Karnataka High Court
M/S Housing Development Finance vs Mr S V Bharath on 15 July, 2022
Author: B.M.Shyam Prasad
Bench: B.M.Shyam Prasad
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JULY, 2022
BEFORE
THE HON'BLE MR.JUSTICE B.M.SHYAM PRASAD
MISCELLANEOUS FIRST APPEAL NO.4249/2022 (CPC)
BETWEEN:
M/S HOUSING DEVELOPMENT
FINANCE CORPORATION LIMITED
(HDFC LIMITED)
HAVING ITS BRANCH OFFICE AT
NO.51, KASTURBA ROAD,
BANGALORE - 560 001
REP BY ITS AUTHORIZED SIGNATORY.
... APPELLANT
(BY SMT. SREEDEVI K.B, ADVOCATE)
AND:
1. MR S V BHARATH
S/O MR. VISHWANTH
PROPRIETOR OF SMART VISIONS
AGED 41 YEARS
R/AT 1280/2/1, 1ST CROSS
1ST MAIN, VIJAYANAGAR
BENGALURU - 560 079.
2. MRS. SAHANA S B
W/O MR. S V BHARATH
AGED 38 YEARS
NO.3/25/, 1ST CROSS, MICR LAYOUT
BENGALURU - 560 040
BYANNA INDUSTRIAL ESTATES
VIJAYANAGAR,
BENGALURU - 560 040.
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THE ABOVE RESPONDENTS ARE
ALSO AVAILABLE AT
NO.57 (HIG) BBMP WARD NO.100
RMV 2ND STAGE,
BENGALURU - 560 094.
3. MR. MAHESH G
S/O MR. GOVINDARAJU
AGED 34 YEARS
HAVING ITS OFFICE AT
GOVIANU GRACE GARDEN
BENSON ROAD
BENSON TOWN,
BENGALURU - 560 046.
... RESPONDENTS
(BY SRI.PRADEEP KUMAR P.K, ADVOCATE)
THIS MISCELLANEOUS FIRST APPEAL IS FILED
UNDER ORDER 43 RULE 1(r) R/W SECTION 151 OF CPC,
AGAINST THE ORDER DATED 30.05.2022 PASSED ON
I.A.NO.2 IN OS.NO. 2275/2022 ON THE FILE OF THE X
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BENGALURU CCH-26, REJECTING THE I.A.NO.II FILED
UNDER ORDER 39 RULE 1 AND 2 OF CPC.
THIS MISCELLANEOUS FIRST APPEAL COMING ON
FOR ADMISSION THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
The appellant, M/s. Housing Development Finance Corporation Limited [HDFC Limited] which has extended Home loan to the first and second respondents, is unsuccessful in its application [I.A. -3- No.II] under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 [for short, 'the CPC'] for temporary injunction against the respondents from proceeding with the construction in the subject property. However, the appellant is successful in its application for injunction [I.A. No.I] under Order XXXIX Rules 1 and 2 of the CPC against the respondents from alienating or transferring or otherwise creating third party rights in the suit schedule property. The dispute is in O.S. No.2275/2022 on the file of the X Additional City Civil and Sessions Judge, Bengaluru [for short, 'the civil Court'] and the impugned common order is dated 30.05.2022.
2. This Court must observe that while rejecting the appellant's application for injunction against construction, the civil Court has clarified that even if any new construction is undertaken by the respondents, there shall be first charge on the property -4- including the construction till the repayment of the entire loan by the borrowers amongst the respondents viz., first and the second respondents.
3. During the hearing, the respondents were permitted to file affidavit on whether they would create any third-party interest in the subject property diluting the first charge over the subject property including the construction thereon. The third respondent, who has entered into certain commercial transactions with the other respondents for development being fully aware of the charge in favour of the appellant, has filed affidavit stating inter alia that he has undertaken the construction in terms of the Joint Development Agreement dated 02.09.2021; he will not create any interest in the subject property without repaying the loan; he would not claim any right contrary to charge of the appellant over the subject property including the construction.
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4. The learned counsels for the parties are heard in the light of this affidavit as also the unequivocal and categorical statement by the learned counsel for the respondents that the respondents have ensured that the outstanding EMIs as of the Notice dated 10.06.2022 are paid in its entirety and the respondents would continue to pay EMI without default.
5. The learned counsel for the appellant submits that there cannot be any change in the nature of the subject property because the first and second respondents [the borrowers], without discharging the loan, have entered the Joint Development Agreement with the third respondent and have started developing the property. The construction in the subject property must be stopped. However, this Court is not persuaded to grant injunction against construction when the civil Court has considered the appellant's request for temporary injunction for construction in the -6- circumstances relied upon by the respondents but with the caveat that there shall always be first charge over the subject property including the construction. The appellant, if aggrieved and if it feels that it should, given the nature of its charge, recall the loan and initiate proceedings for recovery of its dues, it could always pursue such remedy.
6. The learned counsel for the respondents submits that ideally the respondents would like to clear the loans as early as possible, but in any event, they would approach the appellant for restructuring of the loan. This submission is made reiterating the terms of the undertaking filed by way of an affidavit viz., the respondents would not create third party rights or dilute the charge in favour of the subject property or claim any equity.
In the light of the above, the appeal stands disposed of reserving liberty to the appellant and the -7- respondents to pursue all their remedies in accordance with law including the liberty to the respondents to submit a representation with the appellant for restructuring of the loan. This Court may add that if such representation is filed, the appellant could consider the same subject to the applicable Rules and Guidelines.
SD/-
JUDGE AN/-