9911796707
TMI Blog2025 (2) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... whom Champa Bhen Kundia is indebted as a borrower; respondent No.2 is said to be the person who is in possession of the scheduled premises pursuant to an Agreement to sell and a General Power of Attorney; respondent Nos.3 to 8 have really no connection with the present dispute in question. 4. Briefly stated, the facts of this case are that the secured asset, in this case, is the piece and parcel of land (measuring 55.7 Sq. yards) and the building and the Basement of House property bearing no. 2/22, Old Rajinder Nagar, New Delhi- 110018 (hereinafter referred to as "secured asset"). One Champa Bhen Kundia was the owner of the said secured asset. The basement of the secured asset was sold in favour of her son Chandu Bhai vide an unregistered sale deed dated 28.04.2000 allegedly for a consideration of Rs.4,00,000/-. Chandu Bhai again created an unregistered document to show the sale of the basement of the secured assets in favour of Satnam Singh and Surinder Wadhwa vide an unregistered sale deed dated 30.03.2001 for an alleged consideration of Rs.90,000/-. Further, once again, Satnam Singh and Surinder Wadhwa created unregistered document, i.e., Agreement to Sell dated 23.04.2001 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08.09.2009 was challenged by respondent Nos.3 to 6 before the Debt Recovery Appellate Tribunal, New Delhi ("Appellate Tribunal") by filing Appeal No.3 of 2010. However, this came to be disposed of by an order dated 02.06.2010 without interfering with the order passed by the DRT dated 08.09.2009. 9. Thereafter, respondent No.1 gave a notice in the Newspaper "Business Standard" on 20.11.2010 regarding a public auction to be conducted on 21.12.2010 with respect to the basement of the secured asset. The appellant being the successful bidder made the payment of the bid amount of Rs. 7,50,000/- to respondent No. 1 and the latter issued a confirmation certificate dated 22.12.2010. Thereafter, respondent No. 1 issued a sale certificate in favour of the appellant on 27.12.2010. 10. Being aggrieved, respondent No.2 approached the Appellate Tribunal in MA Nos.22 and 23 of 2011 in Appeal No. 3 of 2010 contending that respondent No.2 was not summoned at all in the proceedings before the Appellate Tribunal while passing the order dated 02.06.2010 while there is a dispute concerning the ownership of the basement of the secured asset. By order dated 21.02.2011, the Appellate Tribunal directed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bid being accepted, sale certificate dated 27.12.2010 was also issued to the appellant herein. However, respondent No.2 has sought to get the sale certificate cancelled and consequently, the High Court has held in favour of respondent No.2. 15. Learned counsel for the appellant submitted that respondent No.2 has no right, title and interest in the scheduled property and despite the same is seeking to set aside the auction which was conducted by respondent No.1 and is trying to get the sale certificate dated 27.12.2010 set aside. He submitted that respondent No.2 has no locus standi to interfere in the matter and therefore, the appeal may be allowed by restoring the order dated 03.09.2014 and setting aside the order passed by the Appellate Tribunal and setting aside the order dated 30.08.2012 passed by the DRT. 16. On the other hand, learned counsel for respondent No.1 submitted that the Bank has acted in accordance with Section 13 of the SARFAESI Act and when the original borrower Champa Bhen Kundia did not respond to the notices issued under the said provisions, the Bank was constrained to put up the secured asset for auction and consequently, seek to recover the unpaid debt by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this appeal and hence, the same may be dismissed. 21. The detailed narration of facts and contentions would not call for a reiteration. Although learned counsel for respondent No.2 emphasized the fact that respondent No.2 is presently in possession of the scheduled premises on the strength of the registered General Power of Attorney dated 16.04.2001 as well as the agreement to sell of the same date, the fact remains that the agreement to sell executed by Smt. Champa Bhen Kundia is not by a registered document. In the circumstances, respondent No.1 could not have known that even prior to her seeking a loan and mortgaging the very same property to the Bank on 16.06.2001, there was already an encumbrance as such created in favour of respondent No.2. Therefore, the Bank although had done its due diligence would not have known the fact that there was a prior transaction in respect of the very same secured asset. 22. Learned counsel for respondent No.2 submitted that the fact that there was a registration of the General Power of Attorney in favour of respondent No.2 and thereafter there was an agreement to sell also executed in his favour which created an interest in the secured asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No.2 to pay the outstanding dues so as to ensure that secured asset could be saved from the auction proceedings conducted and possibly the appellant could be paid the amount that he had deposited with the Bank with suitable rate of interest. But respondent No.2 did not make use of the said opportunities to repay the outstanding dues. 26. In the circumstances, we find that the Appellate Tribunal was justified in holding in favour of the appellant herein by order dated 03.09.2024 by setting aside the order dated 30.08.2012 passed by the DRT. The High Court has reversed the said orders and consequently, the appellant has been directed to receive the amounts deposited by him as the sale certificate dated 27.12.2010 has been set aside on the basis that the auction conducted itself was not in accordance with law. The High Court, in our view, was not justified in holding so. 27. Section 54 of the Transfer of Property Act, 1882, defines a "sale" as the transfer of ownership in exchange for a price that is either paid, promised, or part-paid and part-promised. This provision further describes the manner in which a sale is effected. It stipulates that, in the case of tangible i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the High Court. We say so, because, unless the deeds of conveyance through which the alleged transfer took place were registered in accordance with the provision of the Registration Act, respondent No.1 did not have access to the said information since there would be no entry of the said transfer of an immovable property in the encumbrance records. 31. We also take note of the fact that respondent No.1 has conducted the auction in terms of the provisions of the SARFESI Act. When the original owner/borrower Champa Bhen Kundia failed to repay the loan, respondent No.1 issued a notice under Section 13 of the SARFESI Act on 28.10.2006. Thereafter, physical possession of the secured asset was taken over and a Receiver was appointed in terms of Section 14 of the SARFESI Act on 06.07.2007. Thereafter, a notice was issued regarding the public auction of the basement being the secured asset as per Section 13 of the Act on 20.11.2010. The appellant herein participated in the said auction and was declared the highest bidder. Ultimately, respondent No.1 also issued a sale certificate in favour of the appellant on 27.12.2010. Thus, the auction was in due compliance with the statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... courts, in particular, should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity." 34. Consequently, the impugned order of the High Court is set aside. The order of the Appellate Tribunal dated 03.09.2014 is restored and consequently, the order dated 30.08.2012 passed by the DRT is set aside. Respondent No.1 shall take steps to hand over possession of the scheduled premises to the appellant herein. We also reserve liberty to the appellant herein to take possession in accordance with law by making a suitable application before the DRT or the High Court, as the case may be, for the purpose of collecting the keys of the scheduled premises that have been deposited by respondent No.2. 35. The amounts with accrued interest, if any, deposited by respondent No.2 before the DRT, the Appellate Tribunal, the High Court or with the Bank would be withdrawn by respondent No.2 by making suitable applications. If such applications are made, the same shall be considered expeditiously and disposed of. 36. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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