Gagan Chopra vs Union Territory Of Chandigarh & Ors.

…

Record transpires that during the pendency of proceedings, Sh. Gurpreet Singh Sidhu had mortgaged House No.317, Sector 21-A, Chandigarh with State Bank of India (01508), Industrial Area, Phase-1, Chandigarh (Email [email protected]) and also with State Bank of India, RACPC, SCO No.99-103, Sector 8, Madhya Marg, Chandigarh (Email: [email protected]). It seems that State Bank of India had not taken reasonable care and not verified with regard to existing charges on the property i.e. House No.317, Sector 21-A,A, Chandigarh. It may be stated here that the doctrine of lis pendens shall apply as embodied in Section 52 of Transfer of Property Act 1882. It shall be deemed that the decree holders/complainants have first charge over this property.

We, therefore, direct State Bank of India (01508), Industrial Area, Phase--1, Chandigarh (Email [email protected]) and also with State Bank of India, RACPC, SCO No.99-103, Sector 8, Madhya Marg, Chandigarh (Email: [email protected]) to show cause as to why this property i.e. House No.317, Sector 21-A, Chandigarh may not be put to sale so that decretal amount involved in these execution applications pending before us be discharged being the first charge. Both the Banks are also directed to submit, how much EMI is fixed and how much is paid and from which account the loanee is making the payments of EMIs. We direct both the banks to submit these details within a period of two weeks from the date of receipt of copy of order. Copy of order be sent to both the banks through email i.e. [email protected] & (Email: [email protected]) as well as through personal service.

15.

As stated above, the consumer complaints out of which the said execution applications have arisen were filed in the years 2016 to 2020 and if any property has been transferred by the judgment debtor after filing of the said consumer complaints that shall be hit by the doctrine of lis pendens. In the present case, the property in question was sold on 30.09.2022 i.e. during pendency of the consumer complaints and the execution applications respectively. Thus, as per settled principle of law the provisions of Section 41 of the TP Act will not apply in the present case and only the doctrine of lis pendens will apply from the dates of filing of the consumer complaints. Thus, the transaction by way of sale deed dated 30.09.2022 in respect of the house in question is hit by the doctrine of lis pendens.

16.

Now coming to fraudulent transaction, in our considered view, the transaction by way of sale deed dated 30.09.2022 has been made between Sh. Gurpreet Singh Sidhu and Gagan Chopra, with an intent to defeat and delay the creditors/decree holders, and as such, the transfer shall be voidable qua their rights in view of Section 53 of the TP Act. It also appears that Sh. Gagan Chopra had not acted in good faith. He has already moved various applications before this Commission and was well within the knowledge regarding liability of Sh. Gurpreet Singh Sidhu/Judgement Debtor. …

17 to 19 xxx xxx xxx

20.

In this view of the matter, we are of the considered view that the transaction between Sh. Gurpreet Singh Sidhu/Judgment Debtor and Sh. Gagan Chopra vide sale deed no.4415 dated 30.09.2022 qua sale of the house inin question is hit by the doctrine of lis pendens and also the same being fraudulent transaction under Section 53 of the TP Act, the said house is liable to be attached. In this view of the matter, all these objection applications stand dismissed with no order as to costs.

21.

Let attachment warrants bebe issued to the Collector, U.T., Chandigarh for attachment of House 317, Sector 21-A, Chandigarh in order to recover ththe decreetal amount as arrears of land revenue, in the execution applications out of which these applications have arisen.

12.

After having heard the learned counsel for the parties and perusing the material on record, this Court is of the opinion that on the facts of the case, a thorough investigation is required to be done as to whether the transfer ofof the property in question, by the judgment debtor during the pendency of execution proceedings by the creditors was fraudulent and for mala fide reasons. However, it is of the view that in the instant case investigation by the CBI may not be warranted and that the Chandigarh Police would be well equipped to handle such investigation. Accordingly, it is directed that a three member Special Investigation Team (SIT) headed by a Superintendent of Police (SP) should conduct the investigation regarding fraudulent transactions between the parties. The investigation should preferably be concluded and the said report be submitted in a sealed cover before the learned Single Judge, within two months from the date of communication ofof this order.

13.

Having observed as above, we are further of the opinion that in order not to create any further third party interest in the property in question till such time the investigation as above is not completed, auction of the property in question is not warranted and that the learned Single Judge, after the receipt of the final investigation report and in terms thereof, would be free to decide the future course of action. However, the appellant without express permission from the Court shall not sell, alienate, create any encumbrance or third party rights over the property in question.

25.

That on 21.06.2021 i.e. date of visit to property in question, on 22.06.2021 i.e. date of finalization of deal and on 25.06.2021 i.e. on the date of execution of agreement to sale, the property in question was attached under various execution applications pending in the State Consumer Redressal Commission UT Chandigarh. The report of Estate Office Chandigarh shows that, on the date of entering into agreement to sell i.e. 25.06.2021, property in question was under attachment.

26.

Thus as per agreement toto sell dated 25.06.2021, it was liability of Sh. Gurdeep Singh Sidhu to get clear SBI loan and payment i.e. 10.5 crore was to be made by Gagan Chopra on date of execution of the final sale deeed. However, as per enquiry, no efforts was made by Gurdeep Singh Sidhu to make the payment of loan to SBI and it was Gagan Chopra who took all the pain to make the repayment of loan toto SBI. For this Gagan Chopra transferred amount of Rs.1 Crore in the account of Gurdeep Singh Sidhu on 08.07.2021, onon which Gurdeep Singh Sidhu further transferred the amount toto SBI SARBBranch as upfront payment for compromise with SBI Bank. Even after passing the due date of full and final settlement as per agreement to sell i.e. 22.09.2021 and despite arrest ofof Gurdeep Singh Sidhu, Gagan Chopra continued his efforts and became party before Hon'ble State Consumer Redressal Commission UT Chandigarh and also further actively engaged to get the loan settled after de-attachment order by Hon'ble State Consumer Redressal Commission UT Chandigarh. Gurdeep Singh Sidhu made a revised compromise proposal onon 22.08.2022 and the same was accepted on 30.08.2022. He sold his four properties and made partial payments. These midway transaction in violation of agreement to sell is quite reflective of Gagan Chopra desperation to get the property in question in his name by any means. Whenever, property of such high value are purchased, it is common sense that due enquiry about the legal status of property should be made by the purchaser. In this regard, the version of Gagan Chopra is far from convincing that he had paid just one visit to property in question and entered into an agreement to sell. As per statement of Gagan Chopra he along with property dealers had visited the property in question just one day prior to making deal of property in question. Being a property dealer himself, Gagan Chopra cannot feign ignorance that he was not familiar with the intricacies involved in such type of deals. Rejection report of banker clearly mentioned that there are cases pending in Hon'ble State Consumer Commission, UT Chandigarh including some execution proceeding against M/s Emerging Valley Pvt. Ltd. clearly mentioned loan of Rs. 8.90 Crores to M/s Emerging Valley Pvt. Ltd. property in question as security. It was a known fact that Gurpreet Singh Sidhu and his company M/s Emerging Valley Pvt. Ltd were undergoing multiple litigations and these were in public domain. Even a bare enquiry from Estate Department could have revealed the current status of the property in question. By clamming that hehe has not done any such enquiry and entered into agreement to sell just on testimony of property dealers, some of whom he met for the first time, Gagan Chopra's claim appears unsustainable.

27.

This was also apparently clear from his application dated 27.10.2021 under Order 1 Rule 1010 read with section 151 C.P.C to implead himself in the bunch ofof petitions to become party in many cases pending in the State Consumer Redressal Commission as he took plea that he is bonafide purchaser of property in question in good faith and has paid huge amount to seller amounting to Rs.3,05,00,000/- and this house has been attached by Hon'ble Commission, which is depriving the right of applicant over the property in question but also didn't recognize his right as bonafide purchaser when he moved application before Hon'ble State Consumer Redressal Commission. It appears to be a clever ploy onon behalf of Gagan Chopra that instead of application for recovery of his money that was already paid by filling criminal case ofof forgery or cheating, he was challenging the attachment order.

28.

This shows that he was desperate enough to get the property by any means, created third party interest in the matter and became litigant to secure sale of property in his favour. Despite huge investment and all the issues within his knowledge he took no legal step to secure his interest i.e. neither he gave any criminal complaint against fraudulent conduct of Gurdeep Singh Sidhu.

29.

A detailed investigation into the monetary transactions made in pursuance of purchase ofof question in property i.e. House Number 317 Sector-21 Chandigarh was also carried out and the source of money paid was investigated as Gagan Chopra had sold four properties i.e. 1). House Number 1281 ground Floor Sector 21 Chandigarh, 2). House Number 1276 Second Floor Sector 21 Chandigarh, 3). House Number 1204 Tower K, Falcon View SAS Nagar Mohali Punjab & 4). Plot No. 3039/Corner Block D Sector 88 SAS Nagar Mohali Punjab, in the name of Gagan Chopra, his wife Shweta and mother Kiran Chopra. He has also borrowed amount of Rs. 2,48,05,000/- from the lenders namely Sh. Ram Partap Kaushal, Mrs. Jaspal Kaur, Mrs. Vina Gupta, Sh. Ravinder Gupta, Sh. Nawab Singh, Sh. Gurjant Singh, Mrs. Vanita Puri, Sh. Rameshwar Singh Braria, Sh. Amrik Singh, Sh. Prem Singla and Mrs. Prem Vati. Gagan Chopra had got loan sanction amount of rupees 4.75 Crore for purchase of the property in question. Thus, by borrowing from known persons Rs.2,56,05,000/-, by sale of own four properties worth Rs.3,97,13,750/- and by getting sanctioned the loan from PNB Bank amounting to Rs.4.75 Crores Totaling amount Rs. 11,20,18,750/-.

30.

From the inquiry conducted and statement of witnesses, it cannot be said that Gagan Chopra knew Gurpreet Singh Sidhu previous to purchase of property in question. During enquiry, witnesses stated that deal was brokered in their presence. However, there is sufficient evidence on record to show that there were so many red flags in the execution of sale deed that as a prudent purchaser Gagan Chopra should have restrained himself to purchase the property before seller Gurdeep Singh Sidhu settle the outstanding of soso many lenders and become free from all litigations. Thus, from the conduct of Gagan Chopra after entering into agreement to sell to purchase of the property in question mentioned in enquiry report, the collusion between Gagan Chopra and Gurpreet Singh Sidhu, post entering into transaction regarding sale of property in question, cannot be ruled out.

156.

As per the doctrine of lis pendens, nothing new can be introduced during the pendency ofof a petition and if at all anything new is introduced, the same would also be subject to the final outcome of the petition, which would decide the rights and obligations of the parties.

157.

The doctrine of lis pendens is duly recognized in Section 52 of the TPA which states that during the pendency in any court of any suit in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings. The explanation to the provision states that for the purposes of the Section, the pendency of a suit oror proceedings shall be deemed to commence from the date of the presentation of the plaint or institution of the proceeding in aa court, and shall continue until the suit or proceeding is disposed by a “final decree or order” and complete satisfaction of the order is obtained, unless it has become unobtainable by reason of the expiry of any period of limitation. ...

158.

The following conditions ought to be fulfilled for the doctrine of lis pendens to apply:—

i.

There must be a pending suit or proceeding;

ii.

The suit or proceeding must be pending in a competent court;

iii.

The suit or proceeding must not be collusive;

iv.

The right to immovable property must be directly and specifically in question in the suit or proceeding;

v.

The property must be transferred by a party to the litigation; and,

vi.

The alienation must affect the rights of any other party to the dispute.

159.

In short, the doctrine of lis pendens, which Section 52 of the TPA encapsulates, bars the transfer of a suit property during the pendency of litigation. The only exception to the principle is when it is transferred under the authority of the court and on terms imposed by it. Where one ofof the parties to the suit transfers the suit property (or a part of it) to a third-party, the latter is bound by the result of the proceedings even if he did not have notice of the suit or proceeding.

25.

From the aforesaid discussion, keeping in view the object in mind for which the 1986 Act and the 2019 Act have been enacted, in our view, using different tools available for interpretation of statutes, in Sub-section (1) of Section 25 the words where 'an interim order' should be read as where 'any order’. Towards the end of sub-section (1) and before words 'may order the property....’, following line shall be deemed to be added 'enforce the same in the manner as if it were a decree or order made by the Court in a suit and the provisions of Order XXI of the First Schedule to the Code ofof Civil Procedure, 1908 shall, as far as may be. applicable and'. This interpretation goes in line with what was being understood and applied by different fora even post 2002 Amendment in 1986 Act. This is evident from number of execution petitions filed, entertained and disposed of. Many are still pending.

26.

The sub-section (1) of Section 25 shall now read as under:

"Section 25. Enforcement of orders of the District Forum, the State Commission or the National

Commission.

(1)

Where any order made under this Act is not complied with, the District Forum oror the State Commission or the National Commission, as the case may be, enforce the same in the manner as if it were a decree or order made by the Court in a suit and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure,1908 shall, as far as may be, applicable and may order the property of the person, not complying with such order to be attached."

27.

As there was anomalous situation in the language of Section 25(1) of the 1986 Act for the period 15.03.2003 to 20.07.2020, the provision as we have suggested above shall be considered as applicable in all the pending execution petitions or proceedings arising therefrom at any stage.