of the I&B Code defines 'Security Interest' as a right, title, or

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**Reasoning:** The NCLAT reasoned that no security interest was created in favor of the Appellants

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**Interpretation:** The interpretation of Section 3(31) emphasizes the necessity of a formal and

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**Application:** In this case, the absence of a registered sale deed meant that the Appellants

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## Parties

- **Judges:** M. Venu…; Shreesha…; +1 more
- **Appellants:** K. Jayant…
- **Respondents:** M/s.Samruddhi…; Pankaj Sriv…

## Timeline

- **2011-07-12 — Agreement of Sale &…**: Appellants entered into an Agreement of Sale and Construction Agreement with the…
- **2016-01-01 — Possession of…**: Appellants took physical possession of the Schedule B property after securing permission…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61(1) — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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