Ratna Khandelwal & Anr. vs Kotak Mahindra Bank
2021 Latest Caselaw 3307 Del

                          *      IN THE HIGH COURT OF DELHI AT NEW DELHI

                          %                                    Date of decision: 4th December, 2021.

                          +                         CM(M) 1106/2021

                                 RATNA KHANDELWAL & ANR.                 ..... Petitioners
                                            Through: Mr. Sudhir Nandrajog, Senior
                                                     Advocate with Mr. Vikas Arora, Mr.
                                                     Rishi Sood and Ms. Radhika Arora,
                                                     Advocates.

                                                 Versus
                                 KOTAK MAHINDRA BANK                    ..... Respondent
                                            Through: Mr. Ravi Gupta, Senior Advocate
                                                      with Mr. Mahip Datta Parashar and
                                                      Ms. Sanya Lamba, Advocates.

                          CORAM:
                          HON'BLE MR. JUSTICE AMIT BANSAL
                          [VIA VIDEO CONFERENCING]
                                                           JUDGMENT

AMIT BANSAL, J. (Oral) CM No. 43526/2021 (for exemption)

1. Allowed, subject to all just exceptions.

2. The application is disposed of.

CM(M) 1106/2021

3. The present petition under Article 227 of the Constitution of India impugns the order dated 7th October, 2021 passed by the Chief Metropolitan Magistrate (CMM), South District, Saket Courts, New Delhi in CT Case No.362/2021 and the possession notice dated 18th November, 2021 issued by

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RAMOLA Signing Date:12.04.2021 19:33:09 the Court appointed Receiver for taking over the possession of the property being Ground Floor, First Floor and the annexe of property bearing No.25, in Block C, situated in the colony known as Green Park Extension, New Delhi-110016, constructed on land admeasuring 285.32 sq. mtrs. standing in the name of Vishal Sharma (hereinafter referred to as the 'Green Park Property').

4. The senior counsel for the petitioners submits that the present petition has been filed on account of the Debt Recovery Tribunal (DRT) in Delhi not being functional currently.

5. Issue notice.

6. Notice is accepted by the counsel appearing on behalf of the respondent Bank on advance notice.

7. Reply be filed within four weeks.

8. Rejoinder thereto, if any, be filed before the next date of hearing.

9. List on 31st January, 2022.

CM No. 43525/2021 (for stay)

10. The present application has been filed by the applicants/petitioners seeking a stay of the operation of the order dated 7th October, 2021 passed by the CMM in CT Case No.362/2021, whereby the application of the respondent Bank has been allowed, the term of the Court appointed Receiver has been extended for two months, and the Receiver has been directed to take over the possession of the mortgaged properties in terms of the order dated 5th March, 2021. Pursuant to the said order, the Court appointed Receiver has issued the possession notice dated 18th November, 2021 for taking over the physical possession of the Ground Floor, First Floor and the annexe of the Green Park Property.

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RAMOLA Signing Date:12.04.2021 19:33:09

11. The senior counsel for the petitioners presses for reliefs claimed under the said application and, therefore, arguments have been heard on the said application today itself.

12. Mr. Sudhir Nandrajog, senior counsel appearing on behalf of the petitioners submits that, (i) the petitioners are the real sisters of Vishal Sharma, who was a guarantor in respect of the financial facility obtained for the Affinity Beauty Salon Private Limited (hereinafter referred to as the 'Borrower') from the respondent Bank and who had, inter alia, mortgaged the Ground Floor, First Floor and the annexe of the Green Park Property with the respondent Bank; (ii) the petitioners had filed a civil suit being CS(DJ) No.37/2019 for partition and permanent injunction before the District Courts at Saket, New Delhi (hereinafter referred to as the 'Civil Suit') in respect of the Ground Floor of the Green Park Property, in which challenge was also made to the Gift Deed dated 28th May, 2014 (rectified on 28th August, 2014) made by the petitioners' father, Sansar Chand Sharma, in favour of the petitioners' brother Vishal Sharma; (iii) the parties settled the Civil Suit before the Mediation Centre, Saket Courts, New Delhi on 27th November, 2021 and pursuant thereto, a consent decree was passed by the Court of Additional District Judge (ADJ), South, Saket Courts, New Delhi on 29th November, 2021 in terms of which it was agreed between the parties that the Ground Floor of the Green Park Property was a Hindu Undivided Family (HUF) property and, therefore, the Gift Deed dated 28th May, 2014 shall be treated as null and void and the said property shall be jointly owned by the petitioners herein, Sansar Chand Sharma, and Vishal Sharma in equal undivided proportion; and, (iv) the scope of the present petition is only in respect of the Ground Floor of the Green Park Property and not in respect of

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RAMOLA Signing Date:12.04.2021 19:33:09 other properties mortgaged by the family members of the petitioners in favour of the respondent Bank.

13. Upon a query of the Court from the senior counsel for the petitioners as to whether the petitioners are in possession of the Green Park Property, the senior counsel replied that the petitioners were in constructive possession of the said property.

14. Mr. Ravi Gupta, senior counsel appearing on behalf of the respondent Bank has submitted that as on the date of the issuance of the Loan recall Notice cum Invocation of Guarantee Notice by the respondent Bank on 31st May, 2019, an amount of about Rs.25,50,00,000/- was payable to the respondent Bank. He further submits that the present petition has been filed only after various legal challenges taken by the family members of the petitioners against the possession of the mortgaged properties being taken over by the respondent Bank, have been rejected by the Courts. In this regard, a note giving the historical background of the various litigations in relation to the mortgaged properties has been shared with the Court and subsequently emailed to the Court Master. The facts recorded in the said note are reproduced below:

(A) the Civil Suit was filed by the petitioners herein on 15th January, 2019 just before the loan given to Borrower was declared as a Non-Performing Asset (NPA) on 29th January, 2019;

(B) notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'SARFAESI Act') was issued to the guarantors/mortgagors on 13th August, 2019 and thereafter, the possession notice under Section

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RAMOLA Signing Date:12.04.2021 19:33:09 13(4) of the SARFAESI Act' was issued by the respondent Bank on 27th November, 2020 in respect of various mortgaged properties; (C) on 6th July, 2021, the Court appointed Receiver issued notice for taking possession of the Ground Floor, First Floor and the annexe of the Green Park Property on 15th July, 2021;

(D) the said notice was impugned by the father of the petitioners, Sansar Chand Sharma by way of Writ Petition No.6446/2021; (E) vide order dated 13th July, 2021, the said Writ Petition was disposed of with liberty to the petitioners therein to approach the DRT; (F) on 7th October, 2021, the CMM granted two months' time to the Court appointed Receiver to take possession of the Ground Floor, First Floor and the annexe of the Green Park Property;

(G) the order dated 7th October of the CMM in CT Case No.362/2021 was challenged by Sansar Chand Sharma by filing a petition bearing CM(M) 986/2021 before this Court on 20th October, 2021; (H) this Bench vide order dated 9th November, 2021 dismissed the said petition;

(I) the Special Leave Petition against the dismissal order of this Bench dated 9th November, 2021 in CM(M) 986/2021 was also dismissed by the Supreme Court vide order dated 15th November, 2021 in SLP(C) No.18848/2021;

(J) on 18th November, 2021, the impugned notice was issued by the Court appointed Receiver for taking physical possession of the Ground Floor, First Floor and the annexe of the Green Park Property on 6th December, 2021;

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RAMOLA Signing Date:12.04.2021 19:33:09 (K) immediately thereafter, a settlement dated 27th November, 2021 was recorded in the Civil Suit filed by the petitioners and the suit was decreed on 29th November, 2021 in terms of the said settlement; (L) on 29th November, 2021 itself, a redemption request was made by Vishal Sharma with the respondent Bank, which was rejected by the respondent Bank on 1st December, 2021;

(M) another brother of the petitioners, Rajan Sharma filed a writ petition, WP(C) No.13565/2021 in respect of Second Floor of the Green Park Property, wherein the respondent Bank conceded to not taking possession of the Second Floor of the Green Park Property; and, (N) another writ petition was filed by Vishal Sharma, WP(C) 13658/2021 before this Court, was dismissed by this Court on 2nd December, 2021 with costs of Rs.1,00,000/-.

15. Based on the aforesaid factual narration, the senior counsel appearing on behalf of the respondent Bank has made the following submissions:-

(i) various family members of the petitioners, including the two brothers Rajan Sharma and Vishal Sharma and the father Sansar Chand Sharma have been filing cases in collusion with each other so as to thwart the attempts of the respondent Bank to take possession of the mortgaged properties;

(ii) the present petition has also been filed by the petitioners in collusion with their family members so as to prevent the respondent Bank from taking possession of the Ground Floor of the Green Park Property;

(iii) it is admitted in paragraph 20 of the plaint filed by the petitioners in the Civil Suit that they have only been in constructive possession of the Ground Floor as they were married long ago and have been living in their

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RAMOLA Signing Date:12.04.2021 19:33:09 matrimonial homes, details of which are given in the addresses given in the memo of parties to the said suit;

(iv) the suit filed on behalf of the petitioners, though filed on 15th January, 2019 was lying dormant for almost two years and the settlement was reached only on 27th November, 2021 after the impugned possession notice was issued in respect of the aforesaid property on 18th November, 2021;

(v) the respondent Bank was not a party to the aforesaid suit and, therefore, the settlement therein cannot affect the rights of the respondent Bank as a mortgagee in relation to the Green Park Property; and,

(vi) there has been no adjudication in the Civil Suit and the decree has been passed only on the basis of a compromise between the parties and there has been no adjudication to the effect that the aforesaid property is a HUF property. The Civil Suit and the settlement arrived at therein were completely collusive.

16. In rejoinder, the senior counsel for the petitioners has submitted that,

(i) the petitioners, being married sisters, did not know about the various cases filed by their family members and were independently pursuing their remedies by way of the Civil Suit filed by them; (ii) the present scope of the present petition is confined only to the Ground Floor of the Green Park Property and not in respect of any other floor of the said Green Park Property or any other mortgaged properties; and, (iii) that the compromise decree would be binding on the respondent Bank.

17. I have heard the counsels for the parties and perused the record.

18. In my prima facie view, the Civil Suit in question filed by the petitioners was a suit filed in collusion with their two brothers and their father so as to protect the properties mortgaged by her family members in

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RAMOLA Signing Date:12.04.2021 19:33:09 favour of the respondent Bank. The suit was filed only on 15th January, 2019 just before the loan given to the Borrower was declared as a NPA on 29th January, 2019. Obviously, the petitioners and their family members were aware that they have committed defaults in making of the payments due under the loan agreement and the respondent Bank would take steps to seek possession of the properties mortgaged by the family members of the petitioners in order to secure the aforesaid loans. The date of the settlement in the aforesaid suit is clearly suspicious, as soon after the impugned possession notice was issued by the Court appointed Receiver on 18th November, 2021, the settlement was arrived at on 27th November, 2021 and a consent decree was passed thereupon on 29th November, 2021.

19. I am also, prima facie, of the view that the aforesaid settlement cannot bind the respondent Bank as the respondent bank was not a party to the Civil Suit. The Ground Floor of the Green Park Property was mortgaged on 6th June, 2014 by Vishal Sharma in favour of the respondent Bank on the basis of a Gift Deed executed in his favour by his father Sansar Chand Sharma on 28th May, 2014. Having created a mortgage in favour of the respondent Bank, Vishal Sharma could not have given up his share in the Green Park Property in favour of the petitioners by virtue of the settlement in the Civil Suit filed by the petitioners, without the consent of the respondent Bank. It appears that the same was done so as to defeat the rights of the respondent Bank as a mortgagee in respect of the said property.

20. It may also be noted that Vishal Sharma was present during the Court proceedings today through video conferencing. This further fortifies the doubts in my mind that the present petition is collusive and has been filed by the petitioners at the behest of Vishal Sharma.

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RAMOLA Signing Date:12.04.2021 19:33:09

21. In light of the aforesaid, in my prima facie view, Vishal Sharma, Sansar Chand Sharma and Rajan Sharma have unsuccessfully made various attempts by filing cases to thwart the attempts of the respondent Bank from taking possession of the mortgaged properties. Having failed in their attempts, the present petition has been filed on their behest by their sisters, the petitioners herein, only to aid their family members to somehow retain the possession of the property in question.

22. Since the petitioners are not living in the property in question, no irreparable harm or injury would be caused if the possession thereof is taken by the respondent Bank. Even if the possession of the property in question is taken by the respondent Bank, the concerned parties would still be free to settle with the respondent Bank before the property is auctioned by the respondent Bank. Thus, the balance of convenience is also not in favour of the petitioners.

23. In view of the above, the present application is dismissed.

AMIT BANSAL, J DECEMBER 4, 2021 ak/at

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RAMOLA Signing Date:12.04.2021 19:33:09