Auction confirmation prior to moratorium vests title in the purchaser; subsequent sale certificate is merely ministerial.

IDFC First Bank (Appellant) sanctioned a loan to a borrower for which the Corporate Debtor (CD) was a guarantor, mortgaging property in which the CD held a 1/6th share.

Following a consent decree and a Recovery Certificate from DRT Mumbai, a public auction was held on 11.10.2023.

The Recovery Officer confirmed the sale in favor of Quest Queen Vista LLP (Auction Purchaser) on 20.11.2023.

Due to an interim stay by the Calcutta High Court regarding only certain floors, the formal issuance of Sale Certificates (ITCP-18/20) was kept in abeyance.

On 01.01.2024, the NCLT admitted a Section 7 IBC application against the CD and declared a moratorium.

After the High Court vacated its stay, the Recovery Officer issued the Sale Certificate on 14.03.2024.

The Resolution Professional (RP) challenged the sale, arguing it violated the moratorium.

The NCLT Kalka Bench allowed the RP's application, declaring the sale null and void as the certificate was issued post-CIRP initiation.

The court applied Section 29 of the Recovery of Debts and Bankruptcy Act, 1993, which incorporates the Second Schedule of the Income Tax Act, 1961.

Rule 63 of the Second Schedule stipulates that when an order confirming the sale is made, the sale becomes "absolute".

The court relied on *B. Arvind Kumar v. Govt. of India*, holding that a sale certificate is merely evidence of title and not the document that creates it.

It further applied *The State of Punjab v. M/s Ferrous Alloy Forgings P. Ltd.*, establishing that title transfers upon confirmation of sale after objections are disposed of.

The court distinguished *Indian Overseas Bank v. M/s. RCM Infrastructure Ltd.*, noting that unlike the SARFAESI Rules where sale completion depends on subsequent payment of the balance price post-moratorium, the present case involved a sale already made absolute under the Income Tax Act rules prior to moratorium.

The Appellate Tribunal found that the Adjudicating Authority (NCLT) erred in fact by stating the confirmation of sale occurred post-CIRP.

The record proved the sale was confirmed on 20.11.2023, while CIRP began on 01.01.2024.

Under Rule 63 of the Second Schedule of the Income Tax Act, the sale became "absolute" on the date of confirmation because the full purchase money had been paid and no applications to set aside the sale were pending.

The NCLAT reasoned that the issuance of the Sale Certificate (ITCP-18 and 20) is a "ministerial act" and a "formal acknowledgement of a fact already accomplished".

Therefore, since the title had already vested in the Auction Purchaser on 20.11.2023, the property was no longer an asset of the Corporate Debtor on 01.01.2024.

Consequently, the Section 14 moratorium could not attach to or freeze a transaction that was already legally complete.

It held that the sale became absolute upon confirmation on 20.11.2023, and the Auction Purchaser derived full title regardless of the Sale Certificate being issued post-moratorium.

The RP's application to restore possession was dismissed, effectively validating the Auction Purchaser's title and possession.