Delhi High Court
M/S D.B.P Limited vs M/S D.H.A.F.P Limited & Ors on 14 February, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decided on: 14.02.2017
+ CS(OS) 484/2016
M/S D.B.P LIMITED ..... Plaintiff
Through: Mr. Mohit Chaudhary, Advocate
along with Mr. Kunal Sachdeva,
Advocate.
versus
M/S D.H.A.F.P LIMITED & ORS ..... Defendants
Through: Mr. Subodh Kr. Pathak, Advocate for
D-2 to D-4.
Mr. Saurabh Kirpal, Advocate along
with Mr. Shashi Shekhar, Mrs. Sonali
Jaitley Bakshi, Mr. Jaiyesh Bakshi,
Mr. Ravi Tyagi and Ms. Sanya
Kapoor, Advocates for D-6.
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA
JUDGMENT (Oral)
I.A.11750/2016 ( O 39 R 1 & 2 by plaintiff) & I.A. 12871/2016 ( O 7 R 11
by D-6)
1. The case is taken up on the direction of Division Bench in FAO No.
31/2017.
2. Arguments on the application under Order 7 Rule 11 of CPC was
heard at length. During the course of the arguments, the Court was of the
opinion that since the facts pleaded are not clear enough to disclose when
actually the cause of action arose and since the plaintiff had claimed that
CS(OS) No.484/2016 Page 1
their knowledge was from the date of the report of Economic Offences Wing
(EOW), while the defendants contend that the plaintiff had the knowledge
from the earlier dates when the property in dispute as per the report of EOW
was demolished in the year 1997 and, therefore, the suit is barred. The
defendants have also raised an issue of limitation in their written statement.
While disposing of the application under Order 7 Rule 11, the Courts are
required to confine its findings only on the averments in the plaint and the
contentions raised in the written statements and the documents filed by the
defendants cannot be considered. In view of the limited jurisdiction of the
Court under this provision of law, the Court is of the opinion that the
applications stands disposed of with direction that the issue framed
regarding limitation shall be treated as a preliminary issue.
3. Arguments of the parties are also heard on the application under
Order 39 Rule 1 & 2.
4. The contentions of the plaintiff is that defendant no. 1 had purchased
this property in a court auction and thereafter defendant no. 1 had mortgaged
the part of the property to the plaintiff for a sum of Rs. 65 lacs on
19.05.1997 and also handed over the title deeds of the suit property. Mr.
R.K. Nanda (Defendant no. 5) also executed a possession letter on
CS(OS) No.484/2016 Page 2
19.05.1997. It is also contended by the plaintiff that Mr. R.K. Nanda and his
wife had entered into a shareholder agreement with the set of shareholders to
sell their shares to them but a dispute arose between the plaintiff and
Mr. R.K. Nanda qua this agreement and the matter went before Company
Law Board who gave its finding on 11.03.2014 whereby declaring that the
shareholder agreement was valid and thereafter the plaintiff had started to
sue the various parties for the wrong doing of Mr. R.K. Nanda, the earlier
shareholder of plaintiff company. The plaintiff learnt that the suit property
was transferred by Mr. R.K. Nanda through various defendants and finally
to defendant no. 6. It is submitted that Mr. Arun Mehra, the Director and
shareholder of plaintiff company, learnt that the part of the suit property i.e.
top floor and the basement were secured to plaintiff company in the year
1997 at the time when plaintiff company was owned by Mr. R.K. Nanda and
others against the mortgage amount and the possession of these floors was
also handed over to the plaintiff company. The original sale deed of the suit
property was also found in possession of the plaintiff company. It is stated
that now he has learnt that the defendants, in connivance with Mr. R.K.
Nanda and each other are in the process of demolishing the suit property
including the portion of the property secured to the plaintiff. It is prayed
CS(OS) No.484/2016 Page 3
that the plaintiff has prima facie case in his favour since the portion of this
property is a security against the mortgaged amount, in possession of the
plaintiff and that the balance of convenience also lies in his favour and that
he shall suffer irreparable loss and injury. It is contended that defendant
Nos. 2, 3 and 6 and their employees, representatives, agents, etc be
restrained by way of ad-interim injunction from selling, transferring,
alienating, altering or parting with possession of property Plot No.11, Ring
Road, Lajpat Nagar- IV, New Delhi - 110024 in any manner whatsoever to
any person. Learned counsel for the plaintiff has relied during the course of
the arguments on Section 68 of the Transfer of Property Act and alleged that
the property which was a security is needed to be protected.
5. Reply has been filed only by defendant no. 6 and by no other
defendants. Arguments however have been addressed by all the defendants.
Defendant no. 6 has contended that he is the bona fide purchaser of the suit
property and he was never informed that the property was under any
mortgage. It is further submitted that the plaintiff's claim can only be for
the refund/payment of mortgage money but the plaintiff has not placed on
record any mortgage deed and proof of payment of Rs. 65 lacs in the
mortgage transaction and thus has no prima facie case in his favour. It is
CS(OS) No.484/2016 Page 4
further submitted that since he is a bona fide purchaser of the property and
that the plaintiff was very well aware of the fact since this fact was recorded
in the closure report of the FIR, yet have suppressed the material facts from
the knowledge of this Court. It is further submitted that the property was
demolished in 1997 and this fact was within the knowledge of the plaintiff
and he has suppressed this fact. It is further submitted that after demolition
of the property in 1997, the property became a plot on which plaintiff never
had any claim and despite the fact that such demolition was within his
knowledge, he did not came forward for security of the money under
mortgage. The property was sold only after its demolition. The plaintiff on
16.05.2013 was very well aware of the sale of the property to defendant
no.6.
6. It was also contended that the suit is barred by limitation and also
does not disclose any cause of action therefore no relief can be granted to
the plaintiff since he has no right, title or interest in the suit property and
thus has no prima facie case in his favour. Learned counsel for the
defendants has also submitted that Section 68 of Transfer of Property Act
gives the right to the mortgagee to sue for the mortgaged money.
CS(OS) No.484/2016 Page 5
7. Learned counsel for defendants 2 to 4 has submitted that in a suit no.
612/2001 titled as MGF vs. Durga Builders Pvt. Ltd and Ors wherein the
plaintiff was one of the defendant, the plaintiff had admitted that the plot
had been sold to a third party. It is submitted on behalf of the defendants that
although they have disputed the existence of such mortgage, they however
are ready to deposit the money under mortgage with the Registrar General of
this Court and now since the mortgage money is secured, the plaintiff has no
prima facie case in his favour and is not entitled for any injunction.
8. I have heard the parties and given due consideration to the pleadings
of the parties.
9. In order to be entitled for ad-interim injunction, the plaintiff has to
show three ingredients i.e. existence of prima facie case, balance of
convenience and irreparable loss and injury. The whole case of the plaintiff
is based on a mortgage allegedly took place on 19.05.1997 whereby
defendant no. 1 had pledged/mortgaged the suit property to plaintiff for a
sum of Rs. 65 lacs. The contention of plaintiff is that defendant no. 1 had
also handed over the possession of two floors (top floor and the basement) to
the plaintiff on 19.05.1997 at the time when the mortgage was created. For
this purpose, the plaintiff has relied on the document which is a letter of
CS(OS) No.484/2016 Page 6
possession which was allegedly executed on a stamp paper by defendant no.
1 and has placed it at page no. 116 of his plaint. The court has perused this
document which bears the date of purchase of stamp paper as 17.05.1997
while the contention of the plaintiff is that the possession of the mortgage
property was handed over after the mortgage was entered into between the
parties which was on 19.05.1997. The Court found it strange that the stamp
paper for handing over the possession of the property under mortgage which
was allegedly done on 19.05.1997 was purchased on a prior date. In this
case, according to the plaintiff the mortgage was created by handing over the
title deeds as well as the part of the suit property.
10. Even otherwise, the question is what right a mortgagee has against the
mortgagor?
Chapter IV of Transfer of Property Act deals with the MORTGAGES
OF IMMOVEABLE PROPERTY AND CHARGES.
11. This right includes only the right to recover the mortgaged money. It
is a settled proposition of law that in a mortgage, the property secured is
only a security and the mortgagee does not have any interest in the
mortgaged property other than that it is a secured property against his
mortgage for which the mortgagee can sue the mortgagor.
CS(OS) No.484/2016 Page 7
12. Section 68 of the Transfer of Property Act clearly lays down a
situation in which the right to sue the mortgaged money arises in favour of
the mortgagee and those cases are enumerated in Clauses 1 (a) to 1 (d). The
only rights given to the mortgagee is to ensure the payment of the money
under mortgage and till it is done, it can seek the continuation/restoration of
the security.
13. From the contentions of the parties, it is clear that there are several
contentious issues like whether there was any mortgage on 19.05.1997,
whether this property was demolished in the year 1997 and this fact was
within the knowledge of the plaintiff and despite the fact that the plaintiff
lost possession of its security in the year 1997, he kept silent. Whether the
plaintiff was aware of the subsequent transfers of the property to the various
purchasers or not. Besides this, there are other contentious issues between
the parties. Since the mortgagee's right is only limited to the recovery of his
mortgaged amount and since the defendants are ready to secure the alleged
mortgaged money by depositing the same with the court without prejudice to
their rights and since the plaintiff has no right, title or interest in the suit
property other than that part of it was a security against the alleged
mortgaged amount, I find no prima facie case in favour of the plaintiff to
CS(OS) No.484/2016 Page 8
restrain the defendants from raising any construction over the suit property
when the defendants had offered to deposit the alleged amount under the
mortgage with the Registrar General of the Court without prejudice to their
rights.
14. Since the defendants claimed to be the bonafide purchaser of the
property and have a right in the property, they would be put to
inconvenience when they had undertaken to deposit the mortgaged money in
the court. Also, it is the defendants who shall suffer the irreparable loss and
injury if the stay be granted to them.
15. In view of this, I find no ground to grant ad interim injunction in
favour of the plaintiff. The application is dismissed subject to defendant
depositing an amount of Rs.65,00,000/- with the Registrar General within
seven days from today with information to the plaintiff of such deposit.
16. Nothing in this order shall tantamount to an expression of opinion on
the merit of the case.
CS(OS) 484/2016
List the matter on 27.03.2017.
DEEPA SHARMA
(JUDGE)
FEBRUARY 14, 2017/ss
CS(OS) No.484/2016 Page 9
