NCLT Dismisses Fortuna Integral Property Sale Enforcement

Case Details

Case Name: IA No. 596 of 2024 in CP (IB) No. 124/BB/2017

Parties: Applicant - M/s Fortuna Integral Projects Private Limited; Respondent - Mr. Shivadutt Bannanje, Liquidator of Fortuna Buildcon (India) Private Limited

Court/Authority: National Company Law Tribunal, Bengaluru Bench

Case/Order No.: IA No. 596 of 2024 in CP (IB) No. 124/BB/2017

Date of Order: 26.05.2026

Period of Violation/Dispute: Agreement of Sale dated 12.03.2019 and Amendment Agreement dated 20.04.2019, executed prior to commencement of CIRP on 09.08.2019

Parties Involved

Petitioner/Applicant: Fortuna Integral Projects Private Limited (Registered office at New No.7, Old No.390, 13th Cross, Sadashivanagar, Bangalore – 560080)

Respondent: Mr. Shivadutt Bannanje, Liquidator of Fortuna Buildcon (India) Private Limited

Corporate Debtor: Fortuna Buildcon India Pvt. Ltd.

Financial Creditor in Main Matter: M/s. Reliance Capital AIF Trustee Company Private Limited

Secured Creditor: Tumkur Grain Merchants Co-operative Bank Limited (TGMC Bank)

Successful Resolution Applicant: M/s Phalada Developers Pvt. Ltd.

Key Officials: Directors of Applicant Company - Mr. Sailesh Kumar Sriramulu and Mr. Rajesh Kumar Sriramulu (who were also directors of Corporate Debtor at relevant time)

Issues / Allegations / Violations

• The Applicant sought enforcement of Agreement of Sale dated 12.03.2019 and Amendment Agreement dated 20.04.2019 for sale of Schedule Property at Rs.8,75,00,000/-, requesting direction to Respondent to receive balance sale consideration of Rs.2,17,91,500/- and execute sale deed.
• The Respondent alleged the transaction was preferential, undervalued, and fraudulent between related parties within look-back period preceding CIRP commencement.
• The Respondent contended the Applicant is a related party and financial creditor of Corporate Debtor with common directors at time of agreement execution.
• The transaction was alleged to be grossly undervalued - Applicant's valuer assessed property at Rs.8.68 crores (14.02.2019) while RP's valuers assessed at Rs.14.47 crores (03.02.2020) and Rs.15.05 crores (04.02.2020).
• The Respondent alleged no substantial consideration was actually received by Corporate Debtor, and entries were merely inter-corporate fund transfers.
• The Applicant made payments to TGMC Bank on 07.03.2020 during CIRP moratorium, which is prohibited under Section 14 of IBC.
• The Respondent filed IA No. 382/2021 under Sections 43, 44, 45 & 49 of IBC seeking to set aside the agreements, which is pending adjudication.

Findings & Observations

• The Tribunal noted that an Agreement of Sale does not confer any right, title or interest over immovable property unless a registered conveyance deed is executed, citing Hon'ble NCLAT in M/s Indo World Infrastructure Pvt. Ltd. v. Mukesh Gupta & Ors.
• The Tribunal observed that payments were made by Applicant during CIRP moratorium, which is illegal under Section 14 of IBC.
• The Tribunal noted TGMC Bank's dubious conduct - receiving money from Applicant during moratorium while also filing claim before RP and receiving amount under approved resolution plan, then issuing discharge slips to both parties.
• The Application was filed in 2024 seeking enforcement of 2019-20 agreements without cogent explanation for time-lag, potentially barred by limitation.
• The discharge deed dated 21.04.2025 executed between TGMC Bank and Corporate Debtor (now owned by SRA) acknowledged satisfaction of all claims against Corporate Debtor.

Penalties / Settlements / Directions

• The Interlocutory Application (IA No. 596 of 2024) was dismissed by the Tribunal.
• No specific monetary penalties were imposed in this order, but the Tribunal noted that actions during moratorium may attract penalties under Section 74 of IBC.
• The Tribunal suggested TGMC Bank needs to be summoned to explain its conduct as a public institution.

Corrective Actions & Future Obligations

• The pending IA No. 382/2021 seeking avoidance/set aside of the impugned sale transactions will continue for adjudication.
• The Schedule Property remains part of the Corporate Debtor's estate under the control of the Resolution Professional/Liquidator.
• The Successful Resolution Applicant (Phalada Developers Pvt. Ltd.) has taken over the Corporate Debtor through the approved resolution plan.

Final Ruling & Enforcement

• The Tribunal dismissed IA No. 596 of 2024 with the observation that an agreement to sell does not confer property rights to the applicant.
• The dismissal means the Applicant cannot seek enforcement or specific performance of the sale agreements through this application.
• The property remains subject to the ongoing insolvency process and the pending avoidance application (IA No. 382/2021).