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2016 Supreme(Del) 2144
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG & MUKTA GUPTA, JJ.
RAJ KUMAR VIJ – Petitioner
Versus
KOTAK MAHINDRA BANK & ORS. – Respondents
WP (C) 6881/2014
Decided On : 30-05-2016
Ms. Kanika Agnihotri, Mr. Vaibhav Agnihotri and Mr. Ravneet Kaur, Advocates.
Ms. Pratiti Rungta, Advocate for R-1.
Mr. Mukesh M. Goel, Advocate for R-2.
The court established that a person claiming a right under an agreement to sell would have sufficient interest to be identified and protected by the Recovery Officer, and should be treated at par with other owners in similar situations.
Headnote:
Mortgage - Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Section 25, 29, 30 - Second Schedule of the Income Tax Act, 1961 - Rule 4, 11
Fact of the Case:
The case involved a dispute over the ownership and mortgage of a property, with multiple parties claiming rights over different parts of the property. The petitioner sought to redeem the basement of the property, which was subject to a mortgage and auction proceedings.
Finding of the Court:
The court found that the petitioner had a protectable interest in the property and should be put at par with the owners of the floors above the basement. The court set aside the impugned order and restored the order passed by the Debts Recovery Tribunal, directing the petitioner to comply with the said order within 30 days.
Issues: Dispute over ownership and mortgage of property, rights of the petitioner in redeeming the basement, interpretation of relevant sections of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and Second Schedule of the Income Tax Act, 1961.
Ratio Decidendi: The court held that the petitioner had a protectable interest in the property and should be treated at par with other owners. The court also referenced its previous decision in a similar case to support its reasoning.
Final Decision: The impugned order was set aside, and the order passed by the Debts Recovery Tribunal was restored, directing the petitioner to comply with the said order within 30 days. The respondent No.2 was to be refunded the money deposited by him and entitled interest as per the order passed by the Debts Recovery Tribunal.
PRADEEP NANDRAJOG, J.
1. We must begin with an apology for recording the facts which may be a little blurred or slurred but we cannot be faulted inasmuch as the impugned orders passed are sketchy and so are the pleadings. We find traces of relevant facts scattered here and there, but sufficient to be picked up for a decision and not a remand. One Champa Bhen Kundia and her son Chandu Bhai appear to be scamsters of the first order. The mother was the owner of the perpetual lease-hold rights in property bearing Municipal No.2/22, Old Rajinder Nagar and on 28/29.04.2000 she executed a general power of attorney in favour of her son authorizing him to sell the building constructed on the plot and on June 16, 2001 she created an equitable mortgage by deposit of title deed of the property availing a loan in sum of Rs. 13,00,000/- from M/s.Associated Finance Pvt. Ltd., a debt which was assigned to Kotak Mahindra Bank Ltd. But in between the basement was sold by her through her son to one Satnam Singh who in turn, under an agreement to sell dated April 23, 2001, receiving full sale consideration from the writ petitioner, handed over possession of the basement to the petitioner. Other floors were like-wise sold.
2. It is apparent that before the equitable mortgage was created, possession of the basement under an agreement to sell had already been transferred first to Satnam Singh and then to the petitioner.
3. The ground, first, second and third floor were likewise sold to different parties, with whom we are not concerned in the writ petition but would have a relevance for the factual narratives required to decide the instant writ petition.
4. The loan went in default. Debt being assigned to Kotak Mahindra Bank, it proceeded to auction the entire property. And here the facts are blurred. What exactly happened is not known, in that, who purchased what part of the property, but as regards the basement, the respondent No.2 purchased the same.
5. A securitization application under Section 17 of SARFAESI appears to have been filed in which some orders appear to have been passed to the effect that if the respective owners of the basement and the four floors above paid Rs. 2,50,000/- to the bank, the sales would be set aside and pursuant thereto except for the petitioner the others paid Rs. 2,50,000/- and if we may use the expression, redeemed the four floors. Thus, the dispute persists qua the basement.
6. The basement was purchased by respondent No.2 after learned DRT had passed an order directing as above in paragraph 5.
7. Vide order dated August 30, 2012 the learned DRT directed that the petitioner can redeem the basement and as regards the respondent No.2, Debts Recovery Tribunal held that the petitioner would in addition pay 9% simple interest on the sum deposited by the respondent No.2, which amount was to be returned to him and recompense through the interest to be deposited by the petitioner.
8. Said order, on an appeal filed by respondent No.2, has been set aside by learned DRAT vide impugned order dated September 03, 2014.
9. The position as of today is that whereas the purchasers of the four floor above the basement, upon paying proportionately to the bank the debt due, have redeemed their respective floor and the auction purchasers of said floors are not further litigating, the dispute persists qua the basement and it embraces the petitioner and the auction purchaser : respondent No.2. Of course, the bank is also inter-twined.
10. Vide impugned order dated September 03, 2014, learned DRAT has held that no right vests under an agreement to sell in favour of any party and thus the order passed by learned DRT has been set aside. Sale of the basement in favour of respondent No.2 has been affirmed.
11. Now, Section 25 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, reads as under:-
25. Modes of recovery of debts.-- The Recovery Officer shall, on receipt of the copy of the certificate under sub-se
