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2010 DIGILAW 515 (DEL)

Vicky Kumar Rana v. Kamal Kumar Nangia

2010-04-07

V.K.SHALI

body2010
ORDER V.K. Shali, J. 1. I. A. No. 4003/2010. On 26.03.2010 the present suit came for consideration and notice was directed to be issued to the Defendants for 06.04.2010. So far as the I.A. No. 4003/2010 is concerned, it was an application under Order XXXIX, Rules 1 and 2 read with Section 151, Code of Civil Procedure filed by the plaintiff for an ex parte ad interim stay against dispossession from the third floor of the suit property bearing No. 484, Katra Ashrafi, Chandni Chowk, Delhi during the pendency of the suit. 2. After hearing the learned senior counsel for the plaintiff, an ex parte ad interim injunction was issued against the Defendants restraining them from dispossessing the plaintiff who is allegedly in occupation of the shop at third floor of the property bearing No. 484, Katra Ashrafi, Chandni Chowk, Delhi till the next date of hearing. It was also directed that the Defendant No. 3 shall not obstruct ingress and egress from any passage going on to the third floor of the suit property. 3. The matter was listed yesterday before the Court and arguments were heard on the continuation of the said stay order. The learned Counsel for the Defendant No. 3, namely, the Bank of India with whom the suit property was mortgaged by way of the security raised objection to the continuance of the ex parte ad interim order against the Defendants on the ground that the plaintiff has concealed relevant information from the Court on account of which the aforesaid ex parte ad interim order came to be passed. Accordingly, at his request, I have heard the learned senior counsel for the plaintiff Mr. A.S. Chandhiok and the counsel for the Defendant No. 3 on the continuance of the stay order and the matter is adjourned for today for orders. Before dealing with the rival contentions with regard to continuance or the vacation of the ad interim order passed on 26.03.2010, it would be worthwhile to give brief facts of the case. 4. The plaintiff has filed the present suit for permanent injunction against three Defendants, namely, Shri Kamal Kumar Nangia, Shri Samarth Kumar Nangia and Bank of India. Before dealing with the rival contentions with regard to continuance or the vacation of the ad interim order passed on 26.03.2010, it would be worthwhile to give brief facts of the case. 4. The plaintiff has filed the present suit for permanent injunction against three Defendants, namely, Shri Kamal Kumar Nangia, Shri Samarth Kumar Nangia and Bank of India. It was alleged in the plaint that he entered into an oral rent agreement with the erstwhile owner of the suit property Shri Mukesh Kapoor Kailashwati in respect of the third floor of the property bearing No. 484, Katra Ashrafi, Chandni Chowk, Delhi and took possession of the same. It is alleged that the plaintiff started business of garments under the name and style of 'Chhabra Textile Corporation'. The plaintiff contends that he has been doing his business under the said name and style since 2000 and has been making regular payment of sales tax. A photocopy of the assessment order is also placed on record. It is alleged that the plaintiff has invested considerable amount of money in making the premises presentable for running the garment business and is presently running a ladies garments business under the name and style of 'Vicky Creation'. It is alleged that the Defendant Nos. 1 and 2 purchased the suit property from the erstwhile owners on 19.02.2008 and they were also doing the business of garments in the same building and they were jealous of the business being run by the plaintiff and accordingly tried to create hurdles in the use of the premises under the occupation of the plaintiff by stopping his access from the ground floor on to the third floor. It is alleged that the Defendant Nos. 1 and 2 in order to dispossess the plaintiff in a deceitful manner and in connivance with Defendant No. 3 visited the suit premises on 23.03.2010 and threatened the plaintiff to vacate the premises on or before 29.03.2010 failing which they would be compelled to take forcible possession of the suit premises. The plaintiff on inquiry also learnt that the Defendant No. 3 had inserted notices in the newspaper on 25.12.2009 for taking the possession of the suit premises without mentioning his name and hence the present suit was filed by the plaintiff against all the three Defendants for permanent injunction restraining them including their employees, representatives, agents etc. The plaintiff on inquiry also learnt that the Defendant No. 3 had inserted notices in the newspaper on 25.12.2009 for taking the possession of the suit premises without mentioning his name and hence the present suit was filed by the plaintiff against all the three Defendants for permanent injunction restraining them including their employees, representatives, agents etc. from creating any obstruction in the common passage or for dispossessing the plaintiff from the suit premises. 5. On notice being issued the Defendants put in appearance through their counsel. The Defendant Nos. 1 and 2 had sought time to file the written statement while as the Defendant No. 3 contested an ex parte ad interim injunction on the ground of lack of jurisdiction of this Court to entertain the suit itself. In any case, it was contended by them that the question of jurisdiction even if it is deferred by this Court to be considered only after receipt of the reply the ex parte ad interim injunction which has been passed in favour of the plaintiff deserves to be vacated/ modified keeping in view Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter as 'the Act'). 6. It was contended that in the instant case, the Defendant Nos. 1 and 2 were the borrowers of huge amount of money for their business purposes and they had furnished the entire suit property owned by them namely property bearing No. 484, Katra Ashrafi, Chandni Chowk, Delhi by way of security as a mortgage to the Defendant No. 3/Bank. The Defendant No. 3 in terms of the Act, recalled the entire loan amount and asked the Defendant No. 2 to repay the entire amount within a period of 60 days in terms of Section 13 of the said Act, and thereafter, issued a public notice in terms of Section 13(4) of the Act. It is also stated that it took the symbolic possession of the suit property and only the physical possession was to be taken in the instant case to realize the huge amount on arrears of loan and the interest, which is to the tune of approximately nine crores. It is also stated that it took the symbolic possession of the suit property and only the physical possession was to be taken in the instant case to realize the huge amount on arrears of loan and the interest, which is to the tune of approximately nine crores. It was contended that the plaintiff with a view to defeat the very purpose of the provisions of the Act has chosen this ingenious method of obtaining a restraint order against the Defendant No. 3 by colluding with the Defendant Nos. 1 and 2 inasmuch as the documents of rent deed were made to create the false tenancy agreement only in the month of 09.12.2009 to show that the plaintiff was in occupation of the suit premises in the capacity of a tenant who is protected under the Rent Act and the rent was purposely shown as less than Rs. 3,500/- so that he gets the protection of the Delhi Rent Control Act. 7. It was also contended by the learned Counsel for the Defendant No. 3 that apart from Section 17(1) of the Act which enables any aggrieved person which will include the present plaintiff also from, any action initiated by the bank in pursuance to realization of its loan amount initiated under Section 13 of the Act to file an appeal before a specialized tribunal which has been created specifically for this purpose. It was also stated that Section 34 of the Act specifically bars the jurisdiction of the Civil Court to entertain such a suit as has been filed by the plaintiff. The learned Counsel for the Defendant No. 3 has referred to a number of judgments including the judgment of the Apex Court in Mardia Chemicals Ltd. etc. v. Union of India (UOI) and Ors. etc. AIR 2004 SC 2371 , Branch Manager, State Bank of India, Commercial Branch and Anr. v. Chinjgepalli Lathangi and Ors. 2006 (1) ALD 798 , Trade Well v. Indian Bank 2007 Cri LJ 2544 : (AIR 2007 (NOC) 1634 (Bom))and Sajay Bansal v. Sh. Rakesh K. Ahlawat and Ors., W.P. (C) 20229/2004 (Reported in AIR 2005 Delhi 528 ). 8. So far as the plaintiff is concerned, the learned senior counsel Mr. v. Chinjgepalli Lathangi and Ors. 2006 (1) ALD 798 , Trade Well v. Indian Bank 2007 Cri LJ 2544 : (AIR 2007 (NOC) 1634 (Bom))and Sajay Bansal v. Sh. Rakesh K. Ahlawat and Ors., W.P. (C) 20229/2004 (Reported in AIR 2005 Delhi 528 ). 8. So far as the plaintiff is concerned, the learned senior counsel Mr. A.S. Chandhiok contended that by virtue of Section 34 of the Act the complete jurisdiction of the Civil Court is not barred to adjudicate a dispute between a party and the bank which is of a civil nature and which does not fall within the purview of the Act. The learned senior counsel drew the attention of this Court to certain observations passed by the Apex Court in Mardia Chemical (supra) at paras 51 and 52 wherein it has been observed as under: 51. However, to a very limited extent jurisdiction of the Civil Court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or their claim may be so absurd and untenable which may not require any probe, whatsoever or to say precisely to the extent the scope is permissible to bring an action in the Civil Court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely V. Narasimhachariar (supra) p.135 at p. 141 and 144, a judgment of the learned single Judge where it is observed as follows in para 22: The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the Court with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v. Scott (1859) 7 WR (Eng.) 213 (Z49). But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v. Scott (1859) 7 WR (Eng.) 213 (Z49). I need not point out that this restraint on the exercise of the power of sale will be exercised by Courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Rashbehary Ghosh Law of Mortgages, Vol. II, Fourth Edn., page 784). 52. The other decision on which reliance has been placed is A. Batcha Saheb v. Nariman K. Irani and Anr. AIR 1955 Mad 491 more particularly on paragraph 8. 9. It was also contended by the learned senior counsel that he may not be dispossessed from the suit premises except in accordance with due process of law because he is a bona fide and genuine tenant protected under the Rent Act, and therefore, the process of law should be resorted to in order to buttress his contention that he was a bona fide tenant, the learned senior counsel drew the attention of the Court to the photocopy of the document to indicate that he has paid the license fee to the Municipal Corporation of Delhi for running his business. 10. The learned senior counsel for the plaintiff has also relied upon the judgment of the learned single Judge of Calcutta High Court in support of his contention that the Civil Court's jurisdiction is not completely ousted. 11. I have considered the respective submission made by the learned senior counsel for the plaintiff and the learned Counsel for the Defendant No. 3. I have gone through the record. 12. It may be pertinent to mention here that the provisions of the Act have been sufficiently dealt with and interpreted by not only the Apex Court but also by various High Courts including our own High Court and the extensive examination including the dissection of the various provisions especially Sections 13, 17 and 34 of the Act makes the picture very clear. These provisions are not being specifically reproduced herein, however, the sum and substance of the section / provisions, the parameters which emerge from these sections is that in cases where the property is mortgaged or is furnished as a security to a financial institutions or a bank by a person as a security for the loan which has been taken by him in the event of his default in payment of requisite installment of the loan or if he does not pay at all or if his account becomes non-performing asset, bank/financial institutions need not seek orders for attachment before judgment as is done in the civil law under Order XXXVIII, Rule 5 of the Code of Civil Procedure. On the contrary, the bank can issue to such defaulter, a notice recalling such a facility and ask defaulter borrower to clear the entire outstanding within a period of 60 days from the date of issuance of such a notice and in case the defaulter does not comply with the said notice then try to take the physical possession of the property mortgaged or furnished as a security by following various steps which are envisaged under Section 13(4) of the Act by giving a public notice and thereafter go to the Court of CMM under Section 14 of the Act and take actual possession of the said property as a secured creditor. In this scheme of things, it has been visualized by the legislature that there may be persons other than the borrowers who may have interest in the property who may have some objections regarding the realization of the loan amount from the secured assets and for such a person Section 17 (1) of the Act makes it abundantly clear that any person which will include a 'borrower' as well as non-borrower also if he feels aggrieved from any action of the bank he can approach the Debt Recovery Tribunal which is a specialized forum created under the Act itself to seek redressal of his grievance. Further in order to make this scheme of the Act operative both functional as well as effective the jurisdiction of the Civil Court has been specifically barred under Section 34 of the Act. Further in order to make this scheme of the Act operative both functional as well as effective the jurisdiction of the Civil Court has been specifically barred under Section 34 of the Act. A conjoint reading of the Sections 13, 17 and 34 of the Act would clearly show that even though the plaintiff who may be claiming himself to be the tenant in respect of the third floor of the suit property which was pledged with the Defendant No. 3 as a secured asset had to approach the Debt Recovery Tribunal in case he felt aggrieved from the action of the Defendant No. 3 in issuing the public notice on 25.12.2009 or by threatening to take possession of the suit property of the premises on 22.03.2010 when the officials of the bank along with the Defendant Nos. 1 and 2 are alleged to have visited and threatened the plaintiff from being dispossessed. Further Section 34 of the Act ousted the jurisdiction of the Civil Court thereby meaning that this Court is prohibited from taking cognizance of the suit filed by the plaintiff himself. This scheme of thing has been clearly approved by the Apex Court in paras 51 and 59 of Mardia Chemicals ( AIR 2004 SC 2371 ) (supra). It will be worthwhile reproducing hereinbelow the relevant observations of the Apex Court: 51. It has also been submitted that an appeal is entertainable before the Debt Recovery Tribunal only after such measures as provided in Sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the Debt Recovery Tribunal or the appellate Tribunal is empowered to determine. Thus before any action or measure is taken under Sub-section (4) of Section 13, it is submitted by Mr. Salve one of the counsel for Respondents that there would be no bar to approach the Civil Court. Therefore, it cannot be said no remedy is available to the borrowers. We, however, find that this contention as advanced by Shri Salve is not correct. A full reading of Section 34 shows that the jurisdiction of the Civil Court is barred in respect of matters which a Debt Recovery Tribunal or appellate Tribunal is empowered to determine in respect of any action taken "or to be taken in pursuance of any power conferred under this Act". A full reading of Section 34 shows that the jurisdiction of the Civil Court is barred in respect of matters which a Debt Recovery Tribunal or appellate Tribunal is empowered to determine in respect of any action taken "or to be taken in pursuance of any power conferred under this Act". That is to say the prohibition covers even matters which can be taken cognizance of by the Debt Recovery Tribunal though no measure in that direction has so far been taken under Sub-section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the Civil Court shall have no jurisdiction to entertain any proceeding thereof. The bar of Civil Court thus applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal, apart from those matters in which measures have already been taken under Sub-section (4) of Section 13. 59. We may like to observe that proceedings under Section 17 of the Act, in fact are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a Forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in Civil Court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case. We may refer to a decision of this Court reported in (1974) 3 SCR 882 : Smt. Ganga Bai v. Vijay Kumar and Ors. (1974) 3 SCR 882 , where in respect of original and appellate proceedings a distinction has been drawn as follows: There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in very person to bring a suit of civil nature and unless one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. There is an inherent right in very person to bring a suit of civil nature and unless one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. 13. It has been expressed by the Apex Court that the bar of Civil Court applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal apart from those matters in which measures have already been taken under Section 13(4) of the Act which has been applied not only by other High Courts but also our own High court in the abovementioned judgments. 14. As against this the learned senior counsel for the plaintiff has relied upon a solitary authority of the learned single Judge of the Calcutta High Court in Manager, UCO Bank v. Samar Sarkar and Ors. [ AIR 2008 Cal 19 ] to contend that there may be areas where the Civil Court will have the jurisdiction. I have gone through the said judgments. Prima facie in the light of the fact that there is an authority from the Apex Court in Mardia Chemicals (supra) which gives a complete scheme of things in which even if a person is not a borrower his grievance can be redressed. I do not feel persuaded to accept the judgment of the learned single Judge of Calcutta High Court so as to give a relief to the plaintiff. Even on merits, the judgment of the Calcutta High Court is totally distinguishable from the facts of the present case. This is on account of the fact that in the present case the plaintiff is claiming to be a defaulter tenant in respect of the third floor of the suit property. The definite case of the plaintiff is that he has been in occupation of the suit premises since the year 2000 under an oral tenancy from the erstwhile owners. The erstwhile owners admittedly have sold the property to the Defendant Nos. The definite case of the plaintiff is that he has been in occupation of the suit premises since the year 2000 under an oral tenancy from the erstwhile owners. The erstwhile owners admittedly have sold the property to the Defendant Nos. 1 and 2 on 19.02.2008. It is mentioned in the last but one page of the said sale deed that the erstwhile owner have obtained the physical 'vacant' possession of the entire suit property bearing No. 484, Katra Ashrafi, Chandni Chowk, Delhi which would obviously include the second/third floor of the suit property. If the erstwhile owners are showing that they had obtained the possession of the entire building and if they had obtained the vacant possession of the entire building then this fact is totally inconsistent to the contention of the plaintiff that he was in occupation of the second and the third floor of the suit property as on 19.02.2008. Therefore, this prima facie clearly shows that the documents of tenancy purported to have executed on 09.12.2009 by the Defendant Nos. 1 and 2 in favour of the plaintiff for a sum of Rs. 1,600/- as rentals per month in respect of the second and the third floor was created subsequently and does not record the factum that the plaintiff was in possession of the suit property consistently from the year 2000. The documents like sales tax receipt or the documents purported to be issued by the Municipal Corporation of Delhi are not such a document which would inspire any confidence in the light of the fact that there is an inherent contradiction in the stand of the plaintiff with the documents which are placed on record. Further, the type of documents which are being used and relied upon by the plaintiff in order to contend that he was in occupation of the part of the suit property since 2000 are the type of documents which can easily be procured by a party from the authorities which are purported to have been issued by them. 15. The learned Counsel for the Defendant No. 2/Bank has also during the course of the dictation of the judgment in Court given a photocopy of the affidavit to have been given by the Defendant Nos. 15. The learned Counsel for the Defendant No. 2/Bank has also during the course of the dictation of the judgment in Court given a photocopy of the affidavit to have been given by the Defendant Nos. 1 and 2 to the Defendant No. 3/bank which is sworn before a notary public sometime in February, 2008 wherein it has been clearly stated that the suit property is not rented or leased out to anybody. This also goes contrary to the stand of the plaintiff that he was in occupation of the suit property even prior to the execution of the purported lease by the Defendant Nos. 1 and 2 in favour of the plaintiff on 09.12.2009. 16. In the light of the aforesaid, I feel that the plaintiff does not have any prima facie case and the balance of convenience is also not in favour of the plaintiff. The plaintiff will not suffer an irreparable loss in case an ex parte ad interim injunction order is not extended during the pendency of the suit asking the Defendants to file the reply. The plaintiff is free to approach the Debt Recovery Tribunal under Section 17 of the Act in case he still feels aggrieved and accordingly the said order passed on 26.03.2010 restraining the Defendant No. 3 from dispossessing the plaintiff or stopping his ingress and egress to the second/third floor of the suit property is vacated and not extended. Let the written statement and the reply to the application be filed within 30 days with an advance copy to the plaintiff who may respond thereto within two weeks thereafter.