Gulshan Electronics vs Oriental Bank Of Commerce And Ors.

Ranjit Singh, J

In the pending S.A. No. 270/13 filed by Mr. Naresh Kumar Bindal and S.A. No. 282/2013 filed by M/s. Gulshan Electronics, the appellant seems to have made prayer to redeem the property. The appellant has raised certain disputes in regard to ownership of the property in question. On 24.9.2013, the Tribunal passed an order in S.A. No. 270/2013 for confirmation of sale and issuance of sale certificate to the highest bidder. On an application filed for review, order dated 24.9.2013 was recalled on the ground that respondent No. 2, who had filed S.A. 282/2013, was not served. The Counsel had then made submission before the Tribunal noticing the fact that the property was put to sale on 22.8.2013 for a sum of Rs. 19,10,000/- and the highest bidder had deposited the amount. The Bank had accordingly pressed for confirmation of sale. The appellant pleaded before the Tribunal below that it had deposited a sum of Rs. 5.25 lacs and so may be given a chance to deposit the dues of the Bank. The Tribunal asked the appellant if it was ready to deposit the amount within 15 days so that the sale could be set aside. The appellant expressed its inability to pay the amount and showed its willing to pay only a sum of Rs. 1.75 lacs within this period. The prayer thus was considered by the Tribunal below.

The stand of the Bank was that the mortgage of the property was duly and validly created and it was a case of inter se dispute between partners and thus prayer for redemption of the property could not be allowed.

In its S.A. the appellant had claimed that applicant Mr. Naresh Kumar Bindal (respondent No. 2 and applicant in the connected S.A.) was claiming ownership of the property on the basis of forged sale deed and hence had no right to get any relief from the Tribunal.

The Tribunal, after hearing the parties, has viewed that unless a cogent evidence is led in regard to the ownership, the Tribunal could not give any finding in regard to right of redemption by the appellant. The Tribunal has held that it would decide the matter in regard to inter se dispute and permitted the Bank to confirm the sale and issue sale certificate in favour of the auction purchaser. Aggrieved against this, the appellant has filed the present appeal.

Notice in the appeal was issued. During the pendency of the appeal, the appellant had approached the Hon'ble Delhi High Court by filing W.P.(C) No. 3233/2014 as well. The appellant handed over two demand drafts amounting to Rs. 9.60 lacs to the Counsel for the Bank before the High Court with the promise to pay another sum of Rs. 1 lac within two days from the date of the order, i.e., 11.8.2014. By taking note of the same and desire of the appellant to pay up to resolve the matter, the High Court directed the Bank to maintain status quo besides directing the Bank not to take further steps without permission of this Tribunal. The Court has further observed that if the petitioner did not pay up the balance amount, it would be open for this Tribunal to pass appropriate orders including the modification of the order passed by the High Court. As per the direction, the final adjudication/decision is to take into consideration pleas and contentions of the auction purchaser. With this interim arrangement, the writ petition was disposed of.

Since the plea before the High Court was to pay the amount due, the Counsel for the respondent-Bank on 21.8.2014 stated before this Tribunal that a sum of Rs. 5 lacs was still due after accounting for the payments received. The Counsel appearing for the appellant showed his readiness to deposit the balance amount within one week. The case was accordingly adjourned to enable the appellant to make the said deposit. In this manner, the amount due stands deposited and statement to this effect was made on 7.11.2014.

Since the sale had been confirmed and sale certificate had been issued in favour of the auction purchaser during pendency of the appeal, the Counsel for the appellant made a prayer for amending the appeal to challenge the order of sale and confirmation thereof. Later, application was filed to amend the appeal to challenge the sale certificate as well. This plea was opposed by the Bank and the auction purchaser. The said application filed by the appellant was considered and disposed of on 22.4.2015 granting permission to amend the appeal subject to payment of cost of Rs. 5,000/-. The order passed in this regard reads thus:

"The appellant has made a challenge to the order dated 31st March, 2014 passed by the Tribunal below in the SA filed by him.

On 24th September, 2013 the Tribunal below had passed an order in SA No. 270 of 2013 for confirmation of sale and for issuance of sale certificate to the highest bidder. The review application was filed for review of the order dated 24th September, 2013 on the ground that respondent No. 2 was not served. The Tribunal below after considering all the issues has formed a view that if the statement made by the Counsel for M/s. Gulshan Electronics is believed then the property goes back to Shri Rohit Pahwa meaning thereby the mortgage of the Bank is held bad under law. It is further observed that unless cogent evidence is led in this regard the Tribunal cannot give them right of redemption as the two claimants of the property in question are having adverse interest with each other. The Tribunal accordingly has held that it cannot decide the matter without any proof of the inter se dispute and that the mortgage of the Bank has not been denied. The SA accordingly is processed. This order is challenged in the present appeal.

Now an application (IA No. 16 of 2015) is filed for amendment of the memorandum of appeal on the ground that the sale certificate issued pursuant to the order passed by the Tribunal below has not been challenged in the appeal and, therefore, the appellant would intend to raise a challenge against the issuance of sale certificate so as to get effective relief.

Notice was issued to the respondents in this application. Mr. H.P. Bhardwaj appearing for respondent No. 1 Oriental Bank of Commerce states that he does not wish to file reply to the application and that he will not have any objection in case the prayer made in the application is allowed.

The Counsel for respondent No. 3/Auction Purchaser, however, submits that this prayer cannot be allowed as the appellants were well aware of the fact that the sale certificate has been issued when they filed this appeal. Even if that is accepted, in order to get effective relief the appellant cannot be denied their right to challenge the sale certificate which has been issued. The impugned order would show that the Tribunal below has already confirmed the sale and has directed that the sale certificate be issued in favour of the highest bidder. The appellant is entitled to maintain challenge against this part of the order in the present appeal. This, however, shall be subject to all the legal objections that the respondents can raise in this regard.

The prayer made in the application is accordingly allowed. The amended memorandum of appeal is taken on record. The amendment shall be subject to payment of Rs. 5,000/- as costs to be paid to the respondents to be equally shared by the respondents.

Further opportunity is given to the Counsel for the respondents to file reply to the amended appeal. The application (I.A. No. 16 of 2015) is accordingly disposed of.

Adjourned to 22nd May, 2015 for arguments. Reply, if any, to the amended appeal be filed before the date fixed."

Reply to the amended appeal has been filed and the case is listed for hearing today. During first round, a representative of the appellant appeared and prayed for a pass over to await presence of his Counsel. During second round also the representative alone had appeared. There is no need to wait for the Counsel any further. The Counsel for the auction purchaser and the Bank have accordingly made submissions.

Since the appellant has deposited the entire amount due and property has also been auctioned, the appellant need not make any further deposit to maintain the appeal. The application seeking waiver of pre-deposit is accordingly disposed of.

The Counsel for the auction purchaser would submit that opportunity was given to the appellant to make deposit and once it failed to do so, the Tribunal had passed the impugned order. As per the Counsel, the appellant cannot now make any grievance.

I have considered the submissions made before me. This is a case where the appellant has by now deposited due sum in terms of the order passed by the Hon'ble High Court. The High Court had accordingly directed the parties to maintain status quo. The S.A. filed by the appellant is still pending before the Tribunal below. The prayer to redeem this property thus can very well be pressed before the Tribunal below even. It is not clear if the sale in this case was confirmed before the date of status quo order passed by the High Court or after the passing of the order. If the sale had been confirmed prior to the status quo order, then, obviously, the appellant may be required to challenge the same while invoking his right to redeem the property. The appellant is required to establish his title to the property and then his prayer to redeem the property can be considered. The dispute regarding the title of the property is still pending adjudication before the Tribunal below. Only appropriate course thus is that the Tribunal below should first consider and decide the pleas raised by the appellant in his S.A. as well as that of the appellant Mr. Naresh Kumar Bindal in the connected S.A. No. 270/2013 where this plea of redemption can also be pressed. The appellant otherwise has deposited the amount due with the Bank. Till the time the inter se dispute between the appellant and respondent Mr. Naresh Kumar Bindal is decided, it may not be appropriate and desirable to comment on the right of the appellant to redeem this property. All these issues have to be first considered and adjudicated by the Tribunal below. Since the appellant has deposited the complete amount due, the present appeal can be disposed of with direction to the parties to maintain status quo as it existed on the date of the order passed by the High Court during the pendency of S.A. filed by the appellant. If the appellant is left with any grievance after the decision in the S.A., it would be at liberty to raise all the available grounds even those which are raised in the present appeal. Needless to mention that the appellant would be at liberty to take all the pleas in accordance with law before the Tribunal below as well.

The appeal is accordingly disposed of in the above terms.