SATPAL SINGH BINDRA Vs. KOTAK MAHINDRA BANK

JUDGEMENT

(1.) THIS appeal has been directed against the interim order dated 5.8.2009 passed on the application (I.A. No. 588/2009) filed in the SA, whereby the learned Presiding Officer of the Debts Recovery Tribunal -II Delhi (for short, the DRT) restrained the physical dispossession of the appellant by the respondent -Bank till further orders subject to his filing an undertaking that if the property in question is purchased by some person other than him for a better price, then he shall hand over peaceful possession of the property to him. Briefly stated, the facts of the case are that the appellant had filed an application (S.A. No. 42/2009) before the DRT with the averments that he had purchased House No 42, Block No. A -3, Second Floor, Paschim Vihar. New Delhi, hereinafter referred to as the property in question, from one Chandra Prakash and his name was mutated qua that property in the records of the MCD. He took personal loan of Rs. 10 lacs from one Sandeep Adhlakha and executed a sale deed on 20.1.2006 of the property in question as a security thereof. On that very date Sandeep Adhlakha executed an agreement of tenancy. Annexure A -3 to the S.A., in favour of the appellant and he was permitted to retain the property as a tenant at the monthly rent of Rs. 2800/ -. When Sandeep Adhlakha demanded his money back, the appellant arranged the same from one Ashwini Nayar and allowed Sandeep Adhlakha to execute the sale deed of the property in question in favour of Ashwini Nayar as a security. The said sale deed was executed on 5.7.2007 and on 20.7.2007. Ashwini Nayar also executed an agreement of tenancy, Annexure A -4 to the S.A., in favour of the appellant and permitted him to remain in possession as tenant on a rent of Rs. 3100/ - per month in continuation of the earlier agreement of tenancy dated 20.1.2006.

(2.) THE said Ashwini Nayar, in the capacity as guarantor, mortgaged the property in question with the respondent -Bank against the financial facilities sanctioned to his company M/s. Megnostar Telecommunications Pvt. Ltd. As the said borrower company failed to repay the amount of loan, the respondent -Bank classified the account as non -performing asset (NPA) and issued demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act). When the borrower did not pay the amount due on him, the respondent Bank approached the CMM under Section 14 of the said Act and obtained an order for the possession of the property in question. The appellant then filed the application under Section 17(1) of the SARFAESI Act (S A. No. 42/2009) and as an interim relief prayed through application (I.A. No. 588/2009) against is physical dispossession from the property in question. During the course of hearing of that application the applicant proposed to purchase the property in question at the reserve price of Rs. 1.1 crore. The learned Presiding Officer of the DRT permitted the respondent Bank to take symbolic possession of the property in question and to recover its amount through auction but a liberty was given to the appellant to participate in the auction. The learned Tribunal, however, also restrained the Bank from physical dispossession of the appellant till further orders subject to the condition, as mentioned above. Feeling aggrieved with the direction of filing of the undertaking to hand over possession within the specified time if the property is purchased by some one else than him, the appellant has filed the present appeal.

(3.) MR . Bajaj has pointed out that the applicant is neither a borrower nor guarantor or mortgagor and his claim is based on the tenancy and possession of the property in question. He has contended that it is not the case of the respondent -Bank that the appellant was inducted by the defaulter borrower after the creation of the mortgage as he is in possession of the property in question from before the creation of mortgage in favour of the Bank. He has submitted that the question of possession of the appellant as tenant is to be decided by the Tribunal below as the SA is still pending disposal before it. He has further submitted that the appellant would be subjected to great hardship if he is forced to vacate the property in question in the eventuality of it being purchased by some other person than him, on the basis of the undertaking, even before the question of his tenancy is decided by the Tribunal below. Mr. Bajaj also contended that the appellant's legal right as a tenant could not be made dependent on the undertaking as asked for by the learned DRT. According to him, the appellant is living in the property in question with his family and the learned Tribunal below has accepted his possession over the property in question from before its mortgage and he has acquired a right of possession as a statuary tenant which is required to be protected and the respondent -Bank cannot dispossess him in exercise of the powers under the SARFAESI Act. Mr. Bajaj has also relied upon the case of Krishan Singh Rana v. Haryana State Industrial Development Corporation Ltd., : 2001 (1) Bank CLR 228 (SC) and on a judgment of this Tribunal rendered in Aas Mohmad v. Punjab National Bank & Anr.,, 1 (2009) BC 72 (DRAT), in support of his contention.