1. This is a second appeal against order dated 18.7.2001 passed by the first Appellate Tribunal being DRT-II, Delhi arising out of a matter in execution proceedings of the decree passed by DRT in O.A. No. 195/95 Punjab & Sind Bank v. Avtar Singh and Anr.
2. Before the Recovery Officer, the appellant had made an objection that he was bonafide purchaser in possession of the property and, therefore, the same cannot be sold in the aforesaid execution proceedings. The Recovery Officer by his order dated 29.5.2001 dismissed the objections saying that the sale deed in favour of the objector was void ab initio being in contravention of the interim orders of the Hon'ble High Court. Being aggrieved with that order, the objector filed appeal before the concerned DRT.3. By the impugned order, DRT-II has rejected the appeal filed by the objector against order dated 29.5.2001 passed by the Recovery Officer.
In the appeal before DRT-II, Delhi in addition to the request for setting aside the Recovery Officer's order dated 29.5.2001, a prayer was made that the final order dated 1.10.1997 passed by DRT in the aforesaid O. A. be also set aside and consequently, the recovery certificate qua property No. 23/144-A, Vikram Vihar, Lajpat Nagar, New Delhi be also set aside.
4. Learned Presiding Officer of DRT-II in his order dated 18.7.2001 (which is impugned here) came to a conclusion that the final order dated 1.10.1997 passed by his learned predecessor could not be set aside by him as he had no jurisdiction to the same. According to him, that order could only be set aside in an appeal preferred against that order before the Debts Recovery Appellate Tribunal. Regarding the order dated 25.5.2001 passed by Recovery Officer and which was also impugned before him, he came to a conclusion that the same was consequential order and had been passed in compliance of the final order made by DRT in the aforesaid O.A. and, therefore, so long as the final order had not been set aside, the order of the Recovery Officer was perfectly valid and could not be set aside.
5. Feeling aggrieved with the impugned order passed by the first Appellate Tribunal, this second appeal has been preferred before me, by the objector.
6. Heard learned Counsel for the appellant. In this appeal the prayers, inter alia, made are as follows :-- "(i) To call for the records of the Hon'ble Debts Recovery Tribunal-II, Delhi, in Appeal No. 1/2001 in O.A. No. 105/95 from the Hon'ble Debts Recovery Tribunal-II, Delhi.
(ii) Set aside the order dated 18.7.2001 passed by the Hon'ble Debts Recovery Tribunal-11, thereby rejecting the objections of the appellant therein.
(iii) To order that the flat bearing No. 144A, Block 23, on the first floor, Vikram Vihar, Lajpat Nagar-IV, New Delhi, cannot be sold by the learned Recovery Officer in R.C. No. 210/99 titled Punjab & Sind Bank v. Avtar Singh and Ors.
7. Learned Counsel for the appellant fairly conceded that DRT-II could not set aside the final order dated 1.10.1997 passed by his learned predecessor in the concerned O.A. He limited his arguments only in respect of the Recovery Officer's order rejecting the appellant's objection to the sale of Flat No. 23/144-A, Vikram Vihar, Lajpat Nagar, New Delhi on the grounds that the appellant is a bonafide purchaser and in possession of that flat.
8. The facts as stated in this appeal, inter alia, are, that the appellant purchased the said flat from Smt. Praveen Duggal on 19.9.1991, who had purchased the same from Smt. Maninder Kauron 10.8.1989; that originally the flat belonged to one Shri Roshan Lal Chopra who had transferred the same to Smt. Maninder Kauron 26.10.1973 after having obtained permission from the Lessor - President of India - In terms of letter No. L&DO/PS/4/2041 and that the fiat still stood in the name of the previous owner Shri Roshan Lal Chopra who was the first lessee of the flat from the President of India through Land & Development Officer vide the Lease Deed duly registered as Document No.126 in Additional Book No. 1, Volume No. 43 at pages 106 to 109 and registered on 4.2.61.
9. From the Memorandum of Appeal, it transpires that after the appellant purchased the said fiat from Smt. Praveen Duggal, he applied to the Land & Development Officer on 3.8.1992 for transfer of the Lease in favour of Smt. Maninder Kaur and the same was done on 27.9.1993.
There is nothing in the Memorandum of Appeal to show that any permission for transfer of Lease from Smt. Maninder Kaur to Smt.
Praveen Duggal or from Smt. Praveen Duggal to the appellant was accorded. Had Smt. Praveen Duggal or the appellant moved to the Land & Development Officer for transfer of Lease, the same would have been stated in the Memorandum of Appeal.
10. Before forming a view whether the appeal should be admitted or not, I felt it necessary to peruse the original records of the aforesaid O.A. because in the order of Recovery Officer, a mention had been made that by an order dated 6.4.1983, Hon'ble High Court was pleased to restrain the defendants from alienating, transferring, encumbering or parting with the possession of the property in question.
11. From the record of the O.A., I find that originally the Bank had filed a Suit No. 497/83 in Hon'ble Delhi High Court against two defendants Shri Avtar Singh and Smt. Maninder Kaur (wife of Shri Avtar Singh) for recovery of Bank debts. In that suit, one Application No.1544/83 was moved whereby interim orders sought and on that application, an ex-parte order was passed on 6.4.1983 whereby the defendants were restrained from in any manner alienating, transferring, encumbering or parting with the possession of the property, viz., 23/144-A, Vikram Vihar, Lajpat Nagar, New Delhi till the next date of hearing. The defendants did not file any reply to that application and ultimately vide order dated 28.9.1983, the aforesaid interim order dated 6.4.1983 was made absolute. After the establishment of DRT at Delhi under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the aforesaid suit stood transferred to DRT, Delhi on 5.7.1995. Thereafter the suit was treated as Original Application before the DRT and after hearing in the O.A., Shri R.M.Sharma, Presiding Officer of DRT, Delhi, passed the final order decreeing the claim of the Bank and also directing recovery of the debt amount by selling the mortgaged property bearing No. 23/144-A, Vikram Vihar, Lajpat Nagar, New Delhi on the event of failure on the part of the defendants to pay the decreed amount within four weeks from the date of the receipt of the final order. A recovery certificate was issued to the Recovery Officer and the Recovery Officer proceeded to recover the debt as determined by the Tribunal. Since there was a direction in the final order passed by DRT that in the event of failure on the part of the defendants to pay the decreed amount within a stipulated period the Bank shall be entitled to recover the amount by sale of the aforesaid property, the Recovery Officer proceeded to sell the aforesaid mortgaged property. When the proclamation of sale was issued, the appellant came into picture.
12. On perusal of the plaint and the aforesaid suit, it is to be found that the Bank had claimed that the aforesaid properties were mortgaged with it by an equitable mortgage by deposit of title deeds.
13. From the above facts, it is apparent that the defendant Smt.
Maninder Kaur transferred one of the mortgaged properties to Smt.
Praveen Duggal in gross violation of the orders of the Hon'ble High Court dated 6.4.1983 duly confirmed by order dated 1.10.1997. Under that order, not only that aforesaid properties could not be sold but there was also a direction that the defendants shall not part with possession of the same. From the averments in the Memorandum of Appeal itself, 'it is to be found that Smt. Maninder Kaur grossly violated the said order during the very pendency of the suit before the Hon'ble High Court because as per the averment of the appellant, Smt. Maninder Kaur sold that said property No. 23/144-A, Vikram Vihar, Lajpat Nagar, New Delhi to Smt. Praveen Duggal on 10.8.1989. Further it is to be found that Smt. Praveen Duggal sold the said property to the appellant on 19.9.1991. Thus it is also apparent that the appellant purchased the property on a date when the suit was still pending before the Hon'ble High Court.
14. The appellant claims himself to be a bonafide purchaser and also claims that his possession over the property in dispute is on the basis of his title over the property acquired under the sale deed from his predecessor-in-interest Smt. Praveen Duggal. There is a big question mark how it can be supposed that the appellant is a bonafide purchaser.
From the facts it is established that the original sale deed had been deposited with the plaintiff Bank by way of equitable mortgage. The appellant claims to have taken possession of the registered sale deed executed by Smt. Maninder Kaur in favour of Smt. Praveen Duggal but did not care to have the original deeds of transfer from original lessee Shri Roshan Lal Chopra in favour of Smt. Maninder Kaur. He relied on a certified copy of that sale deed and on the records of Land and Development Office wherein the name of Shri Roshan Lal Chopra was already there. He was not purchasing the property from Shri Roshan Lal Chopra and the fact is that he was purchasing the aforesaid property from one Smt. Praveen Duggal. He ought to have ascertained the rights of Smt. Praveen Duggal before purchasing the property in question from her which he did not do. Had he taken that care he would have come to know that Smt. Praveen Duggal did not possess the title deeds in favour of Smt. Maninder Kaur and that the title deeds were with a lender Bank which had already filed a suit for recovery of debts against her. On further enquiry he would have known that there was a restraint order of the Court against Smt. Maninder Kaur.
15. The appellant is trying to say that the equitable mortgage created by Smt. Maninder Kaur in favour of the plaintiff Bank was not a valid mortgage because as per lease deed executed by the President of India, no transfer of leased property could have been made or any mortgage could be created without the permission of the original Lessor - President of India. This argument cuts his own bona fides because he also did not purchase the property in question from Smt. Praveen Duggal after having obtained the permission of original Lessor - The President of India. He was conscious of the fact that permission had to be taken from the original lessor and, therefore, he acted in that direction by moving an application for permission for transfer to Smt. Maninder Kaur only and which according to him, had been accorded. What about permission of the original lessor regarding transfer from Smt. Maninder Kaur to Smt. Praveen Duggal and then from Smt. Praveen Duggal to the appellant? I find that the appellant is silent on this point.
Therefore, if according to the appellant the mortgage to the Bank was bad on the grounds aforesaid then how can transfer of property in the name of appellant is in order.
16. Both the transfers, from Smt. Maninder Kaur to Smt. Praveen Duggal and from Smt. Praveen Duggal to the appellant, in relation to the property in question were in gross violation of the aforesaid orders of the Hon'ble High Court and that also during the pendency of the suit.
In my opinion, no party to a suit should be allowed to flout the orders of the Court and to scuttle the execution proceedings. The appellant here claims to be a subsequent purchaser without the knowledge of Hon'ble High Court's restraint order and he is taking the plea that he is a bonafide purchaser of the property with its lawful possession.
Thus, he contends that the property in question is not liable to be attached and sold. In my opinion, if such a relief is granted, it would be giving lever to the defendants in claims of the Banks for recovery of dues to violate the restraint order of the Court and to defeat the execution proceedings and make mockery of the judicial orders.
17. Coming to the merits of the matter in this appeal, Clause 11, Schedule-II of the Income-tax Act which has been made applicable to the execution proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 will have to be perused. The provisions are extracted as under : (1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection : Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed.
(2) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit.
(a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or (b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question.
(4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.
(5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession to the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim.
(6) Where the claim or an objection is preferred, the party against whom an order is made may institute a suit in a Civil Court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive." 18. From the aforesaid Schedule-II, I agree with the learned Counsel for the appellant that the Recovery Officer could not have declared the sale in favour of the appellant as void. That can be done only by a Civil Court. But it has also to be seen whether in execution proceedings of recovery certificate emanating from a suit in which Smt.
Maninder Kaur being defendant in the suit had been directed not to transfer the property in question or part with the possession of the same, any subsequent purchaser of that property claiming possession over the same should be recognized as having independent possession of the same and not through the judgment-debtor. In case the appellant's possession over the property in dispute is recognized independent of the judgment-debtor then, the result would be that under para (6) of the aforesaid clause the Bank/Recovery Officer will have to file a suit in Civil Court for getting a declaratory decree that the transfer of the property in dispute being in gross violation of Court's order and in the aforesaid stated facts and circumstances was not a bona fide sale/purchase. On the other hand, if the objection of the appellant is rejected then, the objector, being aggrieved with the order, may file a civil suit for his rights. A question arises whether in the facts and circumstances of the case should the Bank/Recovery Officer be asked to establish the rights over the property in dispute by getting it declared that the appellant is not a bona fide purchaser or the appellant be left to his own remedies in the event of rejection of his objection? In my opinion, since the execution proceedings are continuing proceedings, the Recovery Officer be not told to recognize the alleged title and possession of the appellant which appear to have been acquired without due care and are tantamounting to defeat the" execution proceedings. The plaintiff Bank had taken all the steps which it could take to safeguard its interests and, therefore, the Bank cannot be said to have faulted. I may also say that in the facts and circumstances of the case, I am not satisfied with the assertion of bona fides by the appellant. However, I may make it clear that no observations made in this order will have any bearing on the merits of the case which may be instituted before any Court of competent jurisdiction.
19. In the aforesaid circumstances, therefore, I am not inclined to interfere with the impugned order and that of the Recovery Officer. The appeal is, accordingly, dismissed in limine.