Kamlesh Sharma vs Delhi Finance Corporation & Ors.
2009 Latest Caselaw 4885 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                        Date of Decision: November 30, 2009

+                      L.P.A. 843/2004

       KAMLESH SHARMA                    ..... Appellant
           Through: Mr.Ashok Bhalla, Advocate.

                    versus

       DELHI FINANCE CORPORATION & ORS. ..... Respondents
           Through: Mr.Sanjay Poddar, Advocate for
                     respondent No.1.

       CORAM:
       HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
       HON'BLE MR. JUSTICE SURESH KAIT

     1. Whether the Reporters of local papers may be
        allowed to see the judgment?

     2. To be referred to the Reporter or not?            No


     3. Whether the judgment should be reported in the
        Digest?                                   No


PRADEEP NANDRAJOG, J. (Oral)

1. Vide impugned judgment and order dated

14.7.2004 the writ petition filed by the appellant has been

dismissed.

2. It is not in dispute that vide deed of mortgage

dated 19.2.1992 respondent No.1 sanctioned loan in sum

of Rs.7,19,250/- to the appellant to be given by way of

loan and stipulated therein that the loan would bear

interest @18% per annum with further interest to be paid

@4% per annum in case there was a default in repayment

of the loan.

3. It is also not in dispute that on 3.9.1992 further

loan in sum of Rs.1,01,000/- was sanctioned and in

respect thereof another deed of mortgage was executed

as per which interest agreed to be paid was 20% with

further 4% interest in case of default.

4. It is also not in dispute that the amount under

the mortgage deeds had to be advanced in installments

contingent upon the appellant performing her reciprocal

obligations and since she defaulted, the actual loan

disbursed to her was in sum of Rs.5,46,000/-. Repayment

had to commence with effect from 1.2.1994 but was re-

scheduled with effect from 1.5.1994. The very first

repayment was defaulted. The loan was recalled and on

6.6.1994 the appellant was directed to pay back the

entire loan with interest which had accrued. She was

informed that action would be taken under Section 29 of

the State Financial Corporation Act 1951. The appellant

agreed to repay the entire loan and issued a post-dated

cheque which was replaced with a cash deposit on

16.6.1994. The second cheque issued by her in sum of

Rs.1,50,962.30 was dishonoured. She deposited Rs.1 lakh

in cash on 27.9.1994 and tendered another post-dated

cheque in sum of Rs.51,000/- which was dishonoured and

on 9.11.1994 she deposited Rs.50,000/- in cash.

5. The loan which was recalled was never sought

to be rescheduled and to enforce its right, respondent

No.1 invited bids for sale of the mortgaged property.

Respondent No.5 gave the highest bid in sum of

Rs.9,35,000/- which was communicated to the appellant

informing her that if she could get a bid higher than

Rs.9,35,000/-, respondent No.1 would accept the same.

The appellant never offered to bring a buyer who was

willing to pay more than Rs.9,35,000/-. The result was

that the bid of respondent No.5 was accepted. On receipt

of Rs.9,35,000/- from respondent No.5 the necessary sale

certificate was issued and possession handed over to

respondent No.5 since the mortgaged assets were taken

possession of by respondent No.1.

6. Since alleging default committed by the

appellant, Delhi Finance Corporation (DFC) i.e. respondent

No.1 had proceeded to recover the loan which was

advanced, the appellant filed a civil suit seeking injunction

against DFC restraining it from taking possession of the

mortgaged property and sell the same to realize the loan.

7. On 31.5.1996, an interim order was granted in

favour of the appellant requiring her to pay 50% of the

amount due and payable and as claimed by DFC. She did

not do so and withdrew the suit unconditionally.

Thereafter, the appellant filed the writ petition in question

raising various issues pertaining to the proposed action of

DFC to sell her property.

8. It may be noted at the outset that in the writ

petition it was not questioned that the interest charged by

DFC was excessive. It was nowhere pleaded that being a

lady, under some scheme of the Government, the

petitioner was entitled for loan to be disbursed at a rate of

interest less than what was stipulated in the two

mortgage deeds.

9. In the writ petition various grievances were

urged against DDA pertaining to encroachments in the

area in respect whereof the appellant alleged being

rendered incapacitated to perform her obligations under

the mortgaged deeds.

10. Needless to state, said issue raised in the writ

petition had no concern with the enforcement of its right

by respondent No.1; the right being under the deed of

mortgage and the State Financial Corporation Act 1951.

11. The writ petition suffered a dismissal vide

order dated 14.7.2004.

12. Two pleas were raised before the learned

Single Judge. The first was that the appellant was not a

defaulter when the property was sold and secondly that

DFC could not sell the property without paying 50%

unearned increase to DDA as the subject property was

held under a leasehold tenure through DDA which

stipulated that in case of sale 50% unearned increase

would have to be paid to DDA.

13. With respect to the first plea urged, learned

Single Judge has returned a finding that the appellant

became a defaulter from day one i.e. even in respect of

the amount which was disbursed to her she returned not a

penny when the notice under Section 29 of the State

Financial Corporation Act was issued by DFC to the

appellant. Though not expressly stated in the impugned

order, it is apparent that since the loan had been recalled

due to defaults, the entire amount due and payable in the

month of June 1994 has been treated by the learned

Single Judge as the amount which was to be repaid.

14. Holding that the writ petitioner was a defaulter

the learned Single Judge held that DFC would be entitled

to sell the mortgaged assets.

15. With respect to the amounts which were paid

by the appellant from time to time after the loan was

recalled, the learned Single Judge has held that after

adjusting its dues from the sale proceeds and giving

credit for the amounts paid by the appellant, if any

surplus is in the hand of DFC, the same needs to be

refunded and for which the appellant can file a civil suit.

16. The plea that without paying 50% unearned

increase to DDA the property could not be sold has been

repelled with a finding that issue of payment of unearned

increase has to be post sale for only then can unearned

increase be determined.

17. The finding pertaining to the second plea

returned by the learned Single Judge is absolutely correct

and we simply reiterate the same.

18. The plea of learned counsel for the appellant

that having paid money to DFC in installments

commencing from the month of June till the month of

November 1994, the appellant ceased to be a defaulter

has to be rejected for the reason the same is premised as

if the loan stood and was repayable in installments. The

appellant is treating the payments made by her as return

of the equated monthly installments. The plea ignores

the fact that with the default committed in May 1994, the

entire loan was recalled. Thus, the full amount advanced

together with interest thereon became payable in June

1994. The appellant never requested for the loan to be

restored and made repayable in installments.

19. Thus, the learned Single Judge has returned a

correct finding that when the property was put to sale,

even after adjusting the amounts paid by the appellant,

she was a defaulter.

20. It is apparent that the appellant was not

guided properly. Had she tendered the amounts with

penal interest and simultaneously made a request to re-

schedule the loan, probably she would have got the

desired relief. But she did not do so. The result was that

the loan which was recalled on default being committed

continued to remain outstanding and hence due and

payable.

21. Respondent No.1 has complied with the

requirement of law inasmuch as the fair market value of

the mortgaged property was ascertained by inviting offers

and the highest bid submitted by respondent No.5 was

duly intimated to the appellant who was clearly told that if

she brought a buyer who was willing to pay more than

what was offered by respondent No.5, respondent No.1

would be more than willing to accept the said amount.

22. Thus, there is no infirmity in the sale of the

mortgaged asset.

23. We concur with the view taken by the learned

Single Judge that after adjusting the amount due and

payable with reference to the amounts paid by the

appellant as also the money paid by respondent No.5 as

also whatever has been paid to DDA towards unearned

increase, if anything remains to be paid to the appellant,

she can recover the same by filing a suit.

24. We may note that an attempt has been made

to urge that the appellant applied for the loan as a woman

entrepreneur and was entitled to interest being charged

at a lower rate.

25. The plea is meritless for the reason the rate of

interest between the parties has been stipulated in the

registered mortgage deeds and as per law requires to be

paid at the agreed rate of interest. If the appellant had a

problem with the rate at which the interest was charged

to her, she ought to have raised the issue when the

mortgage deeds were drawn up.

26. We find no merit in the appeal. The appeal is

dismissed but with a direction to respondent No.1 to

forward a statement of account to the appellant showing

how the respondent No.1 has appropriated the amounts

received from the appellant as also the amount realized

upon sale of the mortgaged assets and if some money is

lying surplus with the respondent No.1, the same be

refunded to the appellant within 8 weeks from today.

Needless to state, if the appellant is aggrieved with the

adjustment given by respondent No.1, remedy as per law

would be available to her. We clarify that the respondent

No.1 would be entitled to charge interest at the rate

specified in the deeds of mortgage and said issue stands

closed between the parties.

27. No costs.

PRADEEP NANDRAJOG, J.

SURESH KAIT, J.

NOVEMBER 30, 2009 Dharmender