MANISH P GUPTA vs ASSET RECONSTRUCTION COMPANY on 9 February 2024

ORDER

(09.02.2024)

1. Today the matter is listed for orders on the MA.

2. The present MA has been filed by the Applicants under Section 19(25) of the Recovery of Debts and Bankruptcy Act, 1993 (“RD&B Act, 1993”) and prayed to release the property i.e. Plot No.8 admeasuring 2100 sq. ft. and plot no.2 admeasuring 3500 sq. ft. in the layout of Khasra No.97/3 of Adivasi Samaj Griha Nirman Sahakari Sanstha Ltd., together with Residential House of RCC superstructure with brick masonry only admeasuring 2000 sq. ft. i.e. 185.806 sq. mts. bearing Municipal Corporation House No.610/A/7 of Ward No.61 of Mouza Zhingabai Takli, Chhindwara Road, Nagpur, Tahsil & District Nagpur within the limits of Nagpur Improvement Trust (“subject properties'') from attachment, if any, as the same is bad in law.

Facts of the case

3. Brief facts of the MA are that the Applicants are the bonafide purchaser of the subject properties and are in possession of the subject properties. He submitted that the subject properties were originally purchased by one Shri Inderkumar from Aadiwasi Samaj Unnati Gruhnirman Sahakari Sanstha, Maryadit, Nagpur vide sale deed dated 31.03.1983 who sold the said properties to Shri Jaswant vide sale deed dated 04.05.1989, further the Jaswant Kothari sold the said properties to M/s Esteco Coal Services Pvt. Ltd. vide sale deed dated 18.06.1992. Thereafter, M/s Esteco Coal Services entered into an agreement to sell dated 20.07.1996 with Shri Samunder Singh for a sale consideration of Rs.7 lakhs. It is stated that Shri Samunder Singh paid Rs.3 lakhs and it was agreed between the parties that further amount of Rs.3 lakhs was to be paid at the time of execution of the sale deed, but on demand by the Company the said amount was paid by Samunder Singh before the execution of the sale deed.

4. However, inspite of payment of Rs.6 lakhs, M/s Esteco Coal Services failed to execute the sale deed till 20.04.2004 and therefore, Samunder Singh filed a Civil Suit No.428/2005 for specific performance of contract and permanent injunction before the Ld. 4th Joint Civil Judge, Senior Division, Nagpur and Ld. Civil Judge vide ex-parte decree dated 03.01.2006 directed to the company to execute the sale deed pertaining to the subject properties in favour of the Samunder Singh by accepting balance consideration amount of Rs.1 lakhs within two months. After the said order, Samunder Singh paid balance consideration amount of Rs.1 lakh on 14.01.2006 and the sale deed in respect of the subject properties was registered between Samunder Singh and M/s Esteco Coal Services Pvt. Ltd., vide sale deed dated 16.03.2006 however, due to discrepancy in mentioning the municipal house umber in the sale deed, correction deed dated 18.08.2006 was registered.

5. Thereafter, the Additional Tahsildar Non-Agriculture Assessment, Nagpur has converted the land into Non-Agriculture and assessed the Non-Agriculture Tax of Plot No.2 vide order dated 06.04.2011 and Plot No.8 vide order dated 01.04.2011. Due to the said reason, Samunder Singh decided to sell the subject properties to interested buyer and to utilize the sale proceeds for the benefit of his family members and he therefore entered into agreement to sell with one Smt. Renu for sale consideration of Rs.18,00,000/- and the same was registered on 24.06.2008 before the Sub-Registrar, Nagpur-4.

6. It is stated that as the Applicants herein interested to purchase the subject properties, so Smt. Renu Agrawal did not pursue the deal and introduced the Applicants as her nominee to Samudner Singh and he agreed to sell the subject properties to the Applicants hence, the subject properties were sold by Samunder Singh as Vendor, Smt. Renu Agrawal as Consenter to the Applicants vide sale deed dated 31.12.2010 for total sale consideration amount of Rs.39,17,000/-, which was duly paid by the Applicants.

7. It is also stated that before executing the sale deed, Applicants through their advocate published a notice in two daily circulated newspaper i.e. Lokmat Samachar and Dainik Bhaskar dated 08.12.2010 inviting objection from persons or institutions claiming any right, title, interest, lien, charge or any other claim in respect of the subject properties. As no objection came hence, the sale deed was executed in favour of the Applicants.

8. It is also stated the Applicants were not aware about the mortgage of the subject properties and any proceedings before this Tribunal. The rights of the parties are crystallized by the Judgment dated 03.01.2006 in Spl.C.S.No.428/2005 by Ld. Civil Judge, Senior Division, Nagpur, and M/s Esteco Coal Services Pvt. Ltd. never challenged the said order and instead executed the sale deed in favour of Samunder Singh hence, the title derived by Samunder Singh is legal as the same has been derived through decree of court hence, Samunder Singh was a bonafide purchaser.

9. It is also stated that the Applicants paid full consideration amount and they are in physical possession of the subject properties thus, the said property be released from the attachment and be rendered free from attachment and mortgage.

10. It is also stated that the Ld. Recovery Officer has issued a notice for settling sale proclamation dated 05.02.2014 in respect of subject properties. Thereafter, the Applicants moved an Intervention Application before the Ld. Recovery Officer and brought on knowledge of the Ld. Recovery Officer, the above facts however, the Ld. Recovery Officer without considering the matter in its true perspective and only on assumptions and surmises have passed an impugned order dated 20.12.2017 and rejected the application for intervention filed by the Applicants on the ground that “subject property is declared as mortgaged by the Tribunal and hence he cannot go against the same”, thus, the present MA has been filed. Submission of the Respondent

11. On the other hand, the Respondent No.1 (Assignee of Union Bank of India) objected on the present MA and stated that the present MA is barred by limitation. It is stated that the Ld. Recovery Officer vide order dated 20.12.2017 rejected the IA filed by the Applicants herein, whereas the present MA is filed on 24.01.2018. It is stated that the Applicant failed to show on record the date of Application of the certified copy made to this Tribunal and when the true certified copy of the impugned order was received by the Applicants therefore, the Applicants contentions that they received the true copy on 27.12.2017 cannot be accepted.

12. It is further stated that Union Bank of India (Assignor Bank) granted several credit facilities to V K Industries Limited in the year 1993 and to secure the said loan, the borrowers mortgaged the subject properties in favour of the Assignor Bank. Since the borrower committed defaults, the Assignor Bank filed the present OA. Subsequently, Assignor Bank and Borrowers entered into a consent terms, wherein the debt was admitted and this Tribunal passed order on the basis of consent terms and issued a Recovery Certificate dated 28.06.2004 for an amount of Rs.18,22,30,367.20 and thereafter an Attachment Warrant was issued on 14.09.2004 thus, the allegation of the Applicants that the subject properties were purchased by them from one Mr. Samunder Singh vide sale deed dated 31.12.2010 is subsequent to the attachment of the property by the DRT, which is itself bad in law.

13. It is also stated that the decree passed in favour of Saunder Singh for specific performance of the contract and permanent injunction as alleged by the Applicant was passed on 03.01.2006 by the Ld. Civil Judge and subsequent to the said order, a registered sale deed was executed on 16.03.2006 whereas the Attachment warrant was issued prior to the decree and sale deed, thus, the charge on the subject properties of the Respondent No.1 is prior in time and as per Section 48 of the Transfer of Property Act, 1882 any subsequent charges created on the subject properties are subject to the charge created in favour of the Respondent No.1, as the same was prior in time.

14. Ld. Counsel for the Respondent has further submitted that the Agreement to sale and Power of Attorney do not confer any right in any immovable properties. He relied upon the judgment of Hon’ble Apex Court in Ghanshyam Vs. Yogendra Rathi (2020 7 SCC 361) and judgment of Hon’ble Delhi High Court in Imtiaz Ali Vs. Nasim Ahmed (1986 SCC Online Del 269). Consideration

15. Considered the submissions of the parties and perused the record.

16. In the present matter, the Applicants are claiming that they are assailing the order dated 20.12.2017 passed by Ld. Recovery Officer on Exb.419 dated 02.06.2014 and prayed to release the subject properties from attachment however, the said prayer of the Applicant is not maintainable in the MA thus, reliance of the Applicant on the order of Ld. Recovery Officer dated 20.12.2017 for the purpose of limitation is absolutely uncalled for.

17. In so far as the second prayer of the Applicants for declarations the mortgage of subject properties, is bad in law as the applicants are lawful owners of the same is concerned, admittedly, by way of the said prayer, the Applicants are actually challenging the order dated 10.06.2004 of this Tribunal. The order dated 10.06.2004 is passed in terms of the Consent Terms dated 21.10.2003 (Exb. No.7 in OA) and in furtherance of the order dated 10.06.2004, the Recovery

Certificate dated 28.06.2004 (Exb.No.17 in OA) was issued, however, the present MA has been filed by the Applicant on 24.01.2018, thus, the present MA is highly time barred and in the MA, the Applicants even not mentioned/prayed for condonation of delay.

18. Even otherwise, since the Applicant in the present MA praying the relief for modification/review of the order dated 10.06.2004 in the OA which ultimately fall within the purview of the review of the order and the provision pertaining to the review of the order has been provided under Rule 5-A (2) of the DRT (Procedure) Rules, 1993. For the convenience Rule 5(A) is extracted herein below: “(2) No application for review shall be made after the expiry of a period of thirty days from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application.” (emphasis provided)

19. The Hon’ble Apex Court in the matter of Standard Chartered Bank V/s MSTC Ltd (Manu/SC/0073/2020) has held that the DRT has no power to condone the delay in the Review Application. In para 14 of the said judgment, it is observed that: “14. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation - otherwise they would not be maintainable.” (emphasis added)

20. Therefore, in the light of the above dictum, this Tribunal has no power to condone the delay in the review application.

21. During the hearing when Ld. Counsel for the Respondent objected regarding the limitation of the present MA then Ld. Counsel for the Applicant stated that as the Applicant is not aware about the mortgage of the Respondent thus, the clause of limitation is not applicable on the applicant.

22. However, since this Tribunal has no power to condone the delay in a review application therefore, the said contention of the Applicant is not acceptable.

Conclusion

23. In view of the above, the present MA is hereby dismissed as barred by limitation.

24. File be closed and consigned to record. Place: Mumbai. (Dr. Rekha G. Dhakar) Dated: 09.02.2024 Presiding Officer,

DRT-1, Mumbai