Decided on July 02,2014

Janak Raj Chouhan Appellant
Bank of India and Ors. Respondents


Ranjit Singh, J. (Chairperson) - (1.) THE appellant herein is a third party who is neither the borrower nor the guarantor. He had moved an application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act) against the action taken by the respondent Bank under Section 13(4) of the SARFAESI Act. The appellant has based his claim on an agreement to sell entered into with Mr. Jitender Chouhan, respondent No. 4, and Mr. Chetan Chouhan. respondent No. 5, for purchase of land measuring 43.25 Marias situated at Basti Methu, Karnal Road, Jalandhar for an amount of Rs. 87 lacs. This agreement was allegedly executed on 12.8.2008 and a sum of Rs. 10 lacs was paid as earnest money. The sale deed was to be executed on or before 31.12.2008. It is pleaded that the appellant was regularly paying the amount to the respondents. Since the property was mortgaged, the respondents had assured the appellant that on receipt of the payment they would clear the dues of the Bank and after getting the property redeemed, would execute the sale deed in favour of the appellant. The appellant would plead that respondents 3 to 5 played fraud with him and the Bank and even after receiving the amount from the appellant, they did not deposit the same with the Bank and so they failed to redeem the property. The sale deed therefore could not be executed in his favour.
(2.) DURING this period only, the Bank initiated proceedings under the SARFAESI Act and issued notice to respondents 3 to 5, under Section 13(4) of the Act. The grievance of the appellant is that no notice was served on him. The appellant also filed a suit for possession by way of specific performance of agreement to sell dated 12.8.2008 entered into between appellant and respondents 3 to 5. Respondent No. 1 was also impleaded as party in the suit. The plea in the suit was that the appellant was ready to make payment directly to the Bank and would recover the same from respondent Nos. 3 to 5. The Bank filed written statement stating that it did not have any objection if the outstanding amount was paid to the Bank by the appellant which the appellant may subsequently recover from respondent Nos. 3 to 5.
(3.) THE appellant claims that he visited the Bank many times to make payment, but the respondent Bank did not consider his request and rather threatened him saying that the property would be put to sale. The appellant states that he came to learn that the property had already been auctioned on 7.12.2010 in favour of respondent No. 6, i.e., Mr. Arun Sharma. He then also came to know that the possession -cum -sale notice was issued on 30.10.2010 for auction to be held on 7.12.2010. Aggrieved against this action, the appellant had filed this S.A. alleging that the outstanding amount was only Rs. 19,14,000/ - as per notice for which there was no need to put the entire property to sale for a sum of Rs. 71 lacs. The appellant would allege that there were only two bidders, including the auction purchaser and the auction held in favour of successful bidder would be illegal on the ground that in the pending civil suit the appellant had expressed his readiness to make payment of Rs. 87 lacs to respondents 3 to 5. The appellant accordingly prayed for direction to stay the confirmation of sale in favour of the auction purchaser.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.