M/s.Chandragiri construction company & ors V/S Federal Bank & ors

M/s.Chandragiri construction company & ors V/S Federal Bank & ors 
A.IR:891/2011



IA 1369/11 (waiver): The representative of the respondent bank takes notice on behalf of the respondent bank and states that this Tribunal may take note of the requirement under Sec.18 of the SARFAESI Act and pass orders.

Ld.  Counsel Shri Arun Natarajan appearing on behalf of the petitioners states that the petitioners are ready and willing to deposit Rs.3.00 crores into the loan account and prays for time of two months for the purposes of complying with the requirement under Sec.18 of the SARFAESI Act. 


 He adds that the petitioners have already paid a sum of Rs.1.25 crores into the loan account and that the said sum of Rs.1.25 crores may also be taken into account while considering the pre-deposit under Sec.18 of the SARFAESI Act and prays for a sympathetic consideration of the case of the petitioner.  He further states that the petitioners are ready and willing settle the dues in an amicable manner and that it is due to certain reasons beyond the control of the petitioners that the loan could not be repaid in time.

Heard the Ld. Counsel.

In view of the facts and circumstances of the case more particularly in view of the fact that the petitioners are ready and willing to deposit Rs.3.00 crores into the loan account and in view of the fact that the petitioners have already deposited a sum of Rs.1.25 crores into the loan account and that both the sums put together would exceed 25% of the dues it would be appropriate to pass the following order.

“The petitioners are directed to deposit a sum of Rs.3.00 crores into the loan account on or before 1.2.2012. Call this IA on 2.2.2012 for verification of the compliance”

The representative of the respondent bank states that the bank will wait till 2.2.2012 for taking any further action.

IA 1370/11 (stay): Call with IA 1369/11.

43
M.A:554/2010
Integrated Housing Developers ltd V/S R.Premchand & 3 ors 
1.         This appeal impugns the order dated 06.08.2010 passed by the Learned Presiding Officer, DRT Ernakulam in IA No.1941/2010 in OA No.95/2010.

2.         The case of the appellant may be stated as follows:

It is stated that the appellant is the first defendant in OA No.95/2010 filed by the 4th respondent for the recovery of a sum of Rs.4,64,50,839/- and the Respondent Nos.1 to 3 are the defendant Nos.5 to 7 in the said OA.  It is stated that Late Shri K.P. Ramachandran Nair for himself and as power agent of his children viz., the Respondent Nos.1, 2 and 3 vide sale agreement dated 6.3.1992 had agreed to sell the wet agricultural lands admeasuring 12 Acres 27 cents comprised in Survey Nos.1280, 1281, 1282, 1286, 1288, 1279, 1283, 1284 and 1285 and an extent of 30 cents comprised in Survey Nos.1291/1B, 1291/1B-1, 1291/1B-4 and an extent of 48 cents comprised in Survey No.1291/2 and an extent of 2 cents 640 sq. ft. all situated in Kadakampalli Village. Thiruvananthapuram Taluk within the Registration and Sub registration district of Thiruvananthapuram.  It is stated that the said Late Shri K.P. Ramachandran Nair died in the year 1993 leaving behind Respondent Nos.1, 2 and 3 as his legal heirs.  It is stated that the sale consideration had been paid by the appellant to Respondent Nos.1, 2 and 3 in installments and that the said Respondents had handed over the original documents, the physical possession of the property and further that they had also executed a registered power of attorney dated 8.6.1994 in favour of the appellant to deal with the property as its absolute owner alongwith the power for alienation.  It is stated that the appellant had filed for the “Green Zone Exemption” from the Government of Kerala to convert the wet agricultural land into a residential property for the purpose of commencing the housing project after payment of the necessary charges in the year 1995.  It is stated that the appellant had invested a sum of Rs.1 crore on the property for laying a proper approach road by acquiring the adjacent land admeasuring 2 ½ cents and had also developed the interior roads to reach the proposed houses.  It is stated that the appellant had also purchased 28 cents of land  which the Respondent Nos.1 to 3 had sold to a third party.  It is stated that the appellant had mortgaged all the properties in favour of the 4th respondent for the housing project.  It is stated that the appellant is contesting all the cases filed against the property for and on behalf of Respondent Nos.1 to 3 and that the appellant had also filed written statement in the OA.  It is stated that the Respondent Nos.1 to 3 seeing the development of the project and the increase in the value of the property coupled with the changes in the Registration Rules stopped cooperating with the appellant for the completion of the formalities and went to the extent of canceling the power of attorney executed in favour of the appellant with a sole intention to further enrich themselves by defrauding the appellant.  It is stated that the Respondent Nos.1 to 3 had also approached the 4th respondent bank to release the documents deposited by the appellant expressing their willingness to settle the dues of the bank and that the 4th respondent had insisted for the production of a consent letter from the appellant.  It is stated that at this stage the Respondent Nos.1 to 3 filed IA No.1941/201 in OA No.95/2010 against the 4th respondent seeking for a direction to the 4th respondent for the release of the title deeds / Document No 6 in the OA on receipt of the payment as demanded by the bank without impleading the appellant in the said IA.  It is stated that the appellant had already paid the entire sale consideration to Respondent Nos.1 to 3 and that it is in actual physical possession of the property ever since 1994 and it is having an absolute right over the same and that it is a proper and necessary party in the said IA.  It is stated that the IA has been allowed by the Tribunal below and aggrieved by the same the present appeal has been filed.  It is prayed that the appeal be allowed and the order of the Ld. Presiding Officer, DRT Ernakulam dated 6.8.2010 in IA No.1941/2010 in OA No.95/2010 be set aside.

3.         The Ld. Counsel for the appellant stated that one of the grievances of the appellant is that the Ld. Presiding Officer, DRT Ernakulam has passed the order in the IA even without notice to the appellant and prayed that the matter may be remitted to the tribunal below for a fresh consideration of the IA after affording an opportunity to the appellant to put forth its case.  The Ld. Counsel added that the appellant has paid the entire sale consideration to Respondent Nos.1, 2 and 3 and therefore it is not proper on their part to seek the title deeds from the bank and that a fresh hearing of the IA by the Tribunal below is very much necessary in this case.  It is stated that the order of the Ld. Presiding Officer, DRT Ernakulam is liable to be set aside on the question of law as well as on facts. The Ld. Counsel prayed for allowing the appeal.

4.         The Ld. Senior Counsel for Respondent Nos.1 to 3 stated that they had already revoked the General Power of Attorney in favour of the appellant and that therefore Respondent Nos.1 to 3 are entitled to a redemption of the mortgage by the payment of the entire dues to the bank and equally entitled to the return of the original title deeds.  The Ld. Senior Counsel stated that the order of the Ld. Presiding Officer is proper and the Ld. Presiding Officer has rightly held that the Respondent Nos. 1, 2 and 3 are entitled to a redemption of mortgage and drew the attention of this Tribunal to Section 60 of the Transfer of Property Act and added that a reading of the same would drive this Tribunal to conclude that Respondent Nos. 1, 2 and 3 are entitled to the return of the documents of title and relied upon the following decisions in support of the case of Respondent Nos.1 to 3:

(i)                  Corporation Bank, Bangalore Vs. Laitha H. Holla : AIR 1994 KAR 133.
(ii)                T.K. Subramaniya Iyer (Died) and others vs. C. Natarajan and others: AIR 1996 Madras 241
(iii)               Mhadagonda Ramgonda Patil and Others Vs. Shripal Balwant Rainade and Others: (1988) 3 SCC 298
(iv)              Shivdev Singh and Another Vs. Sucha Singh and Anr.: (2000) 4 SCC 326.

5.         The Ld. Counsel for the 4th respondent bank stated that a Debt Recovery Tribunal constituted with the avowed object of recovery of public money cannot restrain any person from paying public money back to the bank.  The Ld. Counsel stated that Respondent Nos.1, 2 and 3 should be given the liberty to pay the dues to the bank.  The Ld. Counsel added that the interse dispute between the appellant and the Respondent Nos.1, 2 and 3 cannot be the subject matter before the DRT in a OA filed under the RDDB & FI Act and that the dispute should be resolved only by the appropriate forum. 

6.         Heard the Ld. Counsel.

7.         A perusal of the IA No.1941/2010 on the file of DRT Ernakulam reveals that the appellant though being the first defendant in the OA filed by the Canara Bank has not been included as a respondent in the said IA.

8.         It is the case of the appellant that it had entered into an agreement with the owners of the Schedule ‘A’ property of the OA for its development as housing sites and that considerable sums of money has been spent for the project and that the appellant has already paid the entire sale consideration to Respondent Nos.1, 2 and 3.

9.         It is seen that the Respondent Nos. 1, 2 and 3 had approached the bank i.e., the 4th respondent for return of the original title deeds on payment of its dues and that the 4th respondent bank had stated that it would not be able to release the title deeds without the consent letter from the developer company, which is the appellant herein.  It is also seen that the title deeds have been deposited with the respondent bank only by the appellant.

10.       From the above it can be seen that attempts have been made by Respondents 1, 2 and 3 for getting back the documents from the bank after obtaining orders from the tribunal below as seen in IA No.1941/2010 in OA No.95/2010 dated 6.8.2010 by keeping out the appellant who according to it has paid the entire sale consideration to the said respondents.  It can also be seen that the appellant has made claims over the property and orders have been passed in the IA No.1941/2010 by the tribunal below without hearing the appellant.  It can also be seen that the 4th respondent bank has also taken a clear stand in its letter dated 12.5.2010 addressed to Respondent Nos.1, 2 and 3 that the documents cannot be returned without the consent of the appellant.

11.       Therefore from the fact that the appellant has claimed the entire property to be its own, from the fact that the appellant had deposited the title deeds of the property with the 4th respondent bank, from the fact that the Respondent Nos. 1, 2 and 3 have not included the appellant as a respondent in IA No. 1941/2010 on the file of DRT Ernakulam, from the fact that the appellant was not afforded an opportunity to place its submissions in IA No.1941/2010. from the fact that the stand of the 4th respondent bank is that the documents cannot be returned to Respondent Nos. 1, 2 and 3 without the consent of the appellant as seen from their letter dated 12.5.2010, from the fact that the rights of the appellant have been decided even without hearing it, from the fact that the principles of natural justice has not been adhered to by the Ld. Presiding Officer of the tribunal below, it would be appropriate if IA No.1941/2010 is remitted to the tribunal below for consideration afresh in accordance with law after due notice to all the parties in the OA.

12.       Accordingly the order dated 6.8.2010 passed by the Ld. Presiding Officer, DRT Ernakulam in IA No.1941/2010 in OA No.95/2010 is hereby set aside and the IA No.1941/2010 is remitted back to the tribunal below for consideration afresh in accordance with law after due notice to all the parties in the OA.  The Ld. Presiding Officer is directed to take up the IA afresh and dispose of the same within a period of one month from the date of receipt of a copy of this order.  The Ld. Counsel for the appellant is directed to file a copy of this order into the tribunal below and seek a date for the hearing of the IA.

13.       The appeal is disposed of accordingly.  


Order  passed by DRAT Chennai on 4th Nov 2011