Debt Recovery Appellate Tribunal - Delhi
Sharat Chander Khandelwal And Anr. vs Central Bank Of India And Ors. on 14 October, 2003
Equivalent citations: III(2004)BC215
ORDER
K.S. Kumaran, J. (Chairperson)
1. 1st respondent-Bank, Central Bank of India (hereinafter referred to as 'the respondent-Bank') filed the Original Application against (1) M/s. Damask International, (2) Mrs. Kiran Dua and (3) Mr. Surinder Kumar for the recovery of the money due to it. The respondent-Bank alleged that the 3rd defendant-Surinder Kumar had equitably mortgaged 2 Bighas and 8 Biswas of land in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola, and prayed (among others) for an order for the sale of this property.
2. In pursuance of the Recovery Certificate issued by the Debts Recovery Tribunal-1, Delhi (hereinafter referred to as 'the DRT'), the learned Recovery Officer ordered the attachment of mortgaged property by his order dated 30.4.2001. The appellants who are third parties, filed their objections before the learned Recovery Officer urging that they have purchased the land measuring 1015 square yards in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola, from Sh. Ashok Kumar Aggarwal as per the Agreement to Sell, General Power of Attorney and Receipt, all dated 3.6.1991 as also an Affidavit executed by Sh. Ashok Kumar Aggarwal. The appellants averred that they are in possession as owners thereof, but their property has been wrongly attached. Therefore, the appellants prayed to drop the attachment and other further proceedings against the property, over which they claim right of ownership and possession.
3. The learned Recovery Officer (attached to the DRT-III Delhi) by his order dated 17.7.2002 dismissed the objections filed by the appellants observing that the appellants had not produced the chain of documents to prove the title, but have produced the General Power of Attorney, Agreement to Sell, Receipt and Affidavit executed by Ashok Kumar Aggarwal without even producing the Title Deed in favour of Ashok Kumar Aggarwal. The learned Recovery Officer also observed that the same property belonging to Ashok Kumar Aggarwal in Khasra No. 25/21 has already vested in Gram Sabha through a case SDM/RA Case No. 195/RA dated 25.1.1993 under Section 85 of the Delhi Land Reforms Act. He also observed that the learned Counsel for the respondent-Bank stated that the mortgaged property has been identified by the Revenue Authorities, and that the affidavit to that effect has been filed by the respondent-Bank.
4. Aggrieved the appellants filed appeal 11/2002 before the DRT. The learned Presiding Officer dismissed the appeal in limine observing that the Revenue record shows that the property in question, allegedly purchased by the appellants from Ashok Kumar Aggarwal, has already vested in the Gram Sabha under Section 81 of the Delhi Land Reforms Act in the year 1993 and, therefore, the appellants have no locus standi to file the appeal, since, the appellants are left with no interest in the property after the property vested with the Gram Sabha.
5. Therefore, the appellants have preferred this appeal. The respondent-Bank has filed a suitable reply opposing this appeal, to which the appellants have filed a rejoinder also.
6. I have heard the Counsels for both the sides and perused the records.
7. As pointed out, the case of the appellants is that they have purchased the land measuring 1015 square yards in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola, from Ashok Kumar Aggarwal on 3.6.1991. In support thereof they have produced the General Power of Attorney, Agreement to Sell, the Receipt for the consideration paid and the Affidavit executed by Ashok Kumar Aggarwal. The learned Counsel for the appellants points out from the copy of the Original Application filed before the DRT that the 3rd defendant in the Original Application namely, Surinder Kumar had created a mortgage by deposit of Title Deeds on 21.1.1995 in respect of the land measuring 2 Biswas and 8 Bighas in the above said Khasra No. 25/21.
8. The learned Counsel for the appellants points out that the appellants are neither the borrowers nor the Guarantors and they are not bound to pay the amount claimed in the Original Application, and their property is not liable to be proceeded against for the claim made in the O.A. She also contends that even the identity of the property mortgaged/ attached has also not been established by any acceptable material and therefore, under the guise of attaching and selling the property belonging to Surinder Kumar situated in the very same Khasra No. 25/21, the property belonging to the appellants cannot be attached or sold.
9. The learned Counsel for the appellants points out that the provisions of the II and III Schedules to the Income Tax Act, 1961 have been made applicable to these proceedings (as per Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993).
10. The learned Counsel for the appellants contends that in view of the provisions of para 11 of the II Schedule to the Income Tax Act, if the Recovery Officer finds that the appellants are the owners of the property, or that they are in possession of the property in their own right, the attachment has to be raised.
11. In this connection, the learned Counsel for the appellants relies upon the decision of the Hon'ble Delhi High Court in Shyam Swarup Sharma v. Canara Bank, III (2002) BC 535=99 (2002) Delhi Law Times 475, wherein the Hon'ble High Court, after referring to the provisions of para 11 of the II Schedule to the Income Tax Act, held as follows:
"The aforementioned provisions on the face of it suggest that the Recovery Officer has no jurisdiction to recover the amount by attachment and sale of immovable property if it does not belong to the defaulter. The person who at the date of attachment had some interest in the attached property is entitled to lay a claim or file objections, which if filed, are required to be investigated upon and decided by the Recovery Officer."
Relying upon the decision, the learned Counsel for the appellants contends that it is evident that the Recovery Officer can order the attachment and the sale of the property belonging only to Certificate Debtors in the O.A. not of others. The learned Counsel for the appellants contends that unless and otherwise, the property is identified as the property of the Certificate Debtors in the O.A., the same can neither be attached nor sold. The learned Counsel for the appellants further contends that there has been no such identification in this case, but without identifying the property as that of the Certificate Debtors, the property of the appellants is sought to be attached and sold for realising the amount under the Recovery Certificate, which the appellants are not bound to pay. In support of her contentions that there has been no proper identification of the property of the Certificate Debtors, the learned Counsel for the appellants points out the various orders passed by the learned Recovery Officer in this matter.
12. On 30.4.2001, the learned Recovery Officer ordered the attachment of the mortgaged property, and by order dated 13.7.2001, he directed the respondent-Bank to get the land demarcated by the Tehsildar, and also to file the copy of the Revenue record. On 20.8.2001, the Counsel for the respondent-Bank stated that the mortgaged property has been identified, but the learned Recovery Officer observed that the respondent-Bank had not fully complied with the directions given on 13.7.2001.
13. On 11.9.2001, The Objectors filed their objections and the respondent-Bank was directed to file its reply to the same. On 17.9.2001, the respondent-Bank filed its reply to the objections. On that date, the Counsel for the respondent-Bank stated that in pursuance of the directions issued on 13.7.2001 to the Tehsildar to get the land identified, the land has been identified and the attachment order as well as the notice for settling proclamation were affixed on that property. But the learned Recovery Officer pointed out that the objections have been filed later on and, therefore, directed the SDM concerned to get the demarcation of the mortgaged property done and to file the report. On 31.10.2001, the learned Recovery Officer observed that the SDM/Tehsildar have not complied with the directions. By order dated 10.12.2001, the learned Recovery Officer gave the last opportunity to the respondent-Bank to get the property demarcated with the help of the DC concerned and to file the report. On 17.1.2002, the Counsel for the respondent-Bank reported that the demarcation/ identification of the mortgaged property could not be carried out as the Objectors did not reach the property.
14. On 18.3.2002, the learned Recovery Officer observed that on the last date of hearing, it was agreed that the Officials of the respondent-Bank as well as Objectors will go to the concerned Revenue Authority on 19th and 26th February for getting a concerned land demarcated, but, the same was not complied with by the Objectors. Therefore, the learned Recovery Officer ordered that last opportunity was given to the Objectors to get their share of the land identified/demarcated with the aid of the Revenue Authorities.
15. By order dated 17.4.2002, the learned Recovery Officer, noting that his directions had not been complied with, directed the concerned Tehsildar to appear in person along with documents in respect of the land measuring 2 Bighas and 8 Biswas in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola. He gave a similar direction on 8.5.2002 also.
16. The learned Counsellor the appellants also points out that on 30.5.2002, the learned Recovery Officer heard arguments of both the sides in part, and adjourned the matter for further arguments to 17.7.2002. She also points out that the learned Recovery Officer passed orders awaiting the report of the Tehsildar as well as his personal appearance, but on 17.7.2002 passed the impugned order dismissing the objections.
17. The learned Counsel for the appellants, pointing out all these details, contends that it is clear that the property that has been mortgaged/attached has not been identified at all whereas the property of the appellants is sought to be attached and sold. The learned Counsel for the appellants also points out from the O.A. that the mortgaged property has been merely described as land measuring 2 Bighas and 8 Biswas in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola, without giving the four boundaries therefor. The learned Counsel for the appellants contends that the appellants have purchased, long before the mortgage, the land in very same Khasra No. 25/21, but without proper identification of the property that was mortgaged, the property of the appellants is sought to be attached and sold. She contends that the several orders passed by the learned Recovery Officer himself will show that the properly mortgaged has not been identified, and the attempts to get the same identified have not yielded any result. She, therefore, contends that in the circumstances, the attachment has to be raised.
18. But, the learned Counsel for the respondent-Bank on the other hand contends that even before the learned Recovery Officer the Counsel for the Objectors admitted that he was not sure whether the property belonging to the Objectors has been attached, and that it is an apprehension that the attached property belongs to the Objectors. The learned Counsel for the respondent-Bank, therefore, contends that on the mere apprehension the appellants/ Objectors cannot succeed.
19. But, the learned Counsel for the appellants contends that by putting forward such a contention, the property belonging to the Appellant/Objectors cannot be attached or sold inasmuch as the property mortgaged has not been identified and demarcated, and that was why the necessity to identify and demarcate the property mortgaged was felt necessary by the learned Recovery Officer himself, who had given directions to get the properly mortgaged/identified and demarcated with the aid of the Tehsildar/SDM.
20. In this connection, the learned Counsel for the appellants also points out the report filed by the Receiver-Mr. Ashish Kumar Sharma appointed by the Recovery Officer for taking possession of the mortgaged/attached property. In this report, the Receiver has stated that the site was identified by Mr. Setia, the Branch Manager of the respondent-Bank, and on identification, he put a board at the site. He has also reported that a few people arrived there and objected to the same and informed him that the property identified is less in area. He has also observed that the site identified by the Branch Manager was about 600 to 700 square yards, and that the Bank's Officials were of the view that it was the land. But, the Receiver has reported that the full land could not be identified by the Bank's Officials, and that only a portion was identified and, therefore, he told them to get the full land demarcated from the concerned Patwari. Therefore, the Receiver has reported that he could not take possession, as the land could not be identified.
21. I agree with the learned Counsel for the appellants. The Recovery Officer would be entitled to attach and sell the properties belonging to the Certificate Debtors only. In this case, the property mortgaged by the 3rd defendant in the O.A. namely. Surinder Kumar is sought to be attached and sold. In the O.A. itself, this property is stated to be of a extent 2 Bighas and 8 Biswas in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola. It is this property that has to be attached and sold. The several factors pointed out above, go to show that this property has not been properly identified and that is why the learned Recovery Officer has all through been passing orders directing the demarcation and identification of the property with the aid of the Revenue Authorities. That has not been done. It may be that the Objectors did not appear on the two dates mentioned in the order dated 18.3.2002. On that date, the learned Recovery Officer observed that the Officials of the respondent-Bank and the Objectors had agreed to go to the Revenue Authorities on 19th and 26th February to get the property demarcated, but the Objectors had not complied with the same. May be, the Objectors did not approach the Revenue Authorities on that date, but still the identification of the property mortgaged has not been made is clear. In spite of the several directions given by the learned Recovery Officer the mortgaged property has not yet been demarcated with the aid of the Revenue Authority and identified.
22. There is also an interim report dated 17.9.2002 by the Receiver (Mr. Sunil Kumar Jha) appointed by the learned Recovery Officer wherein he has indicated that he reached the property mentioned in the order sheet dated 17.7.2002, that on inquiry and inspection he found a number of small shops, residential houses, big temple, etc., that the Officer from the Bank was not able to locate the property and, therefore, the demarcation of the mortgaged property is necessary. The learned Counsel for the respondent-Bank contends that no reliance can be placed upon this report and that the said Receiver was even removed. According to him, this is not a proper report. It has even been mentioned in the reply to the appeal that this report does not disclose the true facts and does not reflect the true position. It has also been stated in the reply that the Bank Officer had shown the joint report of the Patwari demarcating the land, but, the Receiver did not go through it properly. But, the fact remains that there is a report by the Receiver which also casts a doubt as to whether the property mortgaged property has been identified or not.
23. Of course, the learned Counsel for the respondent-Bank contends that the property of Ashok Kumar Aggarwal from whom the appellants claim to have purchased 2 Bighas and 8 Biswas in Khasra No. 25/21 situated in the Revenue Estate of Village Safipur, Ranhola, has vested in the Gram Sabha and, therefore, the appellants have no locus standi to file the objections. The learned Recovery Officer has also observed in his order that Revenue records show that the property of Ashok Kumar Aggarwal in Khasra No. 25/21 has vested in the Gram Sabha as per the order dated 25.1.1993. The learned Counsel for the respondent-Bank contends that the Revenue Authorities had filed the Ejectment Suit against Ashok Kumar Aggarwal, and the said Ashok Kumar Aggarwal is not in position and, therefore, it should be presumed that he has been ejected. He also contends that the learned Recovery Officer and this Court in appeal are not concerned with the circumstances under which the said order was passed.
24. But, we find that the appellants claim to have purchased the property from Ashok Kumar Aggarwal in the year 1991 itself, whereas, the order is stated to have been passed on 21.1.1993 against Ashok Kumar Aggarwal. Further, there is nothing to show that in pursuance of the ejectment order passed on 21.1.1993 possession of the property was taken over by the Gram Sabha. The appellants claim to be in possession from 1991 i.e. even from prior to 21.1.1993. Therefore, simply because there is an ejectment order against Ashok Kumar Aggarwal it cannot be stated that the appellants have no locus standi to file the objections, If the Gram Sabha has any right over the property, and if the appellants are in possession of the property, then it is a matter between the Gram Sabha and the appellants as to whether the Gram Sabha is entitled to take possession or not.
25. In these circumstances, I am of the view that in the proceedings, which commenced before the learned Recovery Officer in pursuance of the Recovery Certificate issued by the DRT-I, Delhi, the Recovery Officer has to investigate the claim of the Objectors and decide the same in accordance with the provisions contained in paragraph 11 of the Second Schedule to the Income Tax Act which are applicable to the proceedings before the Recovery Officers under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Paragraph 11 of the Second Schedule provides for the investigation into the claims made by the Objectors. Sub-para 3 of Para 11 provides that the Objector must adduce evidence to show that he had some interest in or was possessed of property in question at the date of the attachment. It is clear from sub-para 4 of Para 11 that if on investigation the Recovery Officer is satisfied that the property was not in possession of the Certificate Debtor or of some other person in trust of the Certificate Debtor, then the attachment will have to be raised.
26. Therefore, it is evident that if, on the date of attachment the Certificate Debtor was not in possession, or if the Objectors are in possession of the property in question in their own right, and not on behalf of the Certificate Debtors, then the attachment will have to be raised. Therefore, the contention that the property has vested with the Gram Sabha and therefore the appellants have no locus standi to file the objections cannot be accepted.
27. Therefore, taking into consideration all these aspects, I am of the view that the impugned order passed by the learned Recovery Officer dismissing the objections, and that of the DRT-III Delhi dismissing the appeal against the same have to be set aside, and the matter has to be remitted back to the Recovery Officer for further inquiry and fresh disposal, after identifying the property mortgaged in this case.
28. The learned Recovery Officer has also pointed out in his order that the Objectors have not produced even the Title Deed in favour of Ashok Kumar Aggarwal. Now, the appellants have also produced the copy of the Sale Deed in favour of Ashok Kumar Aggarwal dated 29.3.1988 executed by Chander Singh. Since, I am remitting the matter back to the Recovery Officer for further inquiry and fresh disposal, the appellant will be entitled to produce the copy of this document also before the learned Recovery Officer.
29. Accordingly, the appeal is allowed setting aside the impugned order passed by the learned Presiding Officer of the DRT-III Delhi dated 17.9.2002. Consequently, the order passed by the learned Recovery Officer dated 17.7.2002 will also stand set aside.
30. The matter is remitted back to the learned Recovery Officer for further inquiry and fresh disposal in accordance with law and in the light of the observations contained in this order.
31. The learned Recovery Officer shall first demarcate and identify the mortgaged property as also property alleged to have been purchased by the appellants with the aid of the Revenue Authorities.
32. Both parties are directed to extend their cooperation to the learned Recovery Officer as also to the Revenue Authorities in demarcating and identifying the property.
33. Both parties are at liberty to lead such further evidence as may be necessary.
34. The learned Recovery Officer, after affording both sides opportunity of putting forward their case, shall dispose of the matter in accordance with law and in the light of the observations contained in this order.
35. For this purpose both the sides are directed to appear before the learned Recovery Officer on 9.12.2003 for taking further directions in this matter without awaiting any further notice from the learned Recovery Officer.
36. Copy of this order be furnished to the appellants and the respondents. A copy be also forwarded to the concerned Recovery Officer of the DRT.