1. The Applicants have filed this application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (The SARFAESI Act, 2002) challenging the action taken by the Respondent Bank under The SARFAESI Act.
2. Briefly stated facts are that the Applicants No. 2 to 4 live in village Chanalheri which was created after bifurcation of Village Lukhi where the ancestral of Applicants are said to have large tract of land. As per revenue record Sh. Mula, who is known immediate forefather of the parties, is owner of land measuring 1052 Bighas 4 Biswas at Village Chanalheri. He died on 01.02.1926 and the land was mutated in the names of his three sons namely Narpat Singh, Chet Singh Chhittar Singh in equal share of, i.e., 350 bighas 8 Biswas each. Hence, the next head of the family of said Applicants, Sh. Chhittar Singh was owner of land measuring 350 Bighas 8 Biswas(Exh. A1). It is stated that thereafter they purchased large track of land from the income of said ancestral land. When Sh. Chittar Singh died in the year 1954, he was owner of land measuring 944 Bighas 6 Biswas and vide Mutation sanctioned on 04.12.1954 said ancestral family land was mutated in the name of 3 sons of Sh. Chittar Singh, namely Sh. Labh Singh, Sh. Shayam Singh and Sh. Kala Singh in equal shares which is also confirmed from Jamaband for the year 1954-55 (Exh. A2 and Exh. A3). Thereafter with mutual consent and arrangement there was partial partition of said HUF/Ancestral Land and 2/3rd share of the above land was jointly vested with the respective wives and sons of said three bothers due to which they became owners to the extent of 1/9th share in the said land which were also recorded in the Jamabandi for the year 1970-71.
Thereafter total 40 Kanals and 7 Marlas land was acquired by Haryana State Govt for construction of Markanda Channel. Consequently as per Jamabandi for the year 1975-76 Sh. Rajbir Singh, Sh. Rajinder Singh (later known to be Surinder Singh) Sh. Madan Singh, Sh. Raj Pal Sin S/o Kala Singh, Sh. Balbir Singh, Sh. Pala Singh and Sh. Mohinder Singh were shown to be the owners of land measuring 833 Kanas 5 Marlas (Exh. A6). Sh. Kala Singh died in the year 1973. It has been stated that with family funds they purchased agriculture land measuring 43 Kanals 11 Marlas at Village Sarswati Khera also known to be as Bhamajra, Tehsil Pehowa and for convenience of purchase documents 4 sale deeds were prepared in the name of then head members of the family, i.e., Sh. Labh Singh, Sh. Shayam Singh and Smt. Kamla Devi Wd/o Sh. Kala Singh. In the year 1984, 17 Kanals 12 Marlas land out of the said land was sold but the area remained unpartitioned as per Revenue Records. Thereafter in 1985 three godowns measuring 15900 sq. feet each for storing food grains were constructed partly with the family funds and partly taking loan from the SBOP. It has been stated that there had been land measuring 103 Kanals 13 Marlas situated at Village Saraswati Kheral the owners of which are stated to be Sh. Iqbal Singh Chawla (Exh. A12) who transferred a part of land measuring 103 Kanas 4 Marlas by way of lease for 99 years as per registered Lease Deed No. 271 dt. 28.10.1968 but nine months thereafter Sh. Iqbal Singh Chawla sold the said land measuring 100 Kanals 15.5 Marlas through registered Sale Deed No. 672 dt. 15.07.1969 to Sh. Charan Singh, Sh. Khazan Singh and Smt. Kirpal Kaur W/o Sh. Sadhu Singh (Exh. A14 and Exh. A15). Bare perusal of the sale deed shows that reference to lease hold rights over the said land in favour of Smt. Laj Kaur, Smt. Bachan Kaur and Smt. Samar Kaur has been made. Lately the lease hold rights were transferred in favour of Sh. Fakiria S/o Sh. Mam Raj by Smt. Laj Kaur and Smt. Bachan Kaur vide Regd. Lease Deed No. 178 dt. 21.05.1974 for land measuring 83 Kanals 3 Marlas whereas over land measuring 17 Kanals 3 Marlas the lease hold rights were with Smt. Samar Kaur (Exh. A17).
It has been further stated that as per 4 sale deeds mutations No. 590,591,592,593 dt. 15.06.1986 were sanctioned in Revenue Records entering name of Sh. Labh Singh, Sh. Sham Singh, Smt. Kamla Devi, Sh. Babu Singh, Sh. Gaje Singh and Sh. Rulda Singh as owners of land measuring 80 kanals 3 Marlas situated at Village Saraswati Khera (Exh. A23 to A26) and lease hold rights stand fully reflected in the jamabandi for the year 1990-91 (Exh. A27). Thereafter there had neither been any change in the ownership rights vesting in Sh. Labh Singh nor change in the lease hold rights vesting in Sh. Fakiria. After death of Sh. Fakiria on 21.03.2001, lease hold rights stood transferred to his legal heirs, i.e., Respondents No. 7 to 11 (Exh. A29). It has been stated that during his life time, Sh. Fakiria or Respondents No. 3 to 11 had ever transferred their rights over the said land measuring 83 Kanals 3 Marls or had created any lien over their rights except to the extent of right of user of said land to Applicants No. 2 to 4. Hence, Resp. No. 2 Bank per se could not hold or enjoy any right as mortgagee or lien holder against the property/land over which lease hold rights vested with Respondents No. 3 to 11. Further, the Applicants No. 2 to 4 had relinquished their said limited ownership rights over a part of land measuring 15 Kanals 13 Marlas out of 41 Kanals 12 Marlas at Village Sarswati Khera. Hence, their limited ownership stood restricted to land measuring 25 Kanalas 19 Marlas and that Applicant No. 4 Smt. Kamla Devi had given one of 3 godowns built on this property on lease to firm M/s. Star Rice Mills for a period of 5 years (Exh. A31). It is stated that credit facilities in the shape of Term Loan were availed from the Respondent Bank to install plant and machinery by the Applicant No. 1 and that the Bank had also extended Cash Credit (Hypothecation) Limit of Rs. 60 lakh in favour of the Applicant No. 1. It has been further stated that under pressure from the Bank, the Applicants had given 4 title deeds whereby limited ownership rights over land measuring 83 Kanals 3 Marlas stood transferred in favour of Applicants No. 2 to 4 and said three persons, Sh. Babu Singh, Sh. Gaje Singh and Sh. Rulda Singh, in the absence of consent of the said three persons the sale deed title cannot be transferred. As such in no way equitable mortgage could be created over land measuring 25 Kanals 19 Marlas over which the Applicants No. 2 to 4 had limited rights.
On 17.04.1999, partnership firm stood converted into Private Limited Company named M/s. Star Rice Industries (P) Ltd. with Sh. Madan Singh, Sushil Singh and Rajbir Singh becoming promoter directors of the said company. The company set up parboiling rice plant, silky plant and boiler in its extension programme but the bank only extended small term loan of Rs. 12.50 lakh. Moreover, instead of enhancing CC Limit the Respondent Bank reduced the same from Rs. 80 lakh to Rs. 55 lakh and during the FIs 2000-01, 2001-02 and 2002-03. Though the Bank enhanced the limit to Rs. 80 lakh in 2003-04 but it was much below the actual requirements of the Unit and was not in consonance with the norms fixed by Tandon/Chore Committee.
It has been further stated that Sh. Labh Singh, Sh. Sham Singh and Smt. Kamla Devi had formed another partnership by name of M/s. Labh Singh & Company who availed OD Limit of Rs. 40 lakh and further change and enhancement of limit was asked for from the Bank. Sh. Labh Singh and Sh. Sham Singh under pressure from the bank exchanged agricultural land measuring 50 kanals 16 Marlas situated at Village Saraswati Kheri to create security which was a sham transaction and hit by Section 23 of the Contract Act. The Bank enhanced the facility from Rs. 40 to Rs. 60 lakh. As the Bank could not take agricultural land as security, the auditor made objections and the Bank pressured Applicants No. 2 and 3 Labh Singh/Sham Singh to either change/substitute the security or to adjust the account. Since Applicant No. 2 had no source to change security, the Bank proceeded to close/adjust the said account.
In the year 2004-05 bank again reduced the limit of M/s. Star Rice Industries (P) Ltd. To Rs. 60 lakh which broke the back of the Applicant Company but later on enhanced the same to Rs. 75 lakh. During the financial year 2004-05 financial condition of the Unit worsened, the major reason being the conduct of the Respondent Bank. The unit could not genera profit. There had been outstanding of Rs. 97.49 lakh as against sanctioned Limit of Rs. 75 lakh. The Bank regularize the shortfall and enhanced the CC Limit to Rs. 98 lakh but that was not enough to make the unit viable and appreciating the needs, the Bank enhanced CC Limit to Rs. 126 lakh which was later on enhanced from time to time and in the year 2008-09 it was enhanced to Rs. 695 lakh but the Bank did wrongful act by adjusting Rs. 60 lakh liability of another firm M/s. Labh Singh & Company against the said limit.
It has been stated that though the Bank adjusted the account of M/s. Labh Singh & Company yet returned only one title deed/relinquish deed in favour of Sh. Labh Singh retaining of Sh. Sham Singh which the Bank sought to use the same with the intent to create security against facilities of Applicant No. 1 company. It is further stated that if the agriculture land of Sh. Sham Singh was not acceptable as security in M/s. Labh Singh & Company how then it is acceptable in the account of the Applicant No. 1 company. Moreover, land measuring 25 Kanals covered by Sham relinquishment deed was not a definite property. It was a part of bigger khata. Thus in no way equitable mortgage could be created against unpartitioned agricultural land. Further, the relinquishment deeds for exchanged between the brothers and was sham transaction which serve no purpose to the Bank.
It is stated that the Applicant Company failed to serve the interest. The Applicants approached the Bank for restructuring of the facilities which though the Bank agreed yet did not fulfil even though the Applicants deposited Rs. 16 lakh. The Applicants also asked the Bank to tag sales to reduce the liability and also written various letters, which were not replied by the Bank and despite meetings with the Bank Authorities, the Bank went on to declare the Applicants as willful defaulter and issued Notice under Sec. 13(2) on 24.03.2011 and then sent corrigendum dt. 25.03.2011 to the said demand notice (Exh. A51). The Applicant Company tried its best to save the unit and deposited Rs. 80,454/- and Rs. 5,551/- on 07.04.2011 go fully adjust the Term Loan Account to adjust account pertaining to purchase of Trolla Make Tata 3516. Hence, the Trolla became free from any charge of the Bank. The Applicant submitted very comprehensive objections dated 27.05.2011 to which Bank sent reply dt. 01.06.2011 which was an eye wash only. Thereafter, the Bank sent Notice dt. 06.06.2011 for handing over possession of the properties and on 29.06.2011 Bank pasted the Possession Notice seeking to take notional/symbolic possession of first 2 properties (Exh. A51, A52, A53, A54, A54).
Thereafter the Applicants were shocked to find public notice whereby the Respondent No. 1 had put land measuring 25 Kanals 19 Marlas out of total land measuring 83 Kanals 3 Marlas shown to be owned by Respondents No. 4 to 6 despite the fact that Applicants. Etc. as legal heirs of said Sh. Fakiria were lease hold right holders for 99 years (Exh. A57).
The Applicants have also stated that the Respondent Bank has not complied with Rule 8(6) besides taking objections that the notices were not published in two newspapers as required under The Act apart from the fact that the property belongs to HUF and no HUF interest is involved in the credit facilities to a firm, hence mortgage cannot be created in favour of the Bank. The Applicants have also objected to the exaggerated outstanding amount on the ground that the Bank has wrongfully debited the costs, charges, expenses besides charging of excess rate of interest. Moreover, at no stage the Bank had issued any notice or sent in any information prior to 24/25.03.2011 showing its intent to categories the account as NPA.
Thus, the Applicants have prayed that the SA be allowed and action initiated by the Bank be set aside.
3. The Respondent Bank in its Reply has stated that it is incorrect that the properties in the hands of the Applicants No. 2 to 4 are HUF properties as is evident from title deeds and latest search reports and that the properties have been acquired with the help and support of HUF funds (Exh. B1 to Exh. B6). The Respondent Bank has further stated that the properties are neither HUF nor Agricultural land. The title of the property had been sold to the husbands by Sh. Iqbal Singh and lease hold rights to the wives of the said purchasers. The title had been transferred initially by way of lease hold rights and thereafter by way of deed by Sh. Iqbal Singh Chawla and in fact the same was part of the sale transaction. The purchaser had sold their rights to the borrowers/mortgagors and now the said properties are in the hands of the secured creditor, i.e., Respondent Bank. Over the property, rice sheller is existing and various godowns are also having been constructed but no agricultural produce is being done since the last almost 40 years when the property was purchased by the borrowers/mortgagors in the year 1974 and the property is in actual physical possession and being used by the Applicant No. 1. Initially the borrower was M/s. Star Rice Mills, a partnership concern and now the present borrower, i.e., the Applicant No. 1 is a Pvt. Ltd. Company. The properties at Village Chanalheri have no relevance to the facts of the present issue as the secured assets against which the action is being taken are situated at Village Saraswati Khera. The Respondent Bank has also stated that when borrowers/mortgagors Labh Singh, Shyam Singh and Kamla Devi had the right to alienate the property and sell the same on the basis of sale deeds through which entire land has been acquired by them, then question of title and rights of the borrowers/mortgagors on the remaining 25K 19M does not arise.
The Respondent Bank has further stated that it is incorrect that there were any legal or enforceable lease hold rights in favour of Fakira and further the sons and daughters of Fakira are the inheritors of the Lease Hold Rights over 83K 3M. In fact no rights were accrued in favour of Faquira. Therefore, there was no need to take consent of either Fakira or his legal heirs for the purpose of creation of mortgage. The land right from the date of sale deed, i.e., 21.05.1974 vested in the purchaser, i.e., Shayam Singh, Labh Singh and Kamla Devi and thereafter the purchasers built godowns over the said properties in which sheller by name of Star Rice Industries Pvt. Ltd. is being run. Hence, the Bank has rightly proceeded against the property.
The Respondent Bank has further stated that it has sanctioned the facilities strictly as per norms of the Bank. Though the unit was earning profits but the directors of the company were not repaying the interest of cash credit amount and instalments of Term Loan regularly as per terms and conditions. It has been stated that the limits were enhanced or reduced as and when required keeping in view the growth of the unit and the projections given by the Company and that the liability of firm M/s. Labh Singh and Company was adjusted legally and had been duly authorized by the borrower company. With regard to the deposit of Rs. 16 lakh, the Respondent Bank has stated that the Company had not deposited the interest of Cash Credit Limit and was in default, so the company agreed to deposit the same to avoid the account from being declared as NPA. It has been stated that during the meeting on 11th May 2010, the borrowers/mortgagors were asked to regularize the account through tagging arrangement and also to close the current account maintained by the Company with the ICICI Bank Pehowa where most of the funds of this unit were being diverted which they were doing with malafide intention and in violation of terms and conditions as is evident from the fact that only Rs. 75,000/- was deposited in the account having outstanding of over Rs. 7 crores. Further, it is incorrect that the Trolla make Tata 3516 became free from any charge and no longer remained a secured asset. The borrower on its own could not decide that the said asset was no long a secured asset. As required financial papers were not submitted by the Company, the restructuring of loan was declined.
It has been stated that the Bank has not violated any rules and provisions of the Act while initiating proceedings. The notices were duly issued, served, affixed and published as per the Act and also that 30 days notice prior to sale was issued and served as per the Act. The Applicants who are willful defaulters have been unable to point out any irregularity/illegality in the action initiated by the Bank. They are making just concocted storied which have no relevance with the matter and just want to delay the recovery process. Therefore, the SA be dismissed.
4. Applicants have marked Exh. A1 to Exh. A59 on his side and the Respondent Bank has marked Exh. B1 to Exh. B31 on its side.
5. Counsel for the Applicant has argued mainly on the issue of property being HUF and that the property is agriculture land in nature and that under pressure from the Bank, the Applicants had given 4 title deeds whereby limited ownership rights over land measuring 83 Kanals 3 Marlas stood transferred in favour of Applicants No. 2 to 4 and said three persons, Sh. Babu Singh, Sh. Gaje Singh and Sh. Rulda Singh, in the absence of consent of the said three persons the sale deed title cannot be transferred. When no title can be transferred, the mortgage over the same cannot be created over land measuring 25 Kanals 19 Marlas over which the Applicants No. 2 to 4 had limited rights.
The counsel for the Applicants also stressed that the Bank had not released full amount rather it reduced the limits of the Applicants due to which they had to face difficulties in running the unit. Despite the fact that the Applicants had approached the Bank for restructuring the facilities and providing sufficient facilities, the Bank did not heed to request yet issued Notice under Section 13 on 24.03.2011 and then sent corrigendum dt. 25.03.2011 to the said demand notice (Exh. A51). The Applicant Company tried its best to save the unit and deposited Rs. 80,454/- and Rs. 5,551/- on 07.04.2011 go fully adjust the Term Loan Account to adjust account pertaining to purchase of Trolla Make Tata 3516. Hence, the Trolla became free from any charge of the Bank. The Applicant submitted very comprehensive objections dated 27.05.2011, to which Bank sent vague reply dt. 01.06.2011 and issued notice dt. 06.06.2011 for handing over vacant possession of the properties and on 29.06.2011 Bank pasted the Possession Notice seeking to take notional/symbolic possession of first 2 properties and also published notice for sale of land measuring 25 Kanals 19 Marlas out of total land measuring 83 Kanals 3 Marlas shown to be owned by Respondents No. 4 to 6 despite the fact that Applicants. Etc. as legal heirs of said Sh. Fakiria were lease hold right holders for 99 years (Exh. A57).
The Counsel for the Applicants further argued that the Bank has not complied with Rule 8(6) and prayed that the SA be allowed and action initiated by the Bank be set aside.
6. On the other hand side, counsel for the Respondent Bank has argued that the Bank has issued Notice under Sec. 13(2) Sec. 13(4) to the borrowers as well as guarantors along with publication strictly as per the rules and further argued that the property is not an agriculture land as it has structured and huge machinery installed therein. Therefore, by any stretch of imagination it could not be considered as an agriculture land and has taken support of title deed (Exh. B1 to Exh. B4) with LSR. Rather, the counsel for the Bank has argued that once the right to sell has already been granted to the purchaser through the title deeds they cannot claim that the property is under lease. In fact the contention of the Bank was that it's a proxy litigation as one other SA 59 of 2012 was also filed along with the present SA on the same day by same counsel and pleadings of both the SAs are also same which prove that the same has been filed in a collusive manner. He further pointed out that since 1980 on the mortgaged properties, godowns have been erected which itself is sufficient to prove the status of the land and that there is running rice sheller for which DM's permission was not being accorded despite the fact that the total dues to the account is more than Rs. 7 crore. It shows high handedness of highly influential persons managing the affairs even at DM Office. The counsel for the Bank has further argued that once the title deeds showing property being self acquired and having no mention of HUF, it could not be considered as a HUF property and therefore this issue is not having any force as the title deed itself clears.
Counsel for the Bank has further pointed out that the possession of this property was taken on 26.09.2011 and till then none of the Applicants has challenged the same for one year. The photographs and publications are sufficient to prove that the properties are neither agriculture nor belong to HUF and for running rice sheller the Bank has complied all the procedure before initiating proceedings. To prove his point, counsel for the Respondent Bank has drawn my attention towards Exh. B13 and Exh. B14 which is project report submitted by Star Rice Industries confirming and admitting at their own that it's a rice sheller and thereafter various letters Exh. B17 to Exh. B20 are clear admission by the Applicants, not only about their facilities availed for the purpose of sheller but also admitting of their defaults and undertakings to get it regularized.
The counsel for the Respondent Bank has further disclosed that the Applicants have started operations from ICICI Bank whereby they have issued a letter for closure of the current account. Not only this even Applicants whom restructure concessions were also granted vide Exh. B22 dt. 30.12.2010 did not comply terms and conditions of restructuring and ultimately now to derail the process has filed this SA.
7. Heard both counsel and perused the record.
Before parting with the orders, it is worth mentioning that earlier one SA No. 59 of 2012 was filed by the Applicant Ashok Kumar, Sh. Sat Pal, Pawan Kumar and Mahi Pal all sons of Fakira by making Respondent Bank as a party M/s. Star Rice Industries Pvt. Lt. along with Sham Singh Rana, Labh Singh, Kamla Devi, Reshma, Babli, Nirmala, Sheela Devi and Shushma Devi as parties. The said SA which too involved same issues was dismissed with a cost of Rs. 50,000/- and the orders passed in SA 59 of 2012 is reproduced hereunder:
"After going through the lengthy pleadings and arguments of the Applicant, it has been observed that they revolve around just one issue that the Applicants who are the legal heirs of one Fakira who have legal hold rights travelled from Laj Kaur and Bachan Kaur qua 83K 3M vide lease deed Exh. A6 dt. 21.05.1974 should have to be protected. The Applicants along with Respondents No. 7 to 11 are the legal heirs of Sh. Fakira and the lease hold rights are duly mutated as well as reflected in the sale deed and being prior to mortgage this property in connivance with the Bank officials were kept as mortgaged whereas the Bank has no right to proceed against this lease hold property where lessee hold rights are already protected under Law. Apart from this another arguments of the Applicants was that the Respondent Bank has put this property on sale without providing of notice of encumbrance to the general public. Moreover these properties are agriculture land and having all the interest of the applicant therefore, the same should have to be protected as per Law. But the Applicants who are claiming to be legal heirs of one Fakira having lease hold rights failed to place on record any such document since 1974 that whether they were ever in physical possession of this property after mortgage or even prior to mortgage after they are having lease hold rights transferred in favour of their father. Moreover, there is no document on record to suggest that lease money was ever paid by the mortgagor/borrowers to the Applicants as per pattanama. In fact allegations leveled by the Applicants against the Bank officers showing them in connivance is otherwise as the Applicants who are the LRs of the lessee has kept their own sisters on another side instead of part of their team and moreover, the Respondent Bank since mortgage of the properties was never ever disturbed or ever intimated about such lease hold rights particularly knowing well that these properties which has been converted into godown and are in possession of Respondents No. 3 M/s. Star Rice Indus. Pvt. Ltd. are using it for another purpose but never came forward for the last more than fifteen years and particularly from the availment of the loans.
Minutely going through the record, it duly transpired that the Applicants have approached their counsel along with Respondent No. 3 borrowers M/s. Star Rice Indus. Pvt. Ltd. side by sid at the same time and never raised any such objection prior to that. The borrowers have purchased aforesaid land measuring 86 Kanal 3 Maria from Swaran Singh, Charan Singh and Kirpal Kaur by way of four registered sale deeds bearing No. 179 to 182 dt. 21.05.1974. In the said sale deed there was reference to the lease deed in favour of their wives, i.e., Laj Kaur, Bachan Kaur, Samar Kaur, but there is no reference to any sub lease particularly executed in favour of Fakira. Rather vendors Kirpal Kaur and Charan Singh have given all rights to the person owners/mortgagors without mentioning of any sub lease to the Fakira and moreover along with rights they have assured that the property is non-encumbered except from leasing in their favour. In fact vendors have not only assured clear title along with lease hold rights impliedly saying that they are selling properties with all rights. Therefore, vendors cannot say at this stage that they have charge over lease deed/ownership rights vested with them. If we go through the contents of lease deed it shows that they are projecting it as agriculture land from Patanama whereas property from the very beginning is having rice shelter therein for the last 40 years as the borrowers have earlier availed facilities from State Bank of Patiala and thereafter shifted to the present Respondent Bank in the year 1997. During the intervening period neither any objection has been raised nor single document has been placed on record either by vendors or by Applicants having patanama for taking any lease money or qua possession which indicate that all this exercise are sham transactions with the motive to defraud the Bank.
Moreover, further minutely going through the record, I have observed that the possession notice which was given by the Bank on 29.06.2011, these so called Applicant/lessee never came forward till the Bank put the property on sale, particularly in another SA filed by the borrowers on the same date when the Applicant has filed this SA. The photographs which are annexed by the Bank as Annexure B4 clearly shows that the Notice were duly affixed on dated 29.06.2011 and the same was duly published too in the newspapers but the Applicants kept sleeping for more than one year and did not file objections or the case till the Bank put the property on sale. Now for more than three years they are enjoying blanket endless stay against recovery of crores of rupees.
The Applicant who cannot go beyond his prayer and pleadings in fact already enjoyed long innings in connivance with the borrower and he has chosen pawn to linger on recovery proceedings and compelling the Bank into long litigation. I am fully convinced that the land is not being used for cultivation for the last 40 years and that the borrowers/mortgagors after purchasing the land in 1974 have constructed godown, building, put in shelter therein. Hence, there is no question arises for any such type of lease hold which are otherwise just for the colourful exercise. The Applicant cannot now say that lease hold rights could not have been further transferred and in fact the possession has been handed over and surrendered to the purchaser while executing the sale deed by the Seller in favour of the borrowers and therefore, neither the Applicant nor Respondents No. 7 to 11 have any right over the said property. Even if the Applicant's claim is presumed to be true, there is nothing on record to suggest that he has taken or initiated any action against the purchaser with Respondent No. 3 for getting back their possession or for the recovery of the lease hold. I am convinced with the argument of the counsel for the Respondent Bank that the Applicant is instrumental in playing fraud with the Bank in connivance with Respondent No. 3.
Having examined the averments made by the respective counsel of the parties and documents and evidence filed by them in support of their pleadings, I have come to the conclusion that the action taken by the Bank is absolutely in accordance with law just and proper.
6. Accordingly this SA is dismissed with a cost of Rs. 50,000/- to be paid to the Bank as I cannot ignore this fact which the counsel for the Bank has stressed that the Bank has not been able to sell this property due to long litigation. Any application pending stands disposed of."
Further, after filing this SA, the Applicants further filed IAs in the said SA which were decided with a speaking order revolving around the same issues. Order of IA 155 of 2016 is reproduced hereunder:
"IA 555 of 2016
Before orders could be pronounced, certain facts are necessary to be mentioned. Earlier too when the case was fixed for orders after hearing the arguments, the counsel for the Applicant prayed on 21.03.2016 that he wanted to address little more arguments to clarify on some issues and the matter. After hearing the arguments of counsel, the case now was fixed for orders on 12.05.2016 but the Applicant filed this IA and pressed to be heard which was though opposed by the Respondent Bank. However, the matter was heard. The counsel for the Applicant stated that since on the last date of hearing on OA 79 of 2014 which has been filed by the Bank and is fixed for 25.05.2016 for filing of Reply by the SA Applicant therein Defendants. The counsel for the Applicant argued that there cannot be two different decision one in the SA and other in the OA and as such SA and OA should be allowed to be decided at a time. Once SA is disposed of the OA will become redundant without any hearing and filing of reply in the OA. The contention of the Applicant was that in reply to the SA Bank has placed on record Exh. B16 one letter of continuity pertaining to the property No. 1 as it belongs to the Applicant Sham Singh and it stood mortgaged with the Bank on 24.08.2004 but no other document reflecting this mortgage of property is forthcoming and for the second property no such letter of continuity or any document has been forthcoming. Therefore, non-filing of such document or any letter, the claim of the Bank as mortgagee/secured creditor qua second property is not sustainable. Moreover, the Bank has not claimed that demand Notice was served upon others named therein nor has been placed on record and prayed that this IA be allowed and be decided with the OA only.
These arguments which were countered by the Respondent Bank pointed out stating that this is an another attempt by the Applicant to derail the recovery process. Earlier one IA 896 of 2015 was filed by the Applicant which was allowed in favour of the Applicant vide order dt. 01.10.2015 and they were directed to examine the record before Registrar. Moreover this law laid down by the Apex Court that the SARFAESI Proceedings and RDDBI & FI Act are two independent proceedings which could not be pointed out by single orders. Therefore, the conduct of the Applicant itself shows that they just want to linger on the matter.
After hearing the arguments, I myself has perused record and found that the Applicants are almost delaying this matter since more than one year which is otherwise on the verge of arguments or pronouncement of orders. The Applicant who is claiming that the OA will become redundant has failed to answer that if the Respondent Bank has not filed any document on record, it is good case for the Applicant and how independent proceedings under the different acts could be dependent upon the other one particularly when the SA has been filed by the Applicant challenging the SARFAESI proceedings, on the other hand side, the Bank has filed its claim under RDDBI&FI Act for recovery of its dues from the SA Applicant. Further earlier the Applicants who have moved application for perusal of the OA record was given due opportunity and if the Bank was not able to submit any document in their defence, the Applicant had already sufficient time and should place on record the documents from taking it from the file OA which they have duly examined and if they have already filed then will get the fruits on merits.
In light of the above, I am not inclined towards the arguments of the counsel for the Applicant and finding no merit since both proceedings are independent proceedings and orders can be passed by the court independently in both cases. Hence, IA is dismissed and the matter be listed on 14.06.2016 for pronouncement of orders on the SA."
Apart from this, while decided the IAs, the Respondent Bank has placed on record public notice got published vide said Ashok Kumar in counter blast of publication and notice issued and published by the Bank, cautioning the general public from purchasing the said land from the Bank negating the Bank's lien on the said land, which reads as under:
"It is said in general public that the land measuring 83 kanal 3 marla, comprised in khata No. 207/192, vide jamabandi for the year 2005-06, situated at village Saraswati Khera has registered pattanama bearing No. 178 dt. 21.05.1974 in the name of Ashok Kumar, Mahipal, Sat Pal, Pawan Kumar and the patta amounting to Rs. 1000/- per annum and the validity of the said patta/lease from 09.10.1968 to 08.10.2067. In the said land, Punjab National bank, Pehowa, the land measuring 25 kanal 19 marla and other 24 kanal 8 marla comprised in khewat No. 208, khatoni No. 296 auctioned the said land notice and fixed for 15.03.2012. And whosoever purchased the said land, who is respons
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ible for the same and the bank has no legal right to said land." Moreover, while deciding the SA 59 of 2012, the issue of lease hold rights have duly been discussed and it was held that the lease hold rights could not further be transferred as possession has been handed over and surrendered to the purchaser by executing sale deed by the seller in favour of the borrower and it was also held that neither Ashok Kumar, Sat Pal, Pawan Kumar, Mahi Applicants 1 to 4, in the said SA and Reshma, Babli, Nirmala, Sheela Devi and Sushma Devi Resp. No. 7 to 11 have any right over the property and the issue of lease has duly been adjudicated being non est in the SA 59 of 2012, which should also form part of this order. We could not ignore that both the SAs which were filed on the same day on the same issues by a common counsel itself proves a collusiveness between Applicants and said person of SA 64 of 2012, which clearly proves that the sole intention of the applicants is to defeat right of the Bank to proceed against secured assets for which the Bank has duly proved that the title deeds for which the charge of the Bank has already been duly noted has been deposited with the Bank for the creation of mortgage and that the Bank has taken possession of secured assets in June 2012 which was never challenged by the Applicants. Counsel for the Bank has duly proved through the documents that notice under Sec. 13(2) and possession notice dt. 26.09.2011 (Exh. B7) too was served as per rules, Panchnama (Exh. B8) along with inventory, videograph and publication (Exh. B9 to Exh. B12) are more than sufficient to prove the case of the bank without having any irregularity. Further, the properties which the applicant claim to be agriculture land is rice sheller existing and functioning on the said land and structure enacted on the said land cannot be termed as agriculture land, when the applicants themselves have availed the facilities through a project report submitted by them, for the functioning of rice sheller on the same land which was mortgaged with the Bank. I do not find even a single averment which could prove the claim of the Applicant on the issue of HUF also. Rather the Bank issued demand notice for more than Rs. 7 crore in the year 2011 giving full description of property (Exh. B27) against which detailed objections were filed by the Applicants and the Bank has duly replied the same, leave no issue in doubt now. We could not ignore that on 22.07.2011 (Exh. B29) Applicants made a request for rehabilitation of the unit which was not found feasible and bonafide by the Bank. The entire action of the borrowers, particularly counter publication negating the rights of the Bank by one of the respondents clearly prove that the applicants are notorious and hard core litigants and were successful in stretching the matter for a considerable time putting the Bank into hard times by managing the affairs before DM too. I am fully satisfied that the properties is owned and possessed by the borrowers/mortgagors which was duly mortgaged non agriculture properties and the borrowers were given sufficient opportunities through restructuring/rehabilitation who failed to pay the dues and that the action initiated by the Bank is in consonance with the provisions and rules made under The Act. Having examined the averments made by the respective counsel of the parties and documents and evidence filed by them in support of their pleadings, I have come to the conclusion that the action taken by the Bank is absolutely in accordance with law just and proper. 8. Accordingly this SA is dismissed. Any application pending stands disposed of. 9. Order Dasti to the concerned parties. 10. File be consigned to record. Order dictated, corrected, signed and pronounced by me in the open court.