M/S R.L. Varma & Sons (Huf) vs M/S Kotak Mahindra Bank Ltd.
2014 Latest Caselaw 1390 Del

*         IN THE HIGH COURT OF DELHI AT NEW DELHI

       W.P.(C) No.1711/2014 and C.Ms. No.3584-85/2014

                                                 Decided on : 14.03.2014


IN THE MATTER OF
M/S R.L. VARMA & SONS (HUF)                          ..... Petitioner
                         Through : Mr. A.K. Gupta, Advocate with
                         Mrs.Aruna Verma

                       versus


M/S KOTAK MAHINDRA BANK LTD.                 ..... Respondent
                       Through : Mr. Suresh Dutt Dobhal, Advocate


CORAM
HON'BLE MS.JUSTICE HIMA KOHLI

HIMA KOHLI, J. (ORAL)

1. The present petition has been filed by the petitioner praying inter

alia for staying the hands of the respondent/Bank from selling/auctioning

the two properties, i.e., a residential premises bearing House No.A-123,

New Friends Colony, New Delhi and a commercial property measuring

8160 sq. ft. situated on the 4th floor of Gopal Dass Bhawan, Barakhamba

Road, New Delhi.

2. Counsel for the petitioner states that the present petition had to be

filed as the respondent/Bank has issued an auction notice dated

15.2.2014 in respect of the subject properties and the auction thereof is

fixed for tomorrow, i.e., on 15.3.2014 at 10.30 AM. It is the contention of

the learned counsel for the petitioner that the reserved price of the

subject properties fixed in the auction notice is far below the prevailing

circle rates published by the government and therefore, the said auction

ought to be stayed and the properties should be directed to be sold at the

prevalent market rates.

3. A pointed query has been posed to the counsel for the petitioner as

to why has the present petition been filed at the eleventh hour when the

public notice in question was issued on 15.2.2014, but there is no

satisfactory explanation offered by him.

4. Learned counsel for the respondent/Bank, who appears on advance

copy, submits that the present writ petition is yet another attempt on the

part of the petitioners to somehow or the other scuttle the auction

proceedings that are fixed for tomorrow and even earlier such attempts

had been made by them. He states that in any case, the present petition

filed by Smt. Aruna Verma, mother of Sh.Dhruv Verma, the authorized

representative of the HUF, is not maintainable as she does not have any

authority to file such a petition.

5. Counsel for the petitioner informs the court that no doubt Shri

Dhruv Verma is the authorized representative of the HUF, but he is

presently in judicial custody in a criminal case and is therefore unavailable

and due to urgency in the matter, Smt. Aruna Verma had to file an

affidavit in support of the present writ petition.

6. Counsel for the respondent/Bank hands over a set of documents,

including the orders passed by the Division Bench in

WP(C)No.7653/2011 entitled 'Smt. Vinanti Seth vs. Kotak Mahindra

Bank Ltd. & Ors.', wherein the petitioner HUF was impleaded as

respondent No.2 and Smt. Aruna Verma was impleaded as respondent

No.6 and all the parties were duly represented in the aforesaid

proceedings. He points out that the relief sought in the aforesaid writ

petition is identical to the relief being sought in the present writ petition

and after the Division Bench had heard the parties at length, the aforesaid

writ petition was disposed of, vide order dated 21.10.2011, on agreed

terms whereunder the petitioner and her family members had agreed to

make payments to the respondent/Bank in terms of the consent decree

dated 3.2.2011 (Annexure P-6) passed by the Presiding Officer, DRT. But,

they had grossly defaulted in abiding by the obligations undertaken by

them and later on, the respondent/Bank had proceeded to take steps to

dispose of the subject properties to adjust the moneys received towards

the outstanding loan amount payable by the petitioners.

7. Counsel for the respondent/Bank states that in WP(C)No.7653/2011

the petitioner herein and the family members had agreed to make

arrangement for payment of the defaulted installments along with

overdue interest thereon by selling portions of the commercial space at

Gopal Dass Bhawan and when the respondent/Bank agreed to the

aforesaid proposal, the Division Bench had directed that the sale proceeds

would be routed through the respondent/Bank directly and the remaining

portion of the commercial space at Gopal Dass Bhawan would continue to

remain mortgaged with respondent/Bank, apart from the residential

property situated at New Friends Colony.

8. It is stated that the respondents No.2 to 6 therein had agreed to

make the payments to the respondent/Bank within 60 days reckoned

from 21.10.2011 and it was clarified that in case of any default on their

part, the respondent/Bank would be entitled to process the auction sale of

both, the commercial space and the residential property, under the

Securitization and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002. In view of the settlement arrived at between

the parties and the undertakings given by the respondents therein, the

writ petition was dismissed as withdrawn. At the same time, the Division

Bench had observed that the parties were made fully aware of the

consequences of any breach of the statements.

9. Counsel for the respondent/Bank states that the petitioner and the

family members had grossly defaulted in abiding by the undertakings

given by them to the Division Bench and on 20.12.2011, they had filed an

application in WP(C)No.7653/2011, registered as CM No.19848/2011, for

extension of time. In the course of hearing of the aforesaid application,

the Division Bench had observed that the petitioner herein and the family

members had concealed material facts from the Court and they had not

informed the Court that portions of the mortgaged property had been

agreed to be sold by them to third parties, after the mortgage was

created.

10. Vide order dated 10.2.2012, the Division Bench had deprecated the

conduct of the petitioner herein (respondent No.2 in the aforesaid writ

petition) and the respondents No.3 to 6, and observed that there was

non-disclosure of rights created by them in the mortgaged properties at

the stage of creation of mortgage and the same was not even brought to

the notice of the Court. Shri Dhruv Verma, the authorized representative

of the petitioner herein, was directed to file an affidavit giving the correct

factual position, a perusal whereof had compelled the Division Bench to

observe that the respondents therein had not only cheated and misled the

respondent/Bank, but had tried to overreach the Court by failing to

disclose the creation of third party interest in respect of various portions

of the commercial space at Gopal Dass Bhawan. As a result, the

aforesaid application for extension of time filed in WP(C)No.7653/2011,

was dismissed, while imposing costs of `1.00 lac on the applicant.

Further, it was made clear that the respondents No.2 to 6 therein as also

the petitioner would allow the auction to proceed without any obstruction

and physical possession of the residential premises would be handed over

to the respondent/Bank on 15.2.2012.

11. Learned counsel for the respondent/Bank states that the costs

imposed on the applicant were not paid but pursuant to the order dated

10.2.2012 passed by the Division Bench, physical possession of the

residential premises was taken over by the respondent/Bank and now

that the respondent/Bank has fixed a date for conducting the auction sale

of the subject property, the petitioner has filed the present misconceived

petition, yet again trying to stall the said auction proceedings.

12. Copies of the documents handed over by the counsel for the

respondent/Bank, including the orders passed in various proceedings and

the list of dates and events, are taken on record.

13. A pointed query has been posed to the learned counsel for the

petitioner as to whether all the aforesaid orders passed in respect of the

subject properties find mention in the writ petition and if not, have the

copies thereof been placed on record. Counsel for the petitioner responds

by stating that his client had given him limited instructions and he was

not informed about the earlier orders passed in WP(C) No.7653/2011.

14. It is settled law that when a party approaches the High Court and

seeks the invocation of its jurisdiction under Article 226 of the

Constitution of India, it must place on record all the relevant facts before

the Court without any reservation. In exercising its discretionary powers

and extraordinary jurisdiction under Article 226 of the Constitution of

India, the High Court not only acts as a court of law, but also as a court of

equity. Therefore, in case of a deliberate concealment or suppression of

material facts on the part of the petitioner or if it transpires that the facts

have been so twisted and placed before the Court, so as to amount to

concealment, the writ court is well entitled to refuse to entertain the

petition and dismiss it without entering into the merits of the matter.

[Refer: Prestige Lights Ltd. vs. State Bank of India & K.D.Sharma Vs.

SAIL (2007) 8 SCC 449 & (2008) 12 SCC 481].

15. In the case in hand, the petitioner has maintained complete silence

on the previous litigations with the bank in respect of the subject

properties and the orders passed by the Division Bench in

WP(C)No.7653/2011. In the writ petition, reference has only been made

to the proceedings initiated by the respondent/Bank before the DRT and

not to the petition filed by Smt. Vinanti Seth D/o Smt. Aruna Verma

wherein comprehensive orders have been passed by the Division Bench

reflecting the conduct of the petitioner herein and the family members of

the HUF.

16. In view of the aforesaid conduct of the petitioner in deliberately

concealing the relevant orders passed in other proceedings from the Court

and withholding material information which has a direct bearing on the

relief prayed for in the present proceedings, this Court declines to

entertain the present petition, which is accordingly dismissed, along with

the pending applications, with costs of `20,000/- imposed on the

petitioner. The costs shall be paid to the respondent Bank through

counsel within two weeks with a copy of the receipt placed on record

within one week thereafter.

(HIMA KOHLI) JUDGE MARCH 14, 2014 sk/mk