DADHA ESTATES PVT LTD Vs. C RAVINDRAN

JUDGEMENT

(1.) O. A. No. 1033 of 2006 is filed seeking an order of interim injunction restraining the fifth respondent LIC Housing finance Limited from taking further action pursuant to the auction notice in respect of flat bearing No. F6 situate at Lloyds Towers, 93, Lloyds Road, Royapettah, Chennai 600 014. This Court was pleased to grant ad interim injunction when the said Original Application was moved, in absentia of the respondents. The fifth respondent moves application No. 179 of 2007 seeking to vacate the order of ad interim injunction granted by this Court on 28-12-2006 in O. A. No. 1033 of 2006. The fifth respondent has taken out another application No. 180 of 2007 praying to reject the plaint and dismiss the suit in C. S. No. 960 of 2006 on the file of this Court.

(2.) TO avoid confusion, the plaintiff is referred as the applicant and the fifth defendant is referred as respondent herein.

(3.) THE applicant would contend that the applicant is engaged in the business of real estate. The applicant was the owner of an extent of 9 grounds and 442 sq. ft. of land and building at No. 93, Lloyds Road, chennai 600 014. It entered into an agreement for joint development with Ready-money Shops and Homes Limited to promote the said property as residential flats vide an agreement dated 24-9-1994. The applicant also executed a registered power of attorney dated 24-10-1994 authorising Ready-money Shops and Homes Limited to deal with 50% of the undivided land. Readymoney shops and Homes Limited sold to the first respondent and his late wife by name Usha ravindran under the sale deed dated 19-9-1997, an undivided extent on 916. 95 sq. ft. As there was inordinate delay caused by the builder Readymoney Shops and Homes Limited, the aforesaid agreement for joint development was cancelled and the power of attorney was revoked by the applicant. Then a suit in C. S. No. 226 of 1998 was filed by the applicant as against the builder before this Court and an order of injunction restraining the builder for exercising any right under the aforesaid agreement was obtained. Thereafter, a memorandum of settlement dated 22-10-2002 was entered into between the applicant the flat purchasers and the readymoney Shops and Homes Limited. The applicant, under the aforesaid memorandum of settlement, took absolute possession of the entire property and handed over the property to a new contractor for the completion of the construction. The additional amount required to complete the construction was to be paid by the flat purchasers under the pool account. The first respondent and his wife executed a declaration addressed to the applicant confirming the aforesaid memorandum of settlement dated 22-10-2002. The said declaration confirmed that a sum of Rs. 2,97,200/- was payable by the first respondent to the pool account. The first respondent allowed the applicant to hold possession of the apartment No. F6 allotted to him and his wife till payments were made along with interest. The first respondent and his late wife mortgaged only the undivided share of the land and borrowed housing loan from the fifth respondent, but the fifth respondent now claims that the suit flat is also the subject-matter of the mortgage. It has now invoked the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 (SARFAESI Act, 2002) to bring the property to auction sale. A notice was affixed on the outer door of the suit property stating that the fifth respondent had taken possession of the property on 3-11 -2006 pursuant to the orders of the chief Metropolitan Magistrate, Chennai dated 19-10-2006 under Section 13 (4) of the surfaes1 Act. The memorandum of settlement and the declaration given by the first respondent supersede all other agreements/ arrangements. No interest has been created in the suit property which remains in the possession of the applicant. Therefore, the applicant seeks for an order of interim injunction as stated therein. As the suit relates not only to the action taken by the fifth respondent under the SURFAES1 Act, 2002, but, it also pertains to claim of interest over the suit property. The applicant is a third party to the dispute between the first respondent and the fifth respondent. The fifth respondent deliberately misinterprets Section 34 of the SURFAESI Act with a view to hush up the merits of the case. As the applicant was not covered by the provision of the surfaesi Act, 2002, the question of filing any application under Section 17 of the Act by the applicant does not arise. Therefore, the application filed by the fifth respondent to reject the plaint deserves to be dismissed.