MRS. ARTI GUPTA & ANR. vs MR. PRASHANT NAGPAL & ORS.

2023-12-20 Information

$~J-33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Pronounced on: 20.12.2023
+ CS (OS) 534/2018
MRS. ARTI GUPTA & ANR. ….. Plaintiffs
Through: Mr. Gaurav Duggal, Adv

versus

MR. PRASHANT NAGPAL & ORS. …..Defendants
Through: Mr. Rajneesh Vats, Adv. for D-1 & D-6.
CORAM:
HON’BLE MR. JUSTICE SACHIN DATTA
JUDGMENT

I.A. No. 6708/2020 (Application under Order XII Rule 6 read with Section 151 of the Code of Civil Procedure, 1908 seeking judgment on admissions)

1. The present application under Order XII Rule 6 of the CPC has been filed by the plaintiffs seeking a judgment on certain admissions which are stated to have been made by defendant nos. 1 and 6.
2. The present suit has been filed by the plaintiffs, seeking the following reliefs with respect to the property bearing No. H-9/A, Kailash Colony, entire 3rd Floor with terrace, New Delhi-110048 (hereinafter referred to as the suit property):
A. A decree of possession of Suit Property bearing municipal address as H 9/A, 3rd floor, Kailash Colony, New Delhi- 110048, directing the Defendant No. 1 to vacate the Suit Property and hand over the vacant peaceful and actual possession of the Suit Property to the Plaintiffs, as the Plaintiff no. 1 is the registered owner of the Suit Property on the strength of registered Sale Deed dated 10.12.2014 vide registration No. 11631, in Book No.1, Volume No. 13611 on page No.1 to 16, registered on 24.12.2014; and
B. A Declaration that the facility agreement dated 25.06.2013, as allegedly executed between the Defendant no. 3 and 6 is forged and fabricated and cannot be used or relied upon by the Defendant No. 1 or 6.
C. A decree of permanent injunction in favour of the Plaintiff and against the Defendant No. 1, to 6 thereby restraining the Defendants No. 1, to 6, their servants, agents, employees, representatives, heirs, etc. and / or others acting for and on their behalf from creating any nature of third party interest and/or encumbrance and/or dispossession of the Plaintiff qua the Suit Property; and
D. The Defendant No. 1 be directed to pay use and occupation charges to the Plaintiff from August 2017 till the date of vacation of the Suit Property at the rate of Rs.2.10 Lacs per month, as paid by the erstwhile tenant; and
E. For an order of costs of the proceedings including the counsel fee and the court fee affixed; and
Any such further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case may also be passed in favour of the Plaintiff and against the Defendants.

3. As per the plaintiff no.1, she is the owner of the suit property by virtue of a registered sale deed dated 10.12.2014 bearing registration No. 11631, in Book No.1, Volume No. 13611 on page No.1 to 16, registered on 24.12.2014 in the books of Sub Registrar, Mehrauli, New Delhi (hereinafter referred to as the sale deed).
4. The controversy in the present suit is that although a sale deed was executed in favour of the plaintiff no.1 by defendant nos. 2, 3 and 4 on 10.12.2014, the possession of the said property lies with defendant no.1 and the defendant no.6 company (of which the defendant no. 1 is the director); the said defendants assert that the defendant no.1 is in possession of the suit property since 25.06.2013 on the strength of a mortgage created on the suit property by defendant no.3 (Harish Arora), by depositing the Collaboration Agreement dated 12.12.2011 with the defendant no.6, in lieu of a loan advanced by defendant no.6 to defendant no. 3 (Harish Arora). The plaintiff no.1 on the other hand contends that she has been in constructive possession of the suit property since the date of execution of the sale deed and had even rented the suit property to one tenant, who was staying in the suit property till 17.08.2017.
5. Defendant no. 1 is the director of defendant no.6 company (M/s D.L Nagpal Finance & Leasing Co. Pvt. Ltd.), with which the suit property purportedly stands mortgaged.
6. Defendant nos. 2 and 3 are the builders, with whom the defendant nos. 4 and 5 i.e., the owners of the plot bearing H-9/A, Kailash Colony, New Delhi (hereinafter referred to as the plot) had entered into a Collaboration Agreement dated 12.12.2011 for the purpose of re-construction / development of the said plot.
BRIEF FACTS:
7. The entire building in which the suit property is located is stated to have been jointly owned by defendant nos. 4 and 5; the same was subject matter of a partition, and it was eventually agreed that the building on the plot bearing No. H-9/A, Kailash Colony New Delhi would be demolished and re-constructed, and in the newly constructed building, the defendant no.4 would hold and possess the entire basement, ground floor and terrace rights alongwith ownership rights in the land underneath and the defendant no. 5 would hold and possess the entire second floor alongwith ownership rights in the land underneath.
8. For re-constructing the plot, the defendant nos. 4 and 5 are stated to have entered into a Collaboration Agreement dated 12.12.2011 with the defendant nos. 2 and 3 for the purpose of getting the building developed / re-constructed, for and on behalf of the owners, at the builders cost.
9. In the said Collaboration Agreement dated 12.12.2011, it was inter alia agreed that the builders shall demolish, develop, construct and complete the building on the plot bearing No. H-9/A, Kailash Colony, New Delhi at their own cost and expenses, after procuring the requisite permissions, sanctions and approvals for development, construction and completion of the building and shall build a fresh building on the plot, which would consist of a stilt, basement, ground floor, first floor, second floor and third floor with terrace.
10. The said Collaboration Agreement records that the owners had authorised the builders by conferring upon them a Special Power of Attorney to apply for necessary sanctions, permissions, approvals of the concerned authorities for the due execution of the construction work of the proposed building. In terms of the Collaboration Agreement, the builders were given vacant physical possession of the plot with effect from the date of execution of the Collaboration Agreement and were vested with all powers and authorities as the owners for the purpose of the proposed re-construction of the building. It was also agreed between the parties that upon completion of the building, the owners would execute or join in the execution of all documents required for giving portions of the newly constructed building falling in the builders share to buyers.
11. It was also agreed in the said Collaboration Agreement that post the completion of the fresh building on the said plot i.e. H-9/A, Kailash Colony, New Delhi, the following would be the allocation: the respondent no.4 would be allocated the entire basement, entire ground floor, 25% undivided share in the stilt, use of common areas, facilities and amenities and proportionate undivided share in the land underneath; respondent no. 5 would be allocated the entire first floor alongwith 25% undivided share in the stilt, use of common areas, facilities and proportionate undivided share in the land underneath; the builders would be entitled to the entire second floor, entire third floor, entire terrace rights over and above the third floor, 50% undivided share in the stilt, use of common areas, facilities and amenities and proportionate undivided share in the land underneath.
12. It is averred in the plaint that the plaintiff no.2 who is the father-in-law of plaintiff no.1 came to know about the suit property, which was stated to be available for sale in September 2014. The suit property, at that time, is stated to have been in a condition where only a partial structure of the same was complete.
13. The plaintiff no.1 is stated to have entered into an agreement with defendant nos. 2, 3 and 4 for purchasing the suit property for a sale consideration of Rs. 1.01 Crore. In addition to the said amount, it was also agreed between the said parties that the plaintiff no.1 would further pay a sum of Rs. 1.01 Crore to defendant nos. 2 and 3 for the completion of the suit property, to develop / complete the suit property as per the requirements of the plaintiff no.1. For the said purpose, a service and amenities agreement dated 10.11.2014 is stated to have been executed between the plaintiff no.1 and defendant nos. 2, 3 and 4.
14. It is submitted on behalf of the plaintiff no.1 that she applied for a loan of Rs. 2.03 Crore from PNB Housing Finance Limited on 17.11.2014. Out of the total loan amount, an amount of Rs. 1.01 Crore was a home loan to purchase the property and an amount of Rs. 1.01 Crore was a loan for completion / construction / furnishing of the suit property in terms of the service and amenities agreement dated 10.11.2014. The balance of Rs. 1 Lakh was for the payment of insurance premium as a part of the loan agreement with PNB.
15. It is submitted on behalf of the plaintiffs that it was agreed between the plaintiff no. 1 and defendant nos. 2, 3 and 4 that the amount of Rs. 1.01 Crore borrowed by the plaintiff no.1 as a home loan was to be paid to defendant nos. 2 and 3 directly. Further, the loan of Rs. 1.01 Crore for completion / construction / furnishing of the suit property was also to be paid by the plaintiff no.1 to defendant nos. 2 and 3, who had agreed to give the fully completed and developed suit property to the plaintiff no.1.
16. It is submitted on behalf of the plaintiffs that in December 2014, the defendant nos.2 and 3 expressed their inability to complete the partial construction and refurbishing work of the suit property due to internal disputes.
17. The defendant no.3 is stated to have introduced the plaintiff no.1 to one Mr. Vijendra Kumar Singh, who agreed to complete the incomplete structure of the suit property in place of defendant nos. 2 and 3 as agreed upon earlier. The plaintiff no.1 was also asked by defendant nos. 2 and 3 to transfer the amount of Rs. 1.01 Crore for completion / construction / furnishing of the suit property to Mr. Vijendra Kumar Singh instead.
18. It is averred that Mr. Vijendra Kumar Singh also expressed his interest to occupy the suit property as a tenant and run his office therefrom, while also developing the suit property. It was agreed between the plaintiff no.1 and Mr. Vijendra Kumar Singh that Mr. Vijendra Kumar Singh would pay a sum of Rs.2,10,000/- as monthly rent to the plaintiff no.1 in lieu of occupying the suit property as a tenant.
19. It is averred in the plaint that defendant nos. 2 and 3 also gave their No Objection in favour of Mr Vijendra Kumar Singh, giving him rights of construction and development of the suit property.
20. On 29.11.2014, PNB Housing Finance Ltd. sanctioned a home loan of Rs. 2.03 Crores and issued DD No. 547444 dated 29.11.2014 directly to defendant no. 2 and DD No. 547445 dated 29.11.2014 directly to defendant No. 3 amounting to Rs.50,50,000 each, and DD No. 547443 of Rs. 1.01 Crore in the name of plaintiff No. 1 towards furnishing, finishing & completion of the Suit property. The balance remaining amount of Rs. 1 lakh was paid towards Insurance Premium as part of loan agreement with PNB Housing Finance Ltd.
21. On 10.12.2014, a sale deed with respect to the suit property was executed in favour of the plaintiff no.1 by defendant nos. 2, 3 and 4. In the said sale deed, the plaintiff no.1 was represented as the vendee, the defendant no.4 was represented as the vendor, and the defendant nos. 2 and 3 were represented as the confirming party. It is averred in the plaint that at the time of execution of the sale deed, the plaintiff also paid some amount to defendant nos. 2 and 3 in cash.
22. It is averred in plaint that after receiving the balance amount of Rs.1.01 Crore from the Bank on 12.12.2014, Rs. 1.01 Crore was transferred from the plaintiff no.1s account to Mr. Vijendra Kumar Singh, to allow Mr. Vijendra Kumar Singh to complete the incomplete structure of the suit property and refurbish the same along with fixtures and furnishings.
23. A stamped Rent Agreement dated 26.12.2014 is stated to have been executed between the plaintiff no.1 and M/s Unicare Health India through its proprietor Mr. Vijendra Kumar Singh, whereby it was agreed that Mr. Vijendra Kumar Singh would pay a monthly rental amount of Rs. 2,10,000/- to the plaintiff no.1 for a period of 3 years ending on 25.12.2017.
24. It is averred in the plaint that Mr. Vijendra Kumar Singh started completing the partial structure of the suit property and refurbishing the same from 26.12.2014 and occupied the suit property till 17.08.2017, and continued to pay monthly rent, although not in a timely manner.
25. It is averred in the plaint that around 15.08.2017, Mr. Vijendra Kumar Singh informed the plaintiffs that he was vacating the suit property as he was unable to pay the monthly rent and vacated the suit property without any further intimation to the plaintiffs and left the keys of the suit property with a common friend of the plaintiffs.
26. It is averred that on 22.08.2017, the plaintiff no.1 visited the suit property after collecting the keys from the common friend and found some unknown persons (defendant no.1) occupying the suit property. When the plaintiff no.1 asked Mr. Vijendra Kumar Singh about the unauthorised occupants, he informed the plaintiff no.1 that he did not have any knowledge and informed that the said persons/occupants could be land grabbers.
27. Accordingly, the plaintiff no.1 filed a complaint dated 22.08.2017 with the DCP, South-East, New Delhi. Further, the plaintiff no.1 preferred a Criminal Complaint Case No. 33 of 2018 under Section 156 (3) read with Section 200 of the Cr.P.C. before the Magistrate, South-East, Saket District Courts. The said complaint was filed against unknown persons. The said complaint was registered on 22.12.2017 for registration of FIR for offences under Section 442, 445, 447, 448 read with Sections 420, 468, 470, 471, 506 and 120 B of IPC.
28. A status report was filed on 30.05.2018 by the police, whereby it was stated that defendant no.1 was the occupier of the suit property and that on examination of defendant no.1 by the police, defendant no.1 disclosed that he is the director of defendant no.6 company D.L. Nagpal Finance & Leasing Co. Pvt. Ltd. It was disclosed by defendant no.1 that defendant no. 3 had sought financial assistance from defendant no.1s company for development of the plot bearing No. H-9/A, Kailash Colony, New Delhi and had mortgaged the suit property to the firm of defendant no.1. It was also disclosed by defendant no.1 that the original Collaboration Agreement along with possession of the suit property was handed over by defendant no.3 to defendant no.1 after the execution of the facility agreement stated to have been executed on 25.06.2013.
29. A second status report dated 09.08.2019 was filed by the police, wherein it was inter alia detailed that the defendant no.3 (Harish Arora) could not be traced and was absconding. It was further recorded therein that defendant no.3 (Harish Arora) and defendant no.1 had entered into a facility agreement dated 25.06.2013 whereby the defendant no. 3 had mortgaged the suit property with the defendant no.1 in lieu of a loan and had handed over the Collaboration Agreement dated 12.12.2011 and the possession of the suit property to defendant no.1.
30. The plaintiffs refute the claim of the defendant no.1 that he has been in possession of the suit property since 25.06.2013 on the basis of a rent agreement dated 26.12.2014, in terms of which the plaintiff is stated to have rented out the suit property to one Mr. Vijendra Kumar Singh.
31. It has been averred by the plaintiff no.1 that the defendant no.1 has acted in connivance with defendant nos. 3, 4 and 5.
32. It is averred by the plaintiff no.1 that she has been paying a monthly instalment of Rs. 2.06 lakhs to PNB Housing and Finance Ltd. for the loan taken by the plaintiff no.1 from the said bank.
33. By way of the present application, it is averred by the plaintiffs that the defendant nos. 1 and 6 have made the following unequivocal admission in their Written Statement to the present suit:
6. (iii) That the Defendant No. 6 entered into a duly stamped Facility Agreement dated 25.06.2013 with the Defendant No.3 whereby the said Defendant No.6 agreed to extend loan of Rs. 50,00,000/- at the rate of 18% interest per annum which was payable within three years from the date of Agreement with a maximum extension of two years thereafter, subject to display of good faith. Defendant No. 3 agreed to create equitable mortgage or mortgage by deposit of title deeds qua the suit property in favour of the Defendant No.6 until the repayment of the loan. Pursuant to the aforesaid Facility Agreement, Defendant No. 6 disbursed Rs. 50,00,000/- in favour of Defendant No. 3 and later executed Declaration of Memorandum of Deposit for Creation of Mortgage both dated 25.06.2013 whereby the original Collaboration Agreement was deposited with the Defendant No. 6.

34. It is submitted on behalf of the plaintiffs that despite the abovementioned admission on the part of the defendant nos. 1 and 6 that they had advanced a loan of Rs. 50,00,000/- to defendant no.3, the same is not reflected in the audited balance sheets of the defendant no.6 company for the year ended March 2014, which have been placed on record by the plaintiffs. It is further submitted that the same is in contravention to Section 128, Section 129, Section 447, 448 and 449 of the Companies Act, 2013 (hereinafter referred to as the Companies Act).
35. It is submitted that since there is no transaction of a loan being advanced to defendant no.3 reflected in the balance sheets or financial statement of defendant no.6, the defendant no.6 has filed a false affidavit before this court and has also failed to provide any proof of any kind of loan being advanced to defendant no.3.
36. It is submitted on behalf of the plaintiffs that the financial statements of the defendant no.6 company do not reflect any loan being advanced to defendant no.3 (Harish Arora). It is further submitted that under the head short term loans and advances in the financial statement of the defendant no.6 company for the year ended 31.03.2014, the name of defendant no.3 is not reflected and no amount of Rs. 50,00,000/- being disbursed to defendant no.3 can be seen. It is further submitted that the said non-reflection of defendant no.3s name in the financial statements of the defendant no.6 company is in the face of the admission made by defendant no.6 in para 6 (iii) of its Written Statement, whereby the defendant no.6 company has admitted to having advanced an amount of Rs. 50,00,000/- at the rate of 18% interest per annum to defendant no.3 pursuant to the Facility Agreement dated 25.06.2013.
37. It is averred in the present application that the Collaboration Agreement dated 12.12.2011 filed on behalf of the defendants has the following endorsement made by Punjab National Bank:
III Floor of this Property
has been Sold to Arti Gupta

The said endorsement has been reproduced below:

38. It is submitted on behalf of the plaintiffs that the original Collaboration Agreement dated 12.12.2011 was filed on 23.10.2019 vide filing no. 1247975 by the defendant nos. 1 and 6 alongwith other original documents.
39. It is submitted that as per the defence set up by the defendant nos. 1 and 6, the original Collaboration Agreement has remained in their possession since 25.06.2013 and therefore, the abovementioned endorsement dated 10.12.2014, which has been signed by an official of PNB, is the clearest admission that the said property had in fact been sold on 10.12.2014 inasmuch as there is no question of PNB putting its endorsement on 10.12.2014 recording that the suit property has been sold to the plaintiff no.1, if as per the case set up by defendant nos. 1 and 6, the Collaboration Agreement was in their power and possession since 25.06.2013.
40. It is submitted on behalf of the plaintiffs that in para 9 of reply on merits to the present application, the defendant nos. 1 and 6 have concocted an explanation which was not even mentioned in their Written Statement, that with a view to get a loan from PNB, defendant no.3 had approached PNB for creating a mortgage on the suit property and had taken the original Collaboration Agreement from defendant no.6 for the said purpose. It is further submitted that since the bank came to know that the suit property was sold to plaintiff no.1, it made an endorsement on the Collaboration Agreement. It is further submitted that in their reply to the present application, defendant nos. 1 and 6 have admitted that they learnt about the fact that the suit property had been sold to the plaintiff no.1.
41. It is further submitted, based on the said endorsement by PNB, that the defendant nos. 1 and 6 always had knowledge that a sale deed had been executed in favour of plaintiff no.1.
42. The plaintiffs contend that in view of the endorsement made by PNB on the Collaboration Agreement, the entire defence of defendant nos. 1 and 6 is a sham.
43. It is submitted on behalf of the plaintiffs that the documents pertaining to loan and creation of mortgage placed on record by defendant nos.1 and 6 are false and fabricated.
44. The plaintiffs have sought to rely upon the judgment of the Supreme Court in Vijaya Myne vs. Satya Bhushan Kumar1 to contend that the present suit is also a fit case for a judgment based on admission made by the defendant nos. 1 and 6.
45. In response, it has been submitted on behalf of defendant nos.1 and 6, that the said endorsement by PNB dated 10.12.2014 does not amount to an admission, much less an equivocal admission which is contemplated under Order XII Rule 6 CPC.
46. It is submitted on behalf of the defendant nos. 1 and 6 that in order to repay the loan advanced by the defendant no. 6 to defendant no. 3, defendant no.3 had approached the defendant no.6 company and had requested that the suit property which was mortgaged with defendant no.6 be released, and in order to do the same, attempted to avail a loan from PNB. It is further submitted that the defendant no.3 collected the original Collaboration Agreement and alongwith an employee of defendant no.6, presented the said agreement to PNB, in an attempt to avail a loan on the basis of the Collaboration Agreement. It is further submitted that the bank carried out due diligence and found out that the suit property had been sold to plaintiff no.1 and therefore made an endorsement on the said Collaboration Agreement to the effect that IIIrd Floor of this property has been sold to Arti Gupta. It is further submitted that thereafter, the original Collaboration Agreement was returned to defendant no.6 company and was never in possession of defendant no.3 or any other persons. It is further submitted that the Collaboration Agreement has been in possession of the defendant nos.1 and 6 till the time it was filed before this court on 20.11.2019.
47. It is submitted on behalf of defendant nos. 1 and 6 that the plaintiffs in the plaint have admitted the fact that a mortgage was created in favour of defendant nos. 1 and 6 in para 6 of the plaint which is reproduced as under:
6. Defendant no. 6 is M/s D.L. Nagpal Finance & Leasing Co. Pvt. Ltd. having its registered office at B-43, C Floor, Greater Kailash, Part-I, New Delhi-48 being run by Defendant No.l. Defendant No.3 had sought financial assistance from Defendant No.1’s firm Defendant No.6 , for development of H- 9/A, Kailash Colony, New Delhi-110048 and had mortgaged the third floor and terrace of the H-9/A, Kailash Colony, NewDelhi-110048 to the firm of Defendant No.1.

48. It is submitted that it was in the knowledge of the plaintiff that the suit property stood mortgaged in favour of defendant nos. 1 and 6.
49. It is submitted on behalf of defendant nos. 1 and 6 that since the Collaboration Agreement was filed by the said defendants in court, it is clear that they had possession and thus making it clear that the suit property was mortgaged with the said defendants.
50. With respect to the contention of the plaintiff with respect to non-reflection of the loan of Rs. 50,00,000/- being advance to defendant no.3 in the balance sheets of defendant no.6 company and also with respect to the non-reflection of defendant no.3s name in the financial statements of defendant no.6 company, the defendant no.6 company has relied upon Section 58 of the Transfer of Property Act, 1882 to state that the payment of mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced and therefore, the money does not have to be disbursed at the time of the creation of mortgage but could have been done in the future also.
51. The defendant nos. 1 and 6 have relied upon the following judgments:
i. Jeevan Diesel and Electricals Ltd. vs. Jasbir Singh Chadha and Others2
ii. State Bank of India v. Midland Industries and Others3
ANALYSIS AND CONCLUSION
52. The defendant nos.1 and 6 have sought to resist the rights flowing in favour of the plaintiff no.1 by virtue of the registered sale deed dated 10.12.2014 on the basis that the suit property was mortgaged to the defendant no.6 pursuant to a Facility Agreement dated 25.06.2013 between the defendant no.3 (Harish Arora, who was one of the executants of the Sale Deed in favour of the plaintiff no.1) and the defendant no.6.
53. It has been specifically averred in the common Written Statement filed on behalf of the defendant nos. 1 and 6 that pursuant to the aforesaid Facility Agreement the defendant no.6 disbursed Rs.50,00,000/- in favour of the defendant no.3 and the latter executed declaration and memorandum of deposit for creation of mortgage both dated 25.06.2013, whereby, the original Collaboration Agreement was deposited with the defendant no.6.
54. It is further averred in the Written Statement filed on behalf of defendant nos.1 and 6 that the defendant no.1 finally agreed and extended further loan of Rs.30,00,000/- to the defendant no.3 vide ICICI Bank Cheque bearing no.119014 dated 18.02.2017.
55. A perusal of the statements of transactions / summary of accounts of the defendant no.1 (filed by the defendant nos.1 and 6 with list of documents on 23.10.2019 vide filing No. 1247975) reveals that:
(i) on 17.09.2013, a sum of Rs.40 lakhs was paid by the defendant no.1 to the defendant no.3 (Harish Arora) ;
(ii) on 19.01.2016, a sum of Rs.5 lakh was paid by the defendant no.1 to the defendant no.3 (Harish Arora).
(iii) on 02.06.2016, Rs. 5 lakhs was paid by the defendant no.1 to the defendant no.3 (Harish Arora) through self-bearer cheque.
(iv) a sum of Rs. 25 lakh was paid by the defendant no.1 to defendant no.3 (Harish Arora) on 05.12.2016.
(v) a sum of Rs.15 lakh was transferred by the defendant no.1 to defendant no.3 (Harish Arora) on 13.02.2017.
56. The above payments by defendant no. 1 clearly do not prove any disbursal of Rs.50,00,000 lakh by the defendant no.6 to the defendant no.3 pursuant to the Facility Agreement dated 25.06.2013, as asserted by defendant nos. 1 and 6 in the Written Statement.
57. On a perusal of the summary of accounts / statement of transactions filed by the defendant nos. 1 and 6, it is apparent that the same do not reflect that an amount of Rs.50,00,000/- was disbursed by the defendant no.6 to the defendant no.3 in terms of the alleged Facility Agreement. Payment to the defendant no.3 (Harish Arora) from the individual account of the defendant no.1 cannot be said to have any co-relation with the Facility Agreement dated 25.06.2013. Further, even as regards the amounts paid by the defendant no.1 to the defendant no.3 (as reflected from the summary of accounts / statement of transactions of the defendant no.1), neither the timing nor the quantum of the same, has any co-relation with the case set up in the Written Statement.
58. As noticed hereinabove, the Written Statement filed on behalf of defendant no.1 and 6 also avers that the defendant no.1 had agreed to extend a further loan of Rs.30,00,000/- to the defendant no.3 and had issued ICICI bank cheque bearing no.119014 dated 18.02.2017. The summary of accounts / statement of transactions in respect of the bank account of the defendant no.1 reflect no such payment of Rs.30,00,000/- vide ICICI bank cheque bearing no.119014. Thus, a perusal of the summary of accounts / statement of transaction of defendant no.1 and defendant no.6 reveals, ex-facie, that the amount(s)/ transactions reflected therein do not tally with the assertions made in the Written Statement.
59. It is also notable that the Facility Agreement dated 25.06.2013 relied upon by the defendant nos. 1 and 6 clearly contemplates as under:-
e) The interest shall be paid on the first of each month or in the manner specified by DNF, the first of such instalments of interest to be payable on the date immediately after the first disbursal of the said Credit Facility or as specified by DNF in its sole discretion.

xxx xxx xxx

h) The Borrowers shall pay to DNF all instalments inclusive of interest on a monthly basis, on the scheduled due date, from the first due date to the last due date as set out in the repayment schedule mentioned in the First Schedule hereto, time being the essence of the contract, by issuing post-dated cheques to DNF. The Borrower/s undertake/s to DNF to honour all payments without fail on first presentation and not to instruct his/her/their bankers to stop payment of the cheques/countermand the cheques.

60. As such, even if the Facility Agreement dated 25.06.2013 is taken at face value, a perusal of the same reveals that interest was required to be paid in terms thereof on the first of each month, the first of such instalment or interest was to be paid immediately after the first disbursal. Clause h reproduced hereinabove also emphasises that all instalments were required to be paid inclusive of interest and on a monthly basis on the scheduled due date. Not only is there no material to show that the amounts referred to in the Written Statement were ever disbursed, there is also no material whatsoever which shows that any interest was ever paid in the manner set out in the Facility Agreement dated 25.06.2013.
61. In these circumstances, it is inexplicable as to why, sums of money were continued to be transferred from the individual bank account of the defendant no.1 to the defendant no.3 (Harish Arora). Obviously, the transfers of said sums of money were pursuant to the individual dealings between the defendant no.3 and the defendant no.1. Also, assuming that there was a Facility Agreement which contemplated repayment vide monthly instalments/EMIs by the defendant no.3, there was no reason as to why the defendant no.1 or defendant no.6 would continue to pay random amounts to the defendant no.3, despite defendant no.3 (Harish Arora) not adhering to the aforesaid stipulations in the Facility Agreement dated 25.06.2013.
62. As such, the entire story set out by the defendant nos. 1 and 6 is untenable.
63. Further, the Collaboration Agreement contemplates as under:
That the BUILDER and the OWNERS shall be entitled to sell, transfer, convey and assign their respective portions to any prospective buyer and to receive the sale proceeds in respect thereof in their respective names, during or after the completion of the construction, without any objection or hindrance by the other. Further the BUILDERS and the OWNERS shall be fully entitled to enter into any Agreement(s) for the sale/booking of their respective allocations in the newly construction building and shall be entitled to accept cash/cheque in their respective names. Further, the OWNERS hereby agree to confirm, execute or enter Into Agreement, if required by the BUILDER, between the BUILDER and the prospective purchaser of the portion(s) falling to the share of the BUILDER after handing over the completed portion to the OWNERS.

That the OWNERS shall on the completion of the building execute or join in the execution of all documents necessary for giving the flat(s) / portion(s) buyers of builder’s portion legal title to their respective flats/portions including their undivided share in the land underneath, without asking for any further payment, except as herein agreed.

64. Therefore, the unregistered Collaboration Agreement dated 12.12.2011 only apportioned the respective shares of the owners and the builders in the property in question i.e. H-9/A, Kailash Colony, New Delhi. No title document / conveyance deed, as such, has been executed in favour of the defendant no.3 or defendant nos. 1 and 6. As such, reference to the Collaboration Agreement as being the title documents in favour of the defendant no.3, is clearly incongruous. On the contrary, in terms of the aforesaid stipulation in the Collaboration Agreement, there is a proper registered sale deed executed in favour of the plaintiff no.1, duly endorsed by the owner of the property, as contemplated in the Collaboration Agreement.
65. In terms of the recitals of the registered sale deed dated 10.12.2014, the defendant nos. 2, 3 and 4 have made the following representations:

NOW THIS SALE DEED WITNESSETH AS UNDER:-
1. That in consideration of the sum of Rs.1,01,00,000/- (Rupees One Crore and One Lac Only), which has already been received by the CONFIRMING PARTY from the VENDEE, in the following manner:
..
the VENDOR and the CONFIRMING PARTY do hereby transfer, convey, assign and sell all their rights, title and interest in the said portion of the said newly constructed building, [i.e. Entire Third Floor, consisting of Three Bedrooms with attached Bathrooms, Drawing/Dining, Kitchen, Front Balcony and 25% share/area of the Entire Stilt for Car(s) parking AND ALSO Entire Terrace rights over and above the Entire Third Floor of the said newly constructed building, alongwith proportionate, undivided, indivisible and impartible ownership rights in the freehold land underneath measuring 155.55 square yards, bearing No. H-9A, situated at Kailash Colony, New Delhi], to the VENDEE above-named, who shall also have the right for use of all common entrance, passages, staircase, lift and all other common services, facilities, amenities,, easements etc., provided in the building, alongwith owners/occupiers of other portions of the said building. However, nothing herein stated shall confer or deemed to have conferred upon the VENDEE any right or entitlement to the aforesaid common parts/areas to the exclusion of concerned parties of other portions of the said building.

2. That the actual physical vacant possession of the said portion of the said newly constructed building has been delivered by the CONFIRMING PARTY to the VENDEE, on the spot.

3. That now the VENDOR and the CONFIRMING PARTY have been left with no right, title, interest, claim or lien of any nature whatsoever in the said portion of the said newly constructed building, hereby sold and the same has become the absolute property of the VENDEE, with the right to use, enjoy, sell, gift, mortgage, lease and transfer the same by whatever means the VENDEE like, without any demand, objection, claim or interruption by the VENDOR and the CONFIRMING PARTY or any person(s) claiming under or in trust for the VENDOR and the CONFIRMING PARTY.

4. That the VENDOR and the CONFIRMING PARTY hereby assure the VENDEE, that they have neither done nor been party to any act whereby their rights and title to the said portion of the said newly constructed building may in any way be impaired or whereby they may be prevented from transferring the said portion of the said newly constructed building.
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6. That the VENDOR and the CONFIRMING PARTY hereby assure the VENDEE, that the said portion of the said newly constructed building is free from all kinds of encumbrances such as prior Sale, Gift, Mortgage, Will, Trust, Exchange, Lease, legal flaw, claims, prior Agreement to Sell, Loan, Surety, Security, lien, court injunction, litigation, stay order, notices, charges, family or religious dispute, acquisition, attachment in the decree of any court, hypothecation, Income Tax or Wealth Tax attachment or any other registered or unregistered encumbrances whatsoever and if it is ever proved otherwise, or if the whole or any part of the said portion of the said newly constructed building is ever taken away or goes out from the possession of the VENDEE on account of any legal defect in the ownership and title of the VENDOR and the CONFIRMING PARTY, then the VENDOR and the CONFIRMING PARTY will be liable and responsible to make good the loss suffered by the VENDEE and keep the VENDEE saved, harmless and indemnified against all such losses and damages suffered by the VENDEE.
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66. The abovementioned recitals of the registered sale deed are clear and unambiguous. It has been clearly represented by the defendant nos. 2, 3 and 4 in the registered sale deed that suit property is free from any encumbrances / mortgage and that the actual physical possession of the suit property has been handed over to the plaintiff at the spot.
67. Apart from the above aspect, Section 59 of the Transfer of Property Act, 1882 states as under:
59.Mortgage when to be by assurance.Where the principal money secured is one hundred rupees or upwards, a mortgage [other than a mortgage by deposit of title-deeds] can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by 6 [a registered instrument] signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

68. A perusal of the alleged possession letter dated 25.06.2013 executed by the defendant no.3 in favour of the defendant no.6 reveals that the same refers to creation of a usufructuary mortgage in favour of the defendant no.6.
69. Further, defendant no.1 filed an affidavit pursuant to orders dated 22.10.2018 and 11.12.2018, in which he has affirmed that a usufructuary mortgage was created in his favour by defendant no.3 (Harish Arora).
70. A usufructuary mortgage is required to be compulsorily registered as per Section 59 of the Transfer of Property Act, 1882. However, the purported mortgage documents sought to be relied upon by defendant nos. 1 and 6 viz. the Facility Agreement, Declaration, Memorandum of Creation of Mortgage and Possession letter (all dated 25.06.2013) are all unregistered.
71. In Pradeep Kumar and Another v. Raj Kumar4, wherein the appellants were claiming possession of the suit property on the basis of an unregistered mortgage deed, this Court inter alia held as under:
20..Unregistered documents relating to immovable property cannot be accepted as evidence to establish the possessory right of the appellants. Even assuming there was a mortgage deed, it proves that the ownership of the property was with the plaintiff.

72. In Sh. Dinesh Sharma v. Mrs. Krishna Kainth5, this Court inter alia held as under:
35. I agree with the aforesaid conclusion of the Trial Court. Even assuming for a moment that a mortgage was created or agreement to sell was entered, the same having not been registered, no right would accrue in favour of the appellant/defendant to justify the possession of the suit property and the status of the appellant/defendant shall remain as that of a tenant. Hence, the defence that has been put forth by the appellant/defendant is not such a strong defence that will enable him to succeed in the suit, even after the matter is put on trial.

73. Moreover, had the version set out by the defendant nos.1 and 6 been true, as per which, the original copy of the Collaboration Agreement dated 12.12.2011 was deposited with the defendant no.6 pursuant to memorandum of deposit for creation of mortgage on 25.06.2013, there is no explanation whatsoever in the Written Statement filed on behalf of the defendant nos.1 and 6 as to how the Collaboration Agreement came to contain the following endorsement:

74. Having not averred anything with regard to the aforesaid endorsement in the Written Statement, the defendant nos.1 and 6 have sought to give an explanation of the same in the reply to the application under Order XII Rule 6. The relevant portion of the said reply is as follows:-
REPLY ON MERITS
9.It may be submitted that in order to repay the loan so advanced and granted by the answering defendants to the defendant no.3 namely Shri Harish Arora, the said defendant no.3 had approached the answering defendant and had requested that the said property be released by them on the repayment of the loan and in furtherance thereto the said defendant no.3 informed the answering defendant that he will try to get a loan from a Third Party in order to repay the amount given by the answering defendant and in pursuance thereof the original Collaboration Agreement was taken to the Punjab National Bank by defendant no.3 along with an employee of the answering defendant for the purpose of creating a mortgage of the said property, but however, the said transaction could not fructify, as after due diligence, the said Bank came to know that the suit property had been sold to the plaintiff no.1 herein and as such the said Bank official made the endorsement on the Collaboration Agreement and the same was returned to the answering defendants, though the said Collaboration Agreement was never in possession of defendant no.3 or any other defendants other than the defendant no.1 and 6.

75. Thus, without making any averment whatsoever in the Written Statement, it has been sought to be contended in the reply to the application under Order XII, Rule 6 CPC, that:
a) the original copy of the Collaboration Agreement was released by the defendant no.6 to the defendant no.3;
b) the Collaboration Agreement was taken by the defendant no.3 to the Punjab National Bank; and
c) the aforesaid was done for the purpose of creating a mortgage on the suit property.
76. Each of the aforesaid assertions are untenable on the face of it. Firstly, there is no reason as to why the defendant no.6 would part with the so called title documents (the only security purportedly available with the defendant no.6 given by defendant no.3, who was by then admittedly a defaulter in terms of the facility agreement). Secondly, it is completely untenable as to why the defendant no.6 would leave it to the defendant no.3 to pursue with the Punjab National Bank for the purpose of creating a mortgage of the said property when there was prior mortgage in favour of the defendant no.6. Thirdly, and importantly, from the aforesaid averment of the defendant nos. 1 and 6, it becomes apparent that they became aware of the sale of the suit property in favour of the plaintiff no.1. There is no explanation as to why the defendant nos.1 and 6 sat over the matter thereafter and did not take any action whatsoever against the defendant no.3, after having learnt that the defendant no.3 had sold the property purportedly mortgaged with them. In this regard, it is notable that the alleged facility agreement dated 25.06.2013 also contains an arbitration clause in the following terms :
12. Dispute Resolution: In the event of any dispute or differences arising under this Agreement including any dispute as to any amount outstanding, the real meaning or purport hereof (Dispute), such Dispute shall be finally resolved by arbitration. Such arbitration shall be conducted in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any amendment or re-enactment thereof by a single arbitrator to be appointed by DNF. The venue of arbitration shall be at as decided by DNF and the arbitration shall be conducted in English language.

No attempt whatsoever was made by the defendant nos. 1 and 6 to invoke the arbitration clause with respect to the breach of the purported Facility Agreement dated 25.06.2013 by the defendant no.3.
77. The only step that appears to have been taken by defendant nos.1 and 6 is to send a Loan Recall Notice dated 12.06.2018, which was conveniently issued at around the same time when the dispute arose between the plaintiff no.1 and the defendant no.1.
78. Even if all the above circumstances were to be ignored, assuming that the defendant no.6 disbursed a sum of Rs.50,00,000/- to the defendant no. 3 (Harish Arora) pursuant to the Facility Agreement dated 25.06.2013, there is no reason as to why the balance sheets, financial statements and summary of accounts of the defendant no.6 as on 31.03.2014 would not reflect the same. The notes to financial statement of defendant no.6 company for the year ended 31.03.2014 reflect the names of certain individuals under the head Short term loans and advances. The notes to financial statement of the defendant no.6 company for the year ended 31.03.2014 is reproduced hereinbelow:

As can be seen, there is no reference to any loan being advanced to defendant no.3.
79. Section 128 of the Companies Act stipulates that every company shall keep at its Registered Office, books of accounts and other relevant books, papers and financial statements which give a true view of the state of affairs of the Company and also stipulates punishment for the contravention of the said stipulations. Section 129 of the Companies Act provides that the financial statements shall give a true and fair view of the company and shall be in accordance with the accounting standards. Section 129 of the Companies Act further provides that in case there is a contravention of the aforesaid provision, then the Managing Director or other officers stated in the said provision shall be liable to be punished. Further, Section 447 of the Companies Act provides that any person who is found guilty of fraud shall be punishable with imprisonment which shall not be less than 6 months, but which may extend to 10 years, and a fine may also be levied in addition. Section 448 of the Companies Act provides that in any return, report certificate, financial statement, prospectus under any provision of the Act, any person who makes a statement which is false in its material particulars knowing it to be false or omits any material fact knowing it to be material, then he shall be punished for fraud under Section 447. Section 449 of the Act states that in case a person gives false evidence upon any examination on oath or solemn affirmation about any matter arising under the Companies Act, such a person shall be liable to be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and with a fine which may extend to ten lakh rupees.
80. In this regard, the learned counsel for the applicant has rightly submitted that the contention regarding disbursal of amounts by defendant no. 6 to defendant no.3 under the so called Facility Agreement, fly in the face of Sections 128, 129, 447, 448 and 449 of the Companies Act, 2013, inasmuch as no such disbursal of amount by defendant no.6 to defendant no.3 is reflected in the financial statement of the defendant no.6.
81. In the Written Submissions filed on behalf of the defendant no.1, reliance has been placed on Section 58 of the Transfer of Property Act which states that a mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
82. On the basis of the aforesaid, it is sought to be submitted that it is not necessary that money had to be disbursed at the time of the creation of mortgage but could have been done in the future also. This plea of the defendant nos. 1 and 6 is at complete variance with the categorical case set out in the Written Statement filed on behalf of the defendant nos. 1 and 6 to the effect that the defendant no.6 had disbursed an amount of Rs. 50,00,000/- to defendant no.3.
83. Finally, the defendant nos. 1 and 6 have failed to show any document supporting their plea that they have been in possession of the suit property since 25.06.2013. On the other hand, the plaintiffs have annexed a copy of the stamped Rent Agreement dated 26.12.2014, which shows that the suit property was rented out to one M/s Unicare Health India through its proprietor Mr. Vijendra Kumar Singh w.e.f. 26.12.2014. The plaintiffs have also annexed a copy of a ledger which clearly shows payments of rental payments, being made by one Mr.Vijendra Kumar Singh to the plaintiff no.1 w.e.f. 06.02.2015 till 17.08.2017 (date of last payment by Mr. Vijendra Kumar Singh), which is around when the plaintiffs aver that Mr. Vijendra Kumar Singh vacated the suit property.
84. From all the above circumstances, it is evident that the defence set out by the defendant nos.1 and 6 is a sham and completely untenable, and therefore warrants that a judgment be passed under the provision of Order XII Rule 6 of the CPC.
85. A Co-ordinate Bench of this court in Anu Gupta v. Vijay Gupta and Others6, after taking note of the judgments of Division Benches of this court in Rajeev Tandon v. Rashmi Randon7, and P.P.A Impex Pvt. Ltd. v. Mangal Sain Metal8, inter alia held as under:
23. With regard to Order XII Rule 6 of the CPC, the Division Bench of this Court has observed in Rajeev Tandon v. Rashmi Tandon, 2019 SCC OnLine Del 7336, that for the purposes of Order XII Rule 6 of the CPC, the admissions can be in the pleadings or in the documents filed on behalf of the parties. The admissions can also be constructive admissions, which can be inferred from the vague and evasive denial in the Written Statement. In P.P.A Impex Pvt. Ltd. v. Mangal Sain Metal, 2009 SCC OnLine Del 3866, the Division Bench of this Court has observed that the approach to be taken under Order XII Rule 6 of the CPC is akin to that to be taken while considering a leave to defend application in a Order XXXVII suit. If a defence amounting to moonshine has been presented, it should be summarily dismissed by not granting leave to defend and by decreeing the suit forthwith. The Courts are already groaning under the weight of bludgeoning and exponentially increasing litigation. The weight will unvaryingly increase if moonshine defences are needlessly permitted to go to trial.

86. Reference may also be made to the judgment of this court in Tirath Ram Shah Charitable Trust and Ors. v. Mrs. Sughra Bi @ Sughra Begum (Decd)9 wherein it was inter alia observed as under:
12. In the case of Charanjit Lal Mehra v. Smt. Kamal Saroj Mahajan, reported as (2005) 11 SCC 279, the Supreme Court has held that an admission under Order XII Rule 6 CPC can be inferred from the facts and circumstances of the case and that Order XII Rule 6 CPC has been enacted to expedite trial and where the courts find that the suit can be disposed of on such admissions, it should not hesitate from doing so. It is also relevant to refer to the observations of a Division Bench of this Court in the case of Vijaya Myne v. Satya Bhushan Kaura, reported as 142 (2007) DLT 483, where in the light of the innumerable authorities on Order XII Rule 6 CPC, it was held that admissions can be constructive admissions and need not be specific or expressive, which can be inferred from vague and evasive denial in the Written Statement while answering specific pleas in the plaint and further, that admissions can even be inferred from the facts and circumstances of a case.

87. Confronted with a situation where the material/documents on record simply do not support the case set out by the defendant nos.1 and 6 in the Written Statement and in view of the ex-facie untenable contentions/ averments made by the defendant nos. 1 and 6, this court finds that the present case is a fit case for a decree to be passed under Order XII Rule 6 of the Code of Civil Procedure, 1908.
88. In the circumstances, the following decrees are passed:
i. a decree of possession is passed in favour of the plaintiff no.1 and against the defendants, directing the defendant no.1 to vacate the property and handover the vacant, peaceful and actual possession of the Suit Property to the plaintiff no.1.
ii. A decree of permanent injunction is also issued in favour of the plaintiff no.1 and against the defendant nos. 1 to 6 thereby restraining the defendant nos. 1 to 6, their servants, agents, employees, representatives, heirs, etc. and / or others acting for and on their behalf from creating any nature of third-party interest and/or encumbrance and/or dispossessing the plaintiffs from the Suit Property.
89. The prayer as regards payment of user and occupation charges by the defendant nos.1 and 6 to the plaintiff no.1 will require evidence to be adduced, and will be considered independently.
90. The present application stands disposed of in the above terms.
CS (OS) 534/2018
91. List on 19.03.2024.

SACHIN DATTA, J
DECEMBER 20, 2023
dk
12007 SCC OnLine Del 828
2AIR 2010 SC 1890
3AIR 1988 Delhi 153
4 2023 SCC OnLine Del 4465
5 2022 SCC OnLine Del 1142
6 2023 SCC OnLine Del 2391
7 2019 SCC OnLine Del 7336
8 2009 SCC OnLine Del 3866
9 2015 SCC OnLine Del 13655
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I.A. No. 6708/2020 in CS (OS) 534/2018 Page 1 of 30