Debt Recovery Appellate Tribunal - Delhi
Smt. Sarju Devi And Ors. vs Bank Of Rajasthan Ltd. And Ors. on 24 February, 2006
Equivalent citations: III(2006)BC84, [2006]131COMPCAS31(NULL)
ORDER
Motilal B. Naik, J. (Chairman)
1. This miscellaneous appeal is directed against the order passed by the Presiding Officer, DRT, Jaipur in appeal No. 17 of 2004 on October 7, 2004.
2. Heard learned Counsel for the appellants as well as learned Counsel for the first respondent-bank. According to Mr. B. S. Nagar, learned Counsel for the appellants, one Mr. Ram Manohar Natani, one of the directors of M/s. Divya Fibres Pvt. Ltd. who obtained loan from the respondent-bank herein, became defaulter, resulting in the institution of the OA before the Debts Recovery Tribunal by the respondent-bank. The suit has been decreed. While so, the respondent-bank decided to proceed under the Securitisation Act by serving notice under Section 13(2) on September 27, 2002, on the respondents and took further measures under Section 13(4) of the Securitisation Act for taking possession. It also filed an application under Section 14 of the Securitisation Act before the District Magistrate, Jaipur.
3. However, the respondent-bank pursued execution proceedings before the Recovery Officer. These appellants have filed objections before the Recovery Officer with regard to their share in the property. On January 8, 2004, the Recovery Officer allowed the objections on the basis of a preliminary decree passed by the civil court, i.e., Additional District Judge No. 7, Jaipur City, holding that share of Mr. Ram Manohar Natani who is the principal borrower is restricted to 1/5th and that the entire property cannot be put to auction.
4. As against this order of the Recovery Officer passed on January 8, 2004, the respondent-bank preferred an appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 which was heard and decided on October 7, 2004, setting aside the order passed by the Recovery Officer holding that the learned Additional District Judge ignored the provisions of the Benami Transactions (Prohibition) Act, 1988, as the plea taken in the original suit by the members of the family for making an individual property as a joint family property is not maintainable in view of the Benami Transactions (Prohibition) Act, 1988. The objections raised by the objectors Smt. Sarju Devi and others are held to be not maintainable. It is this order which is challenged by these appellants in the appeal.
5. From the submissions made by learned Counsel for the appellants, it appears that on March 4, 1981, a property bearing No. 2-B-9, Suraj Nagar West Civil Lines, Jaipur, was purchased in the name of Mr. Ram Manohar Natani being elder son of Mr. Bhagwan Sahai Natani for the benefit of these appellants Nos. 1, 2, 3 and 4 also from one Mrs. Chandra Rajan. Thereafter, substantial construction work was undertaken during the same year by co-owners jointly. On December 5, 1981, a family arrangement is made through an agreement between the co-owners. After the purchase of the said property, Mr. Bhagwan Sahai Natani, father of Mr. Ram Manohar Natani died and thereafter, his 1/5th share in the said property was equally distributed amongst the other members of the joint family along with Mr. Ritesh Natani who is the grandson of the late Mr. Bhagwan Sahai Natani. Though these appellants approached respondent No. 3 for partition of the said property by metes and bounds, respondent No. 3 refused to act upon, which necessitated institution of a suit by these appellants in the Court of Additional District and Sessions Judge7, Jaipur City. On January 27, 2003, a preliminary decree was passed in favour of the appellants according to which Mr. Ram Manohar Natani is entitled to only 1/5th share in the property. Basing on the preliminary decree, the appellants have also filed an application for appointment of a Commissioner to partition the property by metes and bounds between the co-owners and for passing a final decree.
6. When the Recovery Officer was contemplating to put the property to auction, objections were filed before the Recovery Officer by these appellants bringing to his notice that the mortgaged property is owned by the members of the joint family as co-owners and that the share of Mr. Ram Manohar Natani who had obtained the loan by mortgaging the property is only 1/5th share in the property as per the preliminary decree passed by the competent civil court. The Recovery Officer after making such enquiry came to the conclusion that the respondent-bank is entitled to attach or sell only 1/5th share of the property to which Mr. Ram Manohar Natani is entitled.
7. On behalf of the respondent-bank herein, it is primarily contended by Mr. Nabik Shyam that in the suit proceedings filed against the said M/s. Divya Fibres Pvt. Ltd., these appellants knowing fully well about the pendency of the suit, neither have participated in the suit nor have taken objection for proceeding against the property in the suit. It is also stated, the so-called agreement later entered into between Mr. Ram Manohar Natani with other members of the joint family, is not a registered document on which basis, the Additional District Judge could not have passed a preliminary decree declaring that the share of said Mr. Ram Manohar Natani is only 1/5th in the property. Counsel also pleaded that the suit properties were mortgaged long ago and that the partition suit was filed only in the year 2003 by these appellants and thus, pleaded collusion between the appellants and other parties to the suit. It is stated that the Presiding Officer, DRT, Jaipur was right in holding that the decree passed by the Additional District Judge is not binding. Counsel also submitted when there is bar under the Benami Transactions (Prohibition) Act, 1988, no suit could have been entertained. Even if such a decree is obtained, it would not be of anybody's benefit. Counsel pleaded that the Tribunal was justified in setting aside the order passed by the Recovery Officer and pleaded dismissal of the appeal.
8. In view of these submissions, it is desirable to examine the provisions of the Benami Transactions (Prohibition) Act, 1988, which have appealed to the Presiding Officer, DRT, Jaipur, on which basis, the order passed by the Recovery Officer is set aside. Section 4 of the Benami Transactions (Prohibition) Act, 1988, reads thus :
4. Prohibition of the right to recover property held benami:
(1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.
(3) Nothing in this section shall apply,
(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family ; or
(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.
9. From a reading of these provisions appearing under Sub-sections (1) and (2) of Section 4, there is a clear bar to lay a claim or action to enforce any right on a property held benami. However, the bar envisaged will not apply to claims made under Clauses (a) and (b) of Sub-section (3) of Section 4 of the Benami Transactions (Prohibition) Act. There is a clear distinction between these contingencies.
10. It has been contended by these appellants that the suit property was originally purchased by Mr. Bhagwan Sahai Natani in the name of Mr. Ram Manohar Natani being his eldest son, for the benefit of the Hindu undivided family and that after the death of said Mr. Bhagwan Sahai Natani, his 1/5th share in the property was equally distributed amongst the other members of the joint family along with his grandson also and that a civil suit for partition has been filed bringing the disputed property to shares. A competent civil court has passed a preliminary decree declaring that Mr. Ram Manohar Natani is entitled to only 1/5th share in the property. Though it is contended on behalf of the respondent-bank that later arrangements made in the year 1981 between the family members vide agreement dated December 5, 1981, is not a registered document and cannot be a basis for partition of the suit property, it is difficult to appreciate this submission, inasmuch as family settlement is permissible under Hindu law. When once the members agree to the apportionment of the properties, claim could be made in legal forums also for adjudication. The comments of the Presiding Officer, DRT, Jaipur that the Additional District Judge ignored the provisions of the Benami Transactions (Prohibition) Act, 1988, in my view, are not in tune with the provisions of the Act. As indicated, Sub-sections (1) and (2) of Section 4 of the Benami Transactions (Prohibition) Act, 1988, prohibit making claim but there is no prohibition if the claim falls under Sub-section (3) of the said section where the property is held by a coparcener for the benefit of others. That distinction, in my considered view, has not been taken into consideration, in the impugned order passed by the Presiding Officer, DRT, Jaipur. Even otherwise, the Presiding Officer, DRT, Jaipur could not have arrived at a conclusion that the suit filed by these appellants is collusive in nature without there being any material to that effect before the Tribunal. Since a competent civil court has granted a preliminary decree declaring the share of said Mr. Ram Manohar Natani to be 1/5th in the disputed property, in my considered view, the Recovery Officer was right in accepting the version of these appellants.
11. In view of above discussion, this miscellaneous appeal is allowed. Consequently, the impugned order is set aside. No costs.