Nainital Bank Ltd. vs Lal Chand And Ors.

S.N.H. Zaidi, J

Since the reply has not been filed by respondent No. 2 despite opportunity, right to file the same stands forfeited. Heard parties' counsel on appeal and perused the record. The instant appeal has been directed against the order dated 12.6.2012 passed in S.A. No. 30/2012 by the DRT, Jaipur whereby the appellant bank and the borrower respondent No. 2 has been directed to restore possession of the property in question to the applicant/respondent No. 1 and the bank has further been directed to pay Rs. one lacs to the applicant as compensation.

The admitted facts are that the applicant/respondent No. 1 was in possession of the property in question as tenant since 1959, of which respondent No. 2 was the owner/landlord. Respondent No. 2 took certain loan facilities from the appellant bank and mortgaged that property as collateral security with it. As the borrower committed default in repayment of the loan, the bank took measures under the SARFAESI Act against him and after issuing demand notice under section 13(2) of the said Act, filed the application before the District Magistrate, Jaipur under section 14 of the Act for taking over the possession of the property in question, which was allowed and a Receiver was appointed for the same. The respondent No. 1 approached the Civil Court for restraining the bank, but the suit was dismissed on 2.5.2012 for want of jurisdiction and the actual physical possession was taken by the bank over the property in question on 7.5.2012. An S.A. (No. 30/2012) was filed by respondent No. 1 on that very date before DRT, Jaipur stating that he had been dispossessed from the property in question and prayed for the restoration of its possession to him. The DRT, however, refused to grant indulgence qua the interim relief sought in that S.A. On that very date, the borrower/respondent No. 2 approached the appellant bank to redeem the mortgage by depositing the entire money due on him and the bank redeemed the mortgage and handed over the possession of the property to the borrower respondent No. 2. The respondent No. 2 had entered into an agreement to sell that property with one Mr. Rakesh Singh Chauhan and handed over the possession of the property to Mr. Chauhan on 7.5.2012 itself. Mr. Pathak points out that respondent No. 2 had received the sale consideration in advance from the purchaser with which the mortgage was redeemed.

The contention of Mr. Saluja is that after the redemption of the mortgage by receiving the entire amount due on the borrower, the bank had handed over the possession of the mortgaged property to the borrower on 7.5.2012 and since the bank is not in possession thereof, it is not possible for the bank to restore the possession to the respondent No. 1. He also submits, that in its S.A., the respondent No. 1 had not prayed for any compensation for his alleged harassment, therefore, the order impugned qua the direction to the bank to pay the compensation is beyond the pleadings and is not sustainable.

Mr. Pathak also submits that after the sale of the property in question to Mr. Rakesh Singh Chauhan, the possession of the property was handed over to him and he is in possession thereof and as such respondent No. 2 also cannot hand over the possession of the property to respondent No. 1.

Mr. Yadav, however, contends that respondent No. 1 was illegally dispossessed from the property in question though he was in possession thereof for the last more than 50 years as tenant.

Considering the circumstances of the case and the submissions of the parties' learned counsel, I am of the view that since the appellant bank was not in possession of the property in question when the order impugned was made, as the possession had already been handed over to the borrower on 7.5.212 and the borrower had also delivered it to Mr. Rakesh Singh Chauhan, its purchaser, on that very date itself and since after its sale a right has been created in favour of the third party purchaser, therefore the bank could not restore the possession of the property to the applicant respondent No. 1 and the DRT has erred in not considering these circumstances properly. I am also of the view that the impugned order regarding payment of Rs. one lacs as compensation. being beyond the pleadings, is also not sustainable and the appeal is entitled to be allowed.

The appeal is accordingly allowed and the order impugned regarding restoration of possession of the property in question by the appellant bank to respondent No. 1 as well as the payment of compensation is set aside. Parties to bear their own cost of the appeal. Copy of this order be furnished to the parties as per law.