M/s. Hybrochains Pvt. Ltd. , represented by its Director S. A. J. Kamal Batcha v. M/s. Bharat Housing Finance Ltd. Egmore & Others
2010-03-30
D.MURUGESAN, M.SATHYANARAYANAN
body2010
DigiLaw.ai
Judgment :- D.MURUGESAN, J. 1. The issues involved in both the Original Side Appeals, Writ Petition and the Civil Revision Petition are the same and are interconnected, they are heard together and disposed of by this common judgment. 2. Both the O.S.As. arise out of the following circumstances:- The respondent in the O.S.A. viz. Bharath Housing Finance Ltd., who is plaintiff in C.S.No.355 of 2005, (hereinafter referred to as the subsequent purchaser) filed a suit in C.S.No.355 of 2005 before this Court for a permanent injunction restraining the defendant and his men from interfering with their peaceful possession of the suit property viz. Door No.19, New No.44, Kothari Road, situate in Tank Bund Road near Sterling Road, Nungambakkam, Chennai-34, admeasuring 1252 square feet in R.S.No.568/1, 5 grounds and 378 sq. ft. in R.S.No.570/8 measuring in all 5 grounds 1630 sq. ft. Along with the suit an application in O.A.No.417 of 2005 was filed seeking for an order of interim injunction and ex parte order of interim injunction was granted on 15.4.2005. Thereafter, the defendant (hereinafter referred to as the tenant) in the suit viz., M/s.Hybrochains Pvt. Ltd. filed an Application No.2048 of 2005 seeking to vacate the said ex parte order of interim injunction. Both these applications were heard together and ultimately by a common order dated 15.6.2005 interim injunction granted in favour of the subsequent purchaser was made absolute and consequently, the application seeking to vacate the interim injunction, was dismissed. 3. The tenant has also filed W.P.No.18675 of 2004 challenging the order made by the Debts Recovery Tribunal, Chennai, in O.A.No.884 of 1999, dated 18.06.2004, in and by which the Tribunal directed delivery of possession of the property in question to the subsequent purchaser viz. Bharath Housing Finance Ltd. A copy of that order was marked to the tenant. 4. Civil Revision Petition (C.R.P.No.2107 of 2004) has been filed by the tenant against the order dated 12.3.2004 passed by the Debts Recovery Tribunal, Chennai, in O.A.No.884 of 1999 whereby the Tribunal recorded a compromise entered into between the defendants and the Bank. 5. For better appreciation of facts, we would refer the following further facts leading to the above litigation. The property in question belongs to one Late Thomas Maruthukulam. He was carrying on business under the name and style of M/s.Ruby Rubber Works (Madras) Ltd. in the suit property. 6.
5. For better appreciation of facts, we would refer the following further facts leading to the above litigation. The property in question belongs to one Late Thomas Maruthukulam. He was carrying on business under the name and style of M/s.Ruby Rubber Works (Madras) Ltd. in the suit property. 6. A portion of the suit property was let out to the tenant by the said Late Thomas Maruthukulam, during the year 1983. The said Thomas Maruthukulam filed R.C.O.P.No.291 of 1983 seeking for eviction of the tenant and the same was ordered on 24.4.1984. Aggrieved by the same, the tenant preferred appeal in R.C.A.No.684 of 1984 which was dismissed on 4.12.1984. As against the judgment in R.C.A.No.684 of 1984, the Civil Revision Petition No.679 of 1985 was filed. The parties in that Civil Revision Petition had arrived at a compromise which reads as under: "MEMO OF COMPROMISE The parties hereto hereby AGREE as follows: 1. The Respondent/Landlord agrees to the petitioner/ Tenant continuing in possession of the leased premises, namely, No.19, Kothari Road, Chennai-34, till 17th July, 1989. 2. The Petitioner/ tenant undertakes and agrees that they will vacate the leased premises on or before 17/7/89 and will handover the vacant possession of the said premises to the Respondent/Landlord on or before 17/7/89 and will handover the vacant possession of the said premises to the Respondent/ Landlor on or before 17/7/1989. 3. The Respondent/ Landlord undertaken that he will not make any claim for arrears of rent due from the Petitioner/ Tenant up to June, 1986. The rent at Rs.3000/- per month from the month of July, 1986 will be paid by the Petitioner/ Tenant by 10th of each succeeding English Calendar month regularly till 17/07/1989. In the event of any default in payment of rent the Respondent/ Landlord will be entitled to execute the decree for possession forthwith. 4. The Petitioner/ Tenant will not come to any act of waste nor put up any additional construction nor sub let the premises. 5. The parties pray that this Honble Court may be pleased to pass decretal order on this Compromise Memorandum in the above terms and justice rendered." 7. A perusal of the said memorandum of compromise shows that the tenant had undertaken and agreed that he will vacate the leased premises on and hand over the vacant possession or before 17.7.1989.
5. The parties pray that this Honble Court may be pleased to pass decretal order on this Compromise Memorandum in the above terms and justice rendered." 7. A perusal of the said memorandum of compromise shows that the tenant had undertaken and agreed that he will vacate the leased premises on and hand over the vacant possession or before 17.7.1989. Only on the basis of the landlord agreed to waive the rent payable by the tenant up to June, 1986 an order was also passed to that effect. 8. However, the tenant did not vacate and handover the leased premises as per the undertaking and the compromise decree. Hence, the legal heirs of Thomas Maruthukulam filed E.P.No.759 of 2003 as he died on 17.2.1988. The said Petition was ordered. Challenging the same, the tenant preferred C.R.P.No.1513 of 1993 which was dismissed on 1.11.1993. Questioning the same, the tenant filed S.L.P. No.721 of 1994 and the same was dismissed by the Supreme Court. 9. The said Thomas Maruthukulam availed certain loan from Bank of India (hereinafter referred to as the Bank) offering the property in question. As he committed default in payment of loan, the Bank of India filed a suit in C.S.No.168 of 1976 before this Court and decree was passed on 30.4.1982. The proceedings initiated by the Bank for executing the decree, was later on transferred to the Debts Recovery Tribunal, Chennai. Subsequently, on 11.5.1995 the subsequent purchaser entered into an agreement of sale with the legal heirs of the deceased Thomas Maruthukulam, for purchase of the suit property. While that agreement was pending, the Bank of India filed O.A.No.884 of 1999 before the Debts Recovery Tribunal, Chennai, and obtained an ex parte order on 1.3.2002. The Recovery Certificate was also issued for Rs.91,50,444.82. 10. As the agreement dated 11.5.1995 was not honoured by the legal representatives of the deceased Thomas Maruthukulam, subsequent purchaser filed a suit in C.S.No.936 of 2003 for a specific performance of an alleged agreement of sale dated 11.5.1995. A compromise decree was also passed on 18.12.2003 whereby the owners agreed for the sale, to get the sale certificate from the Debts Recovery Tribunal in favour of the purchaser and also to deliver possession of the property to the said buyer.
A compromise decree was also passed on 18.12.2003 whereby the owners agreed for the sale, to get the sale certificate from the Debts Recovery Tribunal in favour of the purchaser and also to deliver possession of the property to the said buyer. Subsequently, on 12.3.2004 the Debts Recovery Tribunal, Chennai, issued Sale Certificate in O.A.No.884 of 1999 which is the subject matter of challenge in C.R.P.No.2107 of 2004. The sale deed was also registered in favour of the buyer on 26.4.2004 and delivery of possession was ordered on 18.6.2004 and the delivery was also made on 21.6.2004 after issuing notice to the concerned parties. The order dated 18.6.2004 is the subject matter in the writ petition. On the above background, the tenant has approached this Court by way of above appeals, Writ Petition and the Civil Revision Petition. 11. In both the appeals, the tenant has questioned the grant of injunction in favour of the buyer. Earlier the tenant filed M.P.No.17249 of 2004 and prayed for a direction to the Recovery Officer of the Debts Recovery Tribunal, Chennai, and the Inspector of Police (L & O), Nungambakkam, Chennai, from disturbing his peaceful possession without following the due process of law. That Writ Petition was dismissed by this Court on 8.7.2004 by observing that the tenant should move the appropriate forum for remedy. Even while that writ petition was pending, the tenant also filed another Writ Petition NO.18675 of 2004 questioning the order of the Debts Recovery Tribunal, dated 18.6.2004. In the abovesaid O.A., the Recovery Inspector was authorised to break open the locks of the premises and directed to hand over vacant possession of the premises to the buyer by order dated 1.7.2004 in W.P.M.P.No.22277 of 2004. The said order was questioned by the tenant in W.A.No.2686 of 2004 and the same was withdrawn as dismissed on 16.7.2004. Thereafter, he filed another Writ Petition No.22781 of 2004 for a direction to the Recovery Officer, purchaser as well as the Inspector of Police, Law and Order, F3, Police Station, Nungambakkam, Chennai, forbearing them from in any way dispossessing the petitioners physical possession of the property in question. That Writ Petition came to be dismissed on 23.9.2004 with costs of Rs.10,000/- which was payable to the Legal Services Author ity, High Court, Chennai. We are told that the said costs has not been paid. 12.
That Writ Petition came to be dismissed on 23.9.2004 with costs of Rs.10,000/- which was payable to the Legal Services Author ity, High Court, Chennai. We are told that the said costs has not been paid. 12. Mr.A.Chidambaram, learned counsel extensively argued in support of both the O.S.As., Civil Revision Petition and the Writ Petition. The prime contention of learned counsel is that though there was a consent/ compromise decree in the Civil Revision Petition filed before this Court, whereby the tenant had undertaken to vacate the premises leased on or before 17.7.1989, admittedly, he did not vacate and handover possession of the premises either to the said Thomas Maruthukulam as he was no more by this time, or to his legal heirs subsequently. The Execution Petition seeking for arrest of the tenant for non-compliance of the consent decree, was dismissed on 2.11.2006. Inasmuch as no Execution Petition is pending, the tenant cannot be evicted in any manner which is otherwise, impermissible in law. A fraud has been played on the tenant by not only the owners of the property, but also the Bank as well as the purchaser. When the tenant has got every right to stay back in the premises so long as he is not evicted in a manner known to law, the above three had colluded and had obtained a consent decree for sale and only on the basis of such consent decree, the Debts Recovery Tribunal had passed orders which resulted in issue of Sale Certificate and consequently, recovery of possession. Inasmuch as fraud vitiates of solemn proceedings, none of the legal heirs or the subsequent purchaser would be entitled to any order of protection from this Court. More particularly, when the possession is with the tenant, this Court ought not to have granted injunction as prayed for by the subsequent purchaser who is dealing with the property which is questioned in all the above matters. Learned counsel would also rely upon order of this Court dated 8.7.2004 made in W.P.No.17249 of 2004 wherein this Court had observed that the tenant was in possession of the property in question. Though the Writ Petition was dismissed by this Court, this Court also directed the tenant to approach the appropriate forum for appropriate relief. Similar observation was also made when the matter was listed under the caption "For Being mentioned" on 12.7.2004.
Though the Writ Petition was dismissed by this Court, this Court also directed the tenant to approach the appropriate forum for appropriate relief. Similar observation was also made when the matter was listed under the caption "For Being mentioned" on 12.7.2004. In the absence of any legal proceedings seeking to vacate the tenant, further fraud had been played as if the possession was taken from one Mathialagan who was a Watchman of the Company who had no concern with the property. In fact, when a Caveat was filed by the Bank, the address of the tenant was shown only referring door number of the property in question. He would also submit that in any case, the manner in which the possession was said to have taken by the subsequent purchaser cannot be recognised by this Court. According to learned counsel, the present suit and the consequential order of injunction are only to get the seal of approval of this Court as to the title and possession of the subsequent purchaser who secured an order through a fraud transaction. Mr.A.Chidambaram learned counsel has submitted that the petitioner gives up respondents 2 to 9 in C.R.P. 13. We have heard Mr.H.Karthik Seshadri, learned counsel appearing for the subsequent purchaser and Mr.Lakshmi Narayanan, learned counsel, appearing for Bank. According to Mr.H.Karthik Seshadri, for the default committed by the Late Thomas Maruthukulam the Bank had in fact filed a suit in the year 1976. The said Thomas Maruthukulam, had initiated proceedings for eviction of the tenant in the year 1983. Even before that the suit was decreed on 30.4.1982. All subsequent proceedings were only subsequent to the said decree. In fact, for execution of the said decree, the case was transferred to the Debts Recovery Tribunal and that is why the subsequent proceedings of the Debts Recovery Tribunal including the Sale Certificate and Delivery of Possession came to be issued. Hence, the question of fraud does not arise. That apart, pursuant to the agreement of sale entered into between the legal heirs of Thomas Maruthukulam and the subsequent purchaser, consent decree was passed by this Court which was the basis for the Debts Recovery Tribunal to proceed further.
Hence, the question of fraud does not arise. That apart, pursuant to the agreement of sale entered into between the legal heirs of Thomas Maruthukulam and the subsequent purchaser, consent decree was passed by this Court which was the basis for the Debts Recovery Tribunal to proceed further. So long as the borrower, viz., owner of the property had agreed to settle the entire loan account by one time settlement, there was nothing wrong in the Bank to accept the same and consequently allow the sale deed to be executed in favour of the subsequent purchaser. Hence, according to learned counsel the purchase was valid as the same was as per the compromise decree and the subsequent orders of the Debts Recovery Tribunal. possession was also taken only as per Certificate issued by the Recovery Officer. 14. Mr. V.Lakshmi Narayanan, learned counsel also submitted that as far as the Bank is concerned, he would also reiterate the contentions of Mr.H.Karthik Seshadri and he would further add that as on today, the debts due to the Bank had been recovered only through the sale consideration from subsequent purchaser. He would also submit that in terms of Rule 11 of the Rules, the Civil Court would not have jurisdiction to go into the validity of the proceedings by the Debts Recovery Tribunal so long as the orders passed by the Debts Recovery Tribunal are set aside in the manner known to law. 15. On the above factual background and rival contentions, the grievance may be considered. As far as the property is concerned, there is no dispute that Late Thomas Maruthukulam was the owner of the property. At his instance, petition to evict the tenant was ordered and ultimately the tenant had agreed to vacate the premises on or before 17.7.1989. Only on his such undertaking, the landlord also agreed to waive the rent up to June, 1986. Having given such an undertaking, the tenant not only defaulted in paying the rent for the period from 17.7.1986 till the extended period 17.7.1989, but also failed to hand over possession of the property, probably by taking advantage of the death of Thomas Maruthukulam on 17.2.1988. He therefore, forced the legal heirs of Thomas Maruthukulam to file petition for eviction.
Having given such an undertaking, the tenant not only defaulted in paying the rent for the period from 17.7.1986 till the extended period 17.7.1989, but also failed to hand over possession of the property, probably by taking advantage of the death of Thomas Maruthukulam on 17.2.1988. He therefore, forced the legal heirs of Thomas Maruthukulam to file petition for eviction. As far as the agreement of sale of the said property is concerned, it is for the landlord or the owner as the case may be, to enter into an agreement of sale with the subsequent purchaser. The said agreement of sale has nothing to do either with the Execution Proceedings or any other proceedings that have been initiated by the tenant as the right of the tenant is restricted only to his possession and not beyond that. Of course, a grievance was made, though a suit for specific performance was filed and the same was compromised and on the same day consent decree was passed, in our opinion there is nothing to suggest that it is illegal. It is claimed that the land owners had entered into compromise with the agreement holder for sale of property only to settle the dues to the Bank. Actually, the Bank has also come up with a story that after the sale was over, by way of one time settlement, all the dues were paid from and out of the sale consideration, which shows the bona fides of the land owner in the transaction. In that view of the matter, we are of the opinion that all subsequent orders passed including issuance of Recovery Certificate, Sale Certificate and Possession Certificate, are only by due process of law, and we do not find any infirmity in those proceedings. We cannot also find that those orders have been obtained by playing fraud as the right of the tenant is restricted only to protect his possession. In this context we may observe that the series of judgments relied upon by Mr.A.Chidambaram as to the proposition that fraud vitiates all solemn proceedings are not applicable to the facts of this case, especially when it is pleaded by a tenant whose right is restricted only in respect of possession.
In this context we may observe that the series of judgments relied upon by Mr.A.Chidambaram as to the proposition that fraud vitiates all solemn proceedings are not applicable to the facts of this case, especially when it is pleaded by a tenant whose right is restricted only in respect of possession. It is also to be noted that in paragraph No.6 of the order in W.P.17249 of 2009, dated 8.7.2004, the learned counsel for the petitioner/ tenant had submitted that the respondents should be directed not to alter the physical possession, thereby, meaning that the physical possession was with the subsequent purchaser. The appellant herein also filed an appeal questioning the order in W.P. and the same was dismissed as withdrawn. We may also refer to the possession certificate dated 21.6.2004 by the Recovery Inspector wherein it is mentioned that at the time when possession was taken over and handed over to the subsequent purchaser, there was only a Watchman by name Mathialagan was available and possession was taken. In these circumstances, the contention of Mr.A.Chidambaram that possession was not taken in the manner known to law, cannot be accepted. That apart these matters of course, to be gone into detail in the suit filed by the subsequent purchaser. For the present only a prima facie case as to the possession should be considered and a detailed discussion on the same must be avoided. 16. The learned Judge who made the injunction order absolute, has also observed that possession was taken in the manner known to law and the tenant cannot resist the said order solely on the ground that he was not lawfully evicted. Our attention has also been drawn that subsequent to the above proceedings, the tenant has also filed a suit in C.S.No.612 of 2008 for a declaration that the tenant has permanent tenancy right in respect of the suit property and a consequential permanent injunction restraining the defendants therein from interfering with the plaintiffs right, peaceful possession and enjoyment of the property in any manner whatsoever. He has also prayed for a declaration declaring the compromise decree dated 18.12.2003 passed in C.S.No.936 of 2003 is a collusive and fraudulent and invalid and not at all binding on the plaintiff.
He has also prayed for a declaration declaring the compromise decree dated 18.12.2003 passed in C.S.No.936 of 2003 is a collusive and fraudulent and invalid and not at all binding on the plaintiff. He has also prayed for a declaration that the sale certificate issued by the Debts Recovery Tribunal, Chennai, in favour of the subsequent purchaser in respect of the suit property, is also null and void and also invalid in the eye of law. As the petitioner has approached this Court by way of comprehensive suit with the above prayer, he could very well work out his remedy in that suit. As the possession of the property has already been taken pursuant to the various orders including the Recovery Certificate, Sale Certificate, and Certificate of possession, we do not find any infirmity in the order passed by the learned single Judge and both the appeals fail and accordingly, the same are dismissed. 17. As far as the Writ Petition is concerned, the petitioner has approached this Court for quashing the order dated 18.6.2004 made by the Debts Recovery Tribunal in O.A.No.884 of 1999, wherein the Recovery Inspector was directed to break open and deliver possession of the property to the subsequent purchaser. Prima facie, as we have come to the conclusion with regard to taking over of the possession of the property is in accordance with law, we do not find any infirmity in the order dated 18.6.2004 made by the Tribunal in O.A.No.884 of 1999. Accordingly, the writ petition is dismissed. 18. As far as the Civil Revision Petition is concerned, the petitioner has got effective remedy of appeal under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Learned counsel for the petitioner would submit that the provisions would be applicable only in respect of parties and not the third party like the tenant herein. In our opinion, the provision of Section 19 of the said Act would enable the person aggrieved to prefer such an appeal. Be that as it may, having this Court entertained the Civil Revision Petition and is being kept pending for five years, we are not inclined to dismiss the petition the same on the said ground. As we have observed that the very same relief is otherwise available to the tenant viz.
Be that as it may, having this Court entertained the Civil Revision Petition and is being kept pending for five years, we are not inclined to dismiss the petition the same on the said ground. As we have observed that the very same relief is otherwise available to the tenant viz. the Revision Petitioner, in the suit in C.S.No.612 of 2008 he can canvas the points as well in that suit. Hence, the Civil Revision Petition is also dismissed. We make it clear that whatever observations made in this order are only for disposal of O.S.As., Writ Petition and the Civil Revision Petition and the same shall not be construed that we have decided the rival contentions which could only be considered in the main suit. We may also observe that though this Court had imposed a costs of Rs.10,000/-on the tenant to be paid to the Legal Services Authority, High Court, Chennai, within a period of two months, by its order dated 23.09.2004 in W.P.No.22781 of 2004, it appears that the said costs has not been paid. Hence, Member-Secretary, Tamil Nadu State Legal Services Authority, High Court, Chennai, is directed to take all steps to recover the said amount. In the circumstances of the case, there is no order as to costs. All the connected miscellaneous petitions are closed.