PRIVITECH PROJECTS PVT. LTD. Vs. HOUSING & URBAN DEVELOPMENT CORPN. LTD.

JUDGEMENT

(1.) BOTH these appeals have been filed against the order dated 15.6.2010 passed in Appeal No. 17/2008 whereby the DRT -I, Delhi, while setting aside the order dated 5.3.2008 of the Recovery Officer made in RC No. 71/06, has directed the Army Welfare Housing Organisation (AWHO) to deposit entire decretal amount along with up -to -date interest with the Housing and Urban Development Corporation Ltd. (HUDCO) and the HUDCO has been directed to return the amount deposited by the auction purchaser to it with interest @ 10% per annum. Briefly stated, the facts of the case are that AWHO, a registered Society constituted to promote and provide dwelling units to the serving/retired army men and their widows at all India level, had allotted flat No. K 170 in Manoj Vihar, Indrapuram, Ghaziabad (UP), a housing colony developed by it, to Captain (Retd.) Vishnu Swarup and his son Vismay Sharma (respondent Nos. 2 and 3 in both appeals). On the basis of the allotment letter, HUDCO (appellant of Appeal No. 318/2010) sanctioned a housing loan to them for the purchase of that flat after a tripartite agreement confirming the charge on the said flat in favour of HUDCO was executed amongst the borrowers, AWHO and HUDCO. When the borrowers defaulted in repayment of the loan, HUDCO filed an application (OA No. 52 of 2004) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) against them and the guarantor (respondent No. 4 in both appeals) for the recovery of outstanding amount of debt and arrayed AWHO as a pro forma defendant. The OA was allowed and a Recovery Certificate (RC) for Rs. 14.59.188/ - along with interest was issued against the borrowers and guarantor and the proceeding in RC No. 71/2006 were commenced, The Recovery Officer (RO) attached the flat in question and issued notice for its sale by way of public auction. The auction was held on 6.2,2007 and the highest bid of Rs. 29,35,000/ - of Privitech Project Pvt. Ltd. (Appellant of Appeal No. 311/ 2010) was accepted. The bid amount along with additional charge was duly paid by the auction purchaser. AWHO challenged the auction sale by filing objection/ application before the RO, alleging that Vishnu Swarup had obtained the allotment of the flat in question by playing fraud and misrepresentation that he was ex -army personnel, which had been cancelled. During the course of proceedings, AWHO tendered a cheque of the decretal amount of Rs. 14,42,188/ -. which was. however, returned to it by the RO. The RO dismissed the objections on 5.3.2008 and after confirmation of sale the sale certificate was duly registered with the Sub -Registrar, Ghaziabad on 13.8.2008. AWHO assailed the said order of the RO dated 5.3.2008 in appeal (No. 17/2008) filed under Section 30 of the RDDBFI Act before the DRT, which allowed the same by the impugned order with the directions, as mentioned above. Aggrieved with that order, both the auction purchasers as well as HUDCO have directed these appeals separately.

(2.) MR . Amit Dhupar appearing on behalf of the appellant/auction purchaser, mainly stressed on three points: (i) AWHO had no locus to challenge the auction sale; (ii) the RO could not go beyond the decree; and (iii) AWHO had not complied with the requirement of Rule 60 of the Second Schedule to the Income Tax Act.

(3.) HE also contended that as per Section 25 of the RDDBFI Act, the RO was to comply with the RC issued in pursuance of the final order made in the OA and he could not go beyond the R.C. Mr. Dhupar also submitted that no prejudice was caused to AWHO by the sale of the properly as it had already received the entire loan amount towards the price of flat in question directly from HUDCO.