Delhi District Court
Sh. Ashwani Kumar vs Federal Bank Limited on 1 March, 2013
IN THE COURT OF AJAY GOEL, ADDITIONAL DISTRICT
JUDGE-15, (CENTRAL), TIS HAZARI COURTS, DELHI.
RCA-67/12
In the Matter:-
1. Sh. Ashwani Kumar
C-43, Surya Nagar,
Ghaziabad, U.P.
2. Sh. Deepak Anand
E-167, Sector-41,
Noida, U.P.
3. Sh. Rakesh Gulati,
60A, Pocket B,
Hari Nagar, New Delhi. ......Appellants.
VERSUS
Federal Bank Limited
Through its Asst. General Manager
Satkar Building, Nehru Place,
New Delhi-110019. .....Respondent.
Date of Institution: 17.12.2012
Date of Arguments: 21.02.2013
Date of Decision: 01.03.2013
JUDGMENT
1. This is an appeal filed by appellant against the judgment and decree dated 01.11.2012 passed by court of Sh. Naresh Kumar Malhotra, RCA-67/12 Page No. 1/11 Ld. ASCJ, Delhi whereby the suit of the plaintiff was dismissed.
2. The brief facts of the case are that plaintiff filed the suit for mandatory injunction against the defendant wherein it was stated that loan was given by the defendant to a company known as M/s ABI Overseas Ltd. by way of Cash Credit Facility and plaintiffs were the alleged guarantors who had allegedly guaranteed the repayment of the said loan. It was further stated that as security, an immovable property bearing No. 1/5875, Kabook Nagar, Shahdra, Delhi was allegedly mortgaged by the plaintiffs being co-owners in favour of defendant and original title deed were also deposited with the defendant. As averred in plaint the plaintiffs have repaid the entire loan amount of Rs. 75 lacs with interest and no amount is either due or payable by the plaintiff company or company M/s ABI Overseas Ltd. and defendant was required to return the title deeds of property. It was further pleaded in plaint that defendant succeeded in obtaining a letter dated 24.3.2004 issued by plaintiffs creating charge over 125 sq. yards of the said property in favour of defendant bank. As stated the plaintiffs sent a letter dated 15.6.2004 denying the execution of said letter dated 24.3.2004 and plaintiffs also issued a letter dated 25.6.2004 reaffirming the contents of previous letter dated 15.6.2004 and defendant failed to respond or comply with the said representations. As stated the plaintiffs sent a legal notice dated 30.7.2004 and a reply dated 10.9.2004 was sent to the plaintiff company denying the legitimate RCA-67/12 Page No. 2/11 rights of the plaintiffs. It was also stated that as per the plaintiffs they are the lawful owners of property No. 1/5875, Kabool Nagar, Shahdara, Delhi and defendant cannot refuse to return the title deeds of the said property of plaintiff and all the dues pertaining to M/s ABI Overseas Limited are cleared and defendant is bound down to return the title deeds. Hence it was prayed in the suit that decree of mandatory injunction be passed in favour of plaintiffs directing the defendant to release the title deeds of property No. 1/5875, Kabool Nagar, Shahdara, Delhi.
3. In reply to plaint, defendant filed written statement wherein preliminary objections were raised stating that suit against the defendant is a frivolous, misconceived and without any cause of action and hence be dismissed. It was also stated that suit is grossly misconceived and misleading and filed just to preempt the legal consequences that follows the mortgagors liability on the default of the main defaulter/borrower of the defendant bank. On merits, it was stated in written statement that plaintiff had taken over the company from Sh. Vipen Parwanda for a consideration and the same was not fully paid at the time of settling the defendant bank dues as per their understanding and though the defendant was not a party to the transactions between the plaintiffs and Sh. Vipen Parwanda, the plaintiffs have offered to mortgage the property as security for the repayment of outstanding dues of companies i.e. M/s Secos India (P) Ltd., M/s Sikha Associates, M/s Kumar Travels, M/s Venus RCA-67/12 Page No. 3/11 Management (P) Ltd. and M/s Falcon Books Pvt. Ltd.. and since the plaintiffs owe some money to Sh. Vipen Parwanda they offered their property as a security to the defendant bank for the outstanding dues in the accounts of said companies to the extent of Rs. 1.25 crores. It was further stated that letter dated 24.3.2004 is signed by the plaintiffs who are well educated knowledgeable businessmen ostensibly with sound mind and letter is signed by three persons/ plaintiffs and it is clearly stated that there was a liability to the extent of Rs. 1.25 crores in the accounts of the companies i.e. M/s Secos India (P) Ltd., M/s Sikha Associates, M/s Kumar Travels, M/s Venus Management (P) Ltd. and M/s Falcon Books Pvt. Ltd.. It was also stated that it is a voluntary act on the part of plaintiffs as they had some business obligation with Sh. Vipen Parwanda who was involved with said companies. It was further stated in written statement that plaintiffs had given their consent through the letter dated 24.3.2004 and after three months on 15.6.2004, they realised that they had executed a letter under coercion and three plaintiffs admitted that letter was given by them and at the same time stated that it was given under coercion and undue influence, however plaintiffs did not file any criminal complaint stating that the defendant bank officials have taken the letter under coercion and undue influence. It was also stated that since the titled deeds are placed with the defendant bank as a security the defendant bank may not legally deliver the original title deeds to the plaintiff till the RCA-67/12 Page No. 4/11 dues of the defendant is paid. Rest of the contents of plaint were denied and it was prayed that suit be dismissed with heavy costs.
4. Replication was filed by plaintiff to the written statement of defendant wherein contents of plaint were reiterated and those of written statement were denied.
5. From the pleadings of parties, the following issues were framed vide order dated 25.10.2007:-
1. Whether the plaintiff any cause of action to file the present suit? OPP
2. Whether the entire suit property has been mortgaged by the plaintiff in favour of defendant?OPD
3. Whether the plaintiff is entitled to a decree of mandatory injunction directing the defendant to release the title deeds of the suit property to the plaintiff?OPP
4. Relief.
6. In support of their suit, the plaintiffs examined Sh. Ashwani Kumar Arora a PW-1 who reiterated the contents of plaint.
7. In defence, defendants produced Sh. V. K. Seth, Assistant General Manager as DW-1 however this witness was partly cross-examined and later on Sh. Kumar Abhishek was produced as DW-1.
8. The Ld. Trial court after hearing the arguments of both the parties, dismissed the suit of the plaintiffs as without any merits. Hence, the present appeal.
9. I have gone through the record and have heard the arguments of RCA-67/12 Page No. 5/11 both the parties. My issue-wise finding is given below:-
10.Issue No. 1. Whether the plaintiff any cause of action to file the present suit?OPP and Issue No. 2. Whether the entire suit property has been mortgaged by the plaintiff in favour of defendant?OPD and Issue No. 3. Whether the plaintiff is entitled to a decree of mandatory injunction directing the defendant to release the title deeds of the suit property to the plaintiff?OPP:- All issues are taken up together as they are inter-connected and were also decided by Ld. Trial court together. The same were decided against the plaintiffs and in favour of defendant. It has to be kept in mind that DW-1 Sh. V.K. Seth cannot be considered because he has not come forward for cross- examination and testimony available on record on behalf of defendant is only of DW-1 Sh. Kumar Abhishek. The defendants are mainly relying upon the statement of DW-1 and three documents Ex. DW-1/1, DW-1/2 and DW-1/3. The onus was on the defendant to prove that some mortgage was created by the plaintiffs in favour of bank towards the account of Sh. Vipen Parwanda for M/s Secos India (P) Ltd., M/s Sikha Associates, M/s Kumar Travels, M/s Venus Management (P) Ltd. and M/s Falcon Books Pvt. Ltd.. The number of discrepancy have come during evidence. First of all, the documents in question was not witnessed by any witness. No document creating a charge can be accepted unless attested by two witnesses because it is not the mortgage by depositing the title deeds but RCA-67/12 Page No. 6/11 mortgage through document. There is clear cut cutting in the letter in question and words "1400 sq. yards" have been over written without any attestation by executant. DW-1 has admitted that cutting should have been attested and it itself creates doubts regarding veracity of document. The property in question bears No. 1/5875 Kabool Nagar, Shahdra, Delhi-110032 but number of this property is not mentioned in the document and even the preference of loan account in which first lien is to be kept is not mentioned in this letter. Name of companies have been given but how the proceeds of the property involved has to be aportioned is not given. It cannot be stated that property in suit and title deeds were exactly of same property which has been mentioned vaguely in this letter. Moreover, in this letter it is not mentioned anywhere that title deeds are deposited and mortgage is created by depositing title deeds. The Section 70 of Indian Registration Act coupled with Section 59 of the Transfer of Property Act comes into picture and documents is compulsory registrable and could not have been taken into account unless properly stamped and registered as per law. The counsel for appellant has relied upon AIR 1929 Privy Council 141 titled Khoo Sain Ban Vs. Tan Guat Tean wherein it was held that "Where a document purporting to create an equitable charge was compulsorily registrable and if it was not registered no charge can be created by it". Further reliance has been placed upon AIR 1962 Allahabad 101 (V 49 C 28) titled Krishna Deva RCA-67/12 Page No. 7/11 Bhargava & Ors. Vs Official Liquidator U.P. Oil Industries Ltd. wherein it was held that "A company issued debentures which were of a value above rupees one hundred and which purported to create a charge on the properties of the company present and future. The debentures were registered under S. 109 of the Companies Act (1913) but were not registered under S. 17 (1) (b) of the Registration Act. Consequent on the liquidation of the Company, the official liquidator moved an application for a declaration that the debenture-holders were not secured creditors but ordinary unsecured creditors. On a question whether the debentures even though registered under S. 109 of the Companies Act required compulsory registration under S. 17 (1) (b) Registration Act". Further counsel has relied upon AIR (37) 1950 Nagpur 117 Bapurao Dajiba Vs Narayan Govind Kale wherein it was held that "(c) T. P. Act (1882) Ss. 100 and 59 - Amendment of para. 1 of S. 100 - Effect- Section 59 is not made applicable - Charge can be made orally, but if made by document, if must be registered. By the amendment of para 1 of S. 100, the law was not intended to be altered, but the amendment was made to show more clearly what the rights and liabilities of a charge holder were to be. The amendment did not have the effect of brining in its trail S. 59, T.P. Act so that a charge could only be made RCA-67/12 Page No. 8/11 by a registered document attested by two witnesses as is the case with a simple mortgage. If the provisions of S. 59, are extended to charge it becomes at once apparent that all charges, irrespective of the amount secured, must be made also by a registered document. Now if this be the case, the equitable doctrine of notice, which is put in with such circumspection in the second paragraph of S. 100 of the Act becomes meaningless. Under S. 3 of the Act there will always be notice of charge because of registration. The result therefore is that oral charges can still be made, though if a charge is made by a document the document must be registered". The document Ex. DW-1/1 at the most for the sake of arguments shows that Ashwani Kumar was individually personally liable alongwith Vipen Parwanda and no liability can be fastened on the property in question. Ex. DW-1/1 does not mention in which account the promissory note has been made and same is a vague, non-descriptive document. Further, Ex. DW-1/3 is also of no use because third person cannot bind plaintiff by writing letter and by mentioning the property in question as the owner only can do so. If in this manner the mortgage can be created then there is no need of relevant provisions in Registration and Transfer of Property Act whereby mode and manner of creating mortgage is mentioned. Thus foremost ingredient of mortgage has not been proved by defendant though onus was upon him. There was no reason for trial RCA-67/12 Page No. 9/11 court to ignore the copy of letter dated 24.3.2004 produced by plaintiff as Ex. PW-1/2 and to admit the document produced by defendant when reasonable apprehension has arisen regarding the execution of document. The Ld. Trial Court should have given the ground as to why he has preferred the copy produced by bank/defendant. Even the letter dated 01.4.2004 has not been proved as per law as Vipen Parwanda has not been produced in evidence. The documents Ex. DW-1/2 has also not been proved as per law by bank because no official of bank has been produced in whose presence the same was executed. No question was put to plaintiff witness regarding Ex. PW-1/4 and thus the same is deemed to be admitted to be correct by defendant. Even otherwise this Ex. PW-1/4 can also not be read against the plaintiff because as observed above, there is no mention of any property no. in the same. When issue No. 2 has not been proved and mortgage has not been proved then defendant has no right to keep the title deeds of property No. 1/5875 Kabool Nagar, Shahdra, Delhi-110032 with them and plaintiff is entitled to get the same released. As same were not released cause of action was made out in favour of plaintiff. Thus on all counts, the appellant has proved his case. All these issues are decided in favour of appellants and against the respondent and finding of Ld. Trial court on all issues is reversed.
11.Relief:- In view of the above observation, the appeal is accepted with costs. The judgment of Ld. Trial court is not sustainable and RCA-67/12 Page No. 10/11 same is set aside. The suit of the plaintiff stands decreed with costs. The decree of mandatory injunction is passed in favour of plaintiffs and against the defendant and defendant is directed to release the title deeds of the aforesaid property in original of the property bearing No. 1/5875, Kabool Nagar, Shahdara, Delhi-110032. Decree sheet be prepared. Copy of this judgment be sent to concerned trial court alongwith trial court record. Copy of this judgment be sent to concerned Judicial Officer also as directed by Hon'ble High Court. Appeal file be consigned to record room.
Announced in the open court on (AJAY GOEL)
01.03.2013 ADJ-15/(Central)Delhi.
RCA-67/12 Page No. 11/11