SHYAM SWARUP SHARMA Vs. CANARA BANK

JUDGEMENT

(1.) The petitioners in this petition filed under Article 226 of the Constitution of India are seeking direction (i) to quash the order dated 16.2.2000 passed by Recovery Officer, Debt Recovery Tribunal in RC No.3/98 arising out of O.A. No.409/96; (ii) order dated 3.3.2000 passed by the Recovery Officer, Debt Recovery Tribunal, New Delhi rejecting petitioners' objections and thereby directing the petitioners property to be put to sale; (iii) to release the petitioners' flat 81 and B2 duplex in property bearing No.C-3, Kailash Colony, New Delhi, from attachment, sale or similar distress proceedings in RC No. 3/98 titled as Canara Bank vs. Sagar Constructions Pvt.Ltd. & Ors and (iv) to quash and set aside the order dated 13.9.2001 passed by Debt Recovery Tribunal dismissing petitioners appeal alongwith all other orders passed subsequent thereto.

(2.) Facts in brief and in so far as they are relevant for deciding the controversy in question are that Canara Bank filed an application (0.A.409/96) under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act) against Sagar Constructions Co. Pvt. Ltd. (respondent No.2) in which an order for recovery of the debt was passed in favour of the Canara Bank against the said company. In order to recover its debt the Canara Bank appears to have taken out proceedings for recovery, in which a certificate appears to have been issued. Acting on the said certificate the Recovery Officer proceeded to recover the amount by one of the modes prescribed for recovering the amount, namely, attachment and sale of immovable property. On 27.1.2000 an order of attachment came to be passed by the Recovery Officer attaching 12 flats in the property constructed on plot No.C-3, Kailash Colony, New Delhi, which included the property in question.

(3.) Petitioners" case is that they are owners in possession of two flats constructed on plot No.C-3, Kailash Colony, New Delhi. The plot was purchased on 12.12.1984 by Shri Kishan Chand Jain from M/s. Sagar Construction Pvt. Ltd. Possession was also handed over to Shri KC. Jain. Documents annexures P~2 and P-3 have been appended in support of this stand taken by the petitioners. It is alleged that Kishan Chand Jain sold his rights, title and interest in favour of M/s. Peshawar Soap & Chemical works, Adalat Bazar, Patiala, who in turn transferred its rights in favour of M/s. Sumangal Leasing Ltd. which is confirmed by the endorsement of Shri Kishan Chand Jain as is evidenced by document annexure P-5. It is stated that on 25.1.1997 the petitioner agreed to purchase the flats from M/s. Sumangal Leasing Ltd. and entered into a receipt cum agreement annexure P~4 dated 25.2.1997 and on 6.1.1998 two sale deeds were executed in favour of the petitioners in respect of the said flat No.8 Duplex making it a property having two portions Bl and B2. Sale deed annexure P~6 was duly registered. Thus in nutshell the petitioners claim that they were owners in possession of the flats in question much prior to the date when order of attachment was passed by the Recovery Officer on 27.1-2000. It was not the property of the debtor and cannot be subjected to attachment and sale.