Dhaja Ram Charitable Trust v. Lavanaya Ayurvedic Pvt. Ltd.) before the Court of Additional District Judge, Sou on 10 Feb 2025 — Execution Case No. 43 of 2019

Judgment

1. Since both the writ petitions are related, they are being decided by this common judgment.

2. Writ Petition being Matters Under Art. 227 No.2694 of 2022 has been filed challenging the orders dated 23.05.2022 and

02.07.2022 passed by Additional Civil Judge, (Senior Division), FTC, Lucknow in Execution Case No.43 of 2019 as contained in Annexures – 1 & 2.

3. Writ Petition being Matters Under Art. 227 No.6346 of 2024 has been filed challenging the orders dated 07.12.2024, 12.12.2024,

11.09.2024 & 30.11.2019 passed in the Execution Case No.43 of 2019 as well as setting aside the entire execution proceeding in Execution Case No.43 of 2019. A further prayer is made to set aside the auction sale dated

24.04.2024. 2

4. The facts, in brief, are that a suit was filed being Suit No.720 of 2017 (Dhaja Ram Charitable Trust v. Lavanaya Ayurvedic Pvt. Ltd.) before the Court of Additional District Judge, South District, Saket Court, New Delhi for recovery of arrears of profit share, rent and damages against Lavanaya Ayurvedic Pvt. Ltd.,(defendant no 1in the suit) and Defendant No.2 in the said suit was Smt. Sangeeta Srivastava. The said suit was decreed ex-parte on 19.02.2019 in favour of the plaintiff trust, however, it was specifically provided that the suit is being decreed only against Defendant No.1 i.e. the company Lavanaya Ayurvedic Pvt. Ltd. The suit in respect of Defendant No.2 was not decreed. Operative portion of the decree is quoted herein “Vide separate judgment of even date the sult is decreed In lavour of plaintiff and against the defendant no. 1 in the sum of Rs. 17.99,366/ with pre suit interest effective from 01.12.2014 @ 9% per annum, pendente lite Interest @9% per annum and future Interest @6% per annum. Costs of the suit are also awarded in favour of plaintiff and against the defendant no. 1. Defendant no.2 is the chairman of defendant no. 1 company. The agreement Ex.PW1/2 was executed between the plaintiff and defendant no. 1. The defendant no. 1 is a separate entity in the eyes of law and defendant no. 2 cannot be made personally Ilable for the dues of delendant no. 1. Relief against defendant no. 2 is therefore declined. Decree sheet be prepared accordingly.”

5. In pursuance to the ex-parte decree, an Execution Case No.43 of 2019 was filed in the District Court, Lucknow for execution of the decree against the company only seeking attachment of the movable and immovable property of the judgment debtor company. On

13.05.2019, an application was filed by the trust under Order 21 Rule 43 of CPC seeking attachment of the bank account and the house building situate at Plot No.128C, Dhawan Estate, Dewa Road, Chinhat, Lucknow.

6. In the said application with regards to the property sought to be attached and auctioned following was pleaded: 3

”That there is only one immovable property i.e., a commercial plot measurin 0.228 Hectare, Gatta No. 128C in the name of Late Sh. Ashok Kuma Srivastav, former Chairman / Director of Lavanya Ayurvedi Pvt. Ltd., located is Dhawan Estate, Dewa Road, Chinhat, Lucknow, on which the building c Lavanya Ayurvedic Hospital was built and the hospital is currently in operation Value of this property is approx. Rs. 2,50,000,00/- (Rupees Two Crore and fift lace only). A copy of revenue records is attached as Annexure-C.”

7. The said application was allowed vide order dated 30.11.2019 and 16.11.2021. On 23.05.2022, the Execution Court put the property on auction.

8. The petitioners herein claiming to be owner of the property in their independent rights moved an application under Order 21 Rule 29 of CPC on 30.05.22 stating that the property was owned by them and not by the judgment debtor company. The said application came to be rejected on 02.07.2022 mainly on the ground that the independent claims can be seen after the property which was charged becomes free from encumbrances.

9. It also can be perused from records that against an order of attachment passed by the executing Court on 16.11.2021, a Civil Revision No.47 of 2021 was preferred on behalf of the company through one of the petitioners namely Smt. Sangeeta Srivastava, Managing Director of the Company. The said revision came to be dismissed on 07.12.2022.

10. It further bears from record that on 05.04.2024, an auction notice was issued by the Court (Annexure No 18). In the said auction notice the description of property put for auction was: “Lavanya Ayurvedic Hospital, Gata No.128-Sa, Dhawa, Chinhat, Lucknow with two building and four floors each, measuring total build up area 33810 sq. ft. and total plot area measuring .228 hectare.” The property as described above was auctioned on 29.04.2024.

11. Petitioner Nos.1, 2 & 3 moved an application on 01.07.2024 under Order 21 Rule 90 of CPC for setting aside the auction sale held on 29.04.2024. The said application came to be rejected by means of 4 the order dated 11.09.2024. The petitioners thereafter moved a recall application seeking recall of the order dated 11.09.2024. Thereafter, an application was filed under Order 21 Rule 95 of CPC on

06.11.2024 by the auction purchaser for delivery of the physical possession of the property and on 26.11.2024 the trust filed an application for release of the auction money which was deposited by the auction purchaser in pursuance to the auction. On 04.12.2024, objections were filed to the application filed by the decree holder for release of money and also against the application filed by the auction purchaser for physical possession of the property. On 07.12.2024, the executing Court directed the Amin to submit a report by 10.12.2024 with respect of handing over of property of the auction purchaser. The petitioners approached this Court by filing Writ Petition being Matters Under Art. 227 No.6346 of 2024 in which an interim order was passed on 19.12.2024. On 12.12.2024, objections filed were rejected.

12. In the backdrop of the said facts, Shri Sudeep Seth, learned Senior Counsel appearing for the petitioners argues, that in the application filed for execution the property sought to be sold did not belong to the judgment debtor company and this fact was not verified by the executing Court prior to attachment, the mandatory provisions of Order 21 Rule 14 of CPC was not observed; no report was called from the revenue authorities with regard to the ownership of the property. It is further argued that the property which is subject matter of dispute being situate at Khasra No.128C was purchased by Shri Ashok Kuma Srivastava – father of Petitioner Nos.1, 2 & 3 and husband of Petitioner No.4. In the year 2008, the said Shri Ashok Kumar Srivastava constructed a building to run Cancer Institutes in the name of Lavanaya Ayurvedic Schools of Nursing and Pharmacy, Lavanaya Ayurvedic Hospital and Research Centre and Lavanaya Ayurvedic Pvt. Ltd. The said three institutes were being run by a society namely Lavayanaya Ayurvedic Charitable Cancer Shodh 5 Sansthan. In the year 2013, Shri Ashok Kumar Srivastava took financial assistance from the bank and mortgaged property owned by him with the Capital First Bank and was also a personal guarantor in the said loan. Subsequently, Shri Ashok Kumar Srivastava died and thereafter, the bank started recovery proceedings, however, it is informed that the said loan has been settled and the property mortgaged with the bank was released. It also bears from record that after the death of Shri Ashok Kumar Srivastava, all the petitioners being the legal heirs, became the owners of the said property by virtue of succession. It was specifically argued that during this lifetime, Shri Ashok Kumar Srivastava never executed any deed of assignment assigning the land in favour of either the company or to anyone else and remained the recorded owner of the property and the constructions standing thereupon. After his death also, no deed of transfer has been executed by the legal heirs of Shri Ashok Kumar Srivastava.

13. In the backdrop of the said, it is argued that it is well settled that only the property of the judgment debtor company could be attached and sold for execution of a decree which was only against the company and the executing Court by various orders, which are impugned herein, has erred in attaching and selling the land owned by the petitioners in their individual capacity for satisfying the decree which was only against the company. It is further argued that the mandatory provisions specifically Order 21 Rule 14 of CPC, if were, complied with by the executing Court, it would not have led to the property being sold despite not being owned by the company. He, thus, argues that all the orders impugned in the writ petitions are liable to be quashed.

14. It is also re-emphasized that petitioner nos.1, 2 & 3 were not a party to the suit nor were they ever made party in the execution case and thus, the property owned by them could not have been sold in 6 auction as has been done. It is further argued that petitioner no.4, although was made a party in her capacity as a Director of the company, however, no decree existed against her. It is lastly argued that the decree has been executed against strangers to the decree passed in the suit and against the land which is owned by the petitioners.

15. It is also argued after drawing my attention to the attachment application filed by the decree holder,that even in the said application it was stated that land was owned by Shri Ashok Kumar Srivastava on which constructions were raised and the hospital is running, however, in the auction notice the entire property including the Land and building was put up for sale and was also sold.

16. It is also argued that the reasoning given by the executing court that company had raised constructions on the land owned and thus the entire property was that of the company is contrary to settled position in law and without there being any pleadings to that effect.

17. The decree holder Capt. Dilavar Singh Sanghwan argued in person. He extensively argued that Civil Revision No.47 of 2021 was filed by petitioner no.4 as the Chairman of the company and all the issues as are being raised were specifically raised and decided in Civil Revision No.47 of 2021 vide judgment dated 07.12.2022 and as such, the second petition on the same grounds was not maintainable. He further argues, on the strength of an affidavit filed in Writ Petition being Matters Under Art. 227 No.2694 of 2022, that in the balance sheets of Lavanya Ayurvedic Pvt. Ltd., the petitioner no.1 was also a Director apart from petitioner no.4. He further argues that in the balance sheet of the company, fixed assets were shown which cannot be other than the hospital and the auctioned property, and once all these issues were considered and decided vide judgment dated

07.12.2022 passed in Civil Revision No.47 of 2021, the same cannot 7 be agitated once again and the writ petitions on that ground are liable to be dismissed.

18. He further argues with regard to maintainability of the petitions under Art. 227 of the Constitution that a judicial order of a competent Court of law cannot be said to be violating any fundamental rights of an individual and cannot be challenged through a Writ Petition under Art. 227 of Constitution.

19. Shri Pranav Agarwal, learned counsel appearing for auction purchaser in his oral argument submitted that the judgment passed by Revisional Court in Civil Revision No.47 of 2021 decided the issue with regard to ownership of the property and the same would operate in ‘rem’ and would be binding on all. In his written arguments however he relies upon a judgment in the case of Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.1 which was also noticed in subsequent judgment in Vidya Drolia v. Durga Trading Corpn2. Relevant paragraphs are quoted herein below: “48. A judgment in rem determines the status of a person or thing as distinct from the particular interest in it of a party to the litigation; and such a judgment is conclusive evidence for and against all persons whether parties, privies or strangers of the matter actually decided. Such a judgment “settles the destiny of the res itself” and binds all persons claiming an interest in the property inconsistent with the judgment even though pronounced in their absence. [ G.C. Cheshire & P.M. North, Private International Law, 12th Edn. by North & Fawcett (Eds.) (London : Butterworths, 1992), p. 362.] By contrast, a judgment in personam, “although it may concern a res, merely determines the rights of the litigants inter se to the res”. [ G.C. Cheshire & P.M. North, Private International Law, 12th Edn. by North & Fawcett (Eds.) (London : Butterworths, 1992), p. 362.] Distinction between judgments in rem and judgments in personam turns on their power as res judicata, [ G.C. Cheshire & P.M. North, Private International Law, 12th Edn. by North & Fawcett (Eds.) (London : Butterworths, 1992).] i.e. judgment in rem would operate as res judicata against the world, and judgment in personam would operate as res judicata only against the parties in dispute. Use of expressions “rights in rem” and “rights in personam” may not be correct for determining non-arbitrability because of the interplay between rights in rem and rights in personam. Many a times, a right in rem results in an enforceable right in personam. Booz Allen & Hamilton Inc. [Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., 1 2