Dewan Izzat Rai Nanda Thru Lr'S vs Dewan Iqbal Nath Thru Lr'S And Ors.
2020 Latest Caselaw 2491 Del

      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Date of decision: August 25, 2020

+     CS(OS) 34/1977, I.As. 487/2019, 860/2019, 14786/2019, 15583/2019
      & 5697/2020

      DEWAN IZZAT RAI NANDA THRU LR'S          ..... Plaintiff(s)
                   Through: Mr. Arvind Kumar Gupta, Adv.

                          versus

      DEWAN IQBAL NATH THRU LR'S AND ORS.         ..... Defendants
                   Through: Mr. Ritesh Khatri, Adv. for D-1
                            Mr. Rajeev Sharma, Adv. for LRs of
                            D-3
                            Mr. D. Moitra, Adv. for D-4
                            Mr. Manish Sharma and Ms. Jigyasa
                            Sharma, Advs. for Auction Purchaser.

      CORAM:
      HON'BLE MR. JUSTICE V. KAMESWAR RAO
                             JUDGMENT

V. KAMESWAR RAO, J (ORAL)

I.A. 5697/2020

1. By this order I shall decide this application filed by

Radha Soami Satsang Beas ('Beas' in short) (applicant /

defendant no.1) with the following prayers:

"WHEREFORE, in the light of facts and circumstances stated herein above, it is most humbly and respectfully prayed that this

Hon'ble court may graciously be pleased to direct the appropriate office / registry I branch of this Hon'ble court to release the amount of money qua 9 /48th share of the Applicant / Defendant No. 1, in the money lying deposited with High court against auction sale of RS Pura Property; and or pass such other and or further order / direction that this Hon'ble court may deem it fit and proper in interest of justice."

2. It is the case of Beas in the application and so contended

by Mr. Ritesh Khatri, Advocate that the aforesaid suit being CS

(OS) 34/1977, was for partition in which preliminary decree was

passed on July 17, 1998; and it was finally adjudicated on August

16, 2016. One of the properties which was subject matter of

partition was the property situated in Tehsil R.S. Pura, Jammu.

The said property was put up for auction and bid of the auction

purchaser was accepted for a sum of Rs.18 Crores and this

amount was deposited in this High Court, and has not been

disbursed till date. In the final decree dated August 16, 2016 this

Court has in para 15 stated as under:

"15. In this view of the matter, a final decree for partition is passed in the suit directing the partition by sale of all the properties subject matter of the suit

and distribution of the sale proceeds amongst the parties in accordance with their share under the preliminary decree and with the following further directions:

(I) The original title document/s with respect to the property / and which have been auctioned to Lala Amar Nath Choudhary lying deposited in this Court be released in favour of the auction purchaser Lala Amar Nath Choudhary himself (it is clarified that option has been given to the counsel for auction purchaser for the documents to be handed over to him but he has refused and stated that he would like the auction purchaser to personally come and collect the papers from the Court);

(II) List the matter for the said purpose before the Joint Registrar on 26th August, 2016 at 1600 hours; (III) The auction purchaser Lala Amar Nath Choudhary is empowered by this Court to do all acts / deeds before the Courts / Authorities at Jammu & Kashmir to have the land admeasuring 108 kanals and 9 marlas situated at Tehsil R.S. Pura, District Jammu transferred in his own name; (IV) The amount of Rs.18 crores deposited by the auction purchaser in this Court together with interest accrued thereon be disbursed by the Registry in favour of the parties to the suit in accordance with their share as per the preliminary

decree;

(V) The parties to the suit, on the next date of hearing as aforesaid, before the Joint Registrar to give a joint statement of the share of each of the parties in the said amount of Rs.18 crores along with the name/s in which the cheque/s is/are to be drawn by the Registry;

(VI) The Joint Registrar to, in the order of that date, clarify the said position and instruct the Registry accordingly.

(VII) Liberty is also given to the auction purchaser to, in the case of any difficulty encountered or if any further power being required, approach this Court therefor and if any defect is found in the title of the parties to the suit, to intervene in the execution of this suit vis-a-vis the other properties of the parties, for recovery of the price paid by him and for such other relief for which he may be entitled to."

3. The aforesaid order / decree was challenged by the

auction purchaser in an appeal being RFA (OS) 68/2016. The

said appeal was rejected on December 13, 2018. Mr. Khatri, also

submitted that the auction purchaser later approached the Hon'ble

Supreme Court in SLP (C) 786/2019 which was decided by the

Hon'ble Supreme Court on September 20, 2019 whereby the

Hon'ble Supreme Court has directed that in order to safeguard

the interest of the auction purchaser, the respondents therein (who

are plaintiff and defendants herein) shall furnish Bank Guarantee

pari pasu to the extent of their interest, the same to be kept alive

till the title is cleared and also to furnish an undertaking to pay

money along with the amount of the interest, as may be ordered

in case the refund of the auction money is required.

4. He stated that the defendants will cooperate with the

auction purchaser for the due execution of the decree. The Beas,

applicant herein (applicant/defendant No.1) has submitted the

bank guarantee which has been duly verified and marked as

Ex.D1X4 by the order of the Joint Registrar (Judicial) on March

04, 2020. Despite that the money has not been released to the

applicant herein.

5. In fact, he submitted that the execution of the sale deed

has been delayed by the auction purchaser for one or the other

reason. He stated that the parties to the suit have always

supported the auction purchaser for getting the sale deed

registered. In substance, he submitted that the condition imposed

by the Hon'ble Supreme Court vide its order dated September 20,

2019 has been satisfied as the undertaking has already been given

by the Beas (applicant / defendant No.1), which is on record.

6. He highlighted the fact that during COVID-19, the

applicant / defendant No.1 had extensively become part of social

activities in providing large sheds as temporary quarantine

centres for affected people, shelters for lacs of migrants, helping

the society at large. That apart, it is providing food arrangements

for lacs of people, inasmuch as the Delhi centres were processing

about 2.5 lacs and 3 lacs food packets on daily basis for the

period April to mid June. In other words, the funds, if made

available by this Court at this needy hour shall be used for the

benefit of the society at large. Already, due to the bank guarantee,

a large amount of Beas (applicant / defendant No.1) has also got

stuck with their bankers.

7. Mr. Manish Sharma, learned counsel for the auction

purchaser would submit that the auction purchaser has already

submitted a sum of Rs.18 Crores towards the sale consideration

of the property situated in R.S. Pura, Jammu with the Registry of

this Court. Vide order dated November 10, 2014, the sale was

affirmed in favour of the auction purchaser and it had been

further directed that the receiver shall ensure that the sale deed is

executed in favour of the auction purchaser by December 16,

2014.

8. He conceded to the fact that the suit was finally decreed

on August 16, 2016. He also conceded to the fact that the auction

purchaser had filed an appeal being RFA (OS) 68/2016, which

was dismissed by the Division Bench of this Court on December

13, 2018. That apart, he also referred to the proceedings before

the Hon'ble Supreme Court initiated by the auction purchaser. He

also stated that despite being aware of the directions of the

Hon'ble Supreme Court in terms of order dated September 20,

2019 neither plaintiffs nor the defendants herein have complied

with the order within the time directed by the Hon'ble Supreme

Court. It was Beas (applicant / defendant No.1) only, which

belatedly filed a bank guarantee and that also not for complete

amount. None of the other parties to the proceedings have till

date deposited / furnished the bank guarantee in terms of their

respective shares neither have they submitted the undertaking and

nor have executed the sale deed with respect to the subject land in

favour of the auction purchaser.

9. In fact, an application was filed before the Hon'ble

Supreme Court seeking modification of order dated September

20, 2019 by the plaintiffs and the defendants to the extent of

removal of the condition of depositing bank guarantees, however

the said application was dismissed. Even thereafter none of the

parties except Beas (applicant/defendant No.1) who holds 9/48th

share in the subject property (situated in Tehsil R.S. Pura,

Jammu) has filed the bank guarantee with respect to their share of

the sale consideration.

10. According to Mr. Sharma, the bank guarantee on behalf

of defendant No.1 is also defective. The order dated September

20, 2019 specifically directed that the parties were to furnish

bank guarantee for their respective shares along with their share

of the interest. Even though the bank guarantee of defendant No.1

is worded in a manner which states that the bank guarantee is

towards the share of the defendant No.1 along with its share of

the interest, the amount of the bank guarantee is only equivalent

to the share of the defendant No.1 in the sale proceeds. He also

stated that the allegation, the auction purchaser never approached

the Sub-Registrar, Jammu for registration of the sale deed is

denied.

11. On the aspect of release of amount to Beas,

(applicant/defendant No.1) he stated that the release of the

auction money / sale consideration on a pro-rata basis cannot be

allowed. In fact, the Hon'ble Supreme Court while directing the

bank guarantees be furnished in order to safeguard the interest of

the auction purchaser has nowhere permitted release of the sale

consideration in piecemeal. According to Mr. Sharma, as the

defendant No.1 holds only 9/48th share in the subject property

situated at R.S. Pura, Jammu, and release of sale consideration

equivalent to the share of the defendant No.1, while not securing

the balance sale consideration by way of bank guarantees shall

cause grave prejudice to the auction purchaser, as he has still not

been able to enjoy the subject property even after having paid the

sale consideration six years ago. He also stated that no fault lies

with the auction purchaser for not getting the sale deed executed.

In substance, he opposes this application.

12. Having heard the learned counsel for the parties, at the

outset, it may be stated that Mr. Manish Sharma has conceded

that the Beas (applicant / defendant No.1) is a beneficiary of

9/48th share in the property in question in view of its impleadment

in the Suit vide order dated April 03, 2007 of this Court. He also

conceded the fact that in appeal and in SLP before the Hon'ble

Supreme Court, the Beas (applicant / defendant No.1) was a

party and that Beas had even filed an application before the

Hon'ble Supreme Court for extending the time to deposit /

furnish the bank guarantee which was allowed by the Hon'ble

Supreme Court and pursuant to which, Beas (applicant /

defendant No.1) has deposited / furnished the bank guarantee

which has been exhibited by the learned Joint Registrar as

Ex.D1X4 .

13. Having said that the auction purchaser through counsel

Mr. Manish Sharma has opposed the application primarily on the

grounds:

(i) The bank guarantee on behalf of the defendants is

also defective, as the amount of the bank guarantee is

only equivalent to the share of the defendant No.1 in the

sale proceeds.

(ii) The release of the auction money / sale

consideration on a pro-rata basis cannot be allowed, as

the Hon'ble Supreme Court while directing the bank

guarantees be furnished in order to safeguard the interest

of the auction purchaser has nowhere permitted release of

the sale consideration in piecemeal.

(iii) The defendant No.1 holds only 9/48th share in the

subject property at R. S. Pura, Jammu, and release of sale

consideration equivalent to the share of the Beas

(applicant / defendant No.1), while not securing the

balance sale consideration by way of bank guarantees

shall cause grave prejudice to the auction purchaser.

14. I am not in agreement with the pleas advanced by Mr.

Manish Sharma for the reasons that (1) this Court on August 16,

2016 had directed for the disbursing the amount in favour of the

parties to the suit according to their share; (2) The appeal against

the said order has been dismissed by the Division Bench and; (3)

The Hon'ble Supreme Court vide its order dated September 20,

2019 secured money to be disbursed by way of bank guarantees.

15. I find that the bank guarantee bearing No.

L41GOPG193020004 dated October 29, 2019 amounting to

Rs.3,37,50,000/- has been furnished / filed by Beas (applicant /

defendant No.1) in favour of the Registrar General of this Court

and the same has been exhibited as Ex.D1X4.

16. That apart, even an undertaking has been submitted by

the Beas (applicant / defendant No.1) (at page 59 of volume 3 of

the Applications folder). The plea of Mr. Manish Sharma that the

Hon'ble Supreme Court has not ordered the release of the sale

consideration in piecemeal is also not appealing as there is no

such order of the Hon'ble Supreme Court. Once the bank

guarantee as directed by the Hon'ble Supreme Court has been

furnished / deposited for securing the auction purchaser, there is

no bar to release the amount in favour of the Beas (applicant /

defendant no.1) to the extent of the amount of the bank guarantee

and no prejudice is going to be caused to the auction purchaser as

the money is secured.

17. Accordingly, the application is allowed, an amount of

Rs.3,37,50,000/- (which is equivalent to the amount of the bank

guarantee furnished by the Beas) shall be released to the Beas

(applicant / defendant No.1) from the amount deposited by the

auction purchaser in the Court in terms of order dated March 14,

2014. For this purpose, the matter shall be listed before the Joint

Registrar on September 07, 2020 when the counsel for the Beas

(applicant / defendant No.1) / authorized representative of Beas

(with proper authority) and the auction purchaser and / or his

counsel shall be present.

18. The application is disposed of.

V. KAMESWAR RAO, J

AUGUST 25, 2020/aky/jg