Re: Legal opinion regarding transfer the sale proceeds of Tk. 3.00 (three) crore from sundry account to income account.
We refer to your letter dated 07.09.2005 & 13.09.2005 on the above subject.
We have perused the papers/documents referred to us. It appears that Bank 1 has received Tk. 3.00 crore by sale of its 3 (three) floors. However no sale deed is executed due to reluctance of the vendee. The sale proceeds of Tk. 3.00 crore is now kept in the Sundry Account as the audit firm engaged by the Bank raised objection regarding transfer of the money to the Income Account on the ground of non execution & registration of sale deed in favour of the vendee. In such situation two queries have been referred to us. We have perused the queries and our comments are given hereinafter.
Query No. 1
- Whether the Bank has any obligation for registration of the property.
Pursuant to section 54 of the Transfer of Property (Amendment) Act, 2004 sale of the immovable property could only be made by a registered sale deed. The sale deed/document would be compulsorily registrable under section 17 of registration act 1908. Document which compulsorily registrable, if not registered same could not be admit in evidence of any transaction under Registration Act, 1908, nor it would affect any immovable property or confer any right upon the vendee. In this case it appears that Bank made its best endeavor to execute and registration the sale deed but to no effect due to reluctance of the vendee. In such situation we are of the view that the sale is not as per the relevant provisions of the law. It is submitted that Bank as a seller has no any legal obligation for execution and registration of the sale deed.
Query No. 2
- Whether there any legal bar to transfer the sale proceeds to Income Account.
Transfer the sale proceeds from Sundry Account to Income account is the subject matter of Accounting and not the issue of Law. An audit firm performs services involving the auditing or verification of financial transactions, books, accounts or records of financial accounting and related statements. At the time of auditing an audit firm followed International Accounting Standard. In such a situation we are of the view that if the audit firm permits then the Bank transfers the said sale proceeds to its Income Account.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”