TaxTMI 
TaxTMI 
2017 (1) TMI 1863
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....ondent herein was a tenant in respect of premises no.8, Old Court House Street, Kolkata-700001 (hereinafter referred to as the said property) under M/s. Bharat Chamber of Commerce and seeking a declaration of such tenancy, the bank preferred a suit being C.S. No.422 of 1993. In the year 2003, M/s. Bharat Chamber of Commerce preferred an Ejectment Suit No.02 of 2003. During pendency of the same, the appellant purchased the said property by a deed dated 17th February, 2005 and thereafter entered into an agreement with the said bank with conditions to the effect that the said bank would vacate the said property and handover possession to enable the appellant to develop the said property and undertake reconstruction and that upon completion of such reconstruction, the said bank would be relocated. In part performance of the said agreement the parties executed a deed of lease on 11th February, 2011 and the said bank vacated the said property upon availing the shifting charges to the tune of Rs.5 lakhs from the appellant. In the midst thereof the appellant obtained a sanctioned building plan on 11th January, 2007 after paying a sanction fee amounting to Rs.1,46,53,633/-. For such reconst....
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....e of having shifted therefrom and as a consequence thereof reconstruction work over the said property could not be commenced. In the midst thereof, the bank issued a notice under Section 13(2) of the said Act of 2002 and issued possession notice with an intention to sell the said property at Kolkata. 4. He further argues that under Section 13(2) of the said Act of 2002 where any borrower makes any default in repayment of a secured debt, the secured creditor may require the borrower by notice to discharge his liabilities. In the instant case, prior to issuance of the notice under Section 13(2), the bank acted in terms of the agreement and the lease deed by shifting from the said property upon availing the shifting charges from the appellant. Having taken such steps, the bank waived its right to issue the notice under Section 13(2) in respect of the said property. In support of such contention reliance has been placed upon a judgment delivered in the case of Commissioner of Customs, Mumbai -vs- M/s. Virgo Steels, Bombay & Anr., reported in (2002) 4 SCC 316. 5. According to Mr. Mitra, the appellant altered its position to its detriment by incurring huge expenses to obtain a sanc....
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....the agreement, is absolutely fallacious. 9. He further submits that there is not a single clause in the agreement executed towards repayment of the debt. It was only an agreement, that too, an unregistered one, containing clauses to the effect that the appellant would undertake reconstruction of the said property and that during the said period the bank has to shift and that upon such reconstruction, the appellant would relocate the bank in the new building. The said agreement/terms of settlement appears to have been filed in the Ejectment Suit No.2 of 2003 by way of an application under Order 23 Rule 3 read with Section 151 of the Code of Civil Procedure for issuance of a consent decree and though the same stands signed on behalf of the appellant, the bank and M/s. Bharat Chamber of Commerce, it has not been disclosed in the plaint as to whether such consent decree has been obtained. The said agreement cannot, by the furthest of imagination, be construed to be an agreement pertaining to repayment of debt and that as such there was no bar on the part of the bank to take steps against the appellant under the provisions of SARFAESI Act when the appellant has admittedly defaulted i....
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....t to be necessary to avoid lengthy legal process in realizing the amount due. 14. In the order impugned the learned Judge has observed that though the suit for specific performance of the terms of settlement is maintainable, such right to institute the suit to specifically enforce the terms of settlement would not entail an injunction restraining the bank from taking steps as a secured creditor qua the security. This would tantamount to non-suiting the petitioner and to render the suit infructuous. Such a course of action would be nugatory to the jurisdiction of the Court to grant injunction in connection with the specific performance of executory contracts. Sometimes the injunction is the instrument by which the Court specifically enforces the contract itself or some part of it, sometimes the injunction is merely incidental to or ancillary to the performance of the contract and sometimes the injunction is used for the purpose of giving effect to rights resulting from the non-performance of the contract. 15. It would be explicit from the notice under Section 13(2) that the facilities availed by the appellant have been stated to be secured by three properties including that of....
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.... treated as a secured asset under the SARFAESI Act. A secured asset means a property on which security interest is created. Pertaining to the property involved in the suit there exists a subsisting agreement and a lease deed and as such no security interest is created upon the said property. 19. We find substance in the argument of Mr. Mitra that in respect of the Kolkata property, the bank having opted for the course as stipulated in the settlement was estopped from taking steps as a secured creditor qua the security. The learned Tribunal under SARFAESI Act is not empowered to decide the dispute, in respect of the property at Kolkata, in respect of which the instant suit has been preferred. The issue as to whether, in the facts of the case, there was a conscious relinquishment of the right, on the part of the bank, to proceed in terms of the SARFAESI Act, merits consideration and the said issue ought to have been decided, prior to vacation of an interim protection granted by the Court in the month of July, 2013, by the impugned order passed in the month of November, 2016, on the basis of a vacating application filed by the bank in 2014. The learned Judge has vacated the interim....