Dismissed

Mohd Ali and Others v. Central Bank of India and Anr.

DRAT12 Jul 2023REGULAR APPEAL/166/2018

Case brief

AI extract

What is this about?

This appeal challenged the dismissal of a claim that shops within an auctioned mortgaged property were not sold and that appellants were statutory tenants. The court rejected the claim of tenancy based on insufficient evidence and respondent's rights, holding the auction of the entire property was valid and the appeal was dismissed.

What did the court decide?

The appeal was allowed to be dismissed with no order as to costs.

Mohd Ali and Others versus Central Bank of India and Anr. — Execution and Attachment | DRAT (2023)

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IN DEBTS RECOVERY APPELLATE TRIBUNAL, ALLAHABAD

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Regular Appeal No. 166/2018

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Mohd. Ali S/o Shri Daoodji, R/o 13, Chhipapura, Jaora, District- Ratlam (M.P.)-457276

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Usman Gani, S/o Mohd. Ji, R/o 99, Chhipapura, Jaora, District- Ratlam (M.P.)-457276

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Jagdish Chand Bhavsar, S/o Shri Verdi Chandra Bhavsar, R/o 26, Sawariya Colony, Jaora, District-Ratlam (M.P.)457276

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.……….....……………………...……………………………………………Appellants

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Versus

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Central Bank of India through its Branch Manager, Bajajkhana Branch, Ratlam (M.P.)-457001

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Shri Rajendra Pitolia (Auction Purchaser), S/o Shri Shantilal Pitolia, R/o Teachers Colony, Ratlam (M.P.)457001

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……….….………….…….………………………………………………Respondents

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Advocates who appeared in this case

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For the appellants Shri V. K. Shukla, Advocate For the respondent no. 1- None Bank For the respondent no. 2- Shri Deepak Pachauri, Advocate Auction Purchaser

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JUDGMENT

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Date of Decision: 12.07.2023

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JUSTICE R. D. KHARE, CHAIRPERSON

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The present has been filed under section 20 of the Recovery of Debts and Bankruptcy Act, 1993 against the judgment dated 27.07.2018, whereby the appeal filed by the appellants under section 30 of the said Act was dismissed by the Tribunal below.

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The brief facts of the matter are that the respondentBank had granted certain credit facilities to M/s Kalu Ram Govind Ram through its proprietor Bankat Lal Todi. In order to secure the said loan, the borrower had created an equitable mortgage over his property having area of 12365 Sq. ft. which included the shops in question. Since the borrower did not repay the loan,

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therefore, the respondent-Bank filed a Civil Suit for Rs. 32,75,502/- before the District Judge, Ratlam, but on establishment of the DRT at Jabalpur, the said Civil Suit was transferred from there to the DRT, Jabalpur, which was registered as T.A. No. 120/1098. The said T.A. was decreed in toto vide judgment dated 09.05.2000 in favour of the Bank and the recovery certificate was issued. Thereafter the execution proceedings were instituted as TAEX No. 290/2020. In the said proceedings, the respondent-Bank filed an application for attachment of the entire area of the Kamal talkies including the shops in question, which was allowed by the Recovery Officer vide order dated 10.08.2001. It is further stated that before proceeding for auction of the mortgaged property, the respondent-Bank filed a valuation report containing description of the mortgaged property containing the value of the open are as well as Cinema House and the shops in question. Accordingly, the sale notice was issued by the Recovery Officer fixing the reserve price of Rs. 60.74 lacs and the auction was fixed on 19.04.2007. The property was sold for Rs. 60.85 lacs to the respondent no. 2-Shri Rajendra Pitoliya, who was the highest bidder. The sale was confirmed on 06.11.2012 and the sale certificate was issued on 09.11.2012.

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It transpires that after auction of the property in question, the appellants filed their application before the Recovery Officer on 07.08.2015, which was rejected vide order dated 27.01.2016 directing to handover the possession of the remaining part of the mortgaged property including the shops to the auction purchaser before 04.03.2016. Against the said order, the appellants preferred an appeal under section 30 of the

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RDB Act, which was dismissed vide order impugned holding that the property which was sold is a plot of 12365 sq. ft. constituting a Cinema Hall along with shops and respondent No. 2- auction purchaser is now the owner of the whole property and it was further held that the appellants are not the tenants in the subject property, therefore, no relief can be extended to them on the plea of tenancy. Being aggrieved by the said order, the present appeal has been filed by the appellants.

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It appears that on behalf of the respondent-bank Shri G.P Srivastava advocate had appeared and filed his written argument, which is on record, but on the date fixed for hearing on 06.02.2023, he opted not to appear and argue the case.

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Learned counsel for the appellants submitted that this is an appeal filed by the third parties, who claim to be tenants of the property in question since 1947. The first claim, which was raised by the appellants before the Tribunal below, was that the entire property was having area of 10415.70 sq. feet, out of which only 8920 sq. ft. was auctioned by the Recovery Officer and the sale certificate was issued with regard to the said area only. It was further submitted that only portion of the Cinema Hall was sold, but the shops were not sold. The second objection of the appellants was that the appellants are tenants of the premises in question, therefore, the premises can be vacated in view of the provisions of Tenancy Law and not under the provisions of the SARFAESI Act or the RDB Act. The third objection of the appellant before the Tribunal below was that the shops in question were not mortgaged with the Bank,

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therefore, the auction of the same could not have been conducted by the Recovery Officer.

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Learned counsel for appellants has drawn attention of this court to the page no. 62 of the paper book, which is a photocopy of the rent receipt pertaining to the property in relation to the appellants. The learned counsel has further drawn attention of this Tribunal to the page no. 61 of the paper book, which is a map and has also drawn attention of this Court to the area as indicated in the map, which is shown to be 8920 sq. ft. The said map is plan of the Cinema Hall namely Kamal Talkies, situated at Pul Bazar, Jaora, District-Ratlam (M.P.). Learned counsel has further drawn attention of this Court to the page no. 57 of the paper book and has referred to the description of the property, which is Cinema Hall, Kamal Talkies, Pul Bazar, Jaora. It is thus argued that only Cinema Hall was sold and not the shops in question.

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Learned counsel for the appellant has also drawn attention of this Tribunal to the page no. 53 of the paper book, which is sole map and the total area shown in the map was 10415.70 sq. meters, which was cinema hall as well as shops in question. It was lastly contended that the cost of the shops was more than Rs. 2.50 crores, which has been illegally shown to be auctioned in favour of the auction purchaser on the reserve price, even the said shops were not mortgaged, therefore, the same could not have been auctioned and the said auction of the shops is not sustainable and is liable to be quashed. It is argued on behalf of the appellants that these objections, which were taken by the appellants, have not been considered by the Tribunal below.

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Learned counsel for the respondent bank stated in the written argument that the Bank had filed an application in execution proceedings before the Recovery Officer for attachment of the mortgaged property having entire area of the Kamal Talkies including the shops in question, which was allowed vide order dated 10/08/2001. It is further stated that before auction of the mortgaged property, the valuation report showing the description of the mortgaged property was filed before the Recovery Officer, which was containing the value of the land and the Cinema Hall as well as the shops in question. On the basis of the said valuation report, the property was put to auction fixing the reserve price of Rs. 60.74 lacs and the property was sold for 60.85 lacs and the Sale certificate was issued on 09/11/2012 in favour of the respondent no. 2-auction purchaser. It is thus stated that the contention of the appellants that the shops in question were not part of the auction sale dated 19/04/2007 is not tenable. However, the learned counsel further stated that the appellants had not filed any documents, which may show that they are the tenants in the subject property, therefore, the appeal filed by the appellants deserves dismissal with heavy cost.

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Learned counsel for the respondent No. 2-Auction Purchaser submitted that apart from a single rent receipt, the appellants have not filed any other rent receipts to show that they remained continuously tenants in the said premises.

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The next arguments of the learned counsel for the auction purchaser were that as per the attachment order dated 10.08.2001, the Cinema hall as well as shops were attached and valuation of the same had been got

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done by the Bank and thereafter, the auctioned the same. The respondent no. 2 being highest bidder was declared as successful bidder of the said property.

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It was also contended that the auction purchaser is in possession of entire premises and delivery of the possession was not challenged by any of the parties, therefore, the same has become final. It is therefore argued that the claim as raised by the appellants is not sustainable.

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In rebuttal, it is argued on behalf of the appellants that before the Tribunal below the Bank did not file any reply and the reply filed by the respondent no. 2 was adopted by the Bank. It is thus contended that the Bank is having full right for raising any objection and not by the auction purchaser.

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Heard the learned counsels for the parties and considered the documents available on record.

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The first question in the present case is, as to whether the shops in question were auctioned by the Recovery Officer along with Kamal Talkies pursuant to the auction dated 19/04/2007 or not? In this regard, the appellants have referred to page nos. 57 & 61 of the paper book, which are specification and description of the mortgaged property and the map of the property. At page 57 of the memo, the boundaries of the property in question are (1) East- Pakka Road (2) West- Road (3) North- Shiv Mandir (4) South-House and at page 61 of the memo, there is map of Kamal talkies as well as the shops. In this regard, the counsel for the auction purchaser has produced the valuation report dated 01.08.2005 of approved valuer, wherein the constructed area has been

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shown as 847.64 sq. mtr. i.e. 8920 sq. ft. and rest part of the property has been shown to be land. As such the description of the property given in the sale certificate and in the map are the same as given in the valuation report dated 01/08/2005 submitted by the auction purchaser along with its reply dated 01/11/2022 as well as the order of attachment dated 10/05/2001 of the recovery officer. In the said valuation report, under head no. 8, details of the property are shown as; plot12365 sq.ft. and constructed area as shops and cinema house is 9124 sq.ft. As per the valuation report, the valuation of the open land was assessed to be Rs. 52,26,767/- and the constructed area as shops and Cinema House were assessed to be Rs. 8,47,640/-. Thus the value of the open land as well as of the constructed area was totally assessed to be Rs. 60,74,000/- and the reserve price of the property in question including the shops was fixed for Rs. 60,74,000/-. Hence the contention of the appellants that shops in question were not auctioned/sold by the Recovery Officer along Cinema Hall is not tenable.

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The next question the present case is to be considered, as to whether the appellants are the statutory tenants or not and have they locus to challenge the auction sale conducted by the Recovery Officer of the Tribunal below. In this regard, the appellants have referred to page no. 62 of the paper book, which is a photocopy of the rent receipt issued by the then owner of the shops in question. From perusal of the said receipt, it appears that the same was issued in the year 1947 in the name of Daoodji and Habibji, who are the fathers of the appellants no. 1 and 2, but nothing is on record with regard to the tenancy of appellant no. 3. The impression

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of the said rent receipt creates some doubt with regard to its authenticity on observing the printing and writing of the same. Except this rent receipt, nothing has been produced by the appellants to show and prove their tenancy in the subject property. Mere producing of photocopy of a single rent receipt, the appellants cannot claim that they are the statutory tenants and have continued as such. For the sake of argument, if it may be assumed that they are the bonafied tenants of the shops in question, even then the right of the tenants is flowing from the right of the landlord. In the present case, the owner of the property in question who had mortgaged the same has never disputed the auction sale conducted by the Recovery Officer of the Tribunal below, meaning thereby the borrower/mortgagor have accepted the auction/sale of the Kamal Talkies as well as the adjoining shops. As such the appellants cannot be permitted to dispute the auction sale dated 19/04/2007 that in the said auction the shops in question were not sold. Hence the Tribunal below as well as the Recovery Officer has rightly held that the respondent no. 2 (auction purchaser) is now the owner of the whole property including the shops in question and the appellants are not the tenants of the subject property.

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In view of the aforesaid, the impugned order dated 27.07.2018 passed by the Tribunal below does not call for any interference of this Tribunal, hence the appeal is liable to be dismissed. Accordingly, the appeal is dismissed with no order as to costs.

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Justice R. D. Khare Chairperson

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VN Giri

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Mohd Ali and Others v. Central Bank of India and Anr.

Case brief

What is this about?

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Mohd Ali and Others v. Central Bank of India and Anr.

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