Allowed

Sh Darshan Mohan Singh Nanda and Ors. v. Union Bank of India and Ors.

DRT16 Aug 2022APPEAL/1/2022

Case brief

AI extract

What is this about?

The DRT allowed an appeal by an auction purchaser challenging a leasehold rights certificate issued with a reduced area compared to the auction proclamation. The court held the bank liable for regularization charges claimed by the corporation and directed compensation to the purchaser.

What did the court decide?

Impugned order set aside. Bank liable to compensate for any regularization charges levied by RIIICO. RIIICO given extension of two years for construction.

Sh Darshan Mohan Singh Nanda and Ors. versus Union Bank of… — Company and Corporate | DRT (2022)

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AppeallOtl2022

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Sh. Darshan Mohan Singh Nanda v. Union Bank of India

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76.08.2022

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Item no.69

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Present: Sh. OP Mathur, Counsel for the appellant Sh. Hemraj Siddharth, Counsel for respondent no.1/bank Sh. Nikhil Jain, Counsel for respondent no.7 i.e. RIICO

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Matter is taken through VC.

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Arguments heard. Appeal is allowed with direction, vide separate detailed order of even date.

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(Rajesh Malhotra) Presiding Officer DRT-II, Delhi

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Appeal No. 0t/2022 Darshan Mohan Singh Nanda & Anr. V. Union^Bank of^India &^01s.

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' Before RAJESH MALHOTRA, Presiding Officer, Debts Recovery Tribunal-Il, Delhi. Appeal No. 01/2022

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Date of Institution: 07 .03.2022

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Date of decisi on: 7 6.08.2022

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1 Sh. Darshan Mohan SinghNanda
S/o Capt. Mohinder Singh Nanda
R-/o Commander Ship Repairs,
ll2/41, Maliha Street, P.O. Box 7151,
Sharjah, United Arab Emirates.
2 Smt. Tejinder Kaur Nanda
Wo Sh. Darshan Mohan Singh Nanda
R/o Commander Ship Repairs,
ll2l4l, Maliha Street, P.O. Box 7151,
Sharjah, United Arab Emirates. ..Appellants
Versus
1 Union Bank of India
Asset Recovery Branch,
F-14-15, Connaught Place,
New Delhi - 110001
2 M/s Atul Food Products,
2nd floor, Aiwan-E,
Ghalib Building, Mata Sundari Lane,
New Delhi - 110002
3 Sh. A.C. Gulati (since deceased)
2nd floor, Aiwan-E,
Ghalib Building, Mata Sundari Lane,
New Delhi - 110002
Through his legal heirs:-
i) Smt. Saroj Bhutani
D/o Late A.C. Gulati
R/o R-407, Sainik Farm,
New Delhi
iD
Smt. Kiran Jolly
D/oLate A.C. Gulati
R/o 4-407, Defence Colony,

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e3 (RAJESH MALHOTRA) PRESIDING OFFICE& DRT-II, DELHI.

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AppealNo.0t2022 Darshan Mohan Stngh Nada & Anr. V Union Bank of Indra & Ors

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New Delhi iii) Smt. Sushila Gulati Wd/o Late A.C. Gulati R/o 115, CountryLane, Sainik Farm, New Delhi

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4 Sh. B.R. Dougall 2nd floor, Aiwan-E, Ghalib Building, Mata Sundari Lane, New Delhi - 110002

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5 Sh. Atul Gulati R/o M-17, NDSE, Part-II, New Delhi 6 Sh. Om Prakash Gulati R/o M-17, NDSE, Part-II, New Delhi 7 Raj asthan Industrial Development & Investment Corporation Ltd. (RIICO) Moti Dungari Road, Alwar, Rajasthan ..Respondents

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Argued By: Sh. OP Mathur, Ld. Counsel for the appellant, Sh. Hemraj Siddharth, Counsel for respondent no.l/bank, Sh. Nikhil Jain, Counsel for respondent no. 7 i.e. RIICO.

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FINAL ORDER

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This appeal has been filed under Section 30(1) ofthe Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'RDDB&FI Act'), by the appellant Certificate Debtor No. 5, against the impugned order dated 19.02.2022 passed by Ld. Recovery Officer-Il, DRT-II, in RC no. 46 of 2002 in OA no. 653/2000.

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT-N, DELHI,

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Appeil No. 012022 Darshan Mohan Singh Nanda & Anr. V Union Bank of India & Ors

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As per the facts ofthe case, previously vide order dated 04.01.2006, Ld. Recovery Officer put the property bearing plot no. 200, MIA, Alwar, Rajasthan, admeasuring 20800 sq. mtr. with sUperstructure thereon for auction sale. In pursuance of passing of the order dated 4.1.2006, the registry attached to the court of Ld. Recovery Officer issued a proclamation of sale dated 4.1.2006, thereby mentioning the description of the property in question as "Property bearing Plot No. 200, MIA, Alwar, Rajasthan (measuring 20800 sq. mtr) with superstructure thereon". The respondent No.l bank also got published pamphlets for information to the general public about the aforesaid public auction and in the said pamphlets also area of the property in question was mentioned as 20800 sq. mtr. Believing on the representation of the respondent no.l bank that area of the plot in question is 20800 sq. mtr, the appellants participated in the said public auction and were declared as the highest successful bidder for purchasing the aforesaid plot for the highest bid of Rs.45 lakhs and the auction sale of the plot in question was duly confirmed in favour ofthe appellants on 5.4.2006 and the necessary sale certificates were also issued in favour of the appellants by the court ofld. Recovery Officer on 1.6.2006. Thereafter the appellants approached respondent no.7 for issuance of leasehold rights certificates to the appellants with respect to the property in question. Respondent no.7 has issued the leasehold rights certificates to the appellants on 24.2.2016 thereby mentioning the area in question as 20000 sq. mtr. only. The appellants repeatedly visited the ofhce of respondent No.7 and requested

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S' (RAls H MALHOTRA) PRESIDING OFFICER, DRT-II, DELHI.

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Appeal No. 01D022 Darsharl Mohan Singh Nanda & Anr. V. Union B&* of India & Ors

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for issuance of correct leasehold rights certificate thereby mentioning the area of the plot as 20800 sq. mtr., however the officials of respondent No.7 did not pay any heed to the bonafide requests ofthe appellants and having left with no other altemate, the appellants were constrained to hle an application on the record ofLd. Recovery Officer on 17.11.2016 for lssuance of necessary directions to respondent No. 7 to issue a revised/new leasehold rights certificates to the appellants thereby mentioning the correct area of the plot as 20655.46 sq. mtr. or 20800 sq. mtr. as the case may be, without any tariffs or penalties because of *re reissue ofthe leasehold rights certificates in favour ofthe appellants. The aforesaid application could not be taken up for hearing by the court of Ld. Recovery Officer for a period oftwo years approx. because ofpendency of an appeal in the present matter before the Hon'ble DRAT, New Delhi. Since the appeal was pending in DRAT, New Delhi, in the^present matter, the case file of the present R.C. was summoned by the Hon'ble DRAT, New Delhi and therefore, the application filed by the appellants on 17 .11.2016 could not be taken up for hearing by the court ofLd. Recovery Officer for a long period of two years approx. Ultimately the appellants have to file an application before the Hon'ble DRAT, New Delhi, for sending back the case file to the court of Ld. Recovery Officer. Ultimately the case file of the present matter was sent back to the court of Ld. Recovery Officer by the Hon'ble DRAT, New Delhi, and on 21.2.2019, the respondent No.l bank filed its reply to the said application of the appellants for issuance of necessary directions to the respondent No.7

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT{I, DELHI.

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App€al No. 012022 Darshan Mohan Singh Nanda & Anr. V. Union Bank oflndia & Ors

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regarding lssuance of revised./new leasehold rights certificate to the appellants. In its reply, at paragraph no. 4, it was pleaded by the respondent no.l bark:'4.That as per the evaluation made on 8.5.2000, the area of the mortgaged property was measured as 20800 sq. mtr. which 'was mortgaged with respondent No. I bank and accordingly the sale proclamation was issued with respect to the mortgaged property bearing no. A-200, MIA, Alwar, Rajasthan, mentioning the area measuring is 20800 sq. mtr. however the title deeds/ documenls are nol traceable at the branch being the old record". Thus in its reply the respondent no.l bank made an admission that the area of the plot in question was 20800 sq. mtr. which was mortgaged with the respondent no.l bank. Apart from this, at para no.9-12 of the aforesaid reply, the respondent No.1 bank has made an admission that area of the mortgaged property is 20800 sq. mtr. the relevant extract from the reply ofthe respondent no.l bank is as,^"9- 12. That the contents of para 9-12 of the petition, it is submitted that as per the valuation made on 8.5.2000, the area ofthe aforesaid mortgaged property was measured by the valuer as 20800 sq. mtr, which was mortgaged with the respondent no.l bank and accordingly the sale proclamation was issued with respect to the mortgaged property bearing no A-200, MIA, Alwar, Rajasthan, mentioning thq area measuring is 20800 sq. mtr." Along with its reply, the respondent no.l bank annexed the copy of the valuation report dated 8.5.2000, prepared by the panel valuer of the respondent no.1 bank. In the said valuation report also, the valuer ofthe respondent no.l bank has mentioned that the area of the plot

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t (RAJESH MALHOTRA) PRESIDING OFFICER, DRT.II, DELHI.

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App€al No 012022 Darshan Mohan Singh Nanda & Art. V. Union Bank oflndia & Ors.

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in question is 20800 sq. mtr. The relevant extract from the said valuation report is as:'part ii valuation: the said industrial property on Plot No 200, MIA, Alwar, Rajasthan measuring 20800 sq. mtr. happens to be in the name of m/s atul food products. The premises consists of ACC sheds and RCC roof buildings for carrying out various activities". Apart from this, a status report was also filed by respondent no.7 on 10.4.2019, wherein it was admitted by respondent no.7 that as per site report dated 30.9.2015, an excess larrJ of 652.64 sq. mtr. has been found at the site. It is respectfully submitted that in the said site report, respondent no.7 has submitted that the said excess land can be regularized after payment of charges as per charges of Rajasthan Industrial Development & Investment Corporation Ltd. (RIICO) Disposal of Land Rules. The appellants filed their objections against the status report of the respondent no.7 on 16.7.2019 thereby objecting to the contents and submissions made in the said status report of respondent No.7 and prayed that respondent No.7 may be directed to recall its leasehold rights certificate dated 14.2.2016 and issue a revised./new leasehold rights certificate to the appellants thereby mentioning the area of the plot as 20655.46 sq. mtr. or 20800 sq. mtr. as the case may be without any tariffs or penalties, because of reissue of the leasehold rights certificate in favour of the appellants. On 22.2.2019, the application filed by the appellants was taken up for hearing by the court of Ld. Recovery Officer and after conducting hearing on the said application, the court of Ld. Recovery Officer was pleased to pass the directions to respondent no.7, as "the concerned fficer of respondent no.7

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2

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT-II, DELHI.

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Appeal No 0t/2022 Darshar Mohan Sinth Nanda & Anr_ V. Union Bank oflndia & Ors.

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is directed to look into this matter keeping in view the pendency of the file before the Hon'ble DRAT, Delhi and as per the Sale proclamation Notice issued by this forum, the area mentioned is 20800 sq. mtr. and take necessary action as per law" .

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It is further averred that after passing of the order datedZ2.2.20l9, the appellants sent an email to the General Manager (Law) of respondent No.7 at Udyog Bhawan, Tilak Marg, Jaipur, Rajasthan on 8.5.2019 thereby conveying the mandate of the order dated 22.2.2019 passed by the court of Ld. Recovery Officer. Apart from this a copy of the order dated 22.2.2019 was also sent to the respondent no.7 through email dated 8.5.2019 by the appellants. Despite receipt of the order dated22.2.2019, respondent No.7 failed to issue the revised./new leasehold rights certificate to the appellants thereby mentioning the correct .area of the plot in question as 20800 sq. mtr. and because of the aforesaid willful disobedience ofthejudicial order dated 22.2.2019, passed by the court of Ld. Recovery Officer, the appellants were constrained to institute an application U/s 12 of the Contempt of Court Act 1971 r/w rule 4 & 5 of Contempt of Court (C.A.T.) Rules 1992 thereby praying to initiate contempt proceedings against the General Manager (Law) of respondent No.7 U/s 12 of the Contempt Of Court Act. On 9.4.2021, the matter was again taken up for hearing by the court of Ld. Recovery Officer and keeping in view the non-cooperative attitude of the respondent no.7 officials, the court of Ld. Recovery Officer was pleased to observe:"Despite issuance of notices to RIICO directing them *!" r:" documents

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(RAJESH MALHOTRA) PRESIDING OFFICER, DRT-tr, DELHI.

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Appe.t No 0l/2022

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Darshan Mohan Sinth Nanda & Anr. V. Union Bank oflndia & Ors.

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qua the allotment of the auctioned property with a condition that in default the concerned fficer has to appear in person. today this forum observes that only the counsel for NICO is present and no oficial from the RIICO is available and there is no written request seeking exemption of personal appearance. The dispute pending before this forum now relates to the measurement of the property auctioned by this forum. The auction purchaser has denied having receiving the title documents from the C.H. Bank, hence it is necessary for the NICO to file the title documents as per directions. This lackadaisical attitude of the NICO is not appreciated by this forum".

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It is further averred that after making the aforesaid observation, the following directions were issued by the court of Ld. Recovery Officer to respondent no.7 on 9.4.2021i"Directions: Let the Senior Regional Manager of the NICO appear in person before this forum to explain as to why non-compliance of the directions of this forum shall not be treated as hindrance in the recovery proceedings before this forum; RIICO is afforded last opportunity to comply with the order dated 29.12.2020 failing^{whichcoercive action shall be initiatedagainstthe Senior} Regional Manager of RIICO; Let the matter be listed on 26.4.202 I^" .

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Instead of complying with the observations and directions passed by the court of Ld. Recovery Officer in its order dated 9.4.2021, respondent no.7 issued a Show Cause Notice on 9.4.2021 itself i.e.^the same day to the appellants thereby raising various huge arbitrary^and

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(RAJESH MALHOTRA) PRES1DING^OFEICER' DRT.IT.^DELHT'

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Appesi No. 012022

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Da$han Mohan Singh Narda & Anr. V Union Bank oflndia & Ors.

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illegal charges on the property in question and also threatening to cancel the allotment of the plot in question. The aforesaid conduct of respondent no.7 clearly demonstrate that respondent no.7 was not having any sanctity to the^judicial orders passed by the court ofLd. Recovery Officer and the concemed officials of respondent no.7 were having mala-fide intentions to make mental and physical harassment of the appellants.

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Feeling aggrieved with the aforesaid malafide and vindictive attitude of respondent No.7 towards the appellants, the appellants were constrained to institute another application dated 24.6.2021 thereby praying to the court of Ld. Recovery Officer to restrain respondent No.7 from taking any steps in furtherance of its notice dated 9.4.2021 and to maintain status qua of the property in question. Thereafter respondent no.7 again filed another status report on the court record thereby representing that an area of 652.64 sq. mtr. is an excess area at site and seeking regularization of the said excess area from the appellants. The arguments on all the issues raised by the appellants in their aforesaid applications were heard by the Ld. Recovery Officer on 16.11.2021 and the matter was reserved for order. OL 19.2.2022, the Ld. Recovery Officer has passed the impugned order thereby dismissing all the aforesaid applications frled by the appellants. The impugned order^passed by the Ld. Recovery Officer is highly illegal, arbitrary, unwarranted and the same is not sustainable in the eyes of the law. The Ld. Recovery Officer, while passing the impugned order dated 19.2.2022, has failed to appreciate the facts relating to the present case and also failed to

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(RAJESH MALHOTRA) PRESIDING OFFICER, DRT-II, DELHI.

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Appesl No. 012022 Darshan Mohan Singh Nanda & AJu V. Unron Bank of India& Ors.

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appreciate the law applicable to the case ofthe appellants. The appellants assail the validity of the impugned order dated 19.2.2022 passed by the Ld. Recovery Officer inter-alia on following grounds:-

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It is further averred that Ld. Recovery Officer wrongly observed that the applications/objections have been filed by the appellants with inordinate delay. The leasehold rights certificate in question was issued by the respondent no.7 to the appellants on 24.2.2016 against which the appellants preferred their objections on the record of the Ld. Recovery Officer on 17.11.2016. Thus the Ld. Recovery Officer wrongly observed that the objections have been filed by the appellants on 16.7.2019.lnfact the objections/ applications filed by the appellants on 16.7.2019 was only an additional objection/application. Article 137 of the Limitation Act 1963 is a residual provision and provides for the limitation period for any application for which no period of limitation is provided in any of the Articles in the schedule annexed to the Limitation Act, 1963. Article 137 provides the period of limitation of three years from the date when the right to apply accrues.

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It is further averred that the subsequent status report filed by respondent no.7 could not be taken on record by the Ld. Recovery Officer as the same was not supported with the affidavit of any of the concemed officers of respondent no.7. Alongwith its status report dated 9.8.2021, respondent No. 7 has annexed copy of a letter dated 8.3.1979 to N4/s Sterlite Chemicals Pvt. Ltd. as Annexure-A. The first page of the aforesaid letter

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT-II, DELHI.

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Appeal No. 01,2022 Darshan Mohan Singh Nanda & Anr- V. Union Bank of lndia & Ors

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gives the impression that the said letter was dispatched by respondent no.7 to IWs Sterlite Chemicals Pvt. Ltd. through registered A.D., however respondent no.7 has failed to annex any postal receipt alogwith the aforesaid letter and therefore the said letter could not have been looked into by the court of Ld. Recovery Officer in the absence of any proof of service of the aforesaid letter upon IWs Sterlite Chemicals Pw. Ltd.

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It is further averred that appellants are not admitting the claim made by respondent no.7 that certain premium is payable by the appellants to respondent no.7 for the atleged strip of land (excess land as per the submission of respondent no.7). In support of their case the appellants are relying upon section 3lB and 34 of Recovery of Debt And Bankruptcy Act, 1993. Further, Section 100 of the Transfer Of Property Act, 1882, states that:- "100. Charges.-where immoveable property of one person is by act of parties or operation of low made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained I [which apply to a simple mortgage shall, so far as may be, apply to such charge]. nothing in this section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, 2 [and, sove as otherwise expressly provided by any lawfor the time being inforce, no charge shall be enforced ogainsl any propergt in the hands ofa person to whom such prupet$ has been transferred for consideration and without notice of the chargeJ". Thus in view of section 100 of the Transfer Of Property

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GAJEST{MALHoTRA) PRESIDING OFFICER, DRT-II, DELHI.

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ApFal No. 012022 Darshan Mohan Singh Nanda & Anr. V. Union Bank oflndia & On

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Act, 1882, no alleged charge could be enforced by respondent no.7 against the appellants as the property in question has been transferred to the appellants for consideration and without notice of alleged charge. Hon'ble High Court of Punjab & Haryana in the matter of lWs Kamla Engg. & Steel Industries Vs. Punjab National Bank (Civil Writ Petition No. 3541712019, date of decision - 10.8.2020), held that- "27.1 In so far as dues pertaining to the govt. are concerned, thqt are predominanlly lhe toxalion dues arising out of various taxing statutes, With the amendment brought in the Recovery Act, 1993 and the Securitization Act 2002 with the insertion of seclion 3lB and section 26E respectively, prior right has been conferred upon the secared creditor to recover lheir dues vis-a-vis a dues payable lo center or slale govl. or even local aulhorities. as has been discussed in lhe previous paras, if the sale is conducted by the secured creditor and the secured asset, subject matter ofsale, is charged wilh the dues ofgovt.^(not being dues emanaling out of utilization ofproperg as discussed in para 29 of the^judgmenl) including the dues under the taxing statutes, il would nol be the liability of the auction purchaser to pay the sume in view of the prior right secured in favour of the secured creditor by way of seclion 3lB of the RDB Acl, 1993 and section 26E of the SecuritiTation Act, 2002 ond their overriding elfect ofanything which inconsislenl with the provisions of lhese twin acts. It is to be noticed that lhe rights of the appellants, on purchasing lhe secured asset are virtually derivative rights from the secured creditor. thus d the auction purchaser has

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(RAJESH MALHOTRA) PRESIDING OFFICER" DRT-II, DELHI,

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Appcal No. 0l/2022 Darshan Mohar Singh Nanda & Anr- V. Union Bank oflndia & Ors.

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purchased the properA from secured creditor, it is the secured creditor which has exercised ils right of priorily to sell the secured assel lo recover and appropriale its dues and hence the auction purchaser cannot be called upon to pay the dues of the previous owner/borrower)".

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It is further averred that Hon'ble Supreme Court Of India in the matter of Sadashiv Prasad Singh Vs. Harinder Singh & ors. (I (2014) BC 654 (SC), held that:- it is an established principle of law, that a third party auction purchaser's interest in the auctioned property continues to be protected, not withstanding that the underlined decree is subsequently set aside or otherwise. It was fi.rther observed by the Hon'ble Apex Court that the law makes a clear distinction between a stranger who is a bonafide purchaser of the property at an auction sale and a decree holder purchaser at a court auction. The strangers to the decree are afforded protection by the court because they are not corurected with the decree. Unless the protection is extended to them, the. court's sales would not fetch market value or fair price of the property. It was also observed by the Hon'ble Apex Court that rights of appellants in the property purchased by them cannot be extinguished except in cases where purchase can be assailed on the ground of fraud or collusion.

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It is further averred that Ld. Recovery Officer failed to appraise that the appellants could not comrnence construction activities in the plot in question as there is a difference of 4Yo in the measurement of the area of the plot in question and respondent No. 7 is insisting huge amount in the

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P

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(

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT{I, DELHI.

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Appcal No. 01/2022 Da6han Mohan Sin8h Nanda & Anr. V- Union Bant oflndia & Ors

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form ofvery high retention charges and penalties from the appellants. In this regard the appellants have also to submit that the appellants made proper application before the court of Ld. Recovery Officer for issuance of necessary directions to respondent no.7 to reissue a fresh leasehold right certificates to the appellants thereby mentioning the area ofthe plot as 20800 sq. mtrs. Since the matter regarding the exact area of the plot in question was sub-judiced before the court of Ld. Recovery Officer since six years approximate therefore, the appellants could not commence construction activity on the plot in question as the appellants were waiting for the disposal/final decision of the issue qua the measurement of the plot in question, by the court ofLd. Recovery Officer.

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It is further averred that Hon'ble Supreme Court of India in the matter of Jantha Textiles & ors. vs. Tax RecoverT Officer & anr. 0II^{2008 BC} 372 SC) held that:- a third party auction purchaser's interests in auctioned property continues to be protected notwithstanding that underline decree is subsequently set aside or otherwise. In this regard the appellants are relying upon paragraph no. 18 of the aforesaid^judgment passed by Hon'ble Supreme Court Of India. The said para reads as under:-"18.1, ,s an established principle oflaw lhat in a lhird^party auclion,^purchasers inlerest in the auctioned property continues to be protected notwithstanding that the underline decree is subsequently sel aside or otherwise. lhe principle has been stated and reallirmed in a number of judicial pronouncements by the privy counsel and lhis courl."

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1D '( (RAJESH MALHOTRA) PRESIDING OFFICER, DRT-II, DELHI.

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Appeal No. 012022 Darshan Mohan Singh Nanda & Anr- v. Union Bank oflndia & Ors.

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It is further averred that respondent no. I bank in its reply to the application ofthe appellants admitted that area ofthe property in question is 20800 sq. mtrs. The relevant extract from the reply of the respondent No. 1 bank is as under:-'9-12.That the contents of para 9-12 of lhe petition, it is submitted that ds pq lhe voluation made on 8.5.2000, the areo oflhe aforesaid mortgaged properly was meas red by the valuer as 20800 sq. mtr, which was mortgaged with the respondent No. I bank and accordingly the sale proclamation was issued with respect to the mortgaged proper$ bearing no A-200, MIA, Alwar, Rajasthon, mentioning the area measuring is 20800 sq, mtr."

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It is further averred that respondent no.l bank also annexed the copy of the valuation report dated 8.5.2000, prepared by the panel valuer of the respondent no.l bank. In the said valuation report also, the valuer of the respondent no.l bank has mentioned that the area of the plot in question is 20800 sq. mtr. The relevant extract from the said valuation report is:"Port II Valuation: the said industrial propeily on Plot No. 200, MU, Alwar, Rajasthan measuring 20800 sq. mtr. happens lo be in the name of Mh Atul Food Products. the premises consists of ACC sheds and RCC roof buildings for carrying out various activities".

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It is further averred that Ld. Recovery Officer wrongly observed that the appellants have failed to produce any document of title, possession letter, allotment letter or any other correspondence with respondent no.7 which supports the submissions and claim of the appellants. Whereas, vide order

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(RAJESH MALHOTRA) PRESIDING OFFICE& DRT.II, DELHI.

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Appesl No. 0112022 Darshan Mohan Singh Nar 8 & Aff. V. Union Banl of hdia &^Ors

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dated 4.1.2006, the Ld. Recovery Officer put the^property bearing Plot No. 200, MIA, Alwar, Rajasthan, admeasuring 20800 sq. mtr. with superstructure thereon for auction sale at the reserved price of Rs.22,50,000/-. The auction schedule was fixed to taken^place on 20.2.2006 at ll:00 am. In pursuance of passing of the order dated 4.1.2006, the registry attached to the court of Ld. Recovery Officer issued a proclamation of sale dated 4.1 .2006 thereby mentioning the description of the property in question as under:- "property bearing Plot No. 200, MIA, Alwar, Rajasthan (measuring 20800 sq. mtr) with superstructure thereon". Apart from this, the respondent no.l bank also^{got published} pamphlets for information to the general public about the aforesaid public auction and in the said pamphlets also area of the property in^question was mentioned as 20800 sq. mtr. Thus it is wrong to say that the appellants failed to place on record any documents in support of their claim before the court ofLd. Recovery Officer.

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It is further averred that Ld. Recovery Officer wrongly admitted claim of respondent no.7 that strip of land in question is an excess land which needs to be regularized by the appellants by paying the premium and other charges applicable under the Rajasthan tndustrial Development & Investment Corporation Ltd. (RIICO) Disposal Of Land Rules, 1979. The Ld. Recovery Officer failed to appreciate that the sale consideration paid by the appellants to the respondent no. 1 bank was for entire land of 20800 sq. mtr. and not for 20000 sq. mtr. Thus in case any premium or other charges, ifany, are payable for the strip ofland in question, it is the duty

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(RAJESH MALHOTRA) PRESIDING OFFICER, DRT{I, DELHI.

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Appeal No. 0 12022 Darshan Mohan Singh Nanda & Anr. V. Union BanI oflndia & Ors

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of the respondent no.l bank to pay these chargep/premium to respondent no.7 as the sale consideration received by the respondent no.l bank from the appellants is for 20800 sq. mtr. land and not for only 20000 sq. mtr Land. Ld. Recovery Officer wrongly observed that it was the duty of the appellants to examine the details of the property in question before bidding for the same, without appreciating the fact that it is not humanly possible to carry out measurement of the land in question by any individual within a short span of time. Apart ftom this, the respondent no.l bank itself has published the pamphlets thereby mentioning the area of the plot in question as 20800 sq. mtr. and the proclamation of sale issued by the court of Ld. Recovery Officer also mentioned the area of the property as 20800 sq. mtr. therefore, the appellants acted on the representation made to them by the respondent no.l bank as well as by the court of Ld. Recovery Officer who issued the notice of sale^proclamation of the property in question thereby mentioning the area of the property as 20800 sq. mtr.

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Prayer was accordingly made to set aside the impugned order dated 19.2.2022 passed by the court of Ld. Recovery Officer in the interest of justice and thereby pass necessary directions to the respondent no.7 to issue a revised/new leasehold right certificate to the appellants thereby mentioning the area of the plot in question as 2O655.46 sq. mtr. or 20800 sq. mtr. as the case may be, without any tariffs or penalties, because of the reissue of the leasehold right certificate in favor of the appellants and also direct respondent no.7 to issue the aforesaid revised/new leasehold right

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¶117

(RAJESH MALHOTRA) PRESIDTNG OFFICE& DRT-II, DELHI.

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App€al No. 012022 Darshan Mohan Smgh Nanda & Anr. v Union Bark of India & O$.

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certificate to the appellants for a minimum period of two years as the appellants are NRI who are residing in Dubai smce last 30 years approximate and the appellants requires minimum two years time to plan and execute the further course of action/construction activities on the plot ln questron.

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On notice by this Tribunal, respondent no. lAlnion Bank of India filed reply wherein it is averred that appeal is not maintainable as issues raised by auction purchaser/appellant is not within the^purview of this Tribunal. Appeal is time barred as appellant purchased the property vide auction on 20.02.2006 and the sale was confirmed on 05.04.2006. After issuance of sale certificate this Tribunal became functus officio. Appeal is liable to be dismissed on principal of caveat emptor, as he should have exercise the due diligence before purchasing the property in auction. Appellant has not claimed against the respondent bank in the proclamation of sale and clause no. I it is mentioned that "the particulars specified in the annexed schedule have been stated to the best information of the undersigned, but undersigned shall not be answerable for any error, mis-statement or omission in this proclamation. The sale was conducted on 20.02.2006 and present appellant was declared as successful bidder for Rs. 45.00 lacs. The sale was confirmed on 05.04.2006 without mentioning the area of the property, which was never questioned or challenged by appellant/auction purchaser at any point oftime and hence appeal is not maintainable and deserves to be dismissed. Ld. Recovery Officer issued the sale certificate dated 01.06.2006 in favour ofappellanV

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¶123

(illpsn(rn*rorna) PRESIDING OFFICE& DRT-II, DELHI.

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App€alNo. 0l/2022 Da$har Mohan Sngh Nanda & Anr. V Union Bank oflndia & Ors

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auction purchaser. Appellants have been enjoying the ownership of the property since 2006 without any objection. As per site report dated 27.03.1997 conducted by the RllCO/respondent no.7, the area of plot has been reported as 20,655.46 sq. mtr. As per site report dated 30.09.2015 conducted by RllCO/respondent no. 7 the area of said plot has been reported as 20,652.64 sq. mtrs. AppellanVauction purchaser in his appeal himself admitted that as per information the plots are not exactly measuring 20,000 or 8,000 sq. mtrs. respectively and most of these plots are having the variance of 3o/o to 5olo in measurements. Appellants themselves prayed before this Tribunal to reissue lease hold certificate of the said plot mentioning the area as 20,655.46 or 20,800 sq. mtr. On 10.03.2022, respondent no.7 has cancelled the allotment of the aforesaid plot on the ground for non-compliance of the terms & conditions of the allotment and hence, the present appeal became infructuous. The dispute of area of mortgage property, if any, is now subject matter of RIICO/ respondent no.7. During the pendency of the present recovery proceedings, the certificate debtor and objector have approached to certificate holder bank to settle the present account as fulI & final amount offering to pay Rs.41,3 4,5001- towards full and final settlement of the loan account The CH bank has approved and accepted the said settlement for an amount of Rs.41,34,500/- and CH bank has received the entire settlement amount. CH bank filed MA no.7612020 before this Tribunal to close present RC no. 46/2002 which is already allowed vide order dated

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¶128

(RAJESH MALHOTRA) PRESIDING OFFICER" DRT-II, DELHI.

¶129

Appeal No. 0112022 Darshan Mohan Singh Nanda & Anr. V. Union Bank of India & Ors

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¶131

23.09.2020 and RC has been closed. Accordingly, present appeal be dismissed.

¶132

Respondent no.7/RIICO filed affidavit of Sh. Sunil Kumar, Deputy Manager, RIICO wherein it is averred that plot no. 4-200, admeasuring 20,000 sq. mtrs. at Industrial Area, MIA, Alwar was allotted to Starlite Chemicals Pvt. Ltd. vide allotment letter dated 08.03.1979 for establishment of Chemicals Industrv on terms and conditions mentioned therein. Permission for change of name of company was granted as Hindustan Cromates Ltd. and deed of modification was executed on 06.06.1979. Possession of plot measuring 20,000 sq. mtr. was handed over to the allottee. The said allottee had unauthorized possessed over some land of RIICO. The Recovery Officer had auctioned the excess land without prior permission of RIICO. The Transferee Company can claim to the extent of only 20,000 sq. mtr. as per allotment in favour of allottee. The Transferee Company did not deposit premium of excess land. The excess land./strip of land can be regularized with deposition of premium of land as per prevailing rule of RIICO disposal land rules and oflice order of the corporation. The Transferee Company has failed to complete construction by covering at least 20o/o of fhe Plot area with pakka structure lupto 23.02.2018 and deposit annual due to the corporation. Therefore, allotment was cancelled ot 10.03.2022. Appellant filed appeal on 12.05.2022 before MD RIICO, which was allowed with conditions. The allotment was restored and allottee was directed to deposit cost of land for

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-a

¶134

(RAJESH MALHOTRA) PRESIDING OFFICER, DRT.II, DELHI.

¶135

Appeal i.lo. ol2o21 Da6han Mohan Singh Na a&Anr.^{v-UnionBa*of lndia&Ors.}

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¶137

regulaqjzatiop of excess^{land.Prayer was accordingly madeto dismiss the} ..i'... . :.::; present appeal qua respondent no.7. 'lir.l.i:r,

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Service of respondent no.^{2 to 6 was dispensed with being proforma} parties on application IArc. 14612022.

¶139

I heard Ld. Counsel for the parties and have also^{gonethroughthe} documents on record. During the arguments Ld. Counsel^{for all the parties} AS made their submission in verbatim to their^{respective pleadings} mentioned in para no. 2 to 4 above.

¶140

Admittedly, the plot of CD vide no. 200, MIA, Alwar, Rajasthan was auctioned vide proclamation dated 04.01.2006 reflecting the area of the said plot as 20,800 sq. mtr. The said plot was purchased by present appellant auction purchaser for sum of Rs. 45.00 lacs being the highest bidder and the auction sale of the said plot was confirmed on 05.04.2006 and sale certificate was issued in his favour on 01.06.2006, which also reflects the area of plot as 20,800/- sq. mtr. However, respondent no. 7 issued lease hold right certificate to the appellants on 24.02.2016 mentioning the area in question as 20,000 sq. mtr. only, against the area of 20,800 sq. mtr. purchased in auctioned sale. However, on the spot appellant is having areaof20,655.46 sq. yards against the allotted area of 20,000 sq. yards. Respondent No.7 has annexed copy of a letter dated 8.3.1979 to lWs Sterlite Chemicals Pvt. Ltd. as A-nnexure-A, which also reflects the area of industrial plot as 20,000 sq. mtr. On the other hand responded no.l/bank has not produced the title documents of this

¶141

,

¶142

'/ (RAJESH MALHOTRA) PRESIDINC OFFICE& DRT-II, DELHI.

¶143

APP€al No^0112022 Darshan Mohan^{SinghNanda& Anr. V. Union Bankoflndia & Ors}

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industrial^{plot reflectingthe area 20,800 sq. mtrs, on the pretext that title} deeds/documents^{are not traceableat the branch being the old record.} Hou'ever, bank is^{relying upon the valuation report reflecting the area} 20,800 sq. mtrs. This amounts^{to concealment of material documentsand} an adverse inference needs to^{be taken against respondentno.I /bank with} respect to fact that the mortgage^{properry was measuring 20,000 sq. yards} only and not 20,800 sq.^yards, as mentioned^{in the proclamation of sale} and the sale certificate. Simply because the^{actual area} at^{the spot is} 20,655.46 sq. mtrs., instead of 20,000 sq. mtrs or 20,800 sq. mtrs. and respondent no. 7ruICO is demanding extra charges from the appellant/auction purchaser with respect to 655.46 sq. mtrs. does not absolve respondent bank in any manner, as the original allotment of the mortgage property was only to the extent of 20,000 sq. mtrs. Thus respondent no.l/bank is liable to retum the proportionate amount with respect to 800 sq. yards to auction purchaser/appellant alongwith interest, if any amount for extra land charged is by respondent no.TlRIICO from appellant. Principle of caveat emptor is not applicable to the present case, as the specihc measurement of the plot as 20,800 sq. yards was given in the proclamation of sale. Under such situation it is not the duty of any auction purchaser to visit the spot and make measurements regarding the authenticity of the measurements.

¶146

In sequel my observations in the preceding para, the present appeal is hereby allowed with following directions:-

¶147

t/ 1nA.lasn^rraar-uornay PRESIDING OFFICER, DRT-II, DELHI.

¶148

APPeal No. 0^U2022 Darshan^{Mohan SinghNanda& Anr. V.Union Bankoflndia & Ors}

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i. Respondent no.7/RIICO^{is entitled to recoverchargeswith respect} to etc. land measuring^{655.46 sq. mtrs,from appellant/aubtionpurchasers,} only if it is charging^{the same from the other plot holdershavingexcess} area than the allotted area, with^{respectto this industrialarea,citing} atleast 5 exemplars in this regard.

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ii. In case any amount is charged by respondent no.7/RIICO^from present appellants/auction purchasers with respect to 655.47 sq. mtrs, then in that case respondent no.1/bank will be liable. to compensate appellants/auction purchasers as in the following sub para.

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lll. Appellants/auction purchaser will be entitled to compensation equivalent to the amount which will be paid to respondcnt no.7/IUICO with respect to 655.47 sq. mtrs, or the extra amount charged by respondent no.l/bank with respect to 800 sq. yards (i.e. 1,73,0771-) alongwith simple interest @ 6% p.a. from 05.04.2006 till date, whichever is less.

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lv. Respondent no.7/NICO is hereby directed to take lenient view and thereby extend the period for completion of building and commencement of manufacturing by two years, seeing the unnecessary prolonged litigation on account of fault on the part of respondent no, 1/bank.

¶154

In view of the above directions the impugned order 19.02.2022 passed by the Ld. Recovery Officer is hereby set aside.

¶155

i*-eresu^ual-Horne; PRESIDING OFFICE& DRT-II, DELHI,

¶156

Appenl No 0l/2022 Darshan Mohan Sineh Nanda & Anr. V. Union Bank oflndia &^Ors

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Copy ofthis order be sent to Ld. Recovery Officer,^{respondentno. l/bank}

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and respondent no.7/RIICO for compliance.

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