TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 51
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....property, to guard against encroachment upon its title. It also brings before us the plight of an Auction Purchaser who entered the field in good faith only to find the ground beneath its feet unstable. 2. The relevant facts leading to filing of this appeal are as under:- (i) FACTS: - 3. The Delhi Development Authority-the Appellant (hereinafter referred to as "DDA") on 01.10.2001 allotted Plot No. 25, Facility Centre-33 Kalindi Kunj Road, Jasola, New Delhi admeasuring 877.50 square metres (hereinafter referred to as "subject plot") to Respondent No. 2 namely, Sarita Vihar Club (hereinafter referred to as "the club") on leasehold basis. The subject plot was allotted to the club on a premium of Rs.62,96,664/- for construction of a recreational and sports club. The club was required to pay a provisional premium, in respect of subject plot, at the rate of Rs.2,90,40,000/- per acre with annual ground rent at the rate of Rs. 2.5 % per annum of the total premium. As per the letter of allotment dated 01.10.2001, the club, with previous consent in writing of the Lieutenant Governor of Delhi, could mortgage or charge the subject plot to such person as may be approved by the Lieuten....
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....k. Thereupon the Bank filed an original application under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [now known as Recovery of Debts and Bankruptcy Act, 1993 (for short "1993 Act"] before the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as "DRT") for recovery of sum of Rs.86,46,790.37. The aforesaid application was allowed on 27.08.2010 by the DRT. The Recovery Officer, DRT on 02.02.2011 issued a notice, for drawing up the proclamation of sale and settling the terms thereof and informed the Bank to bring to its notice the encumbrances, charges, and claims of liabilities attached to the subject plot or any portion thereof. The DDA by a communication dated 24.02.2011 informed the Recovery Officer, DRT that the club has not sought the permission of the DDA to create a mortgage in favour of the Bank and therefore the mortgage of the subject plot in favour of the Bank is illegal and void. The DDA in the aforesaid communication stated that the sale of the property be set aside and the proceeding to draw the proclamation of sale and settling the terms thereof be immediately stopped. 8. The DDA thereafter on 30.06.2011 filed an affidav....
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....igh Court in its order dated 05.11.2012. 13. The auction of the subject plot was held on 09.11.2012 wherein Respondent No. 6 -M/s Jay Bharat Commercial Enterprises Pvt. Ltd. (hereinafter referred to as "Auction Purchaser") was declared the highest bidder in respect of subject plot. The bid price of the Auction Purchaser of Rs.13.15 crores as against the reserve price Rs.8.85 crores was accepted. The Auction Purchaser deposited sale proceeds through various demand drafts in favour of Recovery Officer, DRT. The Recovery Officer, DRT by an order dated 08.07.2013 confirmed the sale in favour of the Auction Purchaser. A sale certificate dated 12.07.2013 was issued in favour of the Auction Purchaser, and on 17.07.2013, the possession of the subject plot was handed over to auction purchaser. 14. The auction purchaser on 29.07.2013 filed an application before the Recovery Officer DRT for exonerating itself from paying the liabilities and claims over the subject plot which was sold in a public auction. The notice of the said application was issued to the DDA to disclose the amount of unearned increase. The DDA however, sought an adjournment in the aforesaid proceedings. The Recovery O....
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....urchaser, by an order dated 01.12.2014, has released the amount of Rs.12,26,42,478/- in favour of the Auction Purchaser inter alia on the ground that at this stage the sale cannot be set aside/cancelled and at the most amount lying in FDRs can be returned to the Auction Purchaser till the Special Leave Petition preferred by DDA pending before this Court is decided. (ii) SUBMISSIONS BY DDA: - 18. Learned Senior counsel for the DDA submitted that the terms of the lease deed, specifically stipulated that a mortgage or charge has to be created in respect of subject plot only with prior consent in writing, of the Lieutenant Governor. It is further submitted that no consent in writing of the Lieutenant Governor before creation of mortgage in favour of the Bank was taken and the DDA is entitled for its statutory dues. It is pointed out that DDA by a communication dated 22.07.2011 informed the Bank about the amount of unearned increase, which was to be deposited. It is further pointed out that the DDA had filed a detailed affidavit before the Recovery Officer regarding its statutory claims including the ground rent due and the amount due and payable to it on account of unearned incre....
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....plicable to sales of immovable property under the 1993 Act. It is further submitted that under Rule 16 of the Rules, 1962, it was incumbent on the Recovery Officer as well as parties before the DRT to have determined and conclude all issues that materially affect, the value of the property or fixation of the reserve price under Rule 18, prior to issue of proclamation of sale. It is contended that the sale has been held in violation of Second and Third Schedule to the 1961 Act and, therefore, the auction sale is liable to be set aside. It is further contended that neither the sale proclamation disclosed any quantified claim of the DDA nor the reserve price reflected the market value, that DDA claims. It is submitted that DDA cannot foist its right to claim an amount of unearned increase over and above the auction price on the Auction Purchaser. It is therefore submitted that e-auction conducted on 09.11.2012 by the Recovery Officer, DRT be set aside and the Bank be directed to refund the Auction Purchaser an amount of Rs.1,68,28,488/- retained by it along with interest at the rate of 15% being the rate charged by it which is evident from the sale proclamation. (v) CONSIDERATION :....
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....08, the Bank filed an application under Section 19 of 1993 Act for recovery of the dues against the club. It is pertinent to note that under Clause 5(a) and 5(b) of the lease deed, executed between the lessee and the Club, the DDA had the right of pre-emption. The fact that the subject plot had been allotted on lease to the Club by the DDA was within the knowledge of the Bank. However, DDA was not impleaded as a party in the said proceedings under Section 19 of the 1993 Act. In pursuance of Recovery Certificate dated 27.08.2010 issued by DRT, for recovery of sum of Rs.86,46,790.37, the Recovery Officer on 02.02.2011 issued notice for drawing up the proclamation of sale and settling the terms thereof and informed, the Bank to bring to its notice, the encumbrances, charges, claims of liabilities attached to the said property. The DDA filed an objection before the Recovery Officer on the ground that no permission was granted by it to mortgage subject plot to the Bank. However, the aforesaid objection was rejected on 27.02.2012 by the Recovery Officer. The Recovery Officer without directing the DDA to quantify its claim on account of unearned increase in relation to the subject plot an....
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....der Article 226 in a High Court is dismissed not on the merits but because of the laches of the party applying for the writ or because it is held that the party had an alternative remedy available to it, the dismissal of the writ petition would not constitute a bar to a subsequent petition under Article 32. 4. Such a dismissal may however constitute a bar to a subsequent application under Article 32 where and if the facts thus found by the High Court be themselves relevant even under Article 32." 29. Thus, the doctrine of Res Judicata, salutary as it is, rests upon foundation that a matter once heard and finally decided between the parties cannot be reopened. In light of the aforesaid well settled legal propositions, the facts of the case in hand may be noticed. The earlier writ petition i.e. Writ Petition (C) No. 6972 of 2012 filed by the DDA was withdrawn in view of the undertaking furnished by the bank that the auction shall take place in accordance with terms and conditions of the lease. The earlier writ petition was not decided on merits. In view of undertaking furnished by the bank, as recorded by that High Court in its order dated 05.11.2012, the DDA had a right ....