2020 Supreme(Del) 398

IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
Praleen Chopra - Plaintiff
Versus
Honey Bhagat & Ors. - Defendants
CS(OS) 190 of 2018, IA No.5709 of 2018(u/O.XXXIX R-1&2 CPC), IA No.13603 of 2019 (u/O.VI R-17 CPC) & IA No.13604 of 2019 (for condonation of delay of 88 days in refilling IA No.13603 of 2019)
Decided On : 23-03-2020

A plaintiff who executes a sale deed in favour of defendants, thereby entitling any person dealing with the defendants on the basis of the said sale deed to believe that the defendants were absolute owners of the property and entitled to deal with the same without any claim or interference from the plaintiff, is estopped from challenging the title of defendants to the property. The plaintiff is not entitled to void the sale deed for the reason of entire agreed consideration having not been paid but is only entitled to recover the balance consideration from the defendants.

Headnote:

SALE DEED - ABSOLUTE TRANSFER - BALANCE SALE CONSIDERATION - CHARGE ON PROPERTY - JURISDICTION - DEBTS RECOVERY TRIBUNAL - SECTION 17 OF THE SARFAESI ACT - CIVIL COURT - NO JURISDICTION - SUIT DISMISSED.

Fact of the Case:

Plaintiff instituted a suit against five defendants for declaration as null, void and non-est of Sale Deed dated 25th May, 2016 executed by defendants no. 1 to 3 in favour of defendant no.5 with respect to third floor of the North side portion of property No.47 North Avenue Road, Punjabi Bagh, New Delhi; for cancellation of the said Sale Deed; recovery of vacant, peaceful and physical possession of the said property; permanent injunction restraining defendants no. 1 to 5 from dealing with the property; mandatory injunction directing defendant no.5 to deliver vacant, peaceful and physical possession of the property to the plaintiff; and, recovery of mesne profits.

Finding of the Court:

The suit was dismissed as not maintainable. The plaintiff, by executing the sale deed in favour of defendants no.1 to 3, with the language as reproduced above, entitled any person dealing with the defendants no.1 to 3 on the basis of the said sale deed to believe that the defendants no.1 to 3 were absolute owners of the property and entitled to deal with the same without any claim or interference from the plaintiff. The plaintiff, after having so led the defendants no.4&5 into dealing with the defendants no.1 to 3, is estopped from challenging the title of defendants no.1 to 3 to the property, thereby pulling the rug from under the feet of defendant no.4 and particularly defendant no.5. The plaintiff is not entitled to void the sale deed for the reason of entire agreed consideration having not been paid but is only entitled to recover the balance consideration from the defendants no.1 to 3, as also from any transferee without consideration from defendants no.1 to 3, as well as from any transferee from the defendants no.1 to 3 with notice of non-payment. The plaintiff, in the plaint itself admits having been informed by the defendants no.1 to 3 that the defendant no.3 had applied for and availed of a housing loan from defendant no.4, a Financial Institution, and that the defendant no.4 had sanctioned a housing loan for Rs.4,54,99,809/-. The plaintiff, knowing the said fact, executed and registered the Sale Deed for Rs.4,50,00,000/- in favour of defendants no.1 to 3. The plaintiff thus knew that the property so sold by him would be mortgaged with a Financial Institution i.e. the defendant no.4, on the basis of Sale Deed executed by plaintiff in favour of defendants no.1 to 3 and that the defendant no.4 would extend loan to the defendant no.3 on the basis of the said Sale Deed. The plaintiff thus is presumed to know that in the event of the defendants no.1 to 3 not repaying the dues of defendant no.4, the defendant no.4, in exercise of powers vested in it under the SARFAESI Act, would be entitled to take possession of the property. The plaintiff thus stood estopped from obstructing the defendant no.4 from enforcing its security interest under the SARFAESI Act. Moreover, even if the plaintiff was aggrieved from the measures taken by the defendant no.4 with respect to the property, including under Section 13(4) of the SARFAESI Act, the remedy of the plaintiff there against was / is before Debts Recovery Tribunal (DRT), under Section 17 of the SARFAESI Act and the powers of the Tribunal under Section 17(3) are wide enough to grant the relief’s as claimed by the plaintiff herein. Vide Section 34 of the SARFAESI Act, the jurisdiction of this Court to entertain any suit in respect of any matter which the Tribunal is empowered to determine, is barred.

Issues: None

Ratio Decidendi: The plaintiff, by executing the sale deed in favour of defendants no.1 to 3, with the language as reproduced above, entitled any person dealing with the defendants no.1 to 3 on the basis of the said sale deed to believe that the defendants no.1 to 3 were absolute owners of the property and entitled to deal with the same without any claim or interference from the plaintiff. The plaintiff, after having so led the defendants no.4&5 into dealing with the defendants no.1 to 3, is estopped from challenging the title of defendants no.1 to 3 to the property, thereby pulling the rug from under the feet of defendant no.4 and particularly defendant no.5. The plaintiff is not entitled to void the sale deed for the reason of entire agreed consideration having not been paid but is only entitled to recover the balance consideration from the defendants no.1 to 3, as also from any transferee without consideration from defendants no.1 to 3, as well as from any transferee from the defendants no.1 to 3 with notice of non-payment. The plaintiff, in the plaint itself admits having been informed by the defendants no.1 to 3 that the defendant no.3 had applied for and availed of a housing loan from defendant no.4, a Financial Institution, and that the defendant no.4 had sanctioned a housing loan for Rs.4,54,99,809/-. The plaintiff, knowing the said fact, executed and registered the Sale Deed for Rs.4,50,00,000/- in favour of defendants no.1 to 3. The plaintiff thus knew that the property so sold by him would be mortgaged with a Financial Institution i.e. the defendant no.4, on the basis of Sale Deed executed by plaintiff in favour of defendants no.1 to 3 and that the defendant no.4 would extend loan to the defendant no.3 on the basis of the said Sale Deed. The plaintiff thus is presumed to know that in the event of the defendants no.1 to 3 not repaying the dues of defendant no.4, the defendant no.4, in exercise of powers vested in it under the SARFAESI Act, would be entitled to take possession of the property. The plaintiff thus stood estopped from obstructing the defendant no.4 from enforcing its security interest under the SARFAESI Act. Moreover, even if the plaintiff was aggrieved from the measures taken by the defendant no.4 with respect to the property, including under Section 13(4) of the SARFAESI Act, the remedy of the plaintiff there against was / is before Debts Recovery Tribunal (DRT), under Section 17 of the SARFAESI Act and the powers of the Tribunal under Section 17(3) are wide enough to grant the relief’s as claimed by the plaintiff herein. Vide Section 34 of the SARFAESI Act, the jurisdiction of this Court to entertain any suit in respect of any matter which the Tribunal is empowered to determine, is barred.

Final Decision: Suit dismissed.