Delhi District Court
Sh. Vikas Kumar Singhal vs Raj Kumar Verma on 3 September, 2011
IN THE COURT OF DR. ARCHANA SINHA
ADDL. DISTRICT & SESSIONS JUDGE, (CENTRAL) 04, THC, DELHI
Date of institution : 03.06.2005
Judgment reserved on : 29.08.2011
Judgment delivered on : 03.09.2011
Suit No.115/11/05 Unique Case ID No. 02401C0477282005
1. Sh. Vikas Kumar Singhal
S/o Sh. Hari Kishan Dass,
R/o 3/17, Sehdev Gali, Vishwas Nagar,
Shahdara, Delhi110032.
2. Smt. Deepali Arora,
W/o Sh. Gaurav Arora,
R/o F69, Green Park,
New Delhi. .... Plaintiffs
Versus
1. Raj Kumar Verma
S/o Sh. Vijay Kumar Verma
2. Sh. Raj Kamal Verma
S/o Sh. Ashok Kumar Verma
3. Sh. Kishan Kumar Verma,
S/o Late Sh. Gulab Singh Verma
All R/o A4, Priyadarshini Vihar, Delhi110092. ... Defendants
J U D G M E N T
1. The brief resume of the facts of the case are that the plaintiffs are joint and absolute owners of the property bearing No.60, Kishan Kunj Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 1 Extension, Laxmi Nagar, Delhi110092 (herein after called as the suit property). It was purchased by them on 15.04.2004 from the defendants for valuable considerations against the execution of set of documents, such as agreement to sell, General power of Attorney, Will, Affidavit, Possession Letter etc., saying that the property was free from all sorts of encumbrances, charges, liens, mortages, Courts Cases, injunction etc.
2. The plaintiffs interalia averred qua the plaint that a notice from Punjab National Bank, Nehru Nagar, Ghaziabad, U.P. was affixed on the suit property, to the effect that the said property was mortgaged with the bank, by one Smt.Pushpa Devi, towards security for the repayment of loan of Rs.20.00 lacs, extended by the bank in favour of M/s Konika Electronics, in the month of February, 2003.
3. That, thereafter, the plaintiffs served a legal demand notice dated 29.10.2004, to all the defendants to take up the matter with the bank and ensure clear and marketable title of the said property, in favour of the plaintiffs within a period of one week, but instead of complying the formalities asked for, the defendants preferred reply dated 06.11.2004 saying that all the documents along with the possession of the property had already been handed over to them, and as such the dispute has mala fidely being raised by them.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 2
4. As the matter was not settled by the defendants with the bank, to save the property from attachment, the plaintiffs had to pay an amount of Rs.7.00 lacs in lumpsum with the bank, so as to get released the original title deeds from the bank, and thus the plaintiffs were entitled to recover the same from the defendants.
5. The plaintiff served a legal notice in this regard to the defendants, who did not pay heeds. Hence the suit praying for passing of a decree for a sum of Rs.7,52,500/ in favour of the plaintiffs, along with interest @ 18% per annum from the date of filing of the suit, till the date of its realization, and also a decree for a sum of Rs.2.00 lacs in favour of the plaintiffs on account of damages along with court fees.
6. In the written statement, apart from the preliminary objections of no cause of action, nonjoinder of parties as the bank was not made the party and regarding nonfiling of appropriate court fees had been raised. On merits, it was submitted that the answering defendants have not created any mortgage or lien over the property and thus, was not liable to pay any amount to the plaintiff, and thus prayed for dismissal of the suit. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 3
7. The replication to the written statement was filed by the plaintiffs, reiterating the facts as stated in the plaint and also denied the averments of the defendant.
8. On the basis of the pleadings of the parties, the following issues were framed by the court, vide order dated 07.02.2006.
Issues
1. Whether the suit is bad for misjoinder/nonjoinder of necessary party? (OPP)
2. Whether the plaintiff has not approached the court with clean hands and has suppressed various material facts from the court? OPD.
3. Whether the suit has not been properly valued for the purposes of court fees? OPD.
4. Whether the plaintiff is entitled to recover a sum of Rs. 7,52,500/ from the defendants? OPP.
5. Whether the plaintiff is entitled to recover an amount of Rs. 2.00 lacs on account of damages suffered by the plaintiffs as claimed in the plaint? OPP.
6. Whether the plaintiff is entitled to interest, if so, as what rate and for what period? OPP.
7. Relief.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 4
9. To prove their case, the plaintiffs have produced two witnesses, namely Sh. Vikas Kumar Singhal and Sh. D.K. Goel, an employee of Punjab National Bank. The affidavitinevidence of PW1 by way of affidavit is Marked as Mark A, whereas examinationinchief of PW2 has been recorded in court, and they were duly crossexamined at length by the defendant.
These two witnesses exhibited the following documents:
1. Ex.PW1/1 to 6 are the documents as Agreement to Sell, General Power of Attorney, Wills, Affidavits, Possession Letter etc.
2. Ex.PW1/7 is the copy of notice affixed on the property in question.
3. Ex.PW1/8 is the office copy of notice whereas its postal receipts and UPC receipts are Ex.PW1/9 to 12.
4. Ex.PW1/13 & 14 are the A.D. Cards.
5. Ex.PW1/15 is the reply of notice dated 06.11.2004.
6. Ex.PW1/16 is the office copy of the rejoinder notice dated 22.11.2004, whereas its postal receipts are Ex.PW1/17 to 19, its UPC receipt is Ex.PW1/20 and A.D. Cards are Ex.PW1/21 & 22 respectively.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 5
7. Ex.PW1/23 is the office copy of the notice dated 10.12.2005 and its postal receipts are Ex.PW1/24 to 26.
8. Ex.PW1/27 is the original reply dated 29.12.2005.
9. Ex.PW1/28 is the copy of the said bank draft and the original title deed in respect of the property in question is Ex.PW1/29.
10.Ex.PW1/30 to 32 are the copies of representation dated 14.09.2004, 17.12.2004 and 22.12.2004, respectively. The replies dated 02.11.2004, 13.12.2004, 20.12.2004 and 22.12.2004 to the said representation are Ex.PW1/33 to 36 respectively.
11.Ex.PW1/37 is the complaint dated 19.01.2005.
12.Ex.PW1/38 is the legal demand notice dated 18.01.2005, its postal receipts are Ex.PW1/39 to 41 and the A.D. Cards duly received back after service upon the defendants are Ex.PW1/42 to 44 respectively.
10. Thereafter the defendants to prove their defence produced only one witness namely Sh.Krishan Kumar Verma, defendant No.3. The DW1 tendered his affidavitinevidence as DW1/A by way of examinationinchief, who was again crossexamined at length by the plaintiff.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 6
This witness exhibited the following documents:
1. The document Ex.DW1/1 is the General Power of attorney dated 17.04.1998.
2. The document Ex.DW1/2 is the copy of receipt dated 17.04.1998.
3. The documents Ex.DW1/3 to 8 are the General Power of Attorney, Will, Affidavit, Agreement to Sell, Possession Letter and Receipt between Sh. Ashok Kumar and Sh. Rafat Iqbal, all dated 17.09.1998 respectively.
4. The documents Ex.DW1/9 to 12 are the Copies of Affidavit, Receipt, Possession Letter and Indemnity Bond between Sh. Rafat Iqbal and Sh. Arvind Kumar, all dated 15.10.1999, respectively.
5. The documents Ex.DW1/13 to 15 are the copies of Affidavit, Receipt, Possession letter, executed between Sh. Arvind Kumar and Sh. Raj Kamal Verma all dated 21.08.2002 respectively.
6. The documents Ex.DW1/16 to 18 are the copies of Affidavit, receipt and possession letter executed between Sh. Arvind Kumar and Sh. Raj Kumar Verma all dated 21.08.2002 respectively.
7. The documents Ex.DW1/20 to 22 are the copies of Affidavit, Possession Letter and Receipt, executed between Sh. Ashok Kumar and Sh. Krishan Kumar Verma, all dated 21.08.2002 respectively.
8. The document Ex.DW1/24 is the copy of envelope addressed to the plaintiff's advocate containing legal notice dated 06.11.2004.
9. The document Ex.DW1/23 is the copy of notice under Order 12 Rule 8 CPC and the registry slip vide which the notices were sent are Ex.DW1/25 to 27.
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11. Ld. Counsel Sh. Sandeep Garg for the plaintiff has relied upon the following case laws in support of his case:
Bina Murlidhar Hemdev & Ors. Vs. Kanhaiyalal Lokram Hemdev, (1999) 5 SCC 222.
12. Ld. counsel Sh. N.K. Khetrapal for the defendants has filed following citation in support of his case:
1. Asha M. Jain Vs. Canara Bank & Ors., 94 92001) DLT 841
2. D.R. Puri Vs. Kamlesh Sawhney, 2001 (60) DRJ 738.
3. J.K. Bhartiya Vs. UOI & Anr., 2006 1 AD (Delhi) 408
4. Kuldip Singh Suri Vs. Surinder Singh kalra & Anr. 76 /91998) DLT
232.
5. Gurbax Singh VS. Govt. of NCT of Delhi, 2005(85)DRJ 278
6. Leela Goel VS. Prem Sagar Sharma, 2006(91) DRJ 683
7. Kiran Mahajan Vs. Oriental Bank of Commerce, 2004 (114) DLT 348
8. R.K. Saini Vs. Sanjiv Sachdev, 1991 RLR 458
9. Uppuluri Sita Ramaiah Vs. SBI, 1983 (TLS)425595
10. Harish Chander Vs. Priti Sharma, 1976 RLR 267 Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 8 My issue wise findings are as below:
13. Issue No.1 Whether the suit is bad for misjoinder/nonjoinder of necessary party? (OPD) This issue was framed on the preliminary objection of the defendants that the previous owner who have taken loan from the bank was not impleaded as a party and thus, the onus to prove such issue was laid on the defendants.
14. Ld. counsel for the defendants, in the written synopsis, in this regard has submitted that the plaintiff has not impleaded Pushpa Devi, borrower Ashok Kumar, partner of Konika Enterprises or other partner of the said firm or the Bank against whom the right, if any, could be there and without impleading them, the present suit was bad in law, and the rights could not be effectively decided in their absence.
15. On careful perusal of the records, consisting of the pleadings and the evidence viz. ocular as well as documentary led on behalf of the defendants and also, in the light of contentions of both the parties it is observed that apart from a bald statement there is absolutely no evidence, Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 9 either oral or documentary, been placed on record by the defendants, to prove as to how the suit was bad for misjoinder/nonjoinder of necessary party.
16. It is observed that as per the case of the plaintiff, the claim in the suit was made from the defendants, on the basis of documents of sale, handed over by them, and on the ground that the mortgage was created during the period, the suit property was in the ownership and possession of the defendants, and not on the controversy as to whether any previous owner of the suit property had mortgaged the same, with the bank. Thus, there was no occasion to make the previous owner, a party for determination of the issues in question, as such they were not necessary party, in view of the law settled in 1992 AIR SCW 846 wherein it was opined by the Apex Court that, 'a necessary party is one without whom no order can be made effectively. It is, necessary that the person must be directly or legally interested in the action in the answer i.e he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights. It is difficult to say that the rule contemplates joining as a defendant a person whose only object is to prosecute his own cause of action'.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 10
17. Ld. Counsel Sh. N.K. Kheterpal has raised a contention during the course of arguments that Punjab National Bank was also a necessary party but was not made a party to the suit and thus, the suit was bad for nonjoinder/misjoinder of party.
18. It is a well settled principle of law settled in AIR 2005 SC 2209, wherein it was observed that, 'a necessary party is one without whose presence, the questions in the suit cannot be completely decided'.
In this regard, it is observed that a necessary party under Order 1 Rule 10 CPC is one, which is necessary for determination of the real issue in dispute, and is the one without whose presence, the questions in the suit could not be decided, but in this case, as the plaintiff is claiming the reimbursement of the amount already paid by them to the bank, for releasing the original title deed of the suit property, the Bank had no role to play in the suit for recovery against the defendants, thus for determination of the real controversy regarding recovery of such amount, even the bank cannot be treated as necessary party, to be impleaded in the suit.
Thus, the defendant has miserably failed to prove this issue. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 11
19. Issue No.2 Whether the plaintiff has not approached the court with clean hands and has suppressed various material facts from the court? OPD.
The onus of proving this issue was on the defendants as it was framed on the preliminary objections of the defendant taken in para 5.
20. It is observed that the defendants have not led any evidence on this aspect, other than taking in their pleadings. There is absolutely nothing on record to show as to how the plaintiffs and the previous owner wanted back the property from the defendants.
From the records, the plaintiff has established through evidences of PWs1 & 2, that the plaintiffs came to know about the mortgaging of the property with the bank, when an attachment notice was found affixed with the suit property. It is also not in dispute that the suit property was mortgaged during the period, it was in possession of the defendants. Thus, it was on the defendants to prove, as to how the plaintiffs and the previous owner, jointly wanted back the property from the defendants.
The defendants have established on record that they have purchased the property by one Sh. Arvind Kumar, who had purchased it from one Sh. Ashok Kumar and that there was a chain of purchasers and Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 12 sellers of the suit property from the previous owner Smt. Pushpa Devi to the plaintiffs and all have passed on the title documents to the other, along with the possession. It is not the case of the defendant that at the time of purchasing of the property, he had obtained the original title deed of the same from his seller. Thus, the defendants were not able to prove in any manner, as to how the plaintiffs who were the purchasers of the suit property from the defendants, could be a party with the previous owner Smt. Pushpa Devi, attempting to take back the property from the defendants, or to create any such circumstances, where the defendants could have been forced to execute the documents of sale of the property at a throw away price. It is also not established on record, nor it was a case of the defendants that the defendants had sold the property at the throw away price to the plaintiff.
Thus, for establishing the pleadings in para 5 of written statement, the court finds no evidence either ocular or documentary that the suit was bad for suppressing any facts that were the material but not brought on the record by the plaintiffs, as mentioned in the preliminary objections in para 5 of the written statement.
Therefore, the defendants have also miserably failed to prove this issue.
Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 13 21. Issue No. 3
Whether the suit has not been properly valued for the purposes of court fees? OPD The onus to prove this issue was on the defendants and the defendants apart from taking a preliminary objections in para 6 of the written statement, have not produced any evidence as to how the proper court fee was not affixed.
Thus, there is not even an iota of evidence led by the defendants to prove this issue. On the contrary, the plaintiffs have valued the suit at Rs.7,52,500/ on the basis of their claim for recovery, and on the basis thereof the prescribed court fees was affixed. Thus, there is nothing contrary to say that the plaintiffs have not affixed proper court fees.
Thus, this issue is again decided against the defendants and in favour of the plaintiffs.
22. Issues Nos. 4 & 6 .
4. Whether the plaintiff is entitled to recover a sum of Rs.7,52,500/ from the defendants? OPP.
6. Whether the plaintiff is entitled to interest, if so, as what rate and for what period? OPP.
To prove the entitlement for recovery of a sum of Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 14 Rs. 7,52,500/, the plaintiffs have pleaded that an amount of Rs. 7,00,000/ (Rupees Seven Lacs) has been paid by them to Punjab National Bank, Saket, Merrut, U. P., for releasing the title documents of the suit property, as a mortgage was created by one Smt. Pushpa Devi on the suit property on the basis of the said title documents in February, 2003, while advancing the loan to M/s. Konika Electronics, and the plaintiffs came to know about such mortgage through a notice of the bank affixed on the suit property.
31. The plaintiffs' case was that they purchased the suit property from the defendants on 15.04.2004 and the sale documents assured that the suit property was free from all sorts of encumbrances, charges, liens on mortgages, etc. and that in case it is proved otherwise, then the plaintiffs shall have right to take legal action and the defendants shall be liable to indemnify the plaintiffs.
32. In support of its claim, the plaintiff No. 1 examined himself as PW1, tendered his affidavit as markA, and exhibited the documents Ex. PW1/1 to 34. Also, one Sh. D.K. Goel, a bank official from PNB was examined as PW2, who has exhibited the original documents, copies of which have already been exhibited as PW1/7, 13 and 35. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 15
33. To contest the claim, the defendants have examined the sole witness, defendant No. 3 as DW1, who tendered his affidavit as DW1/A and exhibited the documents as DW1/1 to 27. The exhibition of documents Ex.DW1/1 to 22 was objected being the same were photocopies and, thus they are treated as marked documents.
34. On appreciation of evidence, in the light of contentions of both the parties, and considering the observations made in the authorities of the Higher Courts relied upon by the parties, it is observed that it is not disputed that the plaintiffs have purchased the suit property from the defendants on 15.04.2004 for valuable consideration against execution of a set of documents, ie., an Agreement to Sell, General Power of Attorney, Wills, Affidavits, Possession letter etc. which are exhibited as PW1/1 to 6, respectively. These documents are not disputed and are duly proved by producing the originals thereof.
35. The terms & conditions of the sale are the part of the document Ex. PW1/1, the Agreement to Sell. The plaintiffs' claim that the suit property at the time of purchase, was assured as free from all sorts of encumbrances, and if proved otherwise, the first party, ie., the Sellers (the defendants herein) shall be liable to indemnify the second party. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 16
It is observed that such terms & conditions are part and parcel of the document Ex. PW1/1.
36. The relevant extract from Clause 3 of Ex. PW1/1 is reproduced, as below:
That the first party hereby assure the second party that the said flat under sale is free from all sorts of encumbrances and the first party shall not change or revoke the deed of GPA and WILL deed which the first party has execute on today in favour of second party or his/her/their nominee(s)/relatives. If proved, otherwise of the first party shall do any commitment against the above assurances then the second party shall have right to take legal action in civil/criminal court/courts against the first party and the first party shall be liable to indemnify the second party to the extent of loss sustained by the second party. The person of the first party and his/her/their all kind of movable and immovable properties shall be responsible for the same.
37. To this extent, the ocular evidence of PW1 is undisturbed on the test of crossexamination by the defendants. Therefore, it is established that there was an assurance in the Agreement to Sell between the plaintiffs and the defendants that the suit property was free from all sorts of encumbrances and that, in case it proved otherwise, the defendants shall be liable to indemnify the plaintiffs. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 17
38. On appraisal of the evidence of both the parties, it is also established on record, and rather not disputed that the suit property was mortgaged with the Bank on 17.02.2003 by one Ms. Pushpa Devi.
Thus, the mortgage on the suit property was created with the Bank on 17.02.2003 and the consolidated effect of documents Ex. PW1/1 to 34 and of the documents marked DW1/1 to 22, and Ex. DW1/23 to 27 was that on the date of mortgage of the suit property, the defendants were the owners and in possession of the suit property, and also that at the time of the purchase of the suit property on 15.04.2004 by the plaintiffs from the defendants, the mortgage of the suit property still existed thus it was duly proved that the suit property, at the time of the purchase by the plaintiffs, was not free from all sorts of encumbrances.
It may be claimed by the defendants that it was not in the knowledge of the defendants at the time of entering into the contract of sale with the plaintiffs, with respect to the suit property, while executing the sale documents, particularly, the document Ex. PW1/2, ie., Agreement to Sell, but on the above observed facts, it was proved that the suit property was not free from all sorts of encumbrances as by that time a mortgage had already been created with the bank against the suit property. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 18
Obviously, an equitable mortgage was created on the suit property on 17.02.2003 by pledging the original title document Ex. PW1/29 with PNB. And as per the established procedure of a bank, for creating such equitable mortgage on any suit property, a Legal Scrutiny Report (LSR) has to be deposited in a notified area.
39. The plaintiff has produced PW2 Sh. D. K. Goel, a Bank official, who has exhibited the public notice Ex. PW1/7 about the mortgage created on the suit property, also a copy of letter dt. 17.12.2004 Ex. PW1/13, written by the plaintiffs to the Bank, and a letter dt. 20.12.2004 Ex. PW1/35 written by the bank to the plaintiffs, and PW2 deposed that the suit property was mortgaged with the bank on 17.02.2003 by one Ms. Pushpa Devi. Also that, the bank has released the original title deed to the plaintiffs after receiving an amount of Rs. 7,00,000/ (Rupees Seven Lacs) from the plaintiffs.
The plaintiffs through PW1, have produced the said title document, ie., original title deed Ex. PW1/29, and this is not in dispute that this title document was of the suit property. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 19
40. The PW1 has deposed that mortgage was created in consent of the defendants, who were the owners and in possession of the suit property at the time of the mortgage, on the basis of an information given by the bank officials to him, that the inspection was conducted by the bank before advancing the loan to Smt. Pushpa Devi, however, such facts have been disputed by the defendants, submitting that no such inspection was conducted.
41. The defendants have refuted the prepositions of the plaintiffs that it was in the knowledge of the defendants that any mortgage was created on the suit property in February, 2003, also the defendants have denied the submissions that they were a consenting party with Smt. Pushpa Devi for creating the mortgage over the suit property.
However, when the mortgage was created during the period of the ownership and possession of the suit property with the defendants, then the onus shifts to the defendants to prove the facts in rebuttal to the facts that ought to be presumed that the inspection was conducted by the bank at the time of mortgaging of the suit property. Because as per test of reasonable prudence or on the basis of preponderance of all probabilities to the extent of moral certainty, such mortgage ought to be created on the basis of an inspection of the suit property before creating such mortgage. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 20
Also, as per the procedure of the banks, a Legal Scrutiny Report (LSR) had to be deposited with the banks for creating such mortgage on the basis of title documents. As the title documents, ie., title deed Ex. PW1/29 produced by the plaintiffs in the Court, after getting it released from the bank, is not in dispute and Smt. Pushpa Devi was one of the purchaser and thereafter a seller of the suit property, in the chain of the salepurchase of such suit property, as informed by the evidence of the defendants, thus, it was on the defendants to prove the records calling from the bank, relating to LSR through independent evidence to establish that they were not the consenting party with Smt. Pushpa Devi for creating the equitable mortgage with respect to the suit property or that any such inspection of the suit property was not conducted by the bank at the time of advancing the loan against the mortgage by way of placing the title deed of the suit property.
42. Unfortunately, the defendants could not discharge their burden to prove the facts contrary to the presumed facts, which ought to be presumed, on the basis of preponderance of all probabilities with regard to the procedure followed by the bank.
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The nonproving of any such facts by not calling or producing the LSR from the bank, leads to an adverse inference that in case of production of such documents from the bank, it may not have supported the defendants.
For this observation, the reliance is placed on the case titled as Gopal Krishnaji Ketkar V/s Mohamed Haji Latif & Ors. cited as AIR 1968 SC 1413 wherein it was held that:
"Even if the burden of proof does not lie on a party the court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not,in our opinion, a sound practice for those desiring to reply upon a certain state of facts to withhold from the Court the best evidence which is in their possession or which could throw light upon the issue in controversy and to rely upon the abstract doctrine of onus of proof. ..."
Further, it is also a well settled principle of law that the party who relies on certain facts in denial (here the defendants have denied any inspection of the property, that was in their possession, was conducted at the time of creations of equitable mortgage), is under a legal duty to produce the best evidence in the Court to prove such facts. The reliance is placed on Parasnath Hiral Lal V/s Kishan Lal Chuni Lal cited as AIR 1965 All 189 wherein it was observed that, 'Where a party relied upon an entry in an account book, the original account book must be produced before the Court as primary evidence in proof of the entry.' Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 22 In this case, the best evidence was the LSR that could have been called from the bank records by moving appropriate leave to the court or to summon the bank records / officials during evidence for producing such best evidence.
43. More so, as per the terms of Agreement to Sell, it was an assurance extended to the plaintiffs by the defendants that the suit property was free from all sorts of encumbrances and also with the couple of assurance that if proved otherwise the defendants shall be liable to indemnify the plaintiffs, on establishing that the suit property was not free from encumbrances, as an equitable mortgage was already charged on the suit property at the time of purchase of such suit property from the defendants, and on also proving that to free the property from such mortgage, the plaintiffs had to make a payment by way of settlement with the bank to the extent of Rs. 7,00,000/, despite notice duly served to the defendants in this regard, as per the above noted terms of contract of sale that the defendants shall be liable to indemnify such losses.
Thus the plaintiffs are entitled to recover such amount of Rs. 7,00,000/ from the defendants.
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44. Ld. Counsel for the defendants has submitted that the plaintiffs were not under a legal obligation to pay such amount to the bank and that the banks were not entitled to get released such amount from the plaintiffs against any warrant of attachment in view of the provisions of Order 21 Rule 58 CPC, and also as per the provisions of Sections 53A and 54 read with Section 202 of Transfer of Property Act, in view of the Law settled in Asha M Jain Vs. Canara Bank & Ors. 94(2001) DLT 841 (DB) and Kuldeep Singh Suri Vs. Surender Singh Kalra, 76 (1998) DLT 232.
45. Ld. Counsel for the defendants has also raised the contentions that the defendants who had the absolute right on the suit property, have transferred the good title to the plaintiffs and any charge created by the previous owners, who had no right to create such charge, the defendants are not liable for indemnifying any loss occurred to the plaintiffs through the bank against any such mortgage not created by the defendants. He has relied on the case titled as Gurbax Singh Vs. Govt. of NCT of Delhi, 2005 (125) DLT 1.
Another contention has been raised by the Ld. Counsel for the defendants that the property in question, was sold vide valid documents along with delivery of possession, and any of the mortgage created by the Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 24 erstwhile owner, in favour of the bank, by deposits of the title deed, the banks cannot recover such amount from the absolute owner, in view of the law settled in Uppuluri Sita Ramaiah Vs. SBI, 1983, APLJ (2) 312.
Ld. Counsel for the defendants has also relied on the law settled in Leela Goel Vs.Prem Sagar Sharma, 2006 (91) DRJ 683 submitting that in view of the provisions of Section 54 of Transfer of Property Act, the transfer through recognised mode of transfer cannot be questioned against the transferor after the sale become absolute by the transferee.
46. I have gone through the observations made in the above noted cases relied upon by the Ld. Counsel for the defendants and appreciated the law settled therein, for its application in the instant case.
It is observed that on the face of the established and undisputed facts, duly proved on record, three facts are of great relevance viz. the date / nature of mortgage, the title document placed with the bank and the date / nature of contract of sale between the plaintiffs and the defendants, the matrix of law and facts applied in the above cited authorities is absolutely distinguishable, different from the factual matrix and law applied to the present case, and thus, neither the observations nor the law settled in the above cited authorities help the defendants from Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 25 indemnifying the loss occurred to the plaintiffs from the bank due to the equitable mortgage.
47. Thus, the above mentioned contentions of Ld. Counsel for the defendants that for the payment made to the bank by the plaintiffs, the defendants are not liable, are not sustainable. However, by applying the above mentioned law, the defendants may adopt a legal recourse to recover the same amount either from Smt. Pushpa Devi, in whose favour the loan was advanced, against such mortgage or from the bank, if the bank was not permissible in law to receive any such amount from the plaintiffs.
48. On the basis of above discussed facts and law, the Court is of the considered view that the plaintiffs have paid the amount to the bank to clear the encumbrances over the suit property, of which they were owner and in possession of that property, and in terms of the contract of sale, the plaintiffs have proved their entitlement of recovery of the amount from the defendants.
Thus, the plaintiffs have duly proved their entitlement for an amount of Rs. 7,00,000/ from the defendants.
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49. Issue No. 6. was framed for an interest @ 18% per annum, claimed by the plaintiffs on the amount of Rs. 7,00,000/ paid to the bank.
50. An interest by nature of its definition is a charge over the amount paid by the plaintiffs to the bank that was established as legally recoverable amount from the defendants, thus, is allowed to be paid by the defendants to the plaintiffs on the principle amount of Rs. 7,00,000/.
So far as the rate of interest is concerned, the interest is claimed @ 18% per annum, but there appears no contract between the parties in this regard, in view of the provisions of Section 34 of CPC and the law settled in C. K. Sasankan Vs. The Dhanlaxmi Bank Ltd. 2009(2)RCR (Civil) 436 (Supreme Court), an interest @ 12% as reasonable bank rate as per market rate, usually charged by the banks on commercial transactions relating to immovable property, is the reasonable rate of interest for which the plaintiffs are entitled to recover the same from the defendants. So far as the period is concerned, the interest is allowed on the principle amount of Rs. 7,00,000/ from the date it was paid by the plaintiffs to the bank, till the date of realization. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 27
51. Accordingly, the issue Nos. 4 & 6 are decided in favour of the plaintiffs for recovery of an amount of Rs. 7,00,000/ along with an interest only @ 12% per annum for the period claimed, and also for pendantelite and future interest till its realization.
Therefore, issue Nos. 4 & 6 are decided in favour of the plaintiffs, accordingly.
52. Issue No. 5 .
Whether the plaintiff is entitled to recover an amount of Rs. 2 lacs on account of damages suffered by the plaintiffs as claimed in the plaint? OPP.
The plaintiffs have claimed this amount on account of damages so suffered by the plaintiffs in lieu of mental tension, agony, pain and sufferings on account of acts and actions on the part of the defendants.
53. It is pleaded that on receipt of notice from the bank with regard to the mortgage created on the suit property,the plaintiffs approached the defendants who did not react to clear such encumbrances over the suit property that was assured as free from all such encumbrances at the time of purchase from them.
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54. It is established on record that the mortgage was created by one Smt. Pushpa Devi, who was one of the previous owners of the suit property in the chain of sale and purchase of such suit property, and that such equitable mortgage was created on the basis of depositing the title documents with the bank, by her.
55. The defendants have duly proved that they have purchased the suit property from one of the previous owners against the execution of valid sale documents exhibited as EX. PW1/D7 to D14 and Ex.DW1/13 to 22 alongwith the delivery of possession, claiming that on such transfer they were the absolute owner of the suit property. It is also not in dispute that the defendants have transferred a valid title in favour of the plaintiffs by executing the documents Ex. PW1/1 to 6, and delivered the possession thereon.
56. It has also come on record that the mortgage was created by one Smt. Pushpa Devi, who was also one of the purchaser of the suit property in the chain of salepurchase of the suit property, and she was in possession of the title document of the suit property, which she tendered with the bank for creating equitable mortgage.
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57. It is also duly proved and admitted that the defendants were wellinformed by the plaintiffs on receipt of notice from the bank, regarding the encumbrances by way of mortgage created over the suit property. It is also a matter of record and also a matter of prudence as expected that on coming to know such facts, the defendants ought to act to ensure the assurances given in terms of contract of sale of suit property to the plaintiffs. But it is established on record they did not react to the notice, nor they have come with the plea that they were consenting party. Though, it is not proved on record that the facts relating to mortgage of the suit property was in the knowledge of the defendants at the time of transferring of the title to the plaintiffs, but an omission on the part of the defendants is clear for not acting or reacting to the notice received by the plaintiffs from the bank for clearing the encumbrances. In that manner, the omissions on the part of the defendants, can be recorded as negative demeanor.
The defendants have also not tried to prove from independent evidence, either calling it from the bank or otherwise that any inspection of the property for preparing the Legal Scrutiny Report (LSR) at the time of mortgage was conducted by the bank or not, without proving that LSR. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 30 This factor goes against the defendants as such inspection might have been conducted by the bank for preparing the LSR at the time of mortgage, during the period the property was in possession and ownership of the defendants.
58. It is also observed that sometimes 'omission' becomes an 'action' in the form of 'inaction' as sometimes 'silence' works as 'speech'. The duty to be careful by ensuring all the original title documents to be taken into possession with respect to any suit property at the time of purchase, was also imperative on the part of the defendants, the defendants have not discharged that duty with due care. And for not possessing the original title documents at the time of purchase of the suit property from the previous owner, was also an omission on the part of the defendants. Apart from this, on duly served a notice regarding bank mortgage qua property, the defendants did not react to it, was another 'omission'.
59. Further, the depositions of DW1, regarding detailing of the chain of purchasers and the documents executed and exchanged, were absolutely beyond the pleadings and are inadmissible in view of the law Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 31 settled in Gajanan Krishanaji Bapat & Anr. Vs. Dattaji Raghobaji Meghe & Ors. AIR 1995 SC 2284, wherein it was observed that:
"the court cannot consider any fact which is beyond the pleadings of the parties. The parties have to take proper pleadings and establish by adducing evidence..."
and on the observations made in case titled as Ram Swaroop Gupta (dead) by L.Rs Vs. Bishan Narain Inter Colelge 7 Ors., AIR 1987 SC 1242, wherein it was observed that :
It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet........ In such a case it is the duty of the court to ascertain the substance of the pleadings to determine the question.
60. Thus, this part of the pleadings are not supporting the defendants that how and why the property was purchased by them from the previous owners, and on executing or receiving of how many Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 32 documents. But one thing is clear from the records that the original title document was not taken into possession by the defendants from the previous owner or acquired in the chain of previous salepurchase of the suit property, and such original title deed was the cause of concern that was used by one of the previous owners Smt. Pushpa Devi for creating equitable mortgage over the suit property that is also during the period the defendants were the ownersinpossession of the suit property.
61. Thus, as per the above facts it is established that for the 'omissions' of the defendants the property was not free from encumbrances at the time of sale by them to the plaintiffs and it was the duty of the defendants to make the suit property free from all encumbrances as assured by them to the plaintiffs at the time of transfer or at least settle with the bank to make it free, as assured.
62. It is also clear from the records that the plaintiffs were under compulsion and constraints to get released the original title deed from the bank and to settle the accounts with the bank as on the date of notice they were the ownerinpossession of the suit property. Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 33
63. It is also clear from the records, particularly the notices/reply to such notices Ex. PW1/8 to 12 and Ex. PW1/16 to 22, and the pleadings and depositions of the defendants, that they did not take steps to get clear the encumbrances of the property, rather placed certain allegations regarding a collusion between Smt. Pushpa Devi, her son and the plaintiffs, which were never established by the defendants.
Thus, it is clear that the plaintiffs have suffered mental agony, etc. in the process of clearing the mortgage from the bank and getting released the original title documents of the suit property, and also for claiming action in the suit. Thus, they are entitled for the damages claimed on that account. The quantification of Rs. 2,00,000/ is not being duly proved by classifying it in separate heads, but the same was not questioned by the defendants through their pleadings or depositions, except by making a bald statement that they are not entitled for the said amount.
64. Thus, on the basis of test of reasonable prudence, such mental agony and other damages are adjudged as Rs. 70,000/, ie., a 10% of the total amount paid to the bank, that will satisfy the cost of calling of the Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 34 defendants to act, who did not react and also the cost of time and expenses spent in responding to the bank for settling the account for clearing the encumbrances over the suit property.
65. Therefore, on the basis of above discussion on the law and facts established, the Court is of the considered view that for the omissions or absence of due care to compensate the losses for the 'omissions' of the defendants, due to which the plaintiffs have suffered, the plaintiffs are entitled for an amount of Rs. 70,000/, on the account of damages.
Thus, the issue No. 5 is decided accordingly in favour of the plaintiff to some extent.
66. Some of the authorities relied by the counsels of the parties, are not taken into account in the judgment, as such authorities are not found applicable to the present facts and circumstances and need no observation by the Court.
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67. Relief.
In view of the above observations and findings on the issues above discussed, the suit of the plaintiff is decreed.
Accordingly, the plaintiffs are entitled for a money decree:
i) for an amount of Rs. 7,00,000/, along with;
ii) an interest @ 12% per annum on Rs. 7,00,000/ from the date, it was paid to the bank by the plaintiffs till its realization.
iii) and also for the recovery of Rs. 70,000/, as damages.
The Cost to the extent of the Court fees is allowed to the plaintiffs. Decree sheet be drawn accordingly.
File be consigned to R/Room.
(Dr. Archana Sinha) Addl. District Judge, Delivered & announced In the open Court Central04, Tis Hazari Courts, rd on 03 September, 2011. Delhi. 03.09.2011 Suit No.115/11/05 Vikas Kumar Singhal Vs. Raj Kumar Verma & Ors. Page No. 36