In Brief
J.K. Jute Mills Company, a sick industrial company under BIFR supervision, executed a conveyance deed in April 2013 transferring its Katihar property to a third party. The Supreme Court issued a restraint order on 8 May 2014 prohibiting disposal of capital assets without Court permission. However, the deed was registered on 2 July 2014, after the restraint order. The Court held that although the deed was executed before the restraint order, transfer of immovable property is only effective upon registration under Section 54 of the Transfer of Property Act. Therefore, the Company and its Directors violated the restraint order. The transferee was not a party to proceedings and unaware of the order, so was not liable. The Court imposed fines on the Company and certain Directors rather than invalidating the transfer, which had been delegated to BIFR for reconsideration.</summary_100>
The lawyer headnote and full judgment text are available to registered users.