Neutral Citation Number 2022/DHC/004936

RFA(COMM) 3/2021

Page 1 of 17

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

Reserved on: November 03, 2022

Pronounced on: November 18, 2022

+

RFA(COMM) 3/2021 & CM APPL. 5875/2021

PUNJAB NATIONAL BANK

.....Appellant

Through:

Mr. Hashmat Nabi with Mr. Mohit

Nagpal, Advocates.

Versus

SUBHASH AGGARWAL & ORS

..... Respondents

Through:

Mr. Nitin Mittal, Advocate.

CORAM:

HON'BLE MR. JUSTICE SURESH KUMAR KAIT

HON'BLE MR. JUSTICE SAURABH BANERJEE

J U D G M E N T

SAURABH BANERJEE, J.

1.

Appellant-bank/original defendant no.1 before the learned Trial Court

has impugned the judgment dated 18.02.2020¹ whereby its application under

Order VII rule 11 of the Code of Civil Procedure, 1908² in a suit for

declaration instituted by respondent nos. 1, 2 and 3/ original plaintiffs³

against the appellant-bank and Union of India/respondent no.4 has been

rejected and a judgment under Order XII rule 6, CPC has been pronounced

against the appellant bank, in favour of the respondents.

2.

Facts before us disclose that one Mr. Ajay Gupta⁴ availed loan after

mortgaging House No. H-208, Ashok Vihar, Phase-I, Delhi-110052⁵ with

1Hereinafter referred as “Impugned Judgement”

2hereinafter referred as “CPC”

3hereinafter collectively referred as “respondents”

4hereinafter collectively referred as “original borrower”

5hereinafter referred as “property”

Digitally Signed

By:BABLOO SHAH

Signing Date:18.11.2022

15:12:29

Signature Not Verified

Neutral Citation Number 2022/DHC/004936

RFA(COMM) 3/2021

Page 2 of 17

the appellant-bank. As the said original borrower defaulted in repaying the

loan, appellant-bank initiated proceedings under Section 13 of the

Securitisation and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002⁶ and after taking possession, issued notice for

public auction. Respondents, vide e-auction dated 15.07.2016 bought the

property for Rs.6,10,05,000/- and deposited 25% of the bid amount

alongwith the TDS of 1% from 15.07.2016 to 17.08.2016. Sale thereof was

confirmed on 25.07.2016 and the balance sale consideration of

Rs.4,50,00,000/- was to be paid within 15 days of the date of confirmation

of sale i.e., by 10.08.2016.

3.

Appellant-bank, Mayur Vihar Branch, after sanctioning loan of

Rs.4,50,00,000/- credited it to respondents on 09.08.2016. Thereafter, a Sale

Certificate was issued in favour of respondents and the possession of the

property was also handed over to them on 11.08.2016 itself. Meanwhile, the

original borrower filed S.A. No. 265/2016 titled as Ajay Gupta vs. PNB

before the Debt Recovery Tribunal-III, Delhi⁷, wherein, though the

appellant-bank was restrained from creating any third-party interest in the

property vide an order dated 08.09.2016 in the presence of learned counsel

for appellant-bank, the DRT was neither apprised about the auction of

property in favour of respondents nor about the issuance of Sale Certificate

dated 09.08.2016 in their favour.

4.

In view thereof, as per appellant-bank, it was unable to proceed for

registration of the Sale Deed of the property in favour of respondents.

However, upon disposal of the aforesaid proceeding before the DRT in its

6 hereinafter referred as “SARFAESI ACT”

7Hereinafter referred as “DRT”

Digitally Signed

By:BABLOO SHAH

Signing Date:18.11.2022

15:12:29

Signature Not Verified

Neutral Citation Number 2022/DHC/004936

RFA(COMM) 3/2021

Page 3 of 17

favour vide order dated 25.05.2017, the appellant-bank revalidated the Sale

Certificate of property on 29.05.2017 and thence also executed a Sale Deed

in favour of respondents on 30.05.2017. Though the respondents deposited

the loan amount of Rs. 4,50,00,000/- from time to time {Rs.2,00,00,000/-

from 12.06.2017 to