Sarupinder Pal vs State Bank Of India

Ranjit Singh, J

Aggrieved against the order passed by DRT-II, Chandigarh withdrawing the interim order granted in favour of the appellant on an application filed by the respondent Bank, the appellant has filed the present appeal. The facts noticed, in brief, are that land measuring 6 Kanal 4 Marlas comprised in Khasra Nos. 3496/1300/1, 3497/1300/2 situated in Basti Sheikh, Nakodar Road, Jalandhar was purchased by the appellant. Husband of respondent No. 4 and respondents 8 and 9 are said to be partners of respondent No. 5, M/s. Nirmal Cold Storage. This land was allegedly mortgaged to secure the loan which the appellant took from the respondent Bank. M/s. Satnam Agri Products Ltd., a public limited company promoted by family of Mr. Nirmal Singh including his two sons, had availed of financial assistance from time-to-time from respondent State Bank of India, Indian Overseas Bank and NABARD by way of consortium finance. The outstanding amount against the borrower jointly of the financial institutions is Rs. 42,82,20,640/- as on 21.6.2011. O.A. No. 413/2011 was accordingly filed.

M/s. Satnam Agri Products Ltd. had also availed a short-term Working Capital loan of Rs. 3 crores for the purposes of financing farmers to cultivate pea crops for the company. There was a default by the company and O.A. 427/2011 for the recovery of Rs. 1,50,29,878/- as on 3.7.2011 is pending before the Tribunal below. It is alleged that Mr. Mandeep Singh, who is the sole person in command of the company M/s. Satnam Agri Products Ltd., in his individual capacity had also availed facility of Kisaan Credit Card of Rs. 5 crore which carried a minimum rate of interest by projecting himself as a person doing contract farming. This account also became NPA and O.A. 379/2011 has been filed by the Bank for the recovery of Rs. 6,90,68,464 as on 20.6.2011.

M/s. Satnam Agri Products Limited basically has given two securities, for loan facilities out of which one is land measuring 27 Kanal 16 Marala on which the plant and machinery of the company is situated in village Fatehpur and village Partappura and the second property is a cold store by the name of Nirmal Cold Store, Nakodar Road, Jalandhar constructed on 6 Kanal 4 Marlas referred to above. Mr. Mandeep Singh has availed of the loan facilities in his individual name (Kisaan Credit Card). A cold store, by the name of Nirmal Cold Store situated in Sham Chaurasi, Distt. Hoshiarpur, on a land measuring 8 Kanals 17 Marlas is mortgaged in addition to the registered mortgage of agriculture land measuring 91 Kanals 17 Marlas situated in village Kotla Nohal Singh, Village Baro Kangana and Village Dandiana Kala. Another land measuring 24 Kanals and 18 Marlas situated in village Nangal Fidda, Tehsil and Distt. Jalandhar is also mortgaged to secure that account. It is the recovery of the dues against various concerns run by the appellant that they wish to thwart and has accordingly filed various S.As. M/s. Satnam Agri Products Ltd. along with Mr. Mandeep Singh, Smt. Karnaljit Kaur and Nirmal Cold Store, Jalandhar through Mr. Mandeep Singh as his partner has filed S.A. No. 180 of 2011. The creation of equitable mortgage of basic properties of M/s. Satnam Agri Products Ltd. and of the firm M/s. Nirmal Cold Store and all his properties at Jalandhar is not disputed. The emphasis in the said S.A. is for the rehabilitation of the project.

Thereafter, Mr. Mandeep Singh filed S.A. 204/2011 on 3.3.2011 where the action of the respondent Bank proceeding against the secured asset of land measuring 27 Kanal 16 Marlas and another land measuring 8 Kanals 17 Marlas in Sham Chaurasi, Hoshiarpur was challenged. The respondent Bank accordingly would allege that one after the other efforts are being made through various motions to get stay order from Hon'ble Tribunal and these are of proxy litigation initiated by one and the same concern.

Ms. Hardeep Kaur claiming herself to be the wife of one Raghubir Singh filed a suit on 19.8.2011 challenging the action taken by the respondent Bank against Nirmal Cold Store, Jalandhar. It is alleged that the title deed of the property though was in the name of M/s. Nirmal Cold Store, but it being a partnership concern is having four partners. Ms. Hardeep Kaur states to be wife of one of partner. It is stated that she is otherwise staying in America. Said Ms. Hardeep Kaur has claimed 1/4 share of her husband which, she says, could not have been mortgaged.

The respondent Bank made an application before the Civil Court that the Court did not have any jurisdiction to try the suit. The trial Court still continued with the suit, when a Civil Revision was filed before the High Court when a restraint order was passed by the High Court restraining the Civil Court from proceeding with the case.

When the applicant failed to get any relief in this suit, another suit was filed by Mr. Mandeep Singh challenging the permission given by the Deputy Commissioner, Hoshiarpur to take possession of the property, namely, M/s. Nirmal Cold Store at Hoshiarpur. Ignoring the facts that the trial Court at Jalandhar had no Jurisdiction since the property was situated in Hoshiarpur and the permission had also been given by the Deputy Commissioner, Hoshiarpur, the trial Court granted status quo order. The respondent had to move for the modification of the said order. In short, the respondent would allege that every effort is being made by the respondent to thwart the actions of the Bank. It is alleged that the Bank has not succeed in getting police assistance because of the influence of the appellants, etc. Even the present appellant has made a reference to some Civil Suit filed by her, which respondents are not aware of any such pending suit.

Challenging the right of the present appellant by alleging mala fides, it is urged that the original title deed of the land is in the name of M/s. Nirmal Cold Store, which fact is not in dispute. Accordingly, the respondent Bank would urge that the name of the partners in the sale deed has got absolutely no relevance as partnership is a legal entity under the Indian Partnership Act. It is rightly urged that once the property is owned by the firm, the individual partner has got no individual share. The property was mortgaged by Ms. Joginder Kaur, w/o Mr. Nirmal Singh claiming herself to be the sole proprietor of the M/s. Nirmal Cold Store. In order to show her title, Ms. Joginder Kaur had handed over her own affidavit to the Bank, the Income Tax returns of the firm M/s. Nirmal Cold Store filed by Ms. Joginder Kaur as Sole Proprietor and the Balance Sheet of the said firm signed by Ms. Joginder Kaur as sole proprietor. After her death, her son, Mr. Mandeep Singh continued to hold the firm claiming to be a partner of the firm, being LR of the sole proprietor. This could be taken as a normal practice that as on the death of Ms. Joginder Kaur, sole proprietor of firm M/s. Nirmal Cold Store, the firm had come in inheritance to her sons, namely, Mr. Mandeep Singh and Mr. Harjit Singh. The Bank would highlight that the first S.A. was filed by the firm M/s. Nirmal Cold Store and Mr. Mandeep Singh represented it as a partner. Even otherwise, Mr. Nirmal Singh who was the father of Mr. Mandeep Singh and husband of Ms. Joginder Kaur being one of the partners of the firm, Mr. Mandeep Singh obviously could become a partner by virtue of succession but still he became partner on the death of Ms. Joginder Kaur who was sole proprietor of the firm. The mortgage of the property in favour of the respondent Bank is not in dispute and it is only a ploy to get interim order that one petition after another has been filed.

The Counsel for the appellant, however, would contend that the appellant is neither a borrower nor a mortgagor or a guarantor to the loan in question but still the Bank could obtain an order from the District Magistrate. Jalandhar for taking the possession over certain properties including the land measuring 6 Kanal 4 Marlas at Basti Sheikh, Nakodar Road, Jalandhar. The Counsel would submit that the aforesaid property was purchased through a registered sale deed by M/s. Nirmal Cold Store, which is a partnership firm. As per the Counsel, one of the partners of the firm was Mr. Nirmal Singh and on the death of said Mr. Nirmal Singh, his widow had mortgaged the property claiming herself to be the sole owner. She also has expired leaving behind Mr. Mandeep Singh, respondent No. 6, and Mr. Harjit Singh, respondent No. 7, as her LRs. As per the Counsel, the appellant had 1/4th share in the property which is now sought to be possessed of, which order was challenged before the Tribunal below. Initially, the Tribunal had stayed the dispossession of the appellant from the said property as interim measure, but later has vacated the said stay on the application filed by the Bank. The Counsel for the appellant accordingly contends that M/s. Nirmal Cold Store could not be taken to be a sole proprietorship concerned and if it is taken to be a partnership firm, then 1/4th share of the appellant needs to be protected as this could not have been mortgaged. The Counsel had also stated that there is hardly any document in the possession of the Bank which would show a valid mortgage. The Counsel has also referred to the contradictory stand taken by the Bank in this regard while maintaining at some stage that the property was of a partnership firm and has mortgaged as such while at another stage conceding that this was mortgaged by Ms. Joginder Kaur being sole proprietor. I have considered the submissions made before me. I find substance in the submissions made by the Counsel for the Bank that one after another attempt has been made to somehow stall the proceedings for the recovery of the loan, which has been filed by various concerns which are making attempt to stop the Bank from proceeding in legal manner to recover its dues. The Counsel appearing for the Bank, in my view, is justified in submitting that in a partnership firm the individual shares are not separately defined and cannot be separately claimed as is being contended by the Counsel for the appellant. What is available to the partner is right in regard to the income from the share. Otherwise also, this property was offered by Ms. Joginder Kaur as sole proprietor. The documents which the Bank obtained show and support this contention of the Bank. If this has been done in a deceitful manner, the appellant and the other partners cannot be allowed to derive advantage out of their own wrong. It is not the case of the appellant that the partnership firm is no more existing as she is claiming her share as partner in this firm. Obviously, therefore, the partnership firm has been reconstituted on the death of the partners. Once the loan has been obtained by the partnership firm the individual partner cannot come forward for protection of his or her own share as is being prayed. Reference here can be made to law laid down in Ajudhia Parshad Ram Pershad v. Sham Sunder & Ors., AIR 1947 Lah. 13. Full Bench by making reference to Section 15 of the Partnership Act has observed that the property of the firm shall be held and used by the partners exclusively for the purpose of business and that this precludes the possibility of any of partnership properly being, or being deemed to be separate property of any partner so long as partnership subsists . This has been consistently followed as can be seen from Full Bench decision of Andhra Pradesh and Allahabad High Courts in the case of Addanki Narayanappa & Ors. v. Bhaskara Krishnappa & Ors., AIR 1959 A.P. 380 and Manohar Das & Ors. v. The Board of Revenue, U.P., AIR 1971 All 523. I find no substance in the plea raised by the Counsel for the appellant. The Tribunal has rightly recalled the earlier order passed by it. The Bank should not face any hindrance in the recovery of this loan amount.

The appeal is, therefore, dismissed.