MAJOR SINGH SIDHU  Vs INDIAN BANK AND ORS

W.P.(C) 11078/2020 Page 1 of 6
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* IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: – 18.01.2021

+ W.P.(C) 11078/2020 & C.M.No.34637/2020
MAJOR SINGH SIDHU ….. Petitioner
Through Mr.Vishwendra Verma with
Ms.Prithika Kashyap, Advs.

versus

INDIAN BAN K AND ORS ….. Respondent
Through Mr.Harshit Jain, Adv for R -1.
Mr.Vipin Singh, Adv for R -3.

CORAM:
HON’BLE MR. JUSTICE VIPIN SANGHI
HON’BLE MS. JUSTICE REKHA PALLI

VIPIN SANGHI , J (ORAL)

1. The present petition assails the order d ated 14.12.2020 passed by the
DRAT, whereby the petitioners’ appeal assailing the DRT’s order dated
24.09.2020 which rejected its S .A. (SARFAESI Application) , has been
dismissed. Under the impugned order, the DRAT, while dismissing the
petitioners’ appeal , has granted them three months’ time to surrender
possession of the property in their occupation to the respondent no.1/bank.
2. The petitioner /Major Singh Sidhu, represented by his legal heirs in
the present petition, approached the DRT by way of an applic ation under
Section 17 of the SARFAESI Act being SA No.726/2011 on 16.12.2011
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impugning notice dated 05.02.2008 issued by the respondent no.1/bank to
Shri Parmanand Jha/respondent no.2. In the said S.A., the possession
notices dated 08.11.2011 and 28.11.2 011 were also assailed and it was
prayed before the DRT that the bank be directed to accept the payments
made by the petitioner towards the outstanding dues of respondent no.2/the
borrower. The case set up by the petitioner before the DRT was that he was
a bonafide purchaser of property bearing no. B -39, HIG Flat, 3rd Floor,
Dilshad Extension, Delhi, having purchased the same for a consideration of
Rs.12 lakhs from respondent no.2 by way of registered power of attorney
dated 30.12.2004. It was his case th at though he was in possession of the
subject property ever since the date of purchase, he had not received any
notice either from respondent no.1/bank or from respondent no.2 till
November, 2011 and in fact, for the very first time on 18.11.2011, upon
return from an outstation visit, he found a possession notice dated
08.11.2011 lying in the subject property. It is only then that he learnt that the
borrower/respondent no.2 had mortgaged the subject property to respondent
no.1 in order to secure the repayme nt of the loan availed by him in the year
2004 , and upon his failing to clear the dues of the bank, the mortgaged
property had been sold in a public auction in January 2008 to respondent
no.3/Shri Anil Kumar and his wife. It was claimed that he then learnt that
though the respondent no.2 had earlier preferred an application under
Section 17(1) of SARFAESI Act being S.A.NO. 51/2008 to protect the
subject property mortgaged in favour of the bank, but as the property had
already been auctioned by then, the DRT , vide its order dated 20.02.2008,
disposed of the respondent no.2’s application by directing that if respondent
no.2 was desirous of redeeming the mortgage, he should clear the dues of
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the bank within the time granted. Owing to the respondent no.2’s failu re to
clear the dues as directed by the DRT, the bank confirmed the sale of the
subject property and issued a sale certificate in favour of respondent no.3 on
30.06.2008.
3. Upon S.A. No.726/2011 being filed by the petitioner, the DRT after
noticing that the petitioner was ready and willing to pay the outstanding
dues to the bank, permitted the petitioner to deposit the same with a
direction to the bank to keep the same in a no lien interest bearing account
till the disposal of the S.A. In the meanwhile, the bank was also directed to
maintain status quo in respect of the subject property. The S.A., however,
came to be rejected by the DRT vide its order dated 24.09.2020, by interalia
holding that the S.A. was barred by limitation. While holding so, the DRT
noted the fact that the petitioner/Shri. Major Singh Sidhu had earlier filed an
intervention application being MA No.210/2008 in the S.A. filed by the
borrower/respondent no.2 being S.A.No. 51/2008, which application was
disposed of on 25.11.2008. The petitio ner, however, did not take any steps
thereafter for over three years and filed a belated S.A on 16.12.2011. The
DRT also rejected the petitioner’s claim that he was the owner of the
property as the subject property stood transferred in his favour by way o f a
GPA dated 30.12.2004 claimed to have been executed in his favour by
respondent no.2. Furthermore, the DRT did not find any infirmity in the
auction of the subject property by the respondent no.1/bank as the same was
conducted after giving due notice to the borrower/respondent no.2 and after
following the procedure as prescribed under the SARFAESI Act. However,
keeping in view the fact that the petitioner had paid the outstanding amounts
to the bank under the orders of the DRT, the bank was directed to return the
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amount along with interest @10% p.a. within 30 days, failing which, the
bank was held liable to pay further interest @12% compounded six monthly
to the legal representatives of the petitioner, as he had expired during the
pendency of the proceed ings before the DRT. The petitioner was
simultaneously granted thirty days’ time to hand over actual and physical
possession of the subject property to the bank.
4. Aggrieved with the order passed by the DRT rejecting his S.A., the
petitioner, being represent ed through his legal representatives preferred an
appeal before the DRAT, which has been rejected under the impugned order.
Before the DRAT, the petitioners primarily urged that since they had cleared
the dues of the bank, equity was in their favour for r etaining the possession
of the subject property. It was also claimed that the petitioners, having made
the due payments, had a right of redemption under Section 13(8) of the
SARFAESI Act. Both these pleas have been rejected by the DRAT by
holding that onc e the borrower/ mortgagor/ respondent no. 2 had failed to
redeem the mortgage before the public auction was held, his attorney could
not seek to exercise the same right of redemption in its subsequently filed
S.A. as the right of redemption, if any, in fav our of the borrower/ respondent
no.2, already stood extinguished. The DRAT accordingly dismissed the
petitioner’s appeal and granted the legal representatives of the petitioners
three months’ time to surrender possession of the subject property to the
bank .
5. Before us, learned counsel for the petitioners reiterates the same
submissions as raised by him before the DRAT. He contends that the
petitioners, having cleared the outstanding payments of the bank, are entitled
to be treated as owners of the property and therefore, their rightful
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possession of the property for the last sixteen years ought not to be disturbed
at this stage. He further submits that even though the outstanding dues of the
bank as on 30.04.2007 were to the tune of Rs.13,31,615/ -, the prop erty was
auctioned by fixing a reserve price of Rs.11.50 lakhs which, in itself, makes
it evident that the auction was improper and the respondent no.1/bank was
acting in connivance with the respondent no.2/borrower.
6. Having heard learned counsel for the p etitioners, we are unable to find
merit in any of his submissions. In our view, both the DRAT and the DRT
were justified in holding that once the original borrower/ respondent no. 2,
despite having being granted opportunity to pay the due amounts had faile d
to do so, his right to seek redemption stood forfeited; then the petitioner,
who was claiming his rights under a GPA executed by the said respondent,
could no longer claim a right of redemption. Even otherwise, despite our
repeated queries, learned couns el for the petitioners has not been able to give
any justification for the delay of three years on the part of the petitioner in
preferring S.A. No.726/2011, which has been rejected. As noted
hereinabove, the petitioner had moved an application for interve ntion in the
S.A. preferred by respondent no. 2 being S.A. No. 51/2008, which
application came to be disposed of on 25.11.2008, but still the petitioner
chose to file his S.A. assailing the bank’s action only on 16.12.2011 and
therefore, it is evident that despite being aware of the bank’s action in
respect of the mortgaged property, the petitioner chose to remain silent for
over three years. The auction purchaser acquired legal and equitable rights
upon issuance of the sale certificate, which got further c emented with
passage of time. In these circumstances, both the DRT and DRAT were
justified in holding that the S.A. filed by the petitioner was grossly barred by
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limitation. For the aforesaid reasons, we find no infirmity in the impugned
order. The writ pe tition is, accordingly, dismissed along with the pending
application .

VIPIN SANGHI, J

REKHA PALLI, J

JANUARY 18 , 2021
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