Logawney v. Kusum Kumaria & Ors.

3. Admittedly the possession was handed over on 04.03.2017 and the relevant documents concerning the subject property were handed over to the decree holder on 07.09.2017. Admittedly the amount of 5 crores has been released to the judgment debtor and only an amount of 32,50,000 is now lying with the Registrar General alongwith interest awarded on deposit of 5,32,50,000/-. The issues remained to be sorted are: a) reimbursing the expenses incurred by the decree holder; and b) the appropriation of interest accrued upon deposit of 5,32,50,000/-.

4. The learned counsel for the petitioner now has handed over to this court the details of payments to be deducted from an amount of 32,50,000/- so lying with the Registrar General of this Court qua the expenses incurred by the decree holder in relation to the subject property. The expenses are the payment of house tax(s) to the tune of 5,63,031/payment of water bills to DJB to the tune of 77,779/-; cost imposed in RFA 124/2015 - balance to the extent of 3,19,750/-; Cost of 50000/imposed vide order dated 10.10.2013; videography & photography expenses to the tune of 10,000/-; misc. expenses for auction 30,160/-; publication charges 45,235/-; TDS to be deposited 5,32,500/-; statutory interest on TDS 3,35,000/-. The respondent has no objection qua deduction of aforesaid expenses from the amount lying with the Court to be paid to the decree holder. However the objection is qua the auctioneer fees viz. 1,00,000/- which per order dated 21.07.2015 was to be paid by the decree holder only hence the judgment debtor has no liability to pay it. Further the judgment debtors are also not liable to pay the excess payment of 13,62,500/- made by the decree holder to the bidder as the said amount was paid to get the property in his favour. I agree to the contention raised by the judgment debtor in this regard hence only an amount of 19,60,455/- is to be deducted and be paid to the decree holder from the balance amount of 32,50,000/- lying deposited in this Court. Hence the said amount be released by the Registrar General in favour of the decree holder.

5. An issue qua b) the fate of interest accrued on 5,32,50,000/lying deposited since the year 2013, I may refer to Section 55 (6)(b) of the Transfer of the property Act: “55(b)(a)xxxxx (b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 2[* * *] to the extent of the seller’s interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.”

6. Further in Delhi Development Authority vs. Skipper Construction Co.(P) Ltd. and Others (2000) 10 SCC 130 the Court held:

7. In Videocon Properties Ltd. vs. Dr.Bhalchandra Laboratories and Others (2004) 3 SCC 711 the Court held: “The buyer's charge engrafted in clause (b) of paragraph 6 of Section 55 of the Transfer of Property Act would extend and ensure to the purchase-money or earnest money paid before the title passes and property has been delivered by the purchaser to the seller, on the seller's interest in the property unless the purchaser has improperly declined to accept delivery of property or when he properly declines to accept delivery including for the interest on purchase money and costs awarded to the purchaser of a suit to compel specific performance of the contract or to obtain a decree for its rescission. The principle underlying the above provision is a trite principle of justice, equity and good conscience. The charge would last until the conveyance is executed by the seller and possession is also given to the purchaser and ceases only thereafter. The charge will not be lost by merely accepting delivery of possession alone. This charge is a statutory charge in favour of a buyer and is different from contractual charge to which the buyer may become entitled to under the terms of the contract, and in substance a converse to the charge created in favour of the seller under Section 55(4)(b). Consequently, the buyer is entitled to enforce the said charge against the property and for that purpose trace the property even in the hands of third parties and even when the property is converted into another form by proceeding against the substituted security, since none claiming under the seller including a third party purchaser can take advantage of any plea based even on want of notice of the charge. The said statutory charge gets attracted and attaches to the property for the benefit of the buyer the moment he pays any part of the purchase money and is only lost in case of purchaser's own default or his improper refusal to accept delivery. So far as payment of interest is concerned, the section specifically envisages payment of interest upon the purchase-money/price prepaid, though not so specifically on the earnest money deposit, apparently for the reason that an amount paid as earnest money simplicitor, as mere security for due performance does not become repayable till the contract or agreement got terminated and it is shown that the purchaser has not failed to carry out his part of the contract, and the termination was brought about not due to his fault, the claim of the purchaser for refund of earnest money deposit will not arise for being asserted.”

8. The position is made clear by the law above. The new sale certificate was issued by the Court only after the SLP was dismissed and the sale was registered in favour of the decree holder only in July 2017 and whereas the possession of the property was handed over only on 04.03.2017 to the decree holder, as discussed above. Per law (supra) the interest need to be paid to the purchaser till the date on which either the possession was delivered or the sale deed was executed whichever was earlier. The decree holder is thus entitled to the interest on the sum of 5,32,50,000/- lying deposited with this court till the date of handing over of possession of the property to him viz. till 4.03.2017 as the said date is an earlier date than the date when sale was registered in July 2017.

9. The judgment debtor relies upon Order 21 Rule 94 of CPC viz. where a sale of immovable property has become absolute, the Court shall grant a certificate specifying the property sold, the amount of the purchase-money and the name of the person who at the time of sale is declared to be the purchaser and such certificate shall bear date the day on which the sale became absolute and alleges since the initial date of issue of the sale certificate is 28.07.2014 the interest be awarded to the petitioner only till such date. I am not inclined to accept this contention since the judgment debtors themselves have challenged the sale and kept it in abeyance till the matter was finally disposed of in SLP (C) 4821/2016 on 22.07.2016. Neither did the judgment debtors gave possession of the premises to the decree holder nor they allowed the decree holder to get the sale registered. As stated above the new sale certificate was issued only on 10.07.2017 and thereafter it was registered. The judgment debtors cannot claim benefit of stalling the proceedings; not handing over of the possession to the purchaser and yet be allowed to enjoy the interest upon the purchase price. Thus the interest on deposit of 5,32,50000/- till 04.03.2017 be also released in favour of the decree holder by the Registrar General.

10. List for compliance on 31.07.2018.

YOGESH KHANNA, J MAY 02, 2018 DU