Corporation Bank vs Shri Pushp Kumar Mittal & Ors.
2012 Latest Caselaw 1210 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.265/2010

%                                                    22nd February, 2012

CORPORATION BANK                               ..... Appellant
                               Through:   Mr. Ajant Kumar, Advocate.

                      versus


SHRI PUSHP KUMAR MITTAL & ORS.                     ..... Respondents

Through:

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

C.M. Nos. 22852-53/2011

There is no appearance on behalf of legal heirs of respondent

No.3 in spite of service. For the reasons stated in the applications, these

applications are allowed.

Applications stand disposed of.

+ RFA No.265/2010

1. The challenge by means of this Regular First Appeal (RFA) filed

under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the impugned

judgment of the trial Court dated 17.12.2009 decreeing the suit of the

appellant/plaintiff-bank for recovery of money, however, the

appellant/plaintiff-bank was denied entitlement to the sale of mortgaged

property on the ground that no mortgage was proved with respect to the credit

facility for which the suit was filed.

2. The facts of the case are that the appellant/plaintiff granted a cash

credit facility to the defendant No.1/respondent No.1 on 7.3.1996 for `

3,50,000/-. The defendant Nos.2 to 4/respondent Nos.2 to 4 stood as

guarantors. The respondent No.1 executed various security documents on

7.3.1996. The appellant/plaintiff also prayed for grant of a mortgage decree

by claiming that the property bearing No. 1224, Mahal Sarai, Chota Bazar,

Kashmere Gate, Delhi was equitably mortgaged with the appellant/plaintiff-

bank for the subject cash credit facility.

3. The trial Court, as already stated above, has decreed the suit for

recovery of money but has held that there is no mortgage of the property in

favour of the appellant/plaintiff-bank for the subject cash credit facility. The

trial Court has arrived at this finding by reference to the memorandum,

Ex.PW1/8, dated 24.12.1993 as not stating that the subject memorandum

pertains to the subject facility. The trial Court also held that the said

memorandum since it creates interest in an immovable property was bound to

be registered under Section 17(1)(b) of the Registration Act, 1908 and

therefore in the absence of the registration it could not be looked into as per

Section 49 of the Registration Act.

4. Learned counsel for the appellant argued that the memorandum

Ex.PW1/8 refers to the facility of M/s. P.K. Corporation which is the sole

proprietorship of defendant No.1 and therefore it must be held that there was a

valid mortgage in favour of the appellant/plaintiff-bank. Learned counsel also

relied upon the continuity letter, Ex.PW1/14 qua the mortgage for the subject

credit facility.

5. In my opinion, the trial Court has clearly erred in declining the

benefit of the mortgage to the appellant/plaintiff-bank inasmuch as the

appellant/plaintiff-bank proved and exhibited the continuity letter, Ex.PW1/14

which clearly provides that the title deeds are to be held with respect to all the

dues which are payable to the appellant/plaintiff-bank. This continuity letter,

Ex.PW1/14 reads as under:-

"CONTINUITY LETTER From: K.K. Aggarwal R24, Mahal Sarai, Chota Bazar, Kashmere Gate Delhi

To The Manager, Coroporation Bank Chandni Chowk Branch, Delhi.

Dear Sir, I/We have already deposited my/our title deeds relating to my/our properties at survey no.1224, Mahal Sarai at Chota Bazar village Kashmere Gate Delhi district of the extent of about______ with you as a security and have confirmed the deposit of the same as per the memorandum of deposit of title deeds dated 24.12.93. This is to confirm that as already stipulated in the said memorandum you are to hold and continue to hold the said title deeds as security for the repayment of all monies or any money that is already due to you or that may become due to you hereafter on account of whatsoever business transactions between your bank and me/ourselves.

    Place:   Chandni Chowk, Delhi                         Yours faithfully,

    Date:    7.3.96                                              Signature"

I may, at this stage, note that the respondents/defendants did not

examine even a witness in support of their case, and this is another reason why

the case as set up by the appellant/plaintiff-bank should be believed. Even

assuming that the original memorandum of deposit of title deeds, Ex.PW1/8,

required registration, however, it cannot be said that the continuity letter

Ex.PW1/14 requires registration and when this is read with the oral evidence

led on behalf of the appellant/plaintiff-bank, it has to be held, more so in the

absence of any evidence led by the defendants, that the appellant/plaintiff-

bank proved the equitable mortgage with respect to the subject facility.

6. In view of the above, appeal is allowed. The appellant/plaintiff-

bank will be entitled to a preliminary mortgage decree in terms of Order 34

CPC with respect to the amount which has been decreed in favour of the

appellant/plaintiff-bank by the judgment and decree dated 17.12.2009. Parties

are left to bear their own costs. Decree sheet be prepared. Trial Court record

be sent back.

VALMIKI J. MEHTA, J FEBRUARY 22, 2012 Ne