Jagjit Singh And Ors. vs Punjab And Sind Bank And Ors.

Ranjit Singh, J

In the present appeal, the appellants have impugned the order passed by the Tribunal below dismissing their appeal filed against three separate orders dated 6.5.2005,3.8.2005 and 23.8.2005 passed by the Recovery Officer (R.O.).

Appellants are neither the borrowers nor mortgagors of the properties in question. They, however, claim to be the bona fide purchasers of the properties which were put to auction by the R.O. in April 2005. The appellants would claim that they had purchased these properties in the year 1992 and were in possession thereof. As per the appellants, before purchasing these properties, they had made all the inquiries and had referred to the revenue records but did not find any entry having been made in regard to any mortgage created in favour of the Bank. Appellants, therefore, would claim to be bona fide purchasers and in possession of the properties. To this effect only the appellants have filed objection before the R.O., who dismissed the same on 6.5.2005,

After dismissal of the objection, the properties were sold through auction conducted on 7.5.2005 for a sum of Rs. 25.25 lacs against the reserve price of Rs. 25 lacs. The case set up by the appellants is that before the property was put to auction, one-time settlement had been arrived at between the Bank and the borrowers. The Zonal Manager of the Bank had sent a proposal for one-time settlement on payment of Rs. 25 lacs vide his letter dated 21.3.2005 and ultimately informed the Advocate, who was pursuing the case before the Tribunal, about the same. The Advocate, however, did not inform the Court about the settlement having been reached. The auction thus was held on 7.5.2005.

A Faced with this situation, the appellants were left with no option but to file objections against the auction with the prayer that the sale be not confirmed. These objections, however, came to be dismissed on 3.8.2005 and on 23.8.2005 the sale was confirmed. Aggrieved against these orders, the appellants had filed a writ petition before the Hon'ble High Court where dispossession of the appellants was stayed. Ultimately, the writ petition was disposed of and the interim order was continued till disposal of the appeal. The appellants, therefore, are before this Tribunal by way of this present appeal.

Counsel for the appellants would state that the appellants are neither the borrowers nor the guarantors or mortgagors but in possession of the properties since 1992. Since there was no charge noted in the revenue records, the appellants had purchased the same after making due enquiry and thus their right as bona fide purchasers cannot be disputed. The Counsel would also refer to the out-of-Court one-time settlement which was arrived at with the Bank and states that intimation in this regard was also sent, but the Tribunal ignored this part on the premise that the same was not approved by the competent authority. Counsel would contend that neither the Bank nor the Tribunal has given any finding in regard to the fact as to who was competent to accept the OTS proposal and how it can be held that the same was not approved by the competent authority.

Mr. I.P. Singh, Counsel appearing for the Bank, however, would contest the submissions made by the Counsel for the appellants. As per him, the common appeal filed before the Tribunal below against three separate orders passed by the R.O. was not maintainable as each order was required to be challenged separately. It is also pointed out that this appeal before the Tribunal below was filed on 25.1.2006 whereas the orders impugned were passed on 6.5.2005, 3.8.2005 and 23.8.2005. As per the Counsel, the appeal was barred by limitation and objection to this effect was taken before the Tribunal below. The Tribunal did notice this objection but failed to adjudicate the same.

The Counsel for the Bank would also point out that there was no settlement or compromise and this plea was raised on the basis of some misrepresentation. As per the Counsel, the competent authority had cancelled the settlement, if any. The Counsel, in fact, is justified in raising the plea of the locus of the appellants to challenge the rejection of the OTS proposal as the appellants are neither the borrowers nor the guarantors. The issue of settlement was between the appellants and the borrower. Not only that, the Counsel would further point out that the order cancelling the OTS proposal was challenged before the High Court by filing Writ Petition No. 16326, which was dismissed on 25.9.2006. Once the challenge of the appellants to this order of withdrawal of OTS proposal was rejected by the High Court, the appellants cannot be permitted to challenge the same very order in the present appeal. Not only that, the appellants do not seem to have any locus to question this order.

Even otherwise, the O.A. in this case was filed in the year 1998 and was allowed on 9.9.2002 The order passed in the O.A. has become final as none has come forward to challenge the same. The mortgage of the properties in question was upheld by the Tribunal while allowing the O.A. The mortgage was created by deposit of title deeds with the Bank on 27.12.1990 whereas the sale deeds in favour of the appellants is of the year 1992.

The submission of Mr. Bhandari is that he had filed objection under Rule 11 and had claimed possession of the properties. The objection by the appellants was on the basis of the registered sale deed. As per the Counsel, the Tribunal could not have brushed aside the same and was required to adjudicate upon the issue on the basis of possession. Mr. I.P. Singh in turn pointed out that the appellant had also filed civil suit claiming his right on the basis of these registered sale deed. The Bank was impleaded as party in this civil suit. Copy of the order dated 30.1.2014 passed in the said civil suit is annexed with the reply. The appellants had sought a declaration to the effect that he is the owner and in possession of the property in question which is described as commercial property The appellant failed to prove the case and the suit filed by him has been dismissed. Thus, the claim of the appellant being the owner and in possession of the properties would not call for fresh adjudication in the present appeal or by R.O.

Counsel for the Bank is also justified in making a grievance that the appellants could not have been permitted to pursue his remedy on various Fora simultaneously. He had filed objections to the auction before the R.O. and thereafter has pursued their remedy of appeal and the second appeal before this Tribunal, Simultaneously, the appellants had also invoked writ jurisdiction and had further filed civil suit claiming same relief. There is much justification in the plea raised by the Counsel for the Bank as the appellants had been approaching different Forum from time-to-time for the same cause of action. Of course, they have not succeeded in their prolonged litigation and have been able to retain their possession of the properties which were mortgaged with the Bank and were sold in open auction. The auction purchasers have deposited the entire amount in 2005 but has not been able to enjoy the fruits of the properties.

When the Counsel for the appellants made an attempt to show that the land in question was agricultural land and not amenable to the mortgage by way of equitable mortgage, then he was confronted with the submissions by the auction purchaser that the appellant himself has described this property as commercial property in suit filed by him. Otherwise also, the Counsel for the auction purchaser would contend that 22 Marlas of property can hardly be put to any agricultural use and the property being situated in the heart of Batala city is a commercial property which is a fact disclosed by the appellants themselves in the appeal proceedings as well as in the civil suit. On this aspect also the appellants are seen to have been raising frivolous pleas to retain the possession of the property over which they could not establish any legal rights. It would be revealing to notice, as is disclosed by Mr. I.P. Singh during the course of hearing, that the borrower even had lodged an FIR against the Manager of the Bank and the Counsel for the Bank alleging offence under Section 420, IPC when their OTS proposal was not accepted by the authorities at the Board. How allegation of 420, IPC could be made against the Counsel or the Manager even if everything is accepted on the face value is to say the least would be intriguing. Such a person who first obtains loan from the Bank and then fails to repay the same succeeded in initiating criminal proceedings against the Manager and the Counsel would speak volume about the conduct of the borrower.

I find no reason or cause to interfere in the impugned order passed by the Tribunal below and would dismiss the present appeal as totally lacking in any merit. If any recovery proceedings are pending, the R.O. is directed to proceed with the same in accordance with law.