Syndicate Bank v. Sheela Aggarwal & Anr.

1. This petition under Article 227 of the Constitution of India is filed by the petitioner, and which is the defendant no.2 in the suit, impugning the order of the trial court dated 4.4.2013 by which the trial court has refused to dismiss the suit under Section 11 of the Code of Civil Procedure, 1908 (CPC).

2. No doubt, the plaintiff in the suit/respondent no.1 herein had filed objections in the recovery proceedings before the Recovery Officer of the Debt Recovery Tribunal and which objections were dismissed by the recovery officer on 29.8.2007, and the appeal before the Debt Recovery 2014:DHC:6685 Tribunal (DRT) was also dismissed on 4.9.2008 as also the further appeal to the Debt Recovery Appellate Tribunal, however, the issue is not with respect to whether the respondent no.1/plaintiff can obtain an interim order in the suit filed for claiming rights to suit property bearing industrial plot no.52, Sector 34, situated at Technology Park, Gurgaon (Haryana) but, whether the suit itself is maintainable. The respondent no.1/plaintiff claims right as the prior right holder in the suit property on account of an alleged agreement to sell executed prior to the mortgage of the suit property in favour of the Bank.

3. This aspect as to whether a suit lies in spite of dismissal of the objections filed in the recovery proceedings before the DRT has been dealt with by the Supreme Court recently in the judgment in the case of Nitin Gunwant Shah Vs. Indian Bank & Ors. (2012) 8 SCC 305 and the Supreme Court in paras 37 and 38 clearly holds that even if objections are dismissed, an unsuccessful objector has right to file a civil suit to establish his right for possession of the property. These paras read as under:- “37. Rule 47 stipulates that any person other than the defaulter against whom an order under Rule 42 is passed is entitled to file a civil suit to establish his right for possession of the property.

38. The scheme of the above provisions clearly establishes an alternative procedure for the eviction of a person (third party to the proceedings) in occupation of a property which is brought to sale pursuant to a Recovery certificate issued under the 1993 Act. We have already taken note that there is a possibility of a person other than the judgment-debtor being in possession of the property of the judgment-debtor is recognised even under Order 21 of the Code of Civil Procedure and under Rule 98. It provides for the eviction of such persons in an appropriate case where it is found that the person in possession is not legally entitled for the same The Rules under the Income Tax Act which are adopted for the purpose of the Recovery of debts due to the financial institution and Banks under the 1993 Act also provide a similar authority of law. The law further provides under Rule 47 that any person so evicted is entitled to file a separate suit to establish his legal claim. Obviously, such a right is acknowledged in recognition of the fact that an enquiry of the claim of the third party under the Rules is summary in nature by a Quasi-Judicial Forum and therefore, an examination of the issue by a Judicial Forum would adequately protect the interests of such third party or the purchaser, as the case may be.”

4. The trial court therefore has rightly dismissed the application under Section 11 CPC by the impugned order in view of the ratio of the Supreme Court in the case of Nitin Gunwant Shah (supra) and which judgment is referred to in para 9 of the impugned judgment.

5. In view of the above, there is no merit in the petition and the same is therefore dismissed, leaving the parties to bear their own costs.

DECEMBER 03, 2014 VALMIKI J. MEHTA, J. ib