FAO No.11/2008 Page 1 of 4 UNREPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI FAO No.11/2008 Date of Decision: May 05, 2010 UTTAR PRADESH FINANCIAL CORPORATION ..... Appellant through Mr. A.K.Singh, Advocate with Mr. Gitanju Suraj & Mr. Akhtar, Advocates versus M/S NALINI PROPERTIES & ORS ..... Respondents through Mr. Atul Nigam, Advocate for respondent No.1. CORAM: HON'BLE MISS JUSTICE REKHA SHARMA 1. Whether the reporters of local papers may be allowed to see the judgment? No 2. To be referred to the reporter or not? No 3. Whether the judgment should be reported in the ‘Digest’? No REKHA SHARMA, J. (ORAL) Respondent No.1 before me had initially filed the suit in this Court for a decree of declaration, permanent injunction and specific performance in respect of property comprising of flat No.103 in building No.E-544, Greater Kailash, Part-II, New Delhi. Subsequently, on account of the pecuniary jurisdiction of the High Court having been raised, the suit was transferred to the Court of the District Judge for trial. However, while the suit was pending in this Court, the parties were directed to maintain status-quo in respect of the suit property. FAO No.11/2008 Page 2 of 4 It is the case of respondent No.1 before the trial Court that it had entered into an ‘Agreement to sell’ with M/s Hydel Construction Pvt. Ltd. in respect of the aforementioned flat on November 19, 1988 and that M/s Hydel Construction Pvt. Ltd. had earlier purchased the said flat from M/s Amar House Builders. It is further its case that the entire sale consideration of the property has been paid and the respondent is in possession of the property since the date of the agreement. However, it is alleged that M/s Hydel Construction Pvt. Ltd. despite having received the full sale consideration of the suit property had not executed the sale deed in favour of respondent No.1 and that is what led to the filing of the suit for specific performance and for other reliefs. The case of the appellant, namely Uttar Pradesh Financial Corporation is that the entire building, i.e. E-544, Greater Kailash, Part-II, New Delhi in which the flat in question and some other flats have been built, was mortgaged by the partners of M/s Amar House Builders with the appellant on May 15, 1996 and the title deeds were also deposited with it. It is stated that the loan was taken by two sister concerns of M/s Amar House Builders, namely, M/s Shiv Lok Investment Private Limited and M/s Regency Tower India Private Limited, for which the partners of M/s Amar House Builders stood guarantors. According to the counsel, the loan having not been repaid, the appellant in view of Section 29 read with Section 46 of the State Financial Corporation Act, 1951 is entitled to auction the suit property. FAO No.11/2008 Page 3 of 4 The respondent along with the suit had filed an application under Order 39 Rules 1 & 2 of the Code of Civil Procedure (hereinafter referred to as the ‘Code’) praying for status-quo in respect of the suit property till the disposal of the suit. As already noticed above, when the matter was pending before this Court, the parties were directed to maintain status-quo. However, the application under Order 39 Rules 1 & 2 of the Code was not finally disposed of and in the meanwhile, the appellant had also filed an application under Order 39 Rule 4 of the Code seeking vacation of the status-quo order. Both these applications were heard by the learned Additional District Judge who by order dated October 30, 2007 has allowed the application under Order 39 Rules 1 & 2 of the Code and has directed the parties to maintain status-quo in respect of the flat in question. In so far as the application of the appellant under Order 39 Rule 4 of the Code is concerned, the same was dismissed. It is the aforementioned order of October 30, 2007 which is the subject matter of challenge before me. It is submitted by the learned counsel for the appellant that the suit for specific performance filed by respondent No.1 is, on the face of it, barred by time, as it is the respondent’s own case that the ‘Agreement to sell’ was entered into between the parties on November 19, 1988 whereas the suit was filed in the month of April, 1999. It is also submitted that the property in question being mortgaged with the appellant and the loan amount having not been paid, Section 29 read with Section 46 of the State Financial Corporation Act, 1951 empowers the appellant to auction the property FAO No.11/2008 Page 4 of 4 and the procedure laid down therein gives a right to the respondent to file objections, if any to such an auction. Having heard the learned counsels for the parties, I am of the view that in so far as the question of limitation is concerned, it is for the trial Court to adjudicate upon the same and it is not for me to comment either way on whether the suit is within time or barred by time. As regards the submission that Section 29 read with Section 46 of the State Financial Corporation Act, 1951 empowers the appellant to auction the suit property, it is again a matter which needs to be and shall be gone into by the trial Court. The appellant has to first establish that the loan was taken by M/s Amar House Builders or their partners from whom respondent No.10 had purchased the suit property and it thereafter sold the same to respondent No.1, and has to further establish that the loan amount is still outstanding. It also cannot be ignored that the order of status-quo was passed when the matter was pending before this Court. I see no reason to disturb that order when the parties are still in the process of trial. For the fore-going reasons, I find no merit in the appeal. The same is dismissed. The parties are directed to maintain status-quo with regard to the suit property. They are directed to appear before the trial Court on the date fixed. The trial Court is directed to dispose of the suit as expeditiously as possible, preferably within one year from now. REKHA SHARMA, J. MAY 05, 2010 ka