Sanjeev Sehgal & Anr. v. Purnima Bhatia & Ors.

1. The present appeal under Section 96 of the Code of Civil Procedure, 1908 read with Section 13 of the Commercial Courts Act, 2015 seeks to assail the judgment and decree dated 06.06.2024 passed by the learned District Judge, Commercial Court-04, West District, Tis Hazari Courts, Delhi in CS (COMM) No. 689/2022.

SAURABH BANERJEE, J (ORAL)

2. Vide the impugned judgment, the learned Trial Court has dismissed the suit preferred by the appellants/plaintiffs by allowing the application under Order VII Rule 11 CPC preferred by the respondent Nos. 1 & 2.

3. We may note that the appellants had preferred a suit seeking possession of property bearing no. J-12/5, Rajouri Garden (suit property), arrears of rent and mesne profits from the respondent nos. 1 and 2 before the learned Trial Court. The said suit property was leased by the appellants to the respondent nos. 1 & 2 by way of a registered lease deed dated 07.11.2019.

4. It transpires that before the aforesaid suit was filed by the appellants, proceedings under the Securitisation and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (SARFAESI Act), had already been initiated by the respondent No.3-bank on account of a mortgage of the suit property by appellants with the said respondent. This fact, however, was concealed by the appellants while filing the aforesaid suit before the learned Trial Court. Consequently, the learned Trial Court allowed the application under Order VII Rule 11 CPC, preferred by the respondent Nos. 1 & 2, which application was also supported by respondent No. 3 on the ground that since proceedings under the SARFAESI Act were already pending, the suit for possession was not maintainable.

5. On the last date, taking into account the stand of the respondent Nos. 1 & 2 that they were willing to hand over vacant possession of the suit property either to the appellants or to the respondent No. 3 as per directions of this Court, the parties had agreed before this Court that the vacant possession of the suit property would be handed over to the Receiver appointed under the SARFAESI Act pursuant to the proceedings initiated by respondent No. 3.

6. Today, we are informed that the vacant possession of the suit property has been handed over to respondent No. 3.

7. In the light of this position, learned counsel for the appellants submits now that the claim made by the appellants in respect of possession of the suit property is satisfied and no longer survives, the only remaining claims regarding arrears of rent and mesne profits against the respondent Nos.[1] & 2, are required to be adjudicated upon by the learned Trial Court as per law.

8. He, therefore, prays that the impugned judgment insofar as it dismisses the appellants suit for the remaining reliefs of mesne profits and arrears of rent, be set aside and remanding back the suit to the learned Trial Court for adjudication of these claims for arrears of rent and mesne profits.

9. Per contra, learned counsel for the respondent Nos. 1 & 2 opposes the remand of the suit to the learned Trial Court by urging that since the appellants had concealed material facts from the learned Trial Court in the first instance by not disclosing about the pendency of the proceedings under the SARFAESI Act, it is evident that the appellants had approached the learned Trial Court with unclean hands. He, therefore, contends that the learned Trial Court was justified in dismissing the suit.

10. He further submits that even otherwise, the lease deed vide which the property was leased out to the respondent Nos. 1 and 2, was itself contrary to the provisions of Section 65A of the Transfer of Property Act 1882, as despite the property being mortgaged with the respondent No. 3-bank, the appellants had proceeded to enter into a nine years lease with said respondent Nos. 1 & 2. As per him, it is only because of this illegality committed by the appellants that the said respondent Nos.[1] & 2 were compelled to hand over the possession of the suit property to the respondent No.3 before the expiry of the nine years lease period leading to huge financial loss and inconvenience to them.

11. After some arguments, learned counsel for the respondent No. 3, submits that since the appellants are now giving up the claim for possession of the suit property, the said respondents can have no objection to the suit being remanded back to the learned Trial Court for consideration of the appellants’ claims for recovery of arrears of rent and mesne profits. He, however, contends that since the respondent No. 3 has already received the vacant possession of the suit property, it would no longer be a necessary party in the suit before the learned Trial Court.

12. In view thereof, learned counsel for the respondent No. 3 prays that while remanding the matter back to the learned Trial Court, the respondent No. 3-bank be deleted from the array of the parties. Further, he submits that during the pendency of the proceedings before the learned Trial Court, the respondent Nos. 1 & 2 had deposited an amount of Rs. 18,06,250/- and Rs. 10,95,000/- towards arrears of rent/mesne profits with the learned Trial Court by way of two FDRs, which amount has also since been released in favour of respondent No. 3. However, while encashing the said FDRs, the respondent No. 3 has placed the said amount in a ‘Suspense Account’ as while dismissing the suit the learned Trial Court had directed that the said amount would be appropriated only pursuant to the orders as may be passed by the learned DRT.

13. At this stage, learned counsel for the appellants submits that instead of keeping the amount in a ‘Suspense Account’, the respondent No. 3 may be permitted to appropriate the said amount, albeit, subject to the condition that the said appropriation would be subject to any orders as may be passed by the learned DRT in proceedings initiated by any of the parties who are parties before this Court qua the suit property, as per law.

14. Having considered the submissions of learned counsel for the parties and perused the impugned judgment, we find merit in the appellants’ plea that the suit was dismissed by the learned Trial Court primarily on account of the appellants’ claim for possession of the suit property not being maintainable due to pendency of the proceedings initiated by the respondent No. 3 under the SARFAESI Act, for which purpose, we may refer to paragraph nos. 25 to 27 of the impugned judgment, which read as under: