Mr. S. Kiran Mahajan vs Oriental Bank Of Commerce
2004 Latest Caselaw 997 Del

JUDGMENT

Vijender Jain, J.

1. This writ petition has been filed aggrieved by the order of the sale of property by the recovery officer dated 14th September, 2004 and rejecting the application of the petitioner. The petitioner had filed an application for determination of Mortgage liability against her. The petitioners had contended the said liability as per entry in Equitable Mortgage Register of the Bank was valued at Rs. 9 lacs and therefore the liability of the petitioners could not exceed the said amount. It was also contended that as the property bearing No.E-300, 1st Floor, Greater Kailash-II, New Delhi was valued at Rs.9 lakhs, therefore, petitioners' liability could not exceed the said amount and the petitioners were willing to pay the said mortgage liability to the respondent-bank and the proclamation of the sale effected by Recovery Officer should be set aside. The certificate holder bank had opposed the prayer of the applicants. The Debt Recovery Tribunal did not agree with the grounds as set out by the petitioner and dismissed the application stating that the Tribunal cannot accept the value of the property as given by the petitioners nor can discharge the liability of mortgagor in respect of one of the property.

2. Ms. Tasneem Ahmedi counsel appearing for the petitioners has contended that the property initially belonged to Yogi Pharmacy Ltd. who had mortgaged this property in 1994 to the certificate holder. It was contended that thereafter a memorandum of understanding dated 21st December 1996 was signed by Yogi Pharmacy Ltd. & M/s Saraswati Real Estates through its Director Vishal Gulati. Yogi Pharmacy had also given an irrevocable power of attorney dated 21st December, 1996 in favor of M/s Saraswati Real Estates. The power of attorney was revoked by Yogi Pharmacy by giving a notice dated 16.9.1997. Against the said revocation M/s Saraswati Real Estates through its Director Vishal Gulati filed a suit in this Court for declaration that Yogi Pharmacy could not have revoked the irrevocable power of attorney. The learned counsel for the petitioner relied upon the decree dated 15th March, 2001 passed in the said suit. The decree in favor of M/s. Saraswati Real Estate (P) Ltd & Anr. was passed without any contest by M/s. Yogi Pharmacy Ltd & Anr. On the basis of said declaratory decree, it is contended that revocation of irrevocable power of attorney was bad in law and that M/s Saraswati Real Estates had right to do all the acts as stipulated in the said irrevocable power of attorney including the right to sell the said property No. E-300 (First Floor), Greater Kailash II, New Delhi. Learned counsel for the petitioner has contended that on the basis of the said declaratory decree, by virtue of said power of attorney, rights in the said property have been transferred to petitioners who purchased the said property on 27th March, 2001 by having an agreement for sale executed on 27th March, 2001 by Sh. Vishal Gulati acting in his capacity as Director of M/s. Saraswati Real Estates Investment (P) Ltd. in favor of petitioners for consideration. It has been contended on behalf of petitioners that they have rights in the property, therefore, they are entitled to have the value of the said property determined and non-determination of the said value by the Tribunal is incorrect and contrary to law. Learned counsel for the petitioners has also in support of her contention relied upon Halsbury's Laws of England Vol.32, Mortgage. Relevant para 914 of that reads as under:-

"914. Where several properties liable. Where several properties of the same mortgagor which have been charged with a single debt become severed in title, they must, as between themselves, bear the mortgage debt rateably in proportion to their respective values, unless, by special agreement in the mortgage itself or by declaration on the mortgagor's part, one property has been made liable to bear the whole debt in exoneration of the others. The rule does not apply where one property is subject to a specific charge and the other to a general lien for the debt; but it applies as between real and personal property charged with the same debt, and it applies where additional properties are brought into the security on the occasion of further advances. Property which is only charged in aid of the property in the primary security is entitled to exoneration, but property described in a mortgage as a collateral security is not necessarily a secondary security so as to be entitled to be exonerated."

3. We have given our careful consideration to the arguments advanced by the learned counsel for the petitioner. There is no force in the arguments of the petitioner. In view of the fact that the property was mortgaged by Yogi Pharmacy in the year 1994, execution of an irrevocable power of attorney and declaration by this Court that the same could not have been revoked by Yogi Pharmacy in favor of M/s Saraswati Real Estates, execution of an agreement to sell in favor of petitioners do not help the case of the petitioner. M/s Saraswati Real Estates could not have sold the property without any charge earlier created by M/s. Yogi Pharmacy as M/s Saraswati Real Estates has sold as the attorney of M/s. Yogi Pharmacy. In view of the mortgage, the property could not have been sold to the petitioners at the first instance. The petitioners can not claim that they have absolute right in the property and not bound by the mortgage.

4. We have perused the agreement to sell filed by the petitioners. In the agreement to sell, no recital has been made that the property was subject to mortgage, the power of attorney holders M/s Saraswati Real Estates could not have sold the property without charge and if at all it could be sold then same was subject to mortgage. A subsequent purchaser on the basis of an agreement to sell can not demand discharge of property on the basis of value of property recorded in the register of mortgagor, petitioner cannot compel the certificate holder to determine the value of the said mortgaged property independently. Mortgage was in relation to the money advanced by certificate holder to Yogi Pharmacy. Till the debt is paid by the said Yogi Pharmacy applicants cannot insist that they may be permitted to redeem the mortgage.

5. To our mind, it was Yogi Pharmacy who entered into an agreement for taking loan and had mortgaged the property in dispute as well as other properties. It is for the certificate holder i.e. the bank to realise its amount in order to safeguard its dues. The petitioner cannot claim any right to the terms of the mortgage as the petitioner was neither a party to execution of the terms of mortgage nor thereafter have acquired any right by entering into an agreement to sell by Saraswati Real Estates in respect of said mortgage.

6. We think that the petitioners have no locus standi in the matter. The petitioners have no right in the facts and circumstances of the case to get the value of property determined so that property be discharged from mortgage. Counsel says that appeal is pending before Debt Recovery Tribunal.

7. Any expression of opinion stated above will not affect the merits of the case.