Parvesh Jain vs Idbi Bank Ltd & Ors
2018 Latest Caselaw 7464 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI
%                              Date of decision: 18th December, 2018
+       W.P.(C) 13687/2018 & CM. Nos. 53360/2018 and 53361/2018

 PARVESH JAIN                                         ..... Petitioner
                         Through:   Mr. Ajay Jain, Adv.

                versus


 IDBI BANK LTD & ORS                                  ..... Respondents
               Through:             Mr. Sidhartha Barua, Adv. with
                                    Ms. Adity Gupta, Adv.

 CORAM:
 HON'BLE THE CHIEF JUSTICE
 HON'BLE MR. JUSTICE V. KAMESWAR RAO

V. KAMESWAR RAO, J. (ORAL)

CM. No. 53360/2018 Exemption allowed subject to all just exceptions. Application stands disposed of.

W.P.(C) 13687/2018

1. The challenge in this petition is to the order dated December

18, 2017 passed by the DRAT in Misc. Appeal No. 145/2017

whereby the Tribunal has allowed the appeal filed by the IDBI Bank

Limited and set aside the following order of the DRT:-

"Heard both sides on interim relief. It is submitted that the security applicant is only entitled to 85 sq. yds. out of the property covered under the mortgage.

The counsel for the security applicant undertakes to pay Rs.10.00 lacs within one week and another 12.50 lacs within one month thereafter. On the other hand the counsel for respondent no.2 submitted that respondent no.2 is in jail and likely to be released within 7 to 10 days. Respondent no. 2 and 3 are directed to pay the entire balance amount as per OTS with subsequent interest accrued thereon. Respondents no. 2 and 3 are directed to file affidavit within one week to honour the OTS with subsequent interest within time. On payment of Rs.10.00 lacs within one week from today and another Rs.12.50 lacs within one month thereafter and on filing affidavit within one week by the respondent no.2 and 3 as well as by the security applicant to pay both the instalments within prescribed time limit, the taking possession of the property in question by the respondent bank is deferred by next one week, in failure to comply the above-said directions by the security applicant and by the respondent nos. 2 and 3, the respondent no.1 bank will be at liberty to take physical possession of the property in question without any further direction of this Tribunal through the same Receiver."

2. The facts as noted from the record are that Mr. Parvesh Jain

(petitioner herein), Proprietor of Jain Tex & Fab had taken a loan

from the respondent No.1 Bank. Initially, the sanctioned limit was

Rs.430 lakhs, which was subsequently increased to Rs.630 lakhs in

April, 2009 and further to Rs.10 Crores in May, 2010. Repayment

of the loan amounts was secured by way of equitable mortgages of

different properties by deposit of their title deeds with the

respondent No.1 Bank.

3. It may be necessary to state here that before possession of

the mortgaged properties could be taken, under the SARFAESI Act,

on December 16/26, 2015, there was a One Time Settlement (OTS)

between the Bank and the proprietor of the borrower firm whereby

the Bank's Dy. General Manager Rajinder Singh agreed to accept

the payment of Rs.775 lakhs only from the borrower as against the

total outstanding dues of over 12 Crores rupees, which he owed to

the Bank and also to release the Bank's charge over mortgaged

properties including 85 yds. of plot in Mukesh Mkt., Gandhi Nagar.

The borrower was to clear the entire dues as per the settlement

within a period of three months. As the petitioner did not have the

money to pay the Bank even as per the OTS, he entered into some

understanding with the respondent No.2 namely Manak Chand

Maheshwari whereby respondent No.2 agreed to purchase two plots

of 85 sq. yards each, both of which were mortgaged with the Bank,

and one was owned by Parvesh Jain and the other was owned by his

wife namely Ms. Ruchi Jain, respondent no.3 herein. The petitioner

wrote a letter dated January 05, 2016 to the Bank to release any one

of the said two plots to begin with, as the respondent No.2 was

ready with the money. The Bank's Dy. General Manager

Mr. Rajinder Singh agreed to that request of the petitioner and

released one of the two plots measuring 85 sq. yards owned by Ms.

Ruchi Jian, respondent No.3 and thereafter the same was sold by the

petitioner to the respondent No.2 herein in February, 2016 and he

has also made part payment towards the satisfaction of the OTS

amount. It appears that full amount of money payable to the Bank

under the OTS was not paid by the borrower within the period

within which it was agreed to be made and Rs.5.50 Crores only

were paid to the Bank. The petitioner wanted a clearance from the

Bank that he could go ahead to sell other properties as well, as he

had some buyer ready to clear the balance OTS amount but the

Bank did not agree to that request.

4. Finally, the OTS came to be revoked by the respondent

No.1 Bank and steps were again revived to take over physical

possession of the secured assets including the plot in question i.e

plot No. 1542-A, Gandhi Nagar, which was mortgaged by the

petitioner in favour of the Bank. It was, at that stage, the respondent

No.2 herein Manak Chand Maheshwari approached the DRT with

his SA in which he claimed that since OTS has been entered into

between the Bank and the borrower, i.e., the petitioner had

represented to him while selling the plot belonging to his wife,

which had been released by the Bank in January, 2016 that he will

be clearing the Bank's entire dues, Manak Chand Maheshwari

agreed to purchase the other 85 sq. yads plot No. 1542-A also

belonging to the petitioner, which was in fact part of the bigger plot

No. 172 out of which 85 sq. yards was part and was owned by his

wife and accordingly, petitioner sold his plot also to him in

February, 2016.

5. It was his case (of respondent no.2) that the respondent No.1

Bank had illegally obtained an order dated December 14, 2016 for

possession of the plot No. 1542-A, purchased by him from

petitioner, from the Ld. CMM under Section 14 of the SARFAESI

Act. The prayer made by the respondent No.1 was for quashing of

the order dated December 14, 2016 passed by the Ld. CMM. It was

in this background, the aforesaid order was passed by the DRT.

6. The DRAT was of the view that the DRT was not at all

justified in granting any interim protection whatsoever in the matter

because prima facie the relief sought for by Manak Chand

Maheshwari in his SA was beyond the scope of Section 17(1) of the

SARFAESI Act. The only prayer made in the SA was for quashing

of the order passed by the Ld. CMM in the petition under Section

14 of the SARFAESI Act. It held that in view of Section 14(3) of

the SARFAESI Act, no act of CMM in pursuance of this Section

shall be called in question in any Court or before any other

Authority. The DRAT also was of the view, even otherwise the

DRT has granted relief to respondent No.2 without even noticing

that there was a prima facie case in favour of respondent No.2 or

balance of convenience was in his favour for granting interim

protection. The DRAT found that admittedly the respondent No.2

claims to have purchased the property in question from Parvesh Jain

(the petitioner) being fully aware of the fact that the same was

mortgaged with the Bank and consequently Parvesh Jain

(the petitioner) could not have sold it to anyone. Ignoring this fact,

still the DRT granted the interim protection. The DRAT was of the

view that the respondent No.2 took a calculated risk in purchasing a

mortgaged property only with the hope that the OTS will finally

materialize in favour of Parvesh Jain (the petitioner). The DRAT

held, at his instance, the legality of the Bank's action in revoking

the OTS cannot be gone into, more particularly when borrower

himself is avoiding any legal battle to have that decision of the Bank

challenged before any forum. The DRAT also took into

consideration the fact that the OTS has since been revoked. Further,

the DRT could not have directed the payments to be made by the

respondent No.2 Manak Chand Maheshwari, the petitioner and

Ruchi Jain being the borrowers and the guarantor as per OTS, more

particularly when nobody has challenged the revocation of OTS.

Finally, the DRAT set aside the order passed by the DRT.

7. The only submission made by the learned counsel for the

petitioner is that the petitioner having entered into OTS, he is ready

and willing to discharge his liability under the OTS. He states, that

permission needs to be granted for disposal of the mortgaged

property.

8. We are unable to agree with the submission made by the

learned counsel for the petitioner. At the outset, we may state that

the petitioner was not the applicant before the DRT but it was

respondent No.2. In fact, the petitioner, who was borrower, had not

taken any action. It is a matter of fact that the OTS has been

revoked by the Bank and the same has not been challenged. If that

be so, there is no question of discharging any liability under the

OTS. The petitioner herein has no locus to challenge the order

passed by the DRAT when he was not the applicant before the

DRT. We also find that the Bank has proceeded against the

petitioner under the SARFAESI Act. We also note, that the CBI

has registered a criminal case against the borrower.

9. Taking into account, the totality of the facts and the fact that

there is no OTS in place, the revocation of which remained

unchallenged by the petitioner herein, and further that the petitioner

has no locus to challenge the order passed by the DRAT, we find no

infirmity in the order passed by the DRAT. The writ petition is

dismissed.

CM. No. 53361/2018 (for stay) Dismissed as infructuous.

V. KAMESWAR RAO, J

CHIEF JUSTICE

DECEMBER 18, 2018/ak