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2018 Supreme(Del) 789
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J. MEHTA, J.
G. Shanthi – Appellant
Versus
Deepak Chaudhari & Ors. – Respondents
RFA No. 117 of 2018
Decided On : 07-02-2018
For the Appellant :Mr. Raj Shekhar Rao and Mr. Yogesh Raavi, Advocates
For the Respondents: Mr. Amitabh Chaturvedi, Adv., Mr. Prashant Singh, Adv.
Headnote:
Subrogation - Mortgage Rights - Indian Contract Act, 1872, Sections 140, 141 - The court discussed the rights of subrogees in terms of Sections 140 and 141 of the Indian Contract Act, and the issue of territorial jurisdiction for enforcing possession of mortgaged property at Hyderabad.
Fact of the Case:
The suit was filed by the plaintiffs seeking subrogation rights and possession of a mortgaged property at Hyderabad, which was held by the Vijaya Bank. The trial court decreed the suit in favor of the plaintiffs, declaring their rights as subrogees and directing the bank to hand over possession and title deeds of the property.
Finding of the Court:
The court found that the plaintiffs were entitled to the rights of subrogation as per Sections 140 and 141 of the Indian Contract Act. It held that the issue of possession could be enforced through a personal act of obedience and was within the purview of territorial jurisdiction at Delhi.
Issues: The main issue was whether the courts at Delhi had territorial jurisdiction to determine the rights of subrogees and enforce possession of the mortgaged property at Hyderabad.
Ratio Decidendi: The court held that the rights of subrogation and the issue of possession could be adjudicated at Delhi, as possession could be enforced through a personal act of obedience, and it was not necessary for the suit to be filed at the place where the immovable property is situated.
Final Decision: The appeal was dismissed, affirming the trial court's decree in favor of the plaintiffs.
VALMIKI J. MEHTA, J.
Caveat No. 102/2018
Counsel appears for the caveator. Caveat accordingly stands discharged.
CM No. 4689-91/2018(Exemptions)
Exemptions allowed subject to just exceptions. CMs stand disposed of.
RFA No. 117/2018 & CM No. 4688/2018 (stay)
1. This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant no.3 in the suit impugning the judgment of the trial court dated 11.12.2017 by which the trial court has decreed the suit filed by the respondent nos. 1 and 2/plaintiffs thereby subrogating the respondent nos. 1 and 2/plaintiffs in place of the creditor/respondent nos. 3 and 4/defendant nos. 1 and 2/Vijaya Bank, and consequently on account of subrogation the respondent nos. 1 and 2/plaintiffs being given the benefit of stepping into the shoes of the mortgagee of the property mortgaged by the appellant/defendant no.3 with the respondent nos. 3 and 4/defendant nos. 1 and 2/Vijaya Bank. The mortgaged property in dispute is Flat No. 105, D Type, Laasya Block, Poojitha Estates situated as Bahtookhanguda, near ESI Hospital, Hyderabad (hereinafter referred to as 'the Hyderabad property') with respect to which the respondent nos. 1 and 2/plaintiffs have been held to be subrogees in view of Sections 140 and 141 of the Indian Contract Act, 1872 inasmuch as the respondent nos. 1 and 2/plaintiffs have been substituted in place of the mortgagee/Vijaya Bank qua this Hyderabad property (and respondent nos. 1 and 2/plaintiffs are effectively now the mortgagees of this Hyderabad property including the right to possession of the mortgaged property at Hyderabad) on account of respondent nos. 1 and 2/plaintiffs paying the dues of the creditor/Vijaya Bank/mortgagee.
2. The facts of the case are that admittedly the respondent no.5/defendant no.4/company was sanctioned financial limits by the respondent nos. 3 and 4/defendant nos. 1 and 2/Vijaya Bank. Respondent no.5/defendant no.4/company was in the business of trading of pesticides and fungicides and for its buniess took a loan of Rs.1crore on 13.10.2007 from the respondent nos. 3 and 4/Vijaya Bank. Loan was taken from the Hyderabad Branch of the Vijaya Bank and which is the respondent no.4/defendant no.2. Appellant/defendant no.3 was one of the guarantors and who had mortgaged the aforesaid Hyderabad property to Vijaya Bank. Vijaya Bank initiated SARFEASI proceedings against the mortgaged property and took over symbolic possession of the Hyderabad property on 25.5.2010 and actual physical possession on 3.7.2010. To complete the narration I must state that Vijaya Bank was also a mortgagee with respect to the same loan account of the respondent no.5/defendant no.4/company with respect to a property at Delhi, and with which property we are not concerned, and which belongs to the respondent nos. 1 and 2/plaintiffs, inasmuch as the respondent nos. 1 and 2/plaintiffs whereby were the mortgagers and as stated below the dues of the Vijaya Bank were cleared by the respondent nos. 1 and 2/plaintiffs whereby the Delhi property no longer stands charged/mortgaged to Vijaya Bank. As regards the Delhi property it may be noted that pursuant to the proceedings initiated by the Vijaya Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (also known as the SARFAESI Act) legal proceedings took place before the DRT, DRAT and finally before this Court. An agreement was arrived at between the respondent nos. 1 and 2/plaintiffs and the Vijaya Bank whereby the respondent nos. 1 and 2/plaintiffs made a total payment of Rs.127.50 lacs on 19.12.2011 to the Vijaya Bank. This payment was made in terms of the orders dated 21.9.2011 and 16.12.2011 passed by this Court in the proceedings pending in this Court. Once the loan account of the respondent no.5/defendant no.4/company was cleared, and with respect to which mortgagees were created of the Delhi property and the Hyderabad property, t
