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IN THE HIGH COURT OF DELHI AT NEW DELHI
Mini Pushkarna, J.
Ireo Private Limited Others - Appellant
Versus
Vibhor Home Developers Pvt Ltd Others - Respondent
O.M.P.(I) (Comm.) 202/2022 & I.As. 9821/2022, 10814/2022
Decided On : 26-07-2022
The court held that the petitioner has made out a prima facie case and has proved balance of convenience in its favor. The petitioner has been able to prove that it is likely to incur irretrievable injury, if the possession of the property in question, which is with the petitioners, is not secured by this Court. In these circumstances the court deemed it appropriate to issue interim orders under Section 9 of the Act thereby directing the respondent Nos. 1 and 2 to maintain status quo as on today with respect to the possession, nature and character of the lands admeasuring 5.70 acres, situated in Village Behrampur, Sector 59, Tehsil Sohna, District Gurugram as described in Schedule I of the MoU dated 14.07.2021.
Fact of the Case:
The petitioner had defaulted in repayment of the loan dues and thus, a loan recall notice dated 26.11.2018 was served upon the petitioners. Consequently, the loan account of the petitioner was classified NPA on 30.04.2019. A sale notice dated 20.05.2020 was issued by PNB Housing Finance Limited. As per the said notice, the sale of the secured assets through public e-auction was held on 09.06.2020. Respondent No. 1 was declared as a successful bidder having bid for the said property at a price of Rs. 28.10 crores. Thereafter, a sale certificate dated 31.08.2020 was issued in favour of respondent No. 1. Subsequently, petitioner filed an application under Section 17 of 'The Securitization and Reconstruction of Financial Assets and Enforcement Of Security Interest Act, 2002:' (hereinafter referred to as 'SARFAESI Act'), 2002 challenging the said auction and the sale proceedings, by way of an application bearing SA No. 75/2020 before Debt Recovery Tribunal (hereinafter referred to as 'DRT'). The said application, before the DRT was filed on the ground that the property had been hugely undervalued and that the valuation was done for a total area of 5.64 acres, whereas the total area mortgaged as per the loan documents was 5.70 acres. The DRT vide its order dated 17.09.2020 allowed the application of the petitioner herein and set aside the auction while issuing directions for conducting a fresh auction in relation to the said property. Against the order dated 17.09.2020 passed by the DRT, PNB Housing Finance Limited filed two appeals: Appeal No. 126/2020 and Appeal No. 56/2021, before Debt Recovery Appellate Tribunal, Delhi (hereinafter referred to as 'DRAT'). In the meanwhile, a settlement was entered into between the petitioners, along with land owning companies and respondent No. 1, which culminated in Settlement Deed dated 01.12.2020. The parties decided to amicably settle the matter in terms of the said Settlement Deed dated 01.12.2020. Attention of this Court was drawn to the following clauses of the Settlement Deed dated 01.12.2020: '2 (v) that VIBHOR hereby irrevocable and absolutely undertakes shall it neither pursue the matter of auction purchase, nor file any appeal/writ petition or take/initiate any legal proceedings or other action to challenge the quashing of the actual proceedings or the said Order, any time in future, ever;'
Finding of the Court:
The court held that the MoU dated 14.07.2021 is not enforceable. It is contended that the MoU envisages a collaboration agreement to be entered. Thus, MoU dated 14.07.2021 is not a collaboration agreement, but an agreement to enter into a collaboration agreement. The MoU dated 14.07.2021 is in the nature of an agreement to enter into an agreement on future terms. Agreement to enter into a future agreement is never specifically enforceable and is barred by provisions of The Specific Relief Act, 1963.
Issues: Whether the petitioner has made out a prima facie case and has proved balance of convenience in its favor. Whether the MoU dated 14.07.2021 is enforceable.
Ratio Decidendi: The court held that in a contract for sale of immovable property, normally it is presumed that time is not the essence of the contract. Even if there is an express stipulation to that effect, the said presumption can be rebutted. The court also held that in a Section 9 petition, this Court is required to assess and decide which would be the most just and convenient route so as to prevent the ends of justice from being defeated. The intention behind Section 9 of the Act is preservation of the subject matter of an arbitration agreement. The scope of Section 9 of the Act is very broad and the court is empowered to grant various interim measures for preservation of the property, subject matter of dispute.
Final Decision: The court allowed the petition and directed the respondent Nos. 1 and 2 to maintain status quo as on today with respect to the possession, nature and character of the lands admeasuring 5.70 acres, situated in Village Behrampur, Sector 59, Tehsil Sohna, District Gurugram as described in Schedule I of the MoU dated 14.07.2021. The court also directed the petitioners to deposit the amount of Rs. 43,50,00,000/- (Rupees Forty Three Crores Fifty Lacs Only) with the Registrar General of this Court within 3 days and the respondent No. 1 shall have the liberty to move appropriate application for release of the said amount it its favour.
JUDGMENT
Mini Pushkarna, J. (Oral) -
I.A. 10814/2022
1. This is an application on behalf of the petitioners seeking urgent directions praying for stay of operation of the notice dated 12.07.2022 issued by Duty Magistrate, Tehsildar, Wazirabad, Gurugram, Haryana under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter, referred to as SARFAESI Act). By way of the said notice dated 12.07.2022, it has been informed to the petitioners that the possession of the land admeasuring 5.70 acres situated in Village Behrampur, Sector 59, Tehsil Sohna, District Gurugram, currently in possession with the petitioners, shall be taken on 27.07.2022 with the assistance of police force.
2. On behalf of the respondents, it has been argued that this Court will not have jurisdiction under the SARFAESI Act to deal with the notice issued by the Duty Magistrate, Gurugram under Section 14 of the SARFAESI Act. Attention of this Court was drawn to Section 17 of the SARFAESI Act to contend that the remedy of the petitioners will lie by filing an appeal before the Debts Recovery Tribunal (DRT) in terms of Section 17 of the SARFAESI Act.
3. Ld. Senior Counsel for the respondent also relied upon the judgment of the Hon'ble Supreme Court in the case of Kanaiyalal Lalchand Sachdev and Ors. Vs. State of Maharashtra and Ors., (2011) 2 SCC 782, to contend that the efficacious remedy of the petitioners herein would be an appeal before the DRT under Sections 13(4)/Section 14 of the SARFAESI Act.
4. On the other hand, on behalf of the petitioners, it was contended that the notice dated 12.07.2022 issued by the Duty Magistrate, Gurugram was without any authority, as it is the respondents who have approached the said authorities, and not the PNB Housing Finance Limited, which is the lender in the present case.
5. I have given my thoughtful consideration and I am in agreement with ld. Senior Counsel for the respondents that the present application filed before this Court is not maintainable. In view thereof, the present application is dismissed thereby holding that this Court does not have jurisdiction to adjudicate on the notice dated 12.07.2022 issued by the Duty Magistrate, Gurugram under the SARFAESI Act.
6. The present application is dismissed accordingly.
O.M.P.(I) (COMM.) 202/2022
7. The instant petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996. By way of the present petition, the petitioner is seeking measures of interim protection with respect to land in question, pursuant to/ in furtherance of the Memorandum of Understanding dated 14.07.2021 between the parties.
8. Facts of the case material for the present petition are that land measuring about 5.70 acres, Village Behrampur, Sector 59, Tehsil Sohna, District Gurugram, along with another parcel of land i.e. 25.8 acres in Sector 58, Gurugram, which was owned by the petitioners, was mortgaged to PNB Housing Finance Limited. Pursuant thereto, a Corporate Term Loan of Rs. 225 crores was sanctioned vide sanction letter dated 19.12.2017. Out of the said amount, only Rs. 150 crores was disbursed.
9. The petitioner defaulted in repayment of the loan dues and thus, a loan recall notice dated 26.11.2018 was served upon the petitioners. Consequently, the loan account of the petitioner was classified NPA on 30.04.2019.
10. A sale notice dated 20.05.2020 was issued by PNB Housing Finance Limited. As per the said notice, the sale of the secured assets through public e-auction was held on 09.06.2020. Respondent No. 1 was declared as a successful bidder having bid for the said property at a price of Rs. 28.10 crores. Thereafter, a sale certificate dated 31.08.2020 was issued in favour of respondent No. 1.
11. Subsequently, petitioner filed an application under Section 17 of 'The Securitization and Reconstruction of Financial Assets and Enforcement Of Security Interest Act, 2002:' (hereinafter referred to as 'SARFAESI Act'),
In a contract for sale of immovable property, normally it is presumed that time is not the essence of the contract. Even if there is an express stipulation to that effect, the said presumption can be....
The jurisdiction over SARFAESI Act matters lies with the DRT, and severable agreements may allow enforcement of valid clauses while rendering others unenforceable.
Specific performance of a determinable agreement cannot be enforced under the Specific Relief Act, emphasizing the need for timely compliance with contract terms.
The court upheld the specific performance of the Joint Venture Agreement and granted interim measures under Section 17 of the Arbitration and Conciliation Act to prevent the appellant from disrupting....
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