VIJAY KUMAR SHARMA Vs. VIJAY KUMAR KAPOOR

JUDGEMENT

(1.) This common judgment disposes off four appeals (two execution appeals and two company appeals), because of the twining of facts. They relate to one property A-24, Okhla Industrial Estate, Phase I (hereafter "the suit property"). The first set of two appeals are preferred by Yusuf Engineering Co (P) Ltd (hereafter "Yusuf" or "YECPL") which had filed EA 668-69/2011 claiming an order to set aside the sale of the suit property pursuant to a court order dated 30.09.2011 and a further stay of proceedings in Execution Petition No. 135/2010. The other application, EA 5/12 was by Manish Katyal (hereafter "the auction purchaser") who sought confirmation of the auction sale. Yusuf's applications were dismissed and those of the auction purchaser were allowed, by the learned Single Judge, in the order dated 02.03.2012. Yusuf prefers the two execution appeals, i.e. EFA 9 and 12/2012 against the said judgment (the said two appeals are hereafter referred to as the "execution appeals"). The second set of appeals is by Vijay Sharma (Co. A. No. 50/2013) and D.K. Warehouse Pvt. Ltd (Co. A. No. 61/2013- hereafter "D.K. Warehouse"). These appeals, preferred under Sec. 483 of the Companies Act, 1956 (hereafter called "company appeals") are directed against an order of the Company Judge dated 07.05.2013 in CP 265/1998. The company appeals also pertain to the suit property.

(2.) Yusuf purchased the suit property by a registered deed dated 21199 Its predecessor-in-interest had acquired perpetual leasehold rights from the Delhi Development Authority (DDA) through a deed dated 25.09.1980. It is alleged that on 27.11.2003, the suit property was let out to M/s Ambica Research Development (hereafter "ARD") a proprietorship concern of Ms. Anita Jain. It is stated that such an arrangement had the approval of the concerned authorities and that later, a greater portion of the suit property on the ground and first floors etc. were let out through a lease deed for three years to ARD on 10.02006, by a lease deed. Another lease deed was later executed on 01.08.2009. Apparently, in the meanwhile, on 01.09.2005, Ms. Anita Jain married Mr. V.K. Sharma (appellant in one of the company appeals). A dispute had, in the meanwhile arisen between ARD and one Vijay Kapoor (hereafter called the "decree holder" or "DH"), was referred to arbitration. An award was rendered, adverse to ARD, i.e. the proprietorship concern of Ms. Anita Jain, on 6th Jan., 2010, holding her liable to pay Rs. 21,01,875.37 with interest @ 9% per annum from 2006. This award became the subject matter of the execution proceedings, EP 135/2010. In that proceeding, on 26th Aug. 2010, the court attached the suit property as well as another property. The JD appeared through counsel before the Joint Registrar (JR) on 2nd Dec. 2010 and stated that a petition was filed under Sec. 34 of the Arbitration and Conciliation Act (hereafter "the Act") to challenge the award. The JR noted that since there was no stay of the proceedings, draft sale proclamation schedule should be filed within four weeks. On the next date, i.e. 25th Jan. 2011 since the JD did not appear, the JR directed notice under Order 21, Rule 54 , CPC. One Kiran Mittal filed EA No. 95/2011 seeking for the setting aside of the order dated 26th Aug. 2010 of the court-but insofar as it related to some other property, (80-4/3, Forest Lane, Sainik Farms,) New Delhi and not the suit property. The court directed proclamation of sale on 006.2011 and 30.09.2011. On 25th Oct. 2011, the sale proclamation was advertised in English and Hindi dailies. On 15.11.2011 auction of the suit property was conducted and Manish Katyal was the highest bidder at Rs. 1,24,00,000.00. The reserve price of the disputed property was kept at Rs. 35,00,000.00.

(3.) In the two applications filed in execution proceedings, Yusuf claimed that the property in question had been leased by it to ARD for three years commencing from 10th Feb. 2006. It was stated that Yusuf had orally worked out an arrangement of ARD and persuaded it to vacate the property in question at the earliest. Yusuf argued that ARD had written to it on 16th March 2011 stating that it would vacate the premises on 15th April 2011 and on that day it (ARD) handed over the premises to Yusuf, which was thereafter retained by it. On 15th Nov. 2011 when Yusuf personnel visited the suit property to collect old files, the Local Commissioner appointed by this Court reached, with some others with local police and informed them about the court auction. Yusuf also urged that thereafter the lawyer inspected the court file and the applications to set aside the auction and stay execution proceedings were filed. In the circumstances, Yusuf says it could not be fastened with liability of a third party, i.e. ARD, which was merely a tenant. The property in question admittedly was in the name of Yusuf and cannot be sold to realize the debts of any one shareholder. In any event, the property of the JD's husband could not be sold to satisfy the debt of the wife. It is stated that it is not pleaded anywhere in the execution petition that the JD has used YECPL as a front for availing of the benefits which form the subject matter of the arbitral award and, therefore, there is no question of lifting the corporate veil of YECPL. Likewise, since the JD was only an individual, there is no question of enforcing the liability of the JD against a company, which is not even a party either to the Award or the execution proceedings.