It was held as not within ken of the High Court in writ jurisdiction to declare any property as unencumbered one. Such rights between private parties cannot be made subject-matter of writ jurisdiction and to a direction of maintaining status quo on such properties.
In the instant matter there are four parties to the lis. 1. Trust 2. HUDCO 3.Avas Evam Vikas Parishad 4. Builder
The Trust had taken loan from HUDCO which it could not repay. The Trust had mortgaged some immovable properties with HUDCO. Out of the property concerned, mortgaged with HUDCO, the Trust exchanged one land from Avas Evam Vikas Parishad and for the same property it had entered into an Agreement to sell with a Builder ( who had filed the petition in Lucknow HC and against that order, the present appeal was filed ). Thereafter, the Trust had also deposited the deed of exchange of the said land with HUDCO.
As the loan was not repaid by the Trust, HUDCO started proceedings before the Debt Recovery Tribunal wherein objections were filed by the Builder in respect of the property vis-à-vis against the action initiated by HUDCO for sale of mortgaged property under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The objections were filed on the strength of an Agreement to sell entered with Trust in respect of land including the one which was exchanged by the Trust with the Avas Evam Vikas Parishad.
Builder preferred writ petition praying therein for issuance of a writ in the nature of mandamus commanding the U.P. Awas Evam Vikas Parishad to demarcate lands relevant, which are mortgaged to avoid ambiguity in identifying the mortgaged property at any later date, besides restrain against sale.
It was held that it was a misadventure on the part of the Builder to file a writ petition for the kind of reliefs prayed for and that too could not have been entertained by the High Court. It was held as not within ken of the High Court in writ jurisdiction to declare any property as unencumbered one. Such rights between private parties cannot be made subject-matter of writ jurisdiction and to a direction of maintaining status quo on such properties.
The SC observed that there was a serious dispute between the parties to the lis whether the said land is unencumbered and it was not open to the High Court to enter into the aforesaid arena as which of the property is encumbered and to be sold in realization of debt is the outlook of the Recovery Officer, DRT where the recovery proceedings are pending, including the objections preferred by the Builder. Further it was not open to the Builder to file a writ application for the aforesaid reliefs. The High Court could not have adjudicated on the property rights under the guise of directing Avas Evam Vikas Parishad to demarcate the land and give finding that it was unencumbered land. The High Court has erred in law in giving a finding on merits on effect of exchange and on applicability of section 70 of Transfer of Property Act as it is not the function of the High Court to decide these questions under writ jurisdiction. It was for the parties to agitate the questions before the DRT where the recovery proceedings are pending at the instance of HUDCO with whom the property had been mortgaged by the Trust.
On the strength of the agreement to sell, particularly when possession had not been handed over to the Builder, it was not open to him to file a writ application for demarcation of the property as unencumbered property or otherwise. What was sought to be achieved by filing a writ petition, was to get rid of the proceedings pending before the Recovery Officer and to save land from being sold and an attempt was made to get land in question declared as unencumbered one. In such disputes writ petition could not be said to be appropriate remedy, particularly when the order passed by the Recovery Officer, DRT, was not in question.
[Maharaji Educational Trust vs. SGS Construction & Dev. P. Ltd. & Ors.]