Delhi High Court
Praveen Garg vs Oriental Bank Of Commerce And Anr. on 10 March, 2006
Equivalent citations: IV(2006)BC400, 128(2006)DLT811, (2006)144PLR21
Author: R.S. Sodhi
Bench: R.S. Sodhi
JUDGMENT R.S. Sodhi, J.
1. CM(M) 3104/2005 seeks to challenge the order dated 02.12.2005 of the Recovery Officer DRT-1 whereby the Recovery Officer has rejected the objection of the petitioner who stated himself to be the owner in possession of property, plot No. 99, DLF, Model Town, Sector 10, Faridabad, Haryana, measuring 1000 sq.yards.
2. Brief facts of the case, as has been narrated in the petition under Article 227, are as:-
The Petitioner was in the possession of the subject property at Faridabad, was surprised to learn on or about 28th April, 2005 that the said property is sought to be auctioned by Respondent No. 2 for alleged recovery of debts due to Respondent No. 1 with respect to certain credit facility extended to a firm known as General Garments of which Shri Lakshi Narain and Shri Brij Mohan, the original owners of the property were the guarantors. From the informatjion so received petitioner filed a Civil Suit in the court of Civil Judge, Senior Division, Faridabad along with an application under Order 39 Rule 1 and 2 for grant of interim injunction for sale of the property in question. The suit as well as the application came up before the Civil Judge, Faridabad on 29.5.2005. A copy of the Suit nad application Under Order 39 Rule 1 and 2 of the CPC filed before Civil Judge Faridabad is annexed hereto and marked as Annexure-P/4.
The Civil Judge, Senior Division by his orders dated 29th April, 2005 after being satisfied passed ad interim injunction order restraining Respondent No. 1 Bank from putting to auction the plot in question being No. Plot No. 99, Block D-2, Sector 10, DLF measuring 1000 sq. yds. The said injunction order was duly served on the Bank. A cop of order dated 29.4.2005 passed by Learned Civil Judge, Faridabad is a annexed hereto and marked as Annexure -P/5.
5. It appears that the said injunction order was brought to the notice of Recovery Officer i.e. Respondent No. 2 and it was also informed to him by the Bank that after the grant of stay by the Civil Court, further proceedings should be adjourned. The Recovery Officer, i.e. Respondent No. 2, however, in complete disregard and gross contempt of the Civil Court held that since he is personally not a party in the civil proceedings before the Faridabad, the said injunction order was not binding on him. He further observed that only the Supreme Court or the High Court exercising jurisdiction under Constitution of India can have overriding jurisdiction and he decided to disregard and ignore the injunction order of the Civil Court and directed that the auction which was scheduled to be held on 2nd May, 2005. A copy of the said order dated 2nd May, 2005 has already been annexed as Annexure P-2.
6. That on 20th May, 2005, it appears some auction took place which was kept as a closely guarded secret by the court auctioneer. The Petitioner who is the owner and is in possession of the property did not see any auction proceedings taking place in the property. However, from the proceedings oif Respondent No. 2 , it appears that some persons came and offered a bid amount of about Rs.35 lacs whose bid was accepted. The name of auction purchaser is not even disclosed in the impugned order. Thereafter, it appears that some other people filed their objections and offered higher bids for the said property. The copy of Proclamation of sale dated 02.03.2005 issued by Recovery Officer DRT-1 is annexed hereto and marked as Annexure P/5A.
7. The Petitioner in the meantime, on 24th May, 2005 filed their detailed objections to the auction/sale of his property. A copy of the said objection filed by the petitioner is annexed hereto and marked as Annexure P/6. The Respondent Bank filed their reply to the said objections which are annexed hereto and marked as Annexure P/7. A rejoinder was also filed by the Petitioner, a copy of which is annexed hereto and marked as Annexure P/8. The Petitioner had also filed an application on 27th July, 2005 praying, inter alia, as follows:
'Stay of further proceedings including sale and/or confirming of sale and/or title investigation with respect to property being Plot No. 99, Block No. D-2, DLF model Town, Sector 10, Faridabad, Haryana till decision in suit No. 18/2005 which is pending before Faridabad Court.' A copy of the said application along with the affidavit is also annexed hereto and marked as Annexure P/9. The said application however has never been decided by the Recovery Officer.
8. It may also be stated that the recovery proceedings for the certified debt to Respondent No. 1 Bank, is also pending before the Recovery Officer in respect of property in Grater Kailash Part I, New Delhi which is more than sufficient to satisfy the dues. The Respondent No. 1 had requested before the Recovery Officer that the said property be auctioned and sold with the minimum reserve price of Rs.1.6 crores. The petitioner had also requested the Recovery Officer that the said property at Greater Kailash which is more than sufficient to satisfy the dues of the Bank be put to sale. However, the Recovery Officer for reasons best known to him took no further steps for sale of the said property. A copy of the said order dated 9th September, 2005 in this connection is also filed herewith.
3. It is contented by counsel for the petitioner that this is a strange case where in spite of a restraint order passed by a court of competent jurisdiction, the Recovery Officer should assume himself to be an extra constitutional authority and claim himself not to be bound by a judicial order, went on to auction a plot of land against which the debt stood discharged. He contends that the Recovery Officer had no jurisdiction to proceed with the matter when a court of competent jurisdiction had granted an injunction against the sale of the property. He also contends that the Bank had brought this fact to the notice of the Recovery Officer well in time. He contends that subsequently even the debt had been discharged by the judgment-debtor and the scenario that has emerged is that the Recovery Officer while violating the orders of the Court has recovered twice over and more.
4. Counsel for the auction-purchaser submits that he has purchased the property by way of an auction and that he is a bona fide purchaser whose sale cannot be set aside merely because the Recovery Officer has in any manner overshot his jurisdiction. He relies upon a judgment of the Supreme Court in Sagar Mahila Vidyalaya, Sagar v. Pandit Sadashiv Rao Harshe and Ors. .
5. I have heard counsel for the parties and, with their assistance, have gone through the record of the case. It appears to me that the Civil Court at Faridabad had directed vide its order dated 29.04.2005 that no sale of the premises in question shall take place which fact was brought to the notice of the Recovery Officer on 02.05.2005, yet the Recovery Officer subjected the property to sale on 20.05.2005. It also appears that subsequent thereto the judgment-debtor discharged his liabilities and the Bank has recovered its dues under the Recovery Certificate.
6. The question that arises for my consideration is whether the Recovery Officer in view of a stay order by the competent court could have proceeded with such an auction and whether such an auction which then creates a title, can be set aside? I am of the opinion that this aspect of the matter has already been dealt with by the Supreme Court in Surjit Singh and Ors. v. Harbans Singh and Ors. , where the Supreme Court has laid down the law in paragraphs 3 and 4 thereof. From the law enunciated by the Supreme Court it is clear that sale of property is non est. The Recovery Officer had no right to subject the property to sale. Consequently, any auction pursuant thereto would be of no consequence.
7. Accordingly, I set aside order dated 02.12.2005 as also the sale of the immovable property bearing plot No. 99, DLF, Model Town, Sector 10, Faridabad, Haryana, measuring 1000 sq.yards conducted by the Recovery Officer, the second respondent to this petition. Before parting a word of caution is necessary to Recovery Officer who must realize that he is under the law and is bound by orders of court.
8. Civil Miscellaneous (Main) 3104/2005 is disposed of accordingly. CM.APPL.Nos. 17494/2005, 3496, 3497/2006 also stand disposed of. dusty.