Dilip Kumar Saha vs Punjab National Bank & Ors.
2011 Latest Caselaw 4794 Del

*                IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                                           Date of decision : 27.09.2011

+                               WP (C) No.4186 of 2011

DILIP KUMAR SAHA                                               ...PETITIONER
                                Through:         Mr. Ashok Kumar Tiwari, Advocate
                                                 with Petitioner in person.

                                           Versus

PUNJAB NATIONAL BANK & ORS.             ...RESPONDENTS
                  Through:  Mr. Vipin Jai, Advocate                                            for
                            Respondents 1 to 4.


CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER

1.        Whether the Reporters of local papers
          may be allowed to see the judgment?                    No

2.        To be referred to Reporter or not?                     No

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


SANJAY KISHAN KAUL, J. (Oral)

1. The petitioner, who was a Private Secretary in the Ministry of

Finance, filed an application dated 23.12.2003 for seeking a term loan

from the respondent-Bank to the tune of `13,41,000.00 for the

purchase of flat No.39-C, Second Floor, Pocket-I, Rohini, Delhi-

110085. The loan was sanctioned and the petitioner executed various

documents including the agreement for housing loan dated 11.2.2004

in terms whereof the petitioner was required to pay monthly __________________________________________________________________________________________

installments of `11,950.00 in 216 monthly installments. The

petitioner also executed a letter of authority of the even date

authorizing the respondent Bank to debit the sum of the monthly

installments from his bank account.

2. The petitioner defaulted in paying monthly installments which fact

was admitted by the petitioner in its letter dated 23.11.2005 seeking

indulgence. The bank responded by calling upon the petitioner to

adhere to the financial discipline but despite various reminders the

account was not regularized. It may be noticed that as per the

agreement between the parties, the petitioner was required to deposit

the original Conveyance deed with the respondent-Bank as and when

it was executed by the DDA in favour of the petitioner. The

petitioner put up a story that the original Conveyance Deed had got

misplaced and thus sent a certified copy of that document vide letter

dated 4.1.2006 in furtherance of the intention of creating a equitable

mortgage. Since the original document was not being submitted, the

respondent Bank lodged a criminal complaint with the Crime Branch

on 14.2.2006. It is the say of the respondent-Bank that during the

course of investigation it transpired that the petitioner had even tried

to create a mortgage with some other bank which matter is under

investigation. The petitioner had also availed of a personal loan with

the Punjab National Bank.

__________________________________________________________________________________________

3. The respondent-Bank faced with the defaulting account position

declared the same as a NPA and decided to proceed against the

secured asset under the Securitization and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (hereinafter

referred to as the „SARFAESI Act‟) as per a notice under Section

13(2) of the SARFAESI Act dated 10.2.2006. There were even

subsequent notices addressed including to the guarantors, one of

whom happened to be a Joint Secretary in the Ministry concerned.

The guarantor also wrote a letter to the Crime Branch requesting for

appropriate action against the petitioner for not handing over the

original Conveyance Deed to the respondent-Bank as per conditions

of sanction and also as per the Tri-Partite Agreement (for short

„TPA‟) executed between the petitioner, the respondent-Bank and the

DDA. The petitioner after objecting to the notice filed an appeal

under Section 17 of the SARFAESI Act, being SA No.22/2006. The

parties were given opportunity to lead evidence and this SA was

dismissed with costs vide order dated 13.9.2007.

4. It is relevant to note that the plea advanced by the petitioner before

the DRT was that a mortgage was never created. The respondent-

Bank by citing various judgements established that there was

intention to create an equitable mortgage and, in fact, the petitioner

falsely withheld the original documents after having received the

same and set up a false story of the document having been lost. Not __________________________________________________________________________________________

only that, the petitioner sought to set up a case that he would have to

pay interest only for a period of one (1) year. So much for the

honesty of the petitioner!

5. The order of the DRT dated 13.9.2007 has at length dealt with the

issue of the validity of the mortgage and has examined this aspect

even from another perspective, i.e., even in the absence of the original

Conveyance Deed, the property in question is a secured asset against

which the respondent-Bank can proceed taking into consideration the

definition of a Secured Asset, Secured Creditor, Secured Debt and

Secured Interest as contained in the SARFAESI Act.

6. The order of the DRT was assailed by the appellant before the DRAT

in Appeal No.169/2009 where, once again, the principal plea sought

to be advanced, as noticed in the impugned order, was of the lack of

any proper mortgage having been created arising from non-deposit of

the original Conveyance Deed. This aspect again finds discussion in

the impugned order with various judgements being referred to on the

issue of creation of a valid mortgage. The appeal was dismissed vide

impugned order dated 1.2.2011 of the DRAT.

7. It may be noticed that the property in question was auctioned, the

auction purchaser has paid the whole amount and the property stands

transferred to the auction purchaser though the original Conveyance

Deed continued to remain in possession of the petitioner.

__________________________________________________________________________________________

8. Before us learned counsel for the petitioner conceded that he is not

seeking to challenge the validity of the mortgage but that the

respondent-Bank did not act in accordance with law while seeking to

enforce its "security interest". In this behalf it was firstly urged that

the account was never declared NPA prior to the issuance of notice

under Section 13(2) of the SARFAESI Act. We, however, find from

the notice dated 10.2.2006 that there is a clear averment that the

account of the petitioner was declared a NPA as per the Reserve Bank

of India guidelines. It was next urged that the reason for the account

to be declared a NPA has not been given. We find that reference has

been made to repeated failures of the petitioner to pay the dues. The

call notice issued by the counsel for the respondent-Bank dated

20.10.2005 has, in fact, been referred to in the notice under Section 13

(2) of the SARFAESI Act dated 10.2.2006. Linked to this aspect, a

plea was raised that the petitioner deposited an amount of `30,000.00

on 30.12.2005, and therefore the account could be declared a NPA

only if for three (3) months no payment had been made. The fact

remains that the petitioner chose to deposit ad hoc amounts without

adhering to the financial discipline of paying the installments due as

per the agreement and there were continuous outstandings in the

account.

9. Learned counsel for the petitioner also sought to make out a grievance

about the mode and manner in which the auction was carried out and __________________________________________________________________________________________

the property was sold to the auction purchaser. A grievance was also

made to the effect that his representation under Section 13 (3A) of the

SARFAESI Act was not disposed of. Suffice it to say that not only

are these without any merit but the petitioner did not even choose to

raise any such pleas in the forums below nor have they been discussed

in the impugned order. We are examining the legality and the validity

of the orders passed by the DRT and the DRAT under Article 226 of

the Constitution of India and not as an appellate authority. This is not

a second appeal. An order must be perverse or causing grave injustice

for this Court to exercise its extraordinary jurisdiction. The facts of

the case show that it is the petitioner who has led the respondent-Bank

up the garden path by procuring the original Conveyance Deed from

the DDA and not having it deposited with the respondent-Bank

contrary to the TPA executed between the parties. He initially sought

to take advantage of this fact by claiming that there was no mortgage

created since the original document was still in his possession. This

plea has been repelled by both the forums below not only on the

aspect of creation of mortgage but for the fact that the respondent-

Bank had a "security interest" in the property so as to invoke the

provisions of the SARFAESI Act.

10. The petitioner is stated to be no more in Government service as he has

been removed from service in 2007, an action which is stated to be

under challenge in an appeal filed by him. Suffice it to say that such a __________________________________________________________________________________________

conduct is not expected of a person who served with the Government

of India.

11. We find the writ petition without any merit and hence is dismissed

with costs of `20,000.00 to the respondent- Bank to be paid within

fifteen (15) days.

12. We may notice at the end that the original title documents relating to

the property in question have been deposited in this Court as per our

directions, the same be released to the respondent-Bank to be handed

over to the auction purchaser.

SANJAY KISHAN KAUL, J.

SEPTEMBER 27, 2011                                       RAJIV SHAKDHER, J.
b'nesh

__________________________________________________________________________________________