STATE BANK OF INDIA Vs. S B ASSOCIATES

JUDGEMENT

(1.) THE common saying that the travails of a decree -holder or an auction purchaser start with far greater dimensions after the decree is passed or the properties purchased in auction, is well illustrated by the facts of this case.

(2.) THE appellant -State Bank of India financed a Company -known as Haryana Rubber Industries (P) Lt. at Ballabgarh, District Sonepat and when the Company aforesaid defaulted in repaying of the loan, the appellant filed a suit against it and its guarantors for recovery of Rs. 22,97,398.95 paise on September 15, 1980. During the currency of the suit, the Company was ordered to be wound up by this Court in a petition instituted on that behalf under the Companies Act vide Orders dated March 3, 1981 and the Official Liquidator was ordered to take over its affairs on an application filed by the appellant. However, the suit was allowed to continue after the same was transferred to the files of this Court but after its transfer it was registered as Company Petition No. 29 of 1982. The suit, after full length trial, came to be decreed on December 14, 1984. Obviously, the appellant sought execution of the decree and in the course of execution proceedings, this Court directed that the mortgaged properties be sold in an open auction. The Official Liquidator, with a view to carry out the directions aforesaid, was directed to assist in making the property available for sale. The appellant -bank was directed, vide orders dated April 29, 1988 to issue an advertisement with regard to the sale of the mortgaged properties in various News Papers. The immovable property of the Company to be sold was a piece of land measuring 38 Kanals 13 marlas including the building constructed thereon. The public auction was held on September 17, 1988 and the respondent -M/s S.B. Associates, G.T. Road, Ballabgarh, being the highest bidder, succeeded in purchasing the property aforesaid. The sale came to be confirmed by this Court on November 3, 1988. The dispute giving rise to this appeal surfaced when the auction purchaser, respondent -herein, made an application for getting possession of the property sold to it and when the Official Liquidator was directed by orders passed by this Court to deliver possession to it and when he reached the premises for handing -over the possession to the respondent, it transpired then that apart from the land, some constructed portion in the premises was in occupation of the appellant i.e. decree -holder. The appellant had refused to part with the possession, thus, resulting into an application that was moved by the Company, auction purchaser, praying therein that the decree -holder be directed to deliver vacant possession to it. The bank resisted this application on the solitary ground that it was a tenant over the property in dispute even prior to the date when the Company was ordered to be wound up. With a view to prop up its plea of tenancy some accounts statements maintained by it in the name of the company showing that the rent was being regularly credited to the accounts of the Company, were filed in addition to some correspondence between the Company, prior to its liquidation and the bank. The auction purchaser filed rejoinder to the reply aforesaid and denied the tenancy of the bank over the premises. It was also asserted that the bank could not possibly be in possession of the property as tenant but for as mortgagee as also that the bank in the suit for recovery had no where asserted that it was a tenant in some part of the building of the Company.

(3.) WE have heard learned counsel for the parties and gone through the records of the case. The two fold contention of Mr. Sarin, learned Senior Advocate, appearing on behalf of the appellant is that the order for handing over vacant possession to the auction purchaser could not be passed without there being a decree of eviction against the appellant and that the appellant was given no chance to bring on records the evidence which could conclusively prove that it was a tenant under the Company known as M/s Haryana Rubber Industries (P) Ltd.