Possession; Rajinder Kumar Malhotra Vs. Indian Bank [Delhi High Court, 13-05-2016]

Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 19 – Possession – Question of law concerning the power of the Recovery Officer, while executing orders passed by the Debts Recovery Tribunal under the Act wherein the bank or a financial institution has obtained a right to recover the debt, as determined by the Debts Recovery Tribunal from the borrower and the guarantors, to proceed against a property held to be mortgaged with the bank or the financial institution to which objections are filed by third parties, claiming an interest in the property.

Possession


IN THE HIGH COURT OF DELHI AT NEW DELHI

CORAM: HON’BLE MR. JUSTICE PRADEEP NANDRAJOG & HON’BLE MS. JUSTICE MUKTA GUPTA

May 13, 2016

W.P.(C) 4505/2015 SWARAJ KISHORE ARORA ….. Petitioner Represented by: Mr.Sanjiv Kakra, Advocate with Mr.Amrendra Kr.Singh and Mr.Bheem Sain Jain, Advocates for the objector versus INDIAN BANK AND ORS. ….. Respondents Represented by: Mr.P.S.Narasimha, ASG (Amicus Curiae) instructed by Mr.Arshid Anand and Mr.Irom Denning, Advocates Mr.Rakesh Tiku, Sr.Advocate instructed by Ms.Seema Gupta, Advocate for R-1 Mr.Anil K.Khaware, Advocate with Mr.Abhinav Mishra, Advocate for auction purchaser

W.P.(C) 4538/2015 RAJINDER KUMAR MALHOTRA ….. Petitioner Represented by: Mr.Aditya Vikram, Advocate with Mr.Hari Narayan Takkar, Advocate versus INDIAN BANK & ORS ….. Respondents Represented by: Mr.Rakesh Tiku, Sr.Advocate instructed by Ms.Seema Gupta, WP(C) No.4505/2015 & conn.matters Page 1 of 50 Advocate for R-1 Mr.Anil K.Khaware, Advocate with Mr.Abhinav Mishra, Advocate for auction purchaser

W.P.(C) 7993/2015 SUSHMA PARDEL ….. Petitioner Represented by: Mr.Sanjeev Bhandari, Advocate versus INDIAN BANK AND ANR. ….. Respondents Represented by: Mr.Rakesh Tiku, Sr.Advocate instructed by Ms.Seema Gupta, Advocate for R-1 Mr.Anil K.Khaware, Advocate with Mr.Abhinav Mishra, Advocate for auction purchaser

W.P.(C) 4619/2015 PREM AHUJA ….. Petitioner Represented by: Mr.Sanjeev Bhandari, Advocate versus INDIAN BANK AND ORS. ….. Respondents Represented by: Mr.Rakesh Tiku, Sr.Advocate instructed by Ms.Seema Gupta, Advocate for R-1 Mr.Anil K.Khaware, Advocate with Mr.Abhinav Mishra, Advocate for auction purchaser

 PRADEEP NANDRAJOG, J.

1. A common question of law concerning the power of the Recovery Officer, while executing orders passed by the Debts Recovery Tribunal under

Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993

(hereinafter referred to as the Act) wherein the bank or a financial institution has obtained a right to recover the debt, as determined by the Debts Recovery Tribunal from the borrower and the guarantors, to proceed against a property held to be mortgaged with the bank or the financial institution to which objections are filed by third parties, claiming an interest in the property, arise for consideration in the above captioned writ petitions and therefore though the factual matrix of the four writ petitions are slightly different they are being decided by a singular order.

2. The above captioned writ petitions relate to different floors of the same building built on plot bearing municipal No.7/3 Old Rajinder Nagar, New Delhi.

3. The admitted position concerning the building on plot bearing municipal No.7/3 Old Rajinder Nagar, New Delhi is, that the Government of India, through the Land and Development Office, granted perpetual lease- hold rights in favour of one Sh.Hari Ram son of Ralla Ram under an indenture dated March 30, 1963, duly registered with the Sub-Registrar, New Delhi. Appended as an Annexure to the lease-deed and described as an Appendix is a conveyance deed. Jointly under the two, land ad-measuring 85.3 sq.yards with a two room single storey tenement constructed thereon was demised in perpetuity in favour of Sh.Hari Ram. Vide para-c of the lease-deed it was stipulated :-

“(c) The lessee can transfer the land after obtaining the permission of the Lessor aforesaid and the Lessor will not share any unearned increment in the value of the land (being the difference in the premium paid by him to the Lessor and the market value of the land then prevailing) for permitting such transfer. The Lessor will, however, be entitled to claim and recover the unearned increment in the value of land in the event of any subsequent transfer of the land by a transferee the amount so to be recovered being 50% of the unearned increment in the value of the land”.

4. Hari Ram died on October 11, 1970. Twelve years after he died, an application was filed on July 12, 1982 by his legal heirs for being substituted as joint lessees, on completion of the requisite codal formalities vide letter dated September 29, 1982, it was conveyed by the lessor to the legal heirs, who were ten in number, that the property stood mutated in their names with Shakuntala Devi, Jagdish Chander, Rajinder Singh, Inder Singh, Randhir Singh, Parkash Devi, Shanti Devi and Chander Kanta, the wife, sons and daughters of the deceased, each having 1/9th share each in the property and Rajinder Kumar and Sukrita Rani, the grand children of the deceased each having 1/18th share in the property.

5. On the strength of a General Power of Attorney executed on May 31, 1983 jointly by the ten legal heirs of Hari Ram, one Ashok Sirpaul son of Sh.Amrit Lal executed a sale-deed on June 23, 1986 in favour of his real brother Anil Sirpaul which was registered as document No.5682 in Additional Book No.1, Volume No.5518 at pages 82 to 85 in the office of the Sub-Registrar, New Delhi on June 23, 1986.

6. Thus, Anil Sirpaul became the registered owner of the subject property. He died on September 09, 1996, but before that, during his life time he entered into a collaboration agreement on March 25, 1993 with Ms.Alka Wadhwa and Ms.Vibha Sabharwal, who were referred to as builders in the collaboration agreement. The builders were to demolish the existing two room tenement on the plot and construct a four storyed building, comprising a ground floor, a first floor, a second floor and third floor, with the ground and the second floor without terrace rights to be the property of Anil Sirpaul and the first and the third floor with terrace rights vesting in the builders.

7. The property was constructed as per the collaboration agreement and Anil Sirpaul took possession of the ground floor and the second floor from the builders who retained the first and the third floor thereof along with terrace rights.

8. Anil Sirpaul executed an agreement to sell on June 19, 1996 concerning the ground floor of the property in favour of Kanwar Bhan Kataria and recorded therein that he has received the entire sale consideration and handed over vacant physical possession of the ground floor to Kanwar Bhan Kataria. But for reasons unknown, Anil Sirpaul executed a will bequeathing the ground floor to Sushma Pardel. Kanwar Bhan Kataria expired on March 31, 2001. The facts are a little hazy, but the haze is irrelevant because said part which cannot be clearly seen is irrelevant to paint the picture. Sushma Pardel prosecutes the litigation before this Court claiming a right under the will and we find that no natural heir of Kanwar Bhan Kataria contests her claim.

9. Concerning the second floor, ownership whereof was with Anil Sirpaul in terms of the collaboration agreement dated March 25, 1993, relevant fact to be noted is that on March 01, 1994 Anil Sirpaul entered into an agreement to sell with Satish Kumar Mongia, in whose favour he also executed a power of attorney, an indemnity bond and a will, recording in the agreement to sell that having received the entire sale consideration he had handed over vacant physical possession of the second floor to Satish Kumar Mongia. Less than within a year of having acquired possession under the agreement to sell after paying the entire sale consideration, Satish Kumar Mongia entered into an agreement to sell on January 17, 1995 recording therein that having received the entire sale consideration he had handed over vacant physical possession of the second floor to Smt.Vishan Devi Ahuja, who expired on September 27, 2012 and her son Prem Ahuja succeeded to the right of Smt.Vishan Devi Ahuja and litigates as the writ petitioner of WP(C) No.4619/2015.

10. Concerning the first floor, ownership whereof under the collaboration agreement dated March 25, 1993 vested with the builders, on March 01, 1994 Ms.Alka Wadhwa and Ms.Vibha Sabharwal (the builders), executed an agreement to sell recording therein that having received the entire sale consideration possession thereof had been handed over to Rajinder Kumar Malhotra, in favour of whose wife : Madhu Bala Malhotra, a power of attorney was executed by them. Rajinder Kumar Malhotra litigates as the petitioner of WP(C) 4538/2015.

11. Concerning the third floor and the terrace above, one of the two builders : Vibha Sabharwal, entered into two agreements to sell on June 10, 1994, recording therein that having received the entire sale consideration she had handed over vacant physical possession of the third floor as also the terrace above to one Bhupinder Singh Bajaj, in whose favour Vibha Sabharwal also executed a will. At the asking of Bhupinder Singh Bajaj, Vibha Sabharwal executed a special power of attorney as also a general power of attorney in favour of his wife Harsharan Banaj. However, a receipt and a possession letter of even date acknowledging receipt of payment and possession handed over was executed jointly by both builders : Alka Wadhwa and Vibha Sabharwal. One agreement to sell concerns the third floor and the other terrace above. On May 16, 1995, under two agreements to sell, recording therein that entire sale consideration under the two agreements was received by him from Swaraj Kishore Arora and his wife Uma Arora, Bhupinder Singh Bajaj handed over the possession of the third floor and the terrace above to Swaraj Kishore Arora and his wife Uma Arora and also executed a special power of attorney and a general power of attorney in favour of Swaraj Kishroe Arora empowering him to deal with the third floor and terrace above. He willed the third floor to Swaraj Kishore and terrace above to Uma Arora. It needs to be highlighted that one agreement to sell concerning the third floor was with Swaraj Kishore Arora and the other concerning the terrace was with Uma Arora.

12. But before these transactions took place on different dates in the years 1994, 1995 and 1996, on October 12/19, 1990, concerning a request made by M/S Globerac & Alloys Pvt.Ltd.(the principal borrower) to Indian Bank for a credit facility to be advanced by the bank to the company, a letter was written under the signatures of Ashok Sirpaul in his capacity as the Director of the company containing an undertaking to the bank :-