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Judgment
The appellant, who is a third party objector in a recovery proceeding pending before Recovery Officer (R.O.) had filed three application seeking amendment of his claim application, to seek implementation of order dated 6th September, 2011 passed by R.O. so as to proceed against other five mortgaged properties before proceeding against the property in question, and third one to permit the appellant to lead evidence to prove its case.
The R.O., vide its order dated 1st July, 2015, has rejected all the three applications. The appellant then filed appeal against this order which has also been dismissed by the Tribunal below on 10th July, 2015. The appellant, therefore, has filed the present appeal.
Apparently, the appellant has no left any stone unturned in delaying the recovery in this case. Appellant is a third party and claiming right on basis of agreement to sell with the borrower has been able to effectively interfere with the recovery proceedings by approaching one Court after another.
The appellant initially got a foothold into the case through an interim order passed by the Lucknow Bench of the Allahabad High Court wherein the proceeding against the mortgaged property mentioned at SI. No. 6 of the list of properties was directed to remain in abeyance. The appellant company had approached the High Court by way of a writ petition with the following two prayers :
"(i) Issue a writ in the nature of mandamus commanding the Respondent/Opposite Party No. 1 i.e. U.P. Awas Evam Vikas Parishad to demarcate lands measuring 42.45 acres out of 63.45 acres, which are mortgaged so that if at a letter date the properties at SI. No. 6 as mentioned in Annexure P/1 were to be sold by the Respondent No. 3, there would be no ambiguity in identifying the mortgaged property.
(ii) Issue a writ, order or direction commanding the Respondent No. 2 implement its order dated 6th September, 2011 in a time bound manner preferably with a period of 3 months in order to sell properties at SI. No. 1 to 5 as mentioned in Annexure P/1 and further restrain the Respondent No. 2 to proceed with the application filed by the Respondent No. 3 dated 20th October, 2011 (Annexure P/7) till the properties at SI. Nos. 1 to 5 are not sold."
The second prayer noted above was given up during the course of hearing of the writ petition. While granting the first prayer noticed above, the Hon'ble High Court directed the respondent U.P. Awas Evam Vikas Parishad to demarcate 42.45 acres, said to be mortgaged, and 21 acre as unencumbered, out to total area of 63.45 acres, as was mentioned at SI. No. 6 in the list of properties. Respondent Parishad was directed to carry out above exercise either itself or being an instrumentality of the State and having statutory powers as were extracted and reproduced in the order with the help of revenue authorities concerned. The High Court also ordered the parties to maintain status quo in respect of the land, namely, 21 acres out of total area of 63.45 acres as was mentioned at SI. No. 6 of the list of properties. Direction further was that this area of 21 acres of land shall not be alienated and/or transferred in any manner till the exercise of demarcation is fully carried out in accordance with law.
The prayer by the appellant was the before passing any order in the S.A. filed by MET, the I.A. filed by the appellant be taken up for hearing in view of the interim order earlier passed by the said Bench of the High Court, as the proceedings qua the mortgaged property mentioned at SI. No. 6 had been directed to remain in abeyance.
The finding by the Hon'ble High Court to hold that part of the land was unencumbered has met with strong rebuff by the Apex Court in its order dated 15th May, 2015 which is placed before this Tribunal in a connected pending appeal. The writ filed by the appellant claiming right over the part of the mortgaged property has been dismissed by imposing a cost of L 5 lac. While allowing the SLP against the judgment passed by the High Court, the Hon'ble Supreme Court was held that it was misadventure on the part of the Builder to file a writ petition for the kind of reliefs prayed for and that too could not have been entertained by the Bench at Lucknow. It is also held that writ petition with twin reliefs as noticed was not maintainable before the writ Court; Firstly, it was not within ken of the High Court in writ jurisdiction to declare any property as encumbered one. It is observed that such rights between the private parties cannot be made subject-matter of writ jurisdiction as has been ordered in the impugned judgment and order that out of 63.45 acres of land 21 acres be demarcated as an unencumbered property and to maintain status quo. As held by the Supreme Court, the High Court could not have treated 21 acres of land as unencumbered and it was not open to the High Court to enter into the aforesaid arena.
In the course of its judgment, the Hon'ble Supreme Court has also as under :
"Prima facie, we are of the view that on the strength of the agreement to sell, particularly when possession had not been handed over to the Builder, it was not open to him to file a writ application for demarcation of the property as unencumbered property or otherwise. What was sought to be achieved by filing a writ petition, was to get rid of the proceedings pending before the Recovery Officer, DRT at Delhi, and to save land at serial No. 6 from being sold which includes 21 acres of land, and an attempt was made to get the 21 acres of land declared as unencumbered one. As a matter of fact, such disputed questions with respect to the properties inter se between the Builder and the Trust as to demarcation, writ petition could not be said to be appropriate remedy, particularly when the order passed by the Recovery Officer, DRT, was not in question and the order passed by the DRT, Delhi, could not have been questioned before the Lucknow Bench of High Court of Allahabad."
The filing of the writ petition before the Lucknow Bench was held totally uncalled for and propriety required that it should not have been entertained by the Lucknow Bench. The Hon'ble Supreme Court also did not find any merit in the submission that the Housing Board could have demarcated the land in exercise of powers given under Section 15 of the Act of 1965. The SLP is, accordingly, allowed and the writ petition filed by the appellant is dismissed while imposing cost of L 5 lac.
This order was passed by the Hon'ble Supreme Court on 15th May, 2015 and now the appellant has found this new mods to reopen the misconceived challenge by moving these three applications which are nothing but a futile attempt to stall the recovery proceedings.
The appellant, otherwise, it is a third party and filed objection which are being considered under Rule 11 of the Second Schedule to the Income-tax Act. The appellant through his first application had wanted to incorporate khasra numbers of various portions of 21 acres of land and for demarcation of that portion. On this ground, the appellant had prayed for amending his objection application filed and pending since 2011. The plea was that without having reference to the khasra numbers it may be difficult to comply with the judgment passed by the Hon'ble Supreme Court on 15th May, 2015. The R.O. while rejecting this prayer has observed that there is no requirement of demarcating this property in question and there is no dispute pending about the demarcation of the property. Finding this to be an irrelevant prayer, the plea of the appellant was rejected.
The prayer in the second application that the order dated 6th September, 2011 be complied with by selling the five mortgaged properties first before touching property at SI. No. 6, which is also a mortgaged property, has been rejected by the R.O. with the observation that the appellant cannot dictate terms and it is for the Tribunal and the R.O. to decide which mortgaged property is to be sold. As is observed, the appellant had only right to establish its legal right over the property in question and nothing more.
The third application is with a prayer to seek permission to file its evidence on the ground that the appellant was busy and engaged in the matter and so could not point out when the case was fixed for final hearing that the evidence was yet to be led. On 21st May, 2015, the case was adjourned for final argument on 1st July, 2015. The prayer in this application was to recall the order dated 21st May, 2015 and permit the appellant to lead evidence. The R.O. found that there was no requirement to file any evidence to consider the objection filed under Rule 11 of the Rules and thus declined the prayer of the appellant to recall the order dated 21st May, 2015.
While dismissing the appeal filed by the appellant, the Tribunal below in its order has observed that the R.O. has first to find out that if the appellant had any legitimate claim or right over the 21 acres of land of which it is seeking demarcation. It is observed that once the appellant is able to establish its right over this part of the land, the question of demarcation may then arise. The issue of demarcation as such was held to be not necessary in the order passed by the R.O. has been upheld.
Another question that may arise in this regard is whether the demarcation can be sought form the R.O. or it would be within the purview of revenue officials. The entire claim of the appellant is based on some agreement to sell which prima facie would not go to create any right or title over the property in favour of the appellant. The plea for demarcation is just another instance of hindrance that the appellant has raised in recovery. Otherwise, it was no merit. This application has been rightly rejected by the Tribunal below as well as the R.O. and would not call for any interference.
Similarly, I find no substance in the plea of the appellant that R.O. was bound to implement its order dated 6th September, 2011. At the stage when the R.O. had passed the order, the order passed by the High Court was pending before the Supreme Court. Once the order passed by the High Court holding this land to be unencumbered has been set aside by the Hon'ble Supreme Court, it would entirely be within the discretion of the R.O. to proceed against any property in any manner. The appellant, who is a third party objector, certainly has no right to dictate terms as to which property is to be sold first.
It may call for a notice here that the borrower had consented for the sale of this property which, according to the borrower, was enough to satisfy the entire dues of the respondent institution, but the sale of the said property could not fortify only because of the order passed by the Hon'ble High Court and pending SLP. It is now for the R.O. to consider the prayer of the borrower as well as of the creditor and the objector certainly cannot have any right to stall the sale of the property which is mortgaged with HUDCO. The prayer of the appellant to first proceed against the five remaining properties thus has rightly decided by the R.O. and the Tribunal below.
The counsel for the borrower who is present in the connected appeal would rightly refer to order passed by this Tribunal on 25th June, 2013 wherein the plea by HUDCO was that it was for the R.O. to decide which of the properties is to be sold. This Tribunal in its order 25th June, 2013 has held that secured creditor is entitled to proceed under the SRFAESI Act against the secured assets for enforcement of its security interest notwithstanding the fact that R.O. is seized with the recovery of the R.C. amount. The authorised officer was held entitled to proceed against property Nos. 1 to 5 besides property No. 6 to recover the amount of debt due from the respondent. The Tribunal then found that the property Nos. 1 to 5 were medical collage wherein around 500 students for undergraduate courses and 300 students for PG Degree and Diploma courses had been enrolled, and a 700-bed hospital attached to the medical college was functioning. Taking this aspect into consideration, this Tribunal had directed that HDCO shall proceed to sell property no. 6 at first instance instead of proceeding against property nos. 1 to 5. In the background of this order passed by the Tribunal, it is rather inappropriate of the appellant to purse this prayer before the R.O. who had no authority to pass an order contradictory to the order passed by this Tribunal or to press this appeal in view of the earlier order.
It is also pointed out before me that the appellant in the present case had abandoned one of the reliefs claimed in the writ petition and this was for issue of writ, order or direction requiring the R.O. to implement its order dated 6th September, 2011 to sell the property Nos. 1 to 5. Once this plea was abandoned in the writ petition, it is rather unfair inappropriate for the appellant to press the same plea before the R.O. or to press this appeal etc. This would be enough to non suit the appellant in the present appeal and to uphold the order passed by the Tribunal and the R. O. so far as this prayer is concerned.
The appellant otherwise had not come out with any evidence which he would wish to led in support of its objections. Except for its right over the part of the land on the basis of agreement to sell, the appellant has no other plea to make a claim in this case or to object to the recovery which is in progress. The agreement to sell statedly has been produced and is on record. Since no other documents had been mentioned or disclosed, the R.O. and Tribunal below are fully justified in rejecting this prayer which apparently is to stall the recovery proceedings and nothing else.
If find no merit in any of the application filed by the appellant, which have rightly been considered and rejected by the Tribunal below.
The appeal is without any merit and is, therefore, dismissed in limine.
Appeal dismissed.