Delhi District Court
In Re vs Sh. Niranjan Singh S/O Prem Singh on 2 December, 2011
IN THE COURT OF SHRI SANJEEV KUMAR; ADJ01:
ROHINI COURTS; DELHI
LAC No. 79B/09
UID no. 02404C0091182009
IN RE :
UNION OF INDIA
V/S
1. Sh. Niranjan Singh S/o Prem Singh
R/o 6/100, Nirankari Colony,
Delhi110009.
2. Haryana Financial Corporation
R/o 549, Vazir Chand Colony, Karnal.
LAC NO. : 79B/2009
Award No. : 11/200405
Village : SANOTH
Date of Institution : 11.02.2005
Date of arguments : 07.10.2011
Date of Judgment : 02.12.2011
JUDGEMENT
1. The present reference U/S 3031 of Land Acquisition Act, 1894 LAC no. 79B/09 1 of 17 (hereinafter called as LA Act) sent by the Land Acquisition Collector (hereinafter called as LAC) to determine as to who is entitled to receive the compensation of the land bearing khasra nos. 54/9 (45) situated in the revenue estate of Village Sanoth, which was acquired vide award no. 11/200405 (hereinafter called as acquire land ).
2. As per the memorandum sent by the LAC, there were two interest parties (hereinafter called as IP). Notice was issued to both the parties.
3. IP no. 1 has filed his claim in which it is that that IP no. 1 is the Bhumidhar and in possession of the land bearing khasra no. 54/9(45), 22(45), 58/2(412), 58/9(04) situated in the village Sanoth, Delhi which he purchased from Smt. Murti Devi vide registered sale deed dated 17.05.96 after obtaining no objection certificate no. 3592 dated 25.05.96 from the competent authority. It is further stated that after after sale deed land was recorded in his name vide order no. M762/9596 NT(N) dated 08.07.96 and thus IP no. 1 is the bona fide purchaser of the acquired land. It is further stated by the IP no. 1 that land is governed by the Provisions of Delhi Land Reform Act, 1954 (hereinafter called as DLR Act) and and it does not bestow a Bhumidhar with unrestricted interest in the agricultural land and Bhumidhar has only right to use the agricultural land in a particular manner as envisaged in the Act and the right to transfer by LAC no. 79B/09 2 of 17 Bhumidhar is controlled by the provisions of the Act and accordingly no Bhumidhar has any right to mortgage the land belonging to him, therefore the objection filed by the IP no. 2 is false and frivolous and is liable to be dismissed and IP no. 1 is entitle to receive the entire compensation amount.
4. On behalf of IP no. 2 claim was filed by Sh. N.K. Chandna as Manager of IP no. 2 in the form of application under Section 151 Code of Civil Procedure (CPC). In which it is stated that IP no. 2 is a corporation i.e. a body corporate established in the State of Haryana under the State Financial Corporation Act, 1951 (hereinafter called as SFC Act) with its head office at Chandigarh and branches amongst others at New Delhi and Karnal. Further it is stated that one M/s Vicky Paints & Chemicals availed of a term loan of Rs. 2.60 lacs and working capital loan of Rs. 1.36 lacs from the corporation from its Karnal Branch vide mortgage deed dated 17.01.92 and hypothecation deed dated 13.11.92 respectively and Smt. Murti Devi has created equitable mortgage in favour of the corporation of her land which include the acquired land as collateral security against the above said loans and for this purpose she deposited the original sale deed registered as document no. 15693 in Addl. Book no. 1, volume 5833 at pages 17 to 19 dated 02.09.98 with SubRegistrar with the corporation on 16.01.92 and she also executed an affidavit in this regard. It is further LAC no. 79B/09 3 of 17 stated that M/s Vicky Paints & Chemicals went into the default and the corporation sold their factory in open auction to recover its dues and even after sale proceedings of the factory a sum of Rs. 3783502/ is due from M/s Vicky Paints & Chemicals along with future interest at the rate of Rs. 22% per annum with effect from 01.03.04. Further it is stated that balance due from M/s Vicky Paints & Chemicals the corporation initiated proceedings u/s 29 of SFC Act to dispose off the above mentioned collateral security comprising land measuring 14 bigha 7 biswa situated in the Village Sanoth belonging to Smt. Murti Devi which was mortgaged with the corporation and on inquiry from the patwari, corporation came to know that the land has been sold by the defendant no. 1. Further it has come to the knowledge of the corporation that defendant no. 1 has already received some compensation of the acquired land. It is further stated that on receiving information, corporation wrote a letter to Supdt. of Police, Karnal for registration of FIR against Smt. Murti Devi for fraudulently off collateral security. Further it is stated that the sale in favour of the IP no. 1 is liable to be set aside as per the provisions of Section 53(1) of Transfer of Property Act (hereinafter called as TP Act) and further no property possessed by M/s Vicky Paints & Chemicals which can be realize it dues. Therefore, IP no. 2 is only entitle to receive compensation of the acquired land as transfer of land by Smt. Murti Devi in favour of IP no. 1 is liable to LAC no. 79B/09 4 of 17 be set aside. It is further stated that applicant has filed a suit wherein order dated 19.01.05 was passed restraining to release the compensation amount to the defendant no. 1 i.e. IP no. 1.
5. Reply to the said application u/s 151 CPC was filed by the IP No. 1 in which IP no. 1 has taken objection that there is no contract between IP no. 1 and applicant i.e. IP no. 2. further it is denied that Smt. Murti Devi has created equitable mortgage in favour of IP no. 2 of the acquired land. Further it is stated that the any document execution by Smt. Murti Devi in favour of applicant / IP no. 2 is having no sanctity in the eyes of law and same are null and void. Further it is denied that the transfer of land by IP no. 1 is liable to be set aside under the provisions of Section 53(1) TP Act.
6. After completion of pleading, the following issues were framed on 10.05.07:
1. Who is entitled to the compensation and to what extent?
2. Relief.
7. In order to prove his claim IP no. 1 has examined three witness i.e. himself as IPW1/1, Sh. Suraj Bhan Halqa patwari of village Sanoth as IP1W2 and Sh. S.K. Vasisth, office kanoongo as IP1W3.
8. On the other hand on behalf of IP no. 2 only one witness i.e. Sh. Jagtar LAC no. 79B/09 5 of 17 Singh, Asstt. Manager, HFC, Karnal was examined as IP2W1.
9. I have heard the arguments and gone through the record. My issue wise findings are as follows:
10. ISSUE NO. 1
IP no. 1 is claiming compensation being recorded Bhumidhar and in possession of the land. In order to prove the case IP no. 1 has examined three witnesses. He has examined himself as IP1W1 and led his examination in chief by way of affidavit Ex. IPW1/1 in which he has deposed the same contents as stated by him in his claim (as stated in para 4 above). He has also relied upon the sale deed dated 17th May, 1996, executed by Smt. Murti Devi of the acquired land besides other land in favour of IP no. 1 for a consideration of Rs. 1,50,000/ (Rupees one lac fifty thousand only).
IPW2 Sh. Suraj Bhan, patwari proved Khatoni for the year 198990 and of the year 200203 of the acquired land as Ex. IP1W2/A and Ex. IP1W2/B and he has further deposed that as per the said khatoni Sh. Niranjan Singh is recorded Bhumidhar. During cross examination witness has stated that Smt. Murti Devi wife of Sh. Phool Singh was recorded as Bhumidhar in the year 198990 and name of Sh. Niranjan Singh was LAC no. 79B/09 6 of 17 entered in the Khatoni on 08.07.1996.
IP1W3 Sh. S.K. Vashist, Office Kanoongo is record keeper of the office of Deputy Commissioner, NorthWest. He has proved the khasra girdawari of year 200203 to 199899 of land in question as Ex. IP1W3/A to IP1W3/E respectively. During cross examination witness has admitted that he has no personal knowledge of the said khasra girdawari and he cannot tell whether Niranjan Singh was cultivating the land or not.
11. On behalf of IP no. 2, only one witness Sh. Jagtar Singh, Asst. Manager, HFC was examined as IP2W1. He also in his examination in chief led by way of affidavit has reiterated almost same contents as stated in the claim filed on behalf of IP no. 2. He has deposed that M/s Vicky paints took some loan of Rs. 2.60 lacs and working capital loan of Rs. 1.36 lacs from IP no. 2 vide mortgage deed dated 17.01.92. He also prove mortgage deed as Ex. Ip2W1/1 & hypothecation deed dated 13.11.92 as Ex. IP2W1/2. Further he has deposed that Smt. Murti Devi has also created equitable mortgage of land in question as collateral surety of above said loan and for this purpose deposited original sale deed of the land in question. He prove the affidavit executed by Smt. Murti Devi as Ex. IP2W1/4 and sale deed of acquired land as IP2W1/3. He also prove the account statement of M/s Vicky Paints showing balance of loan of Rs.
LAC no. 79B/09 7 of 17 5823861/ on 01.09.07 as Ex. IP2W1/5 & of working loan amount on 01.06.07 as Rs. 1797179/ as Ex. IP2W1/6.
12. Ld. counsel for IP no. 2 has argued that since Smt. Murti Devi has executed the sale deed in favour of IP no. 1 without redemption of mortgage of the land in question and thus sale deed has been executed in favour of IP no. 1 by Smt. Murti Devi in contravention of Section of 53(1) of TP Act hence sale deed in favour of IP no. 1 is void. He further argued that since land in question was mortgaged by Smt. Murti Devi in year 1992 and mortgage was not redeemed till the the day when land was acquired by the Government, therefore even if it is considered that sale deed is valid even then since M/s Vicky Paints was liable to pay a sum of Rs. 228969/ on account of term loan and Rs. 865391/ on account of working capital loan to the IP no. 2, therefore being guarantor of M/s Vicky Paints, Smt. Murti Devi is liable to pay the said amount. Further he has argued that as per Section 29 of the SFC Act, IP no. 2 become entitle to sale the land in question to recover the loan amount. But since, land has been acquired by the Government, therefore IP no. 2 could not do so but IP no. 2 is entitle to the compensation of acquired land as acquisition of land amount to sale.
13. On the other hand, ld. counsel for IP no. 1 has argued that first of all, Smt. LAC no. 79B/09 8 of 17 Murti Devi had no right to mortgage the land in question as land in question is industrial land and is governed by the provisions of DLR Act which prohibit mortgage of the industrial land. He has drawn my attention to the Section 34 of DLR Act. Further, he has argued that even if it is presumed that she can mortgage the land in question even then IP no. 2 can only recover the amount by obtaining decree from civil court against Smt. Murti Devi. But IP no. 2 cannot get the compensation of the land in question as only Bhumidhar and person in possession of the land are entitle to compensation as per DLR Act. Further he has argued that IP no. 1 is a bona fide purchaser as he has purchased the land in question from Smt. Murti Devi after payment of due consideration and after verification of the revenue record wherein no mortgagee is recorded. He submits that since in the revenue record mortgage land was not recorded, therefore there was no way to know whether land was mortgaged or not. He further argued that 'no objections certificate' was also issued by the revenue department and only after that sale deed has been executed by the Smt. Murti Devi in favour of IP no. 1 and thereafter sale deed was registered by SubRegistrar which clearly prove that land in question was free from encumbrances.
He has further argued that Section 29 of SFC Act is not applicable on the agricultural land as it is applicable only to industrial concern. Whereas the LAC no. 79B/09 9 of 17 land in question was purely agricultural land and was governed by the provisions of DLR Act, therefore it could be sold only as per the provisions of the said Act.
14. On appreciation of evidence of IP1W1, it is proved that land in question was sold by Smt. Murti Devi to IP no. 1 vide sale deed dated 17.05.96 as no suggestion has been done by IP no. 2 that land in question was not sold by Smt. Murti Devi to IP no. 1. Further Khatoni Ex. IPW2/A & khasra girdawari Ex. IP1W3/A to IP1W3/E prove that land was also mutated in the revenue record in the name of IP no. 1 and he was also in possession of the land till it was acquired, as it is now a case of IP no. 2 that physical possession of land in question was handed over to him.
15. At the same time from the evidence of IP2W1 Sh. Jagtar Singh, and document ExIP2W1/3 i.e. sale deed executed by Sh. Phool Singh in favour of Smt Murti and her Affidavit Ex IP2W1/4 it is also proved that land in question was mortgaged by Smt. Murti Devi to IP no. 2 as collateral security by way of deposit of title deed for securing loan of Rs. 3,96,000/ approximately in year 1992 to Ms.Vicky Paints. As no suggestion has been given by the IP no. 1 that Smt. Murti Devi had not mortgaged the land in question or the affidavit Ex. IP2W1/4 was not executed by Smt. Murti Devi. In the affidavit she has deposed that she is LAC no. 79B/09 10 of 17 mortgaging land in question to IP No. 2. Further from the account statement Ex. IP2W1/5 and IP2W1/6 it is proved that on the date of notification u/s 4 of LA Act, M/s Vicky Paints defaulted in repayment of loan amount and was liable to pay a loan of Rs. 228969/ on account of term loan on 01.03.03 and Rs. 779420/ to IP no. 2 on 01.12.2002 which are the date closest to the date of notification u/s 4 of LA Act dated 27.01.03. No evidence has been led by IP no. 1 that the said amount has been paid by M/s Vicky Paints or by Smt. Murti Devi even after the said date.
16. Now come to the question whether mortgage of the land in question has been done by Smt. Murti Devi in violation of Section 34 of DLR Act. If land in question cannot be mortgaged then mortgage of the land in favour of IP no. 2 will be void and also not will not confer any right to IP no. 2. Before deciding the issue it would be better to reproduce Section 34 of Delhi Land Reforms Act, 1954 which is reproduced as below:
"No Bhumidhar shall have the right to mortgage any land belonging to him as such where possession of the mortgaged land is transferred or is agreed to be transferred in future to the mortgagee as security for the money advanced or to be advanced.
LAC no. 79B/09 11 of 17
17. On perusal of the Section 34 of the DLR, it is evident that this Section has negative language as it starts from 'no'. It prohibit the Bhumidhar to mortgage the agricultural land with transfer of possession either at the time of entering into transaction or in future. Thus, Section 34 DLR Act do not completely prohibit mortgage of land, it only prohibits mortgage coupled with transfer of possession of the land. Since, in this case land in question was mortgaged by Smt. Murti Devi by deposit of title deed which is permissible in Delhi as well as Haryana and since there is no transfer of possession of the land in question, therefore in my view the mortgage of the land in question by Smt. Murti Devi to IP no. 2 does violate the provision of Section 34 of DLR Act.
18. Now coming to the second contention of ld. counsel for IP no. 1 that Section 29 of SFC Act is not applicable as it is applicable to the industrial concern only. To understand the applicability of Section 29, it would be necessary to produce the Section 29, which is reproduced as below:
"Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any installment thereof (or in meeting its obligations in relation to any guarantee LAC no. 79B/09 12 of 17 given by the Corporation) or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the (right to take over the management or possession or both of the industrial concerns), a well as the (right to transfer by way of lease or sale) and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation"
19. Thus from the perusal of the Section it become evident that whenever any industrial concern takes loan from the State Financial Corporation and failed to pay the loan the property of the said industrial concern or or any guarantor which is kept as pledged, mortgaged or hypothecated to the Financial Corporation, it has right to sell, transfer the property to recover the loan amount. Therefore in view of the provisions of Section 29 of SFC Act, IP no. 2 has the right to sell the land in question in the default of payment of loan amount, by the borrower i.e. M/s Vicky Paints. Therefore, by virtue of Section 29 of SFC Act, IP no. 2 had the right to sell the land in question. But it cannot do the same as land was acquired by the Government. But acquisition of land by the government is amount to deemed sell of land to Government and the compensation amount LAC no. 79B/09 13 of 17 awarded by the Collector is the sale price, therefore presumption arise that on the day of acquisition of the land by the Government, IP no. 2 had the right to sell the land in question by virtue of Section 29 of SFC Act to the Government and thus on that account IP no. 2 will be entitle to compensation.
20. Even otherwise mortgage amount is a charged on the property and can be recovered from subsequent purchaser, if property is sold without redemption of mortgage. Since Smt. Murti Devi sold the land in question to the IP no. 1 during the subsistence of mortgage of land in favour of IP no. 2, thus IP no. 1 being subsequent purchaser has become liable to pay the mortgage amount to IP no. 2 to the extent which can be recovered from sale of mortgaged property. Since the mortgaged amount as stated above (after adding interest) is more than the compensation amount sent by the LAC, therefore in my view IP no. 2 is entitle to receive entire compensation amount.
21. As far as other contention of Ld. counsel for IP no. 1 that IP no. 1 is a bona fide purchaser but the evidence led by the IP no. 1 do not prove so. No evidence has been led by IP no. 1 to prove that he has exercise due care before purchasing the land in question. He has given no explanation why he has not demanded the original sale deed of land in question from LAC no. 79B/09 14 of 17 Smt. Murti Devi before purchasing the land in question, if he had done so he would have come to know that land has been mortgaged. Even otherwise, also if stand of Ld. Counsel is taken that Smt. Murti Devi has pretended that original sale deed has been stolen bur no such evidence has been produced to prove the averments. Neither any copy of the FIR has been produced regarding theft of original sale deed nor any public notice has been given in any newspaper so that the other person could raise any objection against the sale of land. Merely taking a NOC from the revenue department is not sufficient to prove that land in question was having no encumbrances. Even said NOC has not been produced by the IP no. 1. Hence, it is not proved that IP no. 1 is a bona fide purchaser.
22. Even otherwise, for the sake of arguments, it is presumed that IP no. 1 was the bona fide purchaser even then he would not be entitled to compensation of acquired land. IP no. 2 had the right to take action as per law against Smt. Murti Devi for recovery of loan amount which include selling the land in question, which was mortgaged by Smt. Murti Devi to IP no. 2. IP no. 1 cannot defeat the said right. In support of my contention I relied upon the judgement Sh. Ishar Dass Malhotra Vs. Sh. Dhanwant Singh and Others AIR 1985 Delhi 83(1), in para 8 of the judgement it is held that :
LAC no. 79B/09 15 of 17 "It will thus be seen that a mortgage by deposit of title deeds is like any other mortgage and there is a transfer of interest in the property mortgaged to the mortgage. The question, therefore, of the subsequent purchaser having bought the property subject to a mortgage by deposit of title deeds bona fide, with or without notice, is of no relevance. The subsequent purchaser cannot avoid the mortgage by leading evidence to show that he made all reasonable inquiries to find out if the property was subject to a mortgage by deposit of title deeds or not S.48 of the T.P. Act does not admit of any such exception. According to this section, when a person purports to create, by transfer at different times, rights in or over the same immovable property, and such right cannot all exist or be exercised to their full extent together, each latter created right shall in the absence of a special contract or reservation binding the earlier transferees, by subject to the rights previously created".
The only remedy available to the IP no. 1 is take action against Smt. Murti Devi as per law who has sold the acquired land without redemption of LAC no. 79B/09 16 of 17 mortgage of land in question.
23. In view of the above facts and circumstances, I held that IP no. 1 is not entitle to receive any compensation, whereas IP no. 2 is entitle to receive the entire compensation of land in question.
Issue no. 1 decided accordingly.
24. ISSUE NO. 2.
In view of the above findings of issue no. 1, I held that IP no. 2 is only entitle to receive the compensation amount whereas IP no. 1 is not entitle to receive any compensation.
25. Reference is answered accordingly. File be consigned to record room.
Announced in the open court
on 02.12.2011
(SANJEEV KUMAR)
ADJ01/Rohini/Delhi
LAC no. 79B/09 17 of 17