KIRAN MAHAJAN Vs. ORIENTAL BANK OF COMMERCE

JUDGEMENT

(1.) This writ petition has been filed aggrieved by the order of the sale of property by the recovery officer dated 14th September, 2004 and rejecting the application of the petitioner. The petitioner had filed an application for determination of Mortgage liability against her. The petitioners had contended the said liability as per entry in Equitable Mortgage Register of the Bank was valued at Rs. 9 lacs and therefore the liability of the petitioners could not exceed the said amount. It was also contended that as the property bearing No.E-300, 1st Floor, Greater Kailash-II, New Delhi was valued at Rs.9 lakhs, therefore, petitioners' liability could not exceed the said amount and the petitioners were willing to pay the said mortgage liability to the respondent-bank and the proclamation of the sale effected by Recovery Officer should be set aside. The certificate holder bank had opposed the prayer of the applicants. The Debt Recovery Tribunal did not agree with the grounds as set out by the petitioner and dismissed the application stating that the Tribunal cannot accept the value of the property as given by the petitioners nor can discharge the liability of mortgagor in respect of one of the property.

(2.) Ms.Tasneem Ahmedi counsel appearing for the petitioners has contended that the property initially belonged to Yogi Pharmacy Ltd. who had mortgaged this property in 1994 to the certificate holder. It was contended that thereafter a memorandum of understanding dated 21st December 1996 was signed by Yogi Pharmacy Ltd. & M/s Saraswati Real Estates through its Director Vishal Gulati. Yogi Pharmacy had also given an irrevocable power of attorney dated 21st December, 1996 in favour of M/s Saraswati Real Estates. The power of attorney was revoked by Yogi Pharmacy by giving a notice dated 16.9.1997. Against the said revocation M/s Saraswati Real Estates through its Director Vishal Gulati filed a suit in this Court for declaration that Yogi Pharmacy could not have revoked the irrevocable power of attorney. The learned counsel for the petitioner relied upon the decree dated 15th March, 2001 passed in the said suit. The decree in favour of M/s. Saraswati Real Estate (P) Ltd & Anr. was passed without any contest by M/s. Yogi Pharmacy Ltd & Anr. On the basis of said declaratory decree, it is contended that revocation of irrevocable power of attorney was bad in law and that M/s Saraswati Real Estates had right to do all the acts as stipulated in the said irrevocable power of attorney including the right to sell the said property No. E-300 (First Floor), Greater Kailash II, New Delhi. Learned counsel for the petitioner has contended that on the basis of the said declaratory decree, by virtue of said power of attorney, rights in the said property have been transferred to petitioners who purchased the said property on 27th March, 2001 by having an agreement for sale executed on 27th March, 2001 by Sh. Vishal Gulati acting in his capacity as Director of M/s. Saraswati Real Estates Investment (P) Ltd. in favour of petitioners for consideration. It has been contended on behalf of petitioners that they have rights in the property, therefore, they are entitled to have the value of the said property determined and non-determination of the said value by the Tribunal is incorrect and contrary to law. Learned counsel for the petitioners has also in support of her contention relied upon Halsbury's Laws of England Vol.32, Mortgage. Relevant para 914 of that reads as under:-

(3.) We have given our careful consideration to the arguments advanced by the learned counsel for the petitioner. There is no force in the arguments of the petitioner. In view of the fact that the property was mortgaged by Yogi Pharmacy in the year 1994, execution of an irrevocable power of attorney and declaration by this Court that the same could not have been revoked by Yogi Pharmacy in favour of M/s Saraswati Real Estates, execution of an agreement to sell in favour of petitioners do not help the case of the petitioner. M/s Saraswati Real Estates could not have sold the property without any charge earlier created by M/s. Yogi Pharmacy as M/s Saraswati Real Estates has sold as the attorney of M/s. Yogi Pharmacy. In view of the mortgage, the property could not have been sold to the petitioners at the first instance. The petitioners can not claim that they have absolute right in the property and not bound by the mortgage.