Housing Development Finance ... vs Ravindra Dhankar And Another
2017 Latest Caselaw 6544 Del

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*        IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                          Reserved on: 06th November, 2017
                                          Pronounced on: 17th November, 2017

+        CS(OS) 2108/2012
         HOUSING DEVELOPMENT FINANCE
         CORPORATION LTD                           ..... Plaintiff
                         Through : Mr.Ajay Saroya, Advocate for
                                   respondent.
                         versus

    RAVINDRA DHANKAR AND ANOTHER             ..... Defendants
                  Through : Mr.Jagjit Singh, Advocate for
                            applicant.
CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA

YOGESH KHANNA, J.

REVIEW PETITION 572/2015

1. This review is against an order dated 14.09.2015 whereby an application for leave to defend of defendant was dismissed thereby decreeing the suit of the plaintiff.

2. It is now alleged by the applicant that he was not aware of the facts now being alleged, at the time of moving application u/s 37 (3) CPC which touches the core issues of this case and if such facts were made available to the Court it ought not have dismissed his leave to defend application.

3. The applicant alleges to be one of the victims of defendant no.2 and the plaintiff bank, as they both have allegedly cheated the applicant

and similarly placed 400 other buyers of flats built by defendant no.2. It is alleged after the order dated 14.09.2015 was passed dismissing his application for leave to defend, the applicant come to know of various other relevant facts which he now intend to bring to the notice of this Court viz.:-

a) the plaintiff bank had failed to act as per the tripartite agreement entered into between the plaintiff bank, the applicant herein and the defendant no.2 wherein the bank was required to release the money in installments, only on verification of the stages of construction of flats by defendant no.2. The relevant clause of the tripartite agreement dated 30.03.2011 is as under.

"and whereas HDFC based on such requests and representation, shall make disbursement periodically. Which factor is hereby confirmed and acknowledged by the borrower herein."

However, the entire loan amount of Rs.23 lakh was paid by the plaintiff to the defendant no.2/ society fraudulently in a single go although it was required to be paid in installment, per stages of construction;

b) the applicant had also paid to the plaintiff an amount to verify the legal and technical status of the land from the authorities concerned, booking and financial status of the flats/land in the project of defendant no.2, but the plaintiff bank had failed to verify the previous status of flat and rather acted against the RBI guidelines by making payment in a single shot mode;

c) the flat allotted to the applicant was earlier allotted to two other person and was rather mortgaged with financial organizations which fact was never disclosed to the applicant herein;

d) more than 52 person had filed complaints to the police and various FIRs were registered against the defendant no.2 and against officials of the HDFC bank by EOW cell, for cheating and committing of fraud. The main accused of the case Mr.Mahim Mittal was also arrested by EOW cell in January 2014;

e) the applicant surrendered the flat to defendant no.2 which was duly accepted by defendant no.2 vide a letter dated 20.03.2012 whereby the defendant no.2 had agreed to takeover the responsibility of making full and final payment to HDFC Limited (the plaintiff) and also timely payments of the EMIs on behalf of the defendant no.1 to plaintiff till the final closure of account of defendant no.1 and shall also provide a "No dues certificate" as soon as it gets it;

f) it has also come to the knowledge of the applicant that Greater Noida authority had cancelled the allotment of plot in the name of defendant no.2 for non compliance of the payment schedules;

g) the defendant no.1 has also filed newspaper reports showing the fraud committed by defendant no.2 company.

4. The question is if the facts so alleged above would entitle the defendant no.1 to have a reopening of his case or not.

5. It would be appropriate to refer to documents the applicant had filed along with his application under Order 37 Rule 3 CPC for seeking leave to defend vide index dated 17.12.2013 which rather includes a copy of FIR 62/2012 PS EOW; copy of surrender letter dated 20.03.2012; the default notice and the newspaper reports in Times of India, Hindustan Times wherein an alleged fraud committed by the bank officials and the officials of judgment debtor no.2 was alleged.

6. All these documents were filed by defendant No. 1 on 17.12.2013 and there was ample time with the applicant to file any other additional document to substantiate his claim as final order was passed on 14.09.2015 i.e, after about 1½ year of filing of earlier set of documents on dated 17.12.2013. The newspaper reports annexed with index dated 17.12.2013 do show the applicant was aware of the allegations of fraud/cheating allegedly committed by defendant no.2 with officials of plaintiff bank, hence these facts can not be said to have been discovered later.

7. Similarly the issues raised qua installments to be paid at different stages of construction, I may refer to clause 4 of the tripartite agreement dated 30.03.2011 between the parties which notes:

"4. That irrespective of the stage of construction of the Project and irrespective of the date of handing over the possession of the residential apartment to the Borrower by the Builder the Borrower shall be liable to pay to HDFC regularly each month the EMI as laid down in the Loan Agreement to be signed by and between HDFC and the Borrower. The Borrower shall execute an indemnity and such

other documents as may be required by HDFC in favour of HDFC in this regard."

8. Further the indemnity bond dated 05.04.2011 executed by the applicant herein also notes the defendant no.1 had requested to HDFC to disburse the loan irrespective of the stages of the construction to the builder.

9. The learned counsel for the applicant has also raised a plea that he was not aware if the subject flat was earlier sold to some other person or was mortgaged to other financial company but the same is not relevant as when the applicant had entered into an agreement to purchase the subject flat, admittedly, it was clear of all encumbrances and it was only thereafter the parties had entered into the loan agreement dated 13.04.2011 and a tripartite agreement dated 30.03.2011. Rather defendant no.1 had paid 9 EMIs to the plaintiff. Now even if the defendant no.1 was not aware of the previous status of the flat viz. any agreement of sale with Mr.Anuj Verma or anyone else it could have hardly affected the status/right of the plaintiff to own the flat, provided he had paid the entire consideration.

10. Lastly his plea of surrender of the flat and of a letter dated 20.03.2012 being not considered by the Court is a plea on merit and I doubt can be looked into under Rule 1 of Order 47 CPC.

11. Order 47 Rule 1 CPC read as under:

"1. Application for review of judgment.- (1) Any person considering himself aggrieved-

(a) by a decree or order from which an appeal is

allowed, but from which no appeal has been preferred,

(b) by a decree or order from which no appeal is allowed, or

(c) by a decision on a reference from a Court of Small Causes, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the Court which passed the decree or made the order."

12. Rule 1 limits the scope of review.

In State of West Bengal and others vs. Kamal Sengupta and another (2008) 8 SCC 612 the court held:

"35. The principles which can be culled out from the above noted judgments are :

(i) The power of the Tribunal to review its order/decision under Section 22(3)(f) of the Act is akin/analogous to the power of a Civil Court under Section 114 read with Order 47 Rule 1 of CPC.

(ii) The Tribunal can review its decision on either of the grounds enumerated in Order 47 Rule 1 and not otherwise.

(iii) The expression "any other sufficient reason" appearing in Order 47 Rule 1 has to be interpreted in the light of other specified grounds.

(iv) An error which is not self-evident and which can be discovered by a long process of reasoning, cannot be treated as an error apparent on the face

of record justifying exercise of power under Section 22(3)(f).

(v) An erroneous order/decision cannot be corrected in the guise of exercise of power of review.

(vi) A decision/order cannot be reviewed under Section 22(3)(f) on the basis of subsequent decision/judgment of a coordinate or larger bench of the Tribunal or of a superior Court.

(vii) While considering an application for review, the Tribunal must confine its adjudication with reference to material which was available at the time of initial decision. The happening of some subsequent event or development cannot be taken note of for declaring the initial order/decision as vitiated by an error apparent.

(viii) Mere discovery of new or important matter or evidence is not sufficient ground for review. The party seeking review has also to show that such matter or evidence was not within its knowledge and even after the exercise of due diligence, the same could not be produced before the Court/Tribunal earlier."

13. In D.R. somayajulu, Secretary, Diesel loco shed and south eastern railway house building cooperative society limited, Vishakhapatnam and others vs. Attiliappala swamy and others (2015) 2, SCC 390 the court held as under:

"20. In the review petition, in our view, the High Court ignored the sequence of events and the full participation of sons, daughters and the grandchildren including the first respondent before the competent authority. Court of review has only a limited jurisdiction circumscribed by the definitive limits fixed by the language used in Order XLVII Rule 1 C.P.C. It may allow a review

on three specified grounds, namely :- (i) discovery of new and important matter or evidence, which after the exercise of due diligence, was not within the applicant's knowledge or could not be produced by him at the time when the decree was passed or order was made; (ii) mistake or error apparent on the face of the record; or (iii) for any other sufficient reason. Application for review on the ground of discovery of new material should be considered with great caution and should not be granted very lightly."

14. In Haryana State Industrial Development Corporation Limited vs Mawasi and others (2012), 7 SCC 200 the court held as under:

" The petitioner's plea that the documents produced along with the review petitions could not be brought to the notice of the Reference Court and the High Court despite exercise of due diligence by its officers does not commend acceptance because it had not been explained as to why the officers/officials concerned, who were very much aware of other sale transactions produced by themselves and the landowners did not try to find out the reasons for wide difference in the price of land sold by Ext. P-1 and other parcels of land sold by Exts.P-2 to P-13 and Exts. R-1 to R-15."

15. In Inderchand Jain (dead) through Lrs. Vs Motilal (dead) through Lrs. (2009) 14 SCC 663 the court held as under:

"It is beyond any doubt or dispute that the review court does not sit in appeal over its own order. A rehearing of the matter is impermissible in law. It constitutes an exception to the general rule that once a judgment is signed or pronounced, it should not be altered. It is also trite that exercise of

inherent jurisdiction is not invoked for reviewing any order."

16. The aforesaid law limits the powers of Court while dealing with application for review. Now as the facts so alleged in this application were well within the knowledge of defendant no.1 at the time of filing of his application for leave to defend, he cannot allege it to be a new discovery or not being in his knowledge despite due diligence.

17. Moreso it is alleged by the plaintiff a) the court fee, as applicable to review petition has since not been paid and b) a certificate as is required by Rule 10 of Chapter 1(a) of volume 5 of the High Court Rules and Orders is also not annexed, per Nathu Ram Friends Colony Co- operative House building Society Limited vs. Sardar Sohan Singh in C.M. 850/1972 in F.A.O. (OS) 14/1971.

18. However even if I ignore para 17 above, the facts alleged do not fit within the scope of powers to be exercised under Rule 1 of Order 47 CPC. The submissions that surrender letter or other documents were ignored or not properly appreciated by the Court can only be challenged in appeal on merits. The matter is not required to be re-heard on merits in a review petition and hence for reasons aforesaid, the application is dismissed.

19. No order as to costs.

YOGESH KHANNA, J

NOVEMBER 17, 2017 DU