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2015 DIGILAW 284 (HP)

Rajinder Kumar Verma v. Anita Verma

2015-04-02

DHARAM CHAND CHAUDHARY

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JUDGMENT : Dharam Chand Chaudhary, J. Both the applications being identical in nature are proposed to be disposed of together in order to avoid repetition of the pleadings and also conflicting findings. 2. Both applications pertain to confirmation of sale of the building, A-1/12, Safdarjung Enclave, New Delhi. While auction purchaser has filed OMP No.4229 of 2013 with a prayer to confirm the sale at the same time the application OMP No.4319 of 2013 has been filed by the plaintiff with a prayer to cancel the sale of the above property allegedly conducted in violation of the procedure prescribed and irregularities committed while auctioning the same. 3. The suit is inter se the co-owners none else but predecessor-in-interest of Shri Prem Chand Verma and has been filed for the decree of partition of the suit property left behind by said Prem Chand Verma by metes and bounds and rendition of accounts. The moveable and immoveable properties left behind by deceased Prem Chand Verma have been detailed in paras 1 and 2 of the plaint. One of such properties as detailed in para 1(a) of the plaint is three and half storeyed building bearing No.A- 1/12, Safdarjung, Enclave, New Delhi, measuring 500 square yards. This Court has passed preliminary decree for partition of the moveable and immoveable properties as detailed in paras 1 and 2 of the plaint by metes and bounds, on mutual consent of the parties on both sides. 4. Subsequently, an order passed on 2nd March, 2004, in OMP No.440 of 2003, Mr. Bhupender Gupta, Senior Advocate, was appointed as Commissioner to partition the suit property including the one at Safdarjung Enclave in New Delhi with the consent of the parties. The Commissioner so appointed had filed the report. The objections thereto were invited. Lateron, an application registered as OMP No.162 of 2006 came to be filed by the parties except defendant No.5 jointly with a prayer to permit the plaintiff to sell the aforesaid property at Safdarjung Enclave in terms of Section 2 of the Partition Act on the ground that in view of Municipal Bye-laws of the Delhi Municipal Corporation the same cannot be partitioned having become impartible. Defendant No.5 failed to put in appearance despite service of notice of this application upon him and the application was disposed of vide order dated 10th July, 2006 and the parties allowed to sell this property by private negotiations in accordance with law with liberty to make a mention as and when they succeed in selling the property. The parties, however, failed to do so. This has led in filing another application with a prayer to sell the said property by way of auction registered as OMP No.372 of 2009. Defendant No.6 had also filed application OMP No.453 of 2009, with the similar prayer. The common order passed in these applications on 18th September, 2009 reads as follows: “On 10.7.2006, this Court had ordered sale of the property in issue. It was however directed that at the first instance an endeavour be made by the parties to sell the property by private negotiations. By virtue of the present applications the parties are seeking sale of the property by way of a public auction as they have failed to sell the same by private negotiation. Except for defendant No. 5 all appearing parties have no objection to the same. Even though defendant No. 5 was served dasti but he choose not to appear, hence he was proceeded ex-parte on 10.7.2006. Court notice was again issued to him for 16.9.2009 when none caused appearance on his behalf. The matter was adjourned and even today none has entered appearance on his behalf. Accordingly in his absence the present application is being considered and decided. Now pursuant to the orders dated 10.7.2006, property situated at A-1/12, Safdarjung Enclave, New Delhi has to be sold by way of public auction. The procedure to be adopted for selling the property has to be in compliance with the provisions of Section 2 and Section 7 of The Partition Act, 1893 as also Order 21 CPC. For the purpose of effecting sale by way of public auction parties request that Sh. Naresh Sharma, Additional Advocate General, State of H.P. [R/o B-603, Block No. 13, Sector 10, Prerna Apartments, Dwarka and 339, Supreme Court Lawyers Chambers, Bhagwan Dass Road, New Delhi- 1] be appointed as a commissioner. His consent has been obtained. Ordered accordingly. As suggested and agreed the Commissioner shall be entitled to a total fee of Rs. one lac and fifty thousand. His consent has been obtained. Ordered accordingly. As suggested and agreed the Commissioner shall be entitled to a total fee of Rs. one lac and fifty thousand. He shall fix a date for the auction and take all steps in accordance with law for effecting sale of the property. He shall also ascertain the prevailing market rates of the properties in the area, fix a minimum reserve price as also the terms of the auction, and issue a proclamation for sale of the property. He shall take all steps to ensure best sale price of the property. A proclamation shall be issued in two newspapers namely Hindustan Times (English) and Nav Bharat Times (Hindi). It be also notified in the proclamation that the sale shall be subject to confirmation by this Court. The parties shall supply copy of the title deeds and particulars of the property to the Commissioner. The sale proceeds shall be deposited in this Court and all disbursements shall be made in accordance with the orders passed by this Court. The Local Commissioner shall also file his report. The appearing parties agree that for carrying out the sale, expenses shall be defrayed by them. Hence, the appearing parties are directed to initially deposit a sum of Rs. 50,000/- each in this Court which would take care of the incidental expenses which are required to be carried out for effecting the sale. Upon deposit of payment, for the time being Rs. 1 lac be remitted in the name of Mr. Naresh Sharma, in the bank account particulars of which he shall furnish to this Court. He shall maintain proper accounts of all the expenses incurred in the process for sale of the property and furnish the same to this Court. The expenses incurred for the sale of the property shall be eventually deducted from the sale proceeds and refunded to the parties making the deposit. The sale shall be effected within a period of three months. Further a sum of Rs. 75,000/- is directed to be remitted to Mr. Naresh Sharma towards his fee. The remaining amount shall be remitted at the time of the auction. Liberty granted to the Commissioner to approach the Court for any further orders which may be required to be passed for effecting the sale. List the matter on 28th December, 2009. Applications disposed of.” 5. 75,000/- is directed to be remitted to Mr. Naresh Sharma towards his fee. The remaining amount shall be remitted at the time of the auction. Liberty granted to the Commissioner to approach the Court for any further orders which may be required to be passed for effecting the sale. List the matter on 28th December, 2009. Applications disposed of.” 5. It is to be seen from the perusal of the order ibid that the property in question, i.e., A-1/12 Safdarjung Enclave, New Delhi was ordered to be sold by way of public auction in accordance with the provisions contained in Sections 2 and 7 of the Partition Act and Order 21 of the Code of Civil Procedure. Shri Naresh Sharma, Additional Advocate General, State of Himachal Pradesh, was appointed as Commissioner. The Commissioner had to fix the date for the auction and also to ascertain the prevailing market price of the properties in the area and to fix the minimum reserved price, which, as per order passed on 24th February, 2010, was fixed at Rs. 12 crores. The property was thereafter to be sold in open auction after settlement of the terms of the auction and issuing proclamation notifying specifically in the proclamation that the sale shall be subject to confirmation by this Court. 6. Since the procedure prescribed under Sections 2 and 7 of the Partition Act was to be followed by the Commissioner, therefore, it is desirable to take note thereof. Section 2 of the Act reads as follows: “2. Power to Court to order sale instead of division in partition suits.- Whenever in any suit for partition in which, if instituted prior to the commencement of this Act, a decree for partition might have been made, it appears to the Court that, by reason of the nature of the property to which the suit relates, or of the number of the shareholders therein or any other special circumstance, a division of the property cannot reasonably or conveniently be made, and that a sale of the property and distribution of the proceeds would be more beneficial for all the shareholders, the Court may, if it thinks fit, on the request of any of such shareholders interested individually or collectively to the extent of one moiety or upwards, direct a sale of the property and a distribution of the proceeds.” 7. Similarly Section 7 of the Act also reads as follows: “7. Procedure to be followed in case of sales.- Save as hereinabove provided, when any property is directed to be sold under this Act, the following procedure shall, as far as practicable, be adopted namely:- (a) Xxx xxx xxx xxx xxx xxx (b) if the property be sold under a decree or order of any other Court, such procedure as the High Court may from time to time by rules prescribe in this behalf, and until such rules are made, the procedure prescribed in the Code of Civil Procedure in respect of sales in execution of decrees.” 8. Section 2 provides for sale of the property, which is impartible and the distribution of the sale proceeds amongst all the co-sharers. Section 7(b) provides for the procedure to be followed while affecting the sale of the property in question. 9. Since our High Court has not framed any rules prescribing procedure to affect the sale, the procedure prescribed in the Code of Civil Procedure was required to be followed by the Commissioner while conducting the sale of the property in question by way of auction. Order 21 Rule 66 of the Code of Civil Procedure provides for the procedure required to be followed in a matter of sale of any property by public auction, which reads as follows: “66. Proclamation of sales by public auction.- (1) Whereany property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court. Proclamation of sales by public auction.- (1) Whereany property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court. (2) Such proclamation shall be drawn up after notice to the decree holder and the judgment debtor and shall state the time and place of sale, and specify as fairly and accurately as possible— (a) xxx xxx xxx xxx (b) xxx xxx xxx xxx (c) any encumbrance to which the property is liable; (d) the amount for the recovery of which the sale is ordered; and (e) every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property: XXX xxx xxx xxx (3) xxx xxxx xxx xxx (4) For the purpose of ascertaining the matters to be specified in the proclamation, the Court may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto.” 10. Amongst other things the proclamation as drawn and issued should specifically carry a note with regard to any encumbrance to which the property to be sold is iable. 11. Now coming to the proclamation issued by the Commissioner. The terms of auction as detailed therein read as follow: “(I) The reserve price of the property has been fixed at Rs. 12 crores. (II) Entry would be permitted to the venue only to 2 persons per bank draft for the sum of Rs. 2.40 crores favouring “the Registrar, High Court of Himachal Pradesh” payable at Shimla. (III) The successful purchaser would have to deposit 20% of the bid amount, immediately on the acceptance of the bid, which would include the sum of Rs. 2.40 crores. The balance of the final bid would be payable within 4 weeks i.e. 5.3.2011. All sums to be paid by Bank Draft favouring “The Registrar, High Court of Himachal Pradesh” payable at Shimla. (IV) The acceptance of the bids would be subject to confirmation by the Hon’ble High Court in the pending civil suit. (V) The Bank Drafts of the unsuccessful bidders would be returned to them at the close of the auction.” 12. All sums to be paid by Bank Draft favouring “The Registrar, High Court of Himachal Pradesh” payable at Shimla. (IV) The acceptance of the bids would be subject to confirmation by the Hon’ble High Court in the pending civil suit. (V) The Bank Drafts of the unsuccessful bidders would be returned to them at the close of the auction.” 12. Nothing is there in the proclamation/auction notice qua encumbrance, i.e., the property not free hold but lease hold. Auction was conducted by the Commissioner on the appointed day and time at the specified venue and the same purchased by the highest bidder M/s. Fairland Hospitality Services Private Limited, New Delhi, the auction purchaser, herein in a sum of Rs. 19.10 crores. 13. The original title deeds of the property were with Life Insurance Corporation of India, New Delhi. In an application registered as OMP No.341 of 2010, the Corporation was directed to produce the title deeds in the Court vide order passed on 10th September, 2010. Consequently, the title deeds were produced by the Corporation and vide order passed on 15th November, 2010, the same were ordered to be sent to Shri Naresh Sharma, the Commissioner appointed vide order dated 18th September, 2009 for further action. It is on the receipt of the title deeds the Commissioner proceeded further in the matter and after issuing the proclamation/auction notice sold the property in an open auction. Since the sale vide order dated 18th September, 2009 supra was liable to be confirmed by this Court, the question of the property being lease hold has arisen. On 1st March, 2011 with mutual consent of the parties following order came to be passed in the main suit: “In view of agreement between the parties, as emerges out at the bar, the parties will get the plot on which the house in suit has been constructed, which is a lease hold property converted into free hold property from Delhi Development Authority (DDA) within a month from today and thereafter get the conveyance deed executed in their favour from DDA within a further period of fifteen days. As and when the conveyance deed in favour of the parties is executed by DDA, the Auction Purchaser shall deposit the remaining amount of auction sale, i.e., Rs. As and when the conveyance deed in favour of the parties is executed by DDA, the Auction Purchaser shall deposit the remaining amount of auction sale, i.e., Rs. 15,27,70,000/- (fifteen crore twenty seven lac seventy thousand) alongwith interest @ 12% p.a. from 05.03.2011 till the date of deposit, within fifteen days from the date of limitation to this effect to be given by the plaintiffs to the learned counsel for the Auction Purchaser. Since original title deed is still awaited from the Commissioner, plaintiff No.2 Shri Rajinder Kumar Verma, shall be free to obtain the same from the Commissioner/Court so as to facilitate conversion of the lease hold property into free hold property in terms of this order. Shri N.K. Thakur, Advocate, is representing defendant No.5, but his name does not appear in the cause list. The Registry shall reflect the name of the learned counsel in the cause list henceforth. Mr. Thakur states at the bar that objections to auction sale on behalf of defendant No.5 have been filed in the Registry today. These be placed on record for further appropriate orders.” 14. The parties approached Delhi Development Authority for conversion of the property in question from lease hold to free hold, however, the Authority did not agree to that and sought 50% unearned increase out of the sale proceeds and proceeded to serve the parties with show cause notice as to why the mutation attested and sanctioned in their names may not be withdrawn and the case for cancellation of the lease processed further on the ground that they concealed the information qua auction of the property in question without the permission of the authority. Therefore, when the direction to the parties to convert the lease hold to free hold dated 1st March, 2011 could not be complied with for sufficient long time, the auction-purchaser filed an application registered as OMP No.405 of 2012 with a prayer to appoint Local Commissioner in this regard. Therefore, when the direction to the parties to convert the lease hold to free hold dated 1st March, 2011 could not be complied with for sufficient long time, the auction-purchaser filed an application registered as OMP No.405 of 2012 with a prayer to appoint Local Commissioner in this regard. After the parties having exchanged their respective affidavits in this application, auction-purchaser filed another application OMP No.4229 of 2013 aforesaid and on filing of the same following order came to be passed in OMP No.405 of 2012 on 15th October, 2013: “In view of filing of a similar application being OMP No.4229 of 2013 under Section 151 CPC, the present application filed under the same provision of law is disposed of as not pressed.” 15. It is in this backdrop two applications OMP No.4229 of 2013 filed on behalf of the auction purchaser, with the following prayers: “1) Confirm the sale in order to enable the applicant, auction purchaser, to make the payment of the entire balance consideration in the sum of Rs. 15,27,70,000/-; 2) Fix the time for payment of the balance sale consideration after confirmation of sale; 3) Order that the sale certificate be issued and registered in respect of the said property on as is where is basis i.e. the lease hold property; and 4) Any other order that this Hon’ble Court may deem just and fit may also be passed.” and OMP No.4319 of 2013 on behalf of Shri Rajinder Verma, the plaintiff with a prayer to cancel and set aside the auction of the property in question being not as per law. 16. Defendant No.5, who though was exparte and allowed to participate the proceedings at a later stage, has also preferred objections to the auction of the property in question conducted by the Commissioner on 5th February, 2011. 17. The parties have already exchanged reply/ rejoinder-affidavits in both the applications. 18. Admittedly, the property in question was ordered to be sold by way of public auction with the mutual consent of the parties except defendant No.5, who failed to put in appearance despite due service of Dasti notice upon him. The property now stands sold by the Commissioner on 5th February, 2011 and the Commissioner has placed on record the report alongwith record of auction proceedings (page 175). The property now stands sold by the Commissioner on 5th February, 2011 and the Commissioner has placed on record the report alongwith record of auction proceedings (page 175). The highest bidder is M/s. Fair Land Hospitality Services Pvt. Ltd. The sale so conducted has, however, not been confirmed so far. 19. Admittedly, auctioned property is lease hold. The perpetual lease deed is Annexure P-21 on record, filed by the plaintiff alongwith reply to the application, OMP No.4229 of 2013 supra. Item No.4(5)(a) of this document reads as follows: “4(5)(a) The lease shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the residential plot except with the previous consent in writing of the Lessor which he shall be entitled to refuse in his absolute discretion. PROVIDED that such consent shall not be given for a period of ten years from the commencement of this Lease unless, in the opinion of the Lessor, exceptional circumstances exist for the grant of such consent. PROVIDED FURTHER that in the event of the consent being given, the Lessor may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover a portion of the unearned increase in the value (i.e. the difference between the premium paid and the market value) of the residential plot at the time of sale, transfer, assignment, or parting with the possession, the amount to be recovered being fifty percent of the unearned increase and the decision of the Lessor in respect of the market value shall be final and binding. PROVIDED FURTHER that xxxxx xxxxx xxxxx. (b) Xxxx xxxx xxxx xxxx. PROVIDED that, in the event of the sale or foreclosure of the mortgaged or charged property, the Lessor shall be entitled to claim and recover the fifty per cent of the unearned increase in the value of the residential plot as aforesaid, and the amount of the Lessor’s share of the said unearned increase shall be a first charge, having priority over the said mortgage or charge. The decision of the Lessor in respect of the market value of the said residential plot shall be final and binding on all parties concerned. PROVIDED FURTHER that the Lessor shall have the pre-emptive right to purchase the mortgaged or charged property after deducting fifty per cent of the unearned increase as aforesaid.” 20. The decision of the Lessor in respect of the market value of the said residential plot shall be final and binding on all parties concerned. PROVIDED FURTHER that the Lessor shall have the pre-emptive right to purchase the mortgaged or charged property after deducting fifty per cent of the unearned increase as aforesaid.” 20. It is, therefore, crystal clear that the parties, who as a matter of fact, are not competent to sell, transfer, assign or otherwise part with possession of the whole or any part of the property in question except with the previous consent in writing of the lessor, the Delhi Development Authority. As per second proviso, in the event of grant of the consent to sell, transfer or otherwise part with the possession of the lease property lessor is entitled to claim and recover fifty percent of the unearned increase in the value (i.e., the difference between the premium paid and the market value) thereof at the time of its sale and transfer. 21. Admittedly, the previous consent of the lessor has not been obtained either by the parties to the suit or the Commissioner. This was also not a condition in the publication made/auction notice that the property is lease hold and can only be sold with the previous consent of the lessor, i.e., Delhi Development Authority that too on payment of 50% unearned increase in its value. In order to avoid the payment of unearned increase as per the case of the parties including that of the auction purchaser, conversion thereof from lease hold to free hold is required. Order dated 1st March, 2011 passed on the basis of mutual consent of both parties and in the presence of learned Counsel representing the auction purchaser pertains to conversion of the property from lease hold to free hold before the conveyance deed is registered and sale certificate issued in favour of the auction purchaser. The order ibid amply demonstrates that all concerned including auction purchaser were in favour of conversion of the property from lease hold to free hold. Consequent upon this order the plaintiff did approach the Delhi Development Authority for conversion of the property in question into free hold after conveying the same to all the co-sharers. On fulfillment of all codel formalities, the property was allowed to be conveyed to them and mutation also attested in their names. Consequent upon this order the plaintiff did approach the Delhi Development Authority for conversion of the property in question into free hold after conveying the same to all the co-sharers. On fulfillment of all codel formalities, the property was allowed to be conveyed to them and mutation also attested in their names. Their proposal from lease hold of the property into free hold was also accepted subject to furnishing of four copies of unsigned Conveyance deed forms duly stamped by the Collector of Stamps within 45 days from the issuance of letter No.F46(160)73/LAB(R)/1344 dated 14th March, 2012 Annexure P-12 to the reply filed by the plaintiff to OMP No.4229 of 2013. The forms of Conveyance deed were duly furnished by the parties vide letter dated 10th April, 2012 Annexure P-18, but of no avail because on having come to know that the property in question has already been sold in an open auction the lessor not only issued show cause notice Annexure P-19 showing its intention to withdraw the order of mutation but also to pursue the case for cancellation of lease itself. Commissioner Shri Naresh Kumar Sharma was also requested by the lessor vide letter dated 26th April, 2012 Annexure P-20 to the reply to provide complete set of applications/suit pending in this Court alongwith copies of order for examination and necessary action. The conversion proceedings being not yet finalized are still pending consideration of the Delhi Development Authority, the lessor. A reference in this regard can be made to para-4 of the application, OMP No.4045 of 2013. In reply thereto filed on behalf of plaintiff the pendency of conversion proceedings before Delhi Development Authority has not been disputed. As regards auction purchaser, no reply thereto has been filed, which leads to the only conclusion that the auction purchaser also admits the conversion proceedings still pending consideration and not terminated. Therefore, OMP No.4045 of 2013 was ordered to be dismissed being premature on 23rd September, 2014. However, the fact remains that the parties on both sides have failed to apprise this Court about the latest status of such proceedings. 22. Therefore, OMP No.4045 of 2013 was ordered to be dismissed being premature on 23rd September, 2014. However, the fact remains that the parties on both sides have failed to apprise this Court about the latest status of such proceedings. 22. On the other hand, the auction purchaser finding that the conversion proceedings had considerably delayed, moved OMP No.405 of 2012 with a prayer that Commissioner be appointed to report compliance to the order dated 1st March, 2011 qua conversion of the property in question from lease hold to free hold so that payment of balance sale consideration, the sale in its favour can be confirmed and the property converted. In opposition of this application, the plaintiff filed reply denying any delaying tactics on his behalf and stated in para 3 thereof that it is Shri P.K. Aggarwal, Advocate, who himself brought to the notice of the Court that the property, being lease hold, is required to be converted into free hold before the same is conveyed to the auction purchaser and that it is thereafter the plaintiff and defendants were directed to take steps for conversion thereof into free hold by taking up the matter with the lessor, the Delhi Development Authority vide order dated 1st March, 2011. Anyhow, the application OMP No.405 of 2012 was not pressed by the auction purchaser on filing of OMP No.4229 of 2013 and the same was ordered to be disposed of vide order dated 15th October, 2013. 23. The plaintiff is still prepared for the confirmation of the sale, however, subject to the condition that the unearned increase in value of the property sold is borne by the auction purchaser. The case of the plaintiff is that since the Commissioner has failed to notify that the property being lease hold can only be sold on payment of unearned increase to the extent of 50% in its value to the lessor, therefore, the parties should not suffer on account of such lapse on the part of the Commissioner. Non-compliance of the procedure as envisaged under Order 21 Rule 66 (2)(c) and Order 90 of the Code of Civil Procedure by the Commissioner has also been pressed into service. 24. On the other hand, the case of the auction purchaser as set forth by Mr. Non-compliance of the procedure as envisaged under Order 21 Rule 66 (2)(c) and Order 90 of the Code of Civil Procedure by the Commissioner has also been pressed into service. 24. On the other hand, the case of the auction purchaser as set forth by Mr. P.K. Aggarwal, Advocate, during the course of arguments in a nutshell is that the parties having obtained the certified copy of lease deed on 3rd October, 2006, were well aware about the property in question, a lease hold and as such should have brought this fact to the notice of the Court at the earliest opportunity available to them. Also that the property can even be sold as lease hold itself on payment of 50% unearned increase to the lessor by the owners, viz. the plaintiff and defendants. It is also canvassed on behalf of the auction purchaser that the prayer to seek the cancellation of sale being belated, otherwise is also barred under Article 127 of the Limitation Act. 25. Now I will deal with the contentions so raised on both sides. In terms of Section 7(b) of Partition Act reproduced supra, the property ordered to be sold by the Court in terms of Section 2 of the Partition Act should either be sold as per the procedure prescribed in the rules, if any, framed by the High Court and until such rules are framed the procedure prescribed under the Code of Civil Procedure in respect of sales in execution of the decrees. Such provision takes us to Order 21 Rule 66 of the Code of Civil Procedure, which provides for sale of the property in public auction by drawing proclamation in terms of sub-rule (2)(a) to (e) and the auction of the property thereafter. The Commissioner, no doubt, has issued the proclamation/auction notice, however, not strictly in terms of provisions contained under Order 21 Rule 66 of the Code, as the same do not meet with all the requirements, particularly a caution that the property being lease hold can only be sold on payment of 50% unearned increase in its value to the lessor, the Delhi Development Authority that too with its previous consent. Had such cautioning been there in the auction notice, the bidders would have offered their respective bids keeping in view the same. 26. Had such cautioning been there in the auction notice, the bidders would have offered their respective bids keeping in view the same. 26. In a case of this nature having restriction against alienation or transfer of property a willing purchaser should know about such restriction so that he could purchase the same with an expectation that he will obtain sanction of the lessor for its transfer and the willing purchaser offer to pay its price to the seller accordingly keeping in view its sale as lease hold property. This Court draws support in this regard from the judgment rendered by a Division Bench of Delhi High Court in New Delhi Municipal Committee v. Little Threatre Group and another, ILR (Delhi) 1037. 27. Since the Commissioner was in possession of the title deeds of the property, sent to him by the Registry of this Court pursuant to order dated 10th September, 2010, passed in OMP No.341 of 2010. The orders passed in OMP No.341 of 2010 on 22nd July, 2010 and 10th September, 2010 leave no manner of doubt that the title deeds were not with the parties to the suit and rather lying deposited with Life Insurance Corporation of India by Shri Prem Chand Verma by way of mortgage to obtain loan. True it is that copy of lease deed (page 264) Appendix-A to the affidavit in rejoinder filed by defendant No.6 in OMP No.4045 of 2013, reveals that the certified copy thereof was ready on 4th October, 2006, however, date of its issuance and to whom it was supplied there is no endorsement in this regard in this document. Therefore, I find no substance in the submissions that this copy was obtained by the plaintiff and for that matter by defendants on 3rd October, 2006 made by Mr. Aggarwal, learned Counsel representing the auction purchaser. As a matter of fact 3rd October, 2006 is the date of preparation of the copy of this document, which has been signed by the examiner on 4th October, 2006, however, who was the applicant having applied for the supply of the copy thereof and on what date it has been supplied, this document is silent. Anyhow, the title deeds were with Shri Naresh Kumar Sharma, the Commissioner. Anyhow, the title deeds were with Shri Naresh Kumar Sharma, the Commissioner. It is for this reason that plaintiff Rajinder Kumar Verma was authorized to obtain the same from Shri Sharma vide order dated 1st March, 2011 and thereby facilitated the parties to seek the conversion of the property from lease hold property into free hold property. 28. The plaintiff and defendants did take steps for conversion of the property into free hold immediately thereafter, as is apparent from the perusal of Annexures P-1 to P-18 to the reply filed in OMP No.4229 of 2013 on behalf of the plaintiff. As noticed in paras supra, the conversion proceedings seem not to be yet finalized, of course, the lessees while approaching for conversion of the property into free hold, the lessor has served them with show cause notice (Annexure P-19). The plaintiff and defendants seem to be not at any fault as they are in favour of sale of the property in question being impartible. 29. Admittedly, the property cannot be sold without the previous consent of the lessor and without making payment of 50% of unearned increase in its value, as is apparent from Clause 4(5)(a) of the terms and conditions of the covenant, i.e., lease deed. Mr. Aggarwal is absolutely justified in submitting that the property even can be sold as lease hold. It is so held by the Division Bench of Delhi High Court in Little Threatre Group’s case supra. It is, however, no where held in this judgment that it is the liability of the lessee to pay 50% unearned increase in the value of the property to the lessor. In this case it could not be held that the plaintiff and defendants are liable to pay unearned increase to the lessor when as discussed in para supra that they were not aware about any such condition in the lease deed at the time when agreed to sell the property in an open auction. Had this condition been in their notice, they may have not agreed for fixation of the reserve price of the property at Rs. 12 crores or should have insisted upon a condition that unearned increase in the value of the property shall be borne by the purchaser. 30. Had this condition been in their notice, they may have not agreed for fixation of the reserve price of the property at Rs. 12 crores or should have insisted upon a condition that unearned increase in the value of the property shall be borne by the purchaser. 30. In The Commissioner of Income Tax, Delhi v. Monoflex India P. Ltd. and others (2011) 244 CTR (Del) 251, a case having more or less similar facts, it has been held that in a case of sale of leased property the payment of unearned increase to the lessor is a pre-condition. This judgment reads as under: “11. Under Section 108(j) of the Transfer of Property Act, 1882 a lessee is entitled to transfer leasehold right, which he enjoys, to a third party, subject to a contract to the contrary. However, the lessee continues to be liable for the terms and conditions of the lease. 12. In view of the aforesaid legal position and the terms of the sub-lease quoted above, there cannot be an iota of doubt that unearned increase is payable under the provisions of Transfer of Property Act, 1882 and the sub-lease, with special regard to provisions in the said sub-lease deed on the involuntary sale and transfer of the leasehold rights in favour of the purchasers for recovery of the dues payable by the defaulting Assessee/lessee Gurcharan Singh Sethi. Payment of unearned increase is a pre-condition imposed in the sub-lease deed for transfer of the leasehold rights from the sublessee to a third party. The said term/ condition is binding and without the same being satisfied, the rights in the property, i.e., sub-lease rights, cannot be transferred from the sub-lessee, i.e., Gurcharan Singh Sethi, to any third party, i.e., the purchasers. Payment of unearned increase is a condition precedent and not a condition post transfer.” 31. It is seen that in the case ibid, the lessee was M/s. Gurcharan Singh Sethi, a firm and the lessor Delhi Development Authority. The assessee firm was declared defaulter having failed to make the payment of tax in respect of the lease property. The Tax Recovery Officer consequent upon the order passed by the Commissioner of Income Tax put the property to auction. 32. The assessee firm was declared defaulter having failed to make the payment of tax in respect of the lease property. The Tax Recovery Officer consequent upon the order passed by the Commissioner of Income Tax put the property to auction. 32. On the question as to who is liable to pay unearned increase, while taking note of the terms and conditions of auction notice and for want of a condition that the liability to pay the same would be that of the highest bidder or that the bidder was made aware that he has to bear 50% unearned increase separately, it is appellant (The Commissioner Income Tax), who was held liable to make the payment of unearned increase to the lessor. This judgment reads as follows: “19. The second question is who is liable to pay the unearned increase. Learned Single Judge has, in the impugned judgment, specifically referred and has quoted the public notice by which sale was made. The said notice reads as under: Industrial plot No.A-35 Mohan Cooperative Industrial Estate, New Delhi measuring about 5300 sq. yard. Under instruction from Tax Recovery Officer XX Vikas Bhawan, New Delhi, the above mentioned property owned by Sh. Gurcharan Singh Sethi R/o 47, Hanuman Road, New Delhi P/o M/s Gulab Singh Sethi & Sons, New Delhi attached for realization of Income-Tax Dues from M/s Gulab Singh Sethi & Sons, 53, Najafgarh Road, New Delhi-15, will be offered for sale by public auction at site at 11-30 A.M. On Friday 18th Sept., 1981 at 11-30 A.M. at Site. Brief Conditions of Sale 1. The sale is subject to conditions prescribed in second schedule to the Income-Tax Act, 1961 and Income-Tax Certificate proceeding rules 1962. 2. Proffer for any deed will be deemed an acceptance of all the conditions of sale in toto. The purchasers are advised to satisfy themselves before bidding in every respect. 3. The highest bidder shall pay 25% of the Bid in cash or by Bank Draft in favour TRO XX, New Delhi at the spot and Balance within 15 days from the date of sale. 4. Right of acceptance or rejection of any bid is reserved with the Tax Recovery Officer XX, Vikash Bhawan, New Delhi. 5. The Transfer will be made by a Sale Certificate to the auction purchaser whose bid is accepted. 6. Other terms and conditions of auction will be announced on the spot. 4. Right of acceptance or rejection of any bid is reserved with the Tax Recovery Officer XX, Vikash Bhawan, New Delhi. 5. The Transfer will be made by a Sale Certificate to the auction purchaser whose bid is accepted. 6. Other terms and conditions of auction will be announced on the spot. 7. Any further information please contact Tax Recovery Officer XX on any working day during office hours and from the auctioneers. 8. The purchaser has to deposit Rs. 2,000/- advance towards the Security deposit with the cashier of the Department on the spot before bidding. By order Sh. C.L. Arora Nath TRO XX (N.D.) Auctioners J.R. Basheshar 20. The aforesaid terms and conditions did not stipulate that the bidder would have to pay 50% unearned increase or bear such burden. There was no such stipulation. The sub-lease deed or copy thereof was with the appellant and they had finalised the terms of the sale. In case 50% unearned increase was to be paid separately by the purchaser, it should have been so indicated and mentioned. This would have resulted in a lower bid amount. It is not the case of the appellant that sale consideration paid by the purchasers was less than the market price. No document has been placed on record to establish that the bid amount was low because the bidders were aware or were made aware that they have to bear 50% unearned increase separately. It is not the contention of the appellant that the parties were not ad idem and therefore there was no concluded contract. On the other hand, the plea which has not been taken by the appellant is that 50% unearned increase is payable by the original sub-lessee and not by the appellant or the Tax Recovery Officer. The terms of auction did not stipulate that the original sub-lessee shall pay 50% unearned increase. The appellant had agreed and promised to issue sale certificate to the auction purchaser, whose bid was accepted. It is only on payment of 50% unearned increase that an effective transfer can be made by the said sale certificate. In these circumstances, it is for the appellant to make payment of unearned increase. Of course, in case its dues are still payable, it is open to them to take appropriate proceedings against the defaulter Assessee in accordance with law.” 33. In these circumstances, it is for the appellant to make payment of unearned increase. Of course, in case its dues are still payable, it is open to them to take appropriate proceedings against the defaulter Assessee in accordance with law.” 33. This judgment, however, is hardly of any help to the case in hand for the reason that the parties to the suit were not aware about the property being leasehold, hence could have not been sold without the previous consent of the lessor and that even on obtaining such consent also it was their liability to pay 50% unearned increase in its value to the lessor nor any such term was notified by the Commissioner in the auction notice, therefore, here also the plaintiff cannot be held liable to pay unearned increase to the lessor. 34. The proceedings with respect to conversion of the property from leasehold to free hold are still in progress. Of course, the property can be sold being leasehold itself, however, on payment of the unearned increase. The parties to the suit have no objection to the confirmation of the sale in case the auction purchaser is ready and willing to deposit the unearned increase with the lessor. Therefore, the auction purchaser either to deposit the same or should wait for the outcome of the conversion proceedings initiated by the parties to the suit by taking up the matter with the lessor. 35. The judgment of the Apex Court in Commissioner of Wealth Tax, New Delhi v. P.N. Sikand (1992) 2 SCC 798, cited on behalf of the auction purchaser, however, is not applicable in the case in hand, as the issue involved in the present case before this Court does not pertain to the calculation of the unearned increase but the liability qua payment thereof to the lessor. 36. Now coming to Rule 90 of Order 21 of the Code of Civil Procedure which provides the grounds on which the sale of immovable property can be set aside, the property in question has not been sold in execution of any decree nor the parties to the suit are JDs. 36. Now coming to Rule 90 of Order 21 of the Code of Civil Procedure which provides the grounds on which the sale of immovable property can be set aside, the property in question has not been sold in execution of any decree nor the parties to the suit are JDs. and on the other hand, there being no stipulation in the auction notice that the liability to pay 50% unearned increase will be that of their nor were they aware about any such stipulation in the lease deed being not in their possession, they are likely to suffer with huge financial loss in the event of called upon to make payment of the unearned increase that too when it is the Commissioner, who committed procedural irregularities while affecting sale. As such the present is a fit case where the sale cannot be confirmed. 37. No doubt, on behalf of the auction purchaser reliance has been placed on Janak Raj v. Gurdial Singh and another, AIR 1967 SC 608 , however, the legal principles settled by the Apex Court in that judgment are not attracted in this case. The protection of the auction purchaser envisaged under this judgment cannot be extended to the auction purchaser in the present case before this court. Similarly, in Kadiyala Rama Rao v. Gutala Kahna Rao (Dead) by LRs. And others, (2000) 3 SCC 87 , the auction of the immovable property was conducted consequent upon the mortgage decree passed in favour of the decree holder. The present, however, for the detailed reasons recorded hereinabove is not a case of this nature and as such the sale cannot be confirmed. Of course, the parties including the auction purchaser either to pursue the matter qua the conversion of the property in question into free hold or in the event of the plaintiff is in hurry to obtain the sale certificate, which is possible only on confirmation of the sale by this Court, should come forward to bear the amount payable by way of unearned increase. The third alternative available to the auction purchaser is to seek refund of the bid amount lying deposited in the Registry of this Court. 38. True it is that under Article 127 of the Limitation Act the application for setting aside the sale of the auctioned property should be filed within 60 days from the date of its auction. The third alternative available to the auction purchaser is to seek refund of the bid amount lying deposited in the Registry of this Court. 38. True it is that under Article 127 of the Limitation Act the application for setting aside the sale of the auctioned property should be filed within 60 days from the date of its auction. Article 127, however, deals with an application where the property has been sold in execution proceedings. The present, however, is not a case of sale of property in question during the execution proceedings and rather with mutual consent of the parties to the suit in terms of the provisions contained under Sections 2 and 7(b) of the Partition Act. To my mind, it is rather Article 137 of the Limitation Act takes care of an order of this nature and as such the limitation would be three years from the date of auction. I, therefore, find no substance in the arguments to the contrary addressed in this regard on behalf of the auction purchaser. 39. The issue of limitation, therefore, is not covered by the ratio of the judgment of Apex Court in Mohan Lal v. Hari Prasad Yadav and others, (1994) 4 SCC 177 . 40. If coming to the objections to the sale of the property in question in an open auction filed on behalf of defendant No.5, he having failed to put in appearance despite service when the order qua its sale in an open auction was passed on 18th September, 2009, is not justified in claiming that as per master plan prepared by Delhi Development Authority now two families can live in one floor and they being six right-holders, the property can be partitioned, more particularly when four right-holders are already residing therein. Above all, in view of supplementary affidavit filed on behalf of defendant No.6, there is no substance in the objections raised by defendant No.5, as according to defendant No.6, the division of the property into six parts as averred by defendant No.5 is now time barred. As per further version of defendant No.6, even if whatever defendant No.5 now has submitted at this belated stage is believed to be true, it would amount to revoke and amend all the orders passed in the suit with mutual consent of the parties except the said defendant who deliberately opted not to put in appearance despite service. As per further version of defendant No.6, even if whatever defendant No.5 now has submitted at this belated stage is believed to be true, it would amount to revoke and amend all the orders passed in the suit with mutual consent of the parties except the said defendant who deliberately opted not to put in appearance despite service. 41. Defendant No.5 cannot question the orders passed prior to 1st March, 2011 as the exparte order passed against him was not ordered to be set aside and rather he has simply been allowed to participate in further proceedings from 1st March 2011 vide order passed that day in OMP No.20 of 2011. Meaning thereby that he has no right to question the order passed on 18th September, 2009 qua the auction of the property in question, particularly when the application, OMP No.20 of 2011, he had moved under Order 9 Rule 13 of the Code of Civil Procedure with the prayer to recall the orders dated 10th July, 2006 and 18th September, 2009, was ultimately not pressed by him, as per his statement recorded separately and rather sought permission to join further proceedings in the suit, i.e., from 1st March, 2011 onward, which permission was duly granted. Therefore, there is no force in the objections raised on behalf of defendant No.5 to the sale of the property in question in an open auction. 42. In view of above, applications, OMP No.4229 of 2013 filed on behalf of the auction purchaser for confirmation of the sale and OMP No.4319 of 2013 of the plaintiff for cancellation of the sale, being pre-mature are ordered to be dismissed and stand also disposed of accordingly. The objections to the sale of the property in an open auction raised on behalf of defendant No.5 for the reasons stated hereinabove are, however, without any substance, hence rejected. Both the applications and objections stand disposed of accordingly.