MAMTA DEVI AND ANR vs VIJAYA BANK AND ORS on 17 August 2019

FINAL ORDER

The present appeal has been filed by the appellants under Section 30 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the impugned order dated 20.06.2019 passed by the Ld. Recovery Officer-II of this Tribunal in RC No. 374/2016 whereby the objections filed on behalf of the appellants were dismissed and Ld. Receiver has been appointed to take actual and physical possession of the property-in-question being property admeasuring 80 sq. yards bearing Plot No. A-106, out of Khasra No. 23 in the area of Village Bharola, Majlis Park Colony, Delhi.

2. The brief facts of the case are that the appellants herein are neither the borrower nor the guarantor and in fact, they are in legal possession of the property-in-question and also having the original chain of the documents of the entire property. It is also submitted that at the time of the purchase of the said property, the entire property consist of 180 sq. yds., accordingly, the appellants verified the chain of title deeds including registered Sale Deed of the portion measuring 80 sq. yds. existing in the name of Sh. Kirpal Singh who has purchased the same from, none else, but his mother Ms.

Gurbachan Kaur by virtue of registered sale deed dated 06.06.2002 whereas out of total land area of 180 sq. yds., 100 sq. yds. was sold by way of Agreement to Sell dated 23.01.2017 and GPA dated 10.05.2011 to other brothers of Sh. Kirpal Singh / sons of Ms. Gurbachan Kuar i.e. Sh. Gurdev Singh and Sh. Harcharan Singh and further, Ms. Mamta Devi and Ms. Manmeet Kuar acquired the property- in-question through GPA for sale consideration of Rs. 70.0 which was duly registered on 02.01.2012 with the Sub Registrar Office, Delhi and Agreement to Sell was executed on 23.01.2012 apart from Possession Letter, Receipt as well as Will whereas, the respondent no. 1 bank is claiming the mortgage over the property of Sh. Kirpal Singh on the basis of forged and fabricated documents, in fact, the original sale deed is lying with the appellants and documents which were deposited with the bank are nothing, but, false and forged documents. It is also stated in the appeal that the appellant herein is bonafide purchaser of the property-in-question, therefore, Ld. Recovery Officer failed to rely upon the fact that the original documents were in possession of the appellant and the mortgage, stated to have been created in favour of respondent bank, was based on forged and fabricated documents, hence the bank cannot take the possession thereof. Accordingly, prayed for setting aside the impugned order dated 20.06.2019 passed by Ld. Recovery Officer.

3. On the other hand, detailed reply to this appeal has been filed on behalf of respondent no. 1 bank denying all the allegations and stating that the property-in-question was, in fact, equitably mortgaged for availing the loan facility by Sh. Kripal Singh and the OA filed on behalf of respondent no. 1 bank was duly decided and it was considered in the OA that the mortgage was rightly created in favour of the respondent no. 1 bank. Apart that, preliminary objections have been raised by the respondent no. 1 bank that the appellants had filed an SA bearing no. 237/2015 under SARFAESI Act 2002 which was dismissed by this Tribunal, vide detailed order dated 15.06.2017, however, the said order was never challenged, therefore, the same has attained finality and action / measures taken under Section 13(4) were held valid. It is also submitted that Section 78 of Transfer of Property Act has nothing to do with the priority of title and same is limited in application to priority of charge among the competing mortgagees, but the appellants herein are not the mortgagors and are claiming their right, title and interest in the property-in-question on the basis of GPA, Agreement to Sell etc. which were executed later on i.e. on 23.01.2012. Apart that, one SA bearing no. 646/2011 was also filed on behalf of Sh. Kirpal Singh, being proprietor of M/s Saini Dewatering, but the same was also dismissed in default on 14.01.2015 wherein Sh. Kirpal Singh never denied in the said SA that the equitable mortgage was not created in favour of the respondent bank, therefore, the appellants herein are claiming their right, title and interest in the property-in-question merely on the basis of GPA and Agreement to Sell, which does not create any valid title in their favour, accordingly, prayed for dismissal of present appeal.

4. Heard Ld. counsels for both the parties and record has been thoroughly perused. In the present matter, on behalf of the appellants herein, it is contended that the title deeds which have been deposited by the borrower / Sh. Kirpal Singh with the respondent bank are bogus and the record which is in custody of the appellants and the sale deed, upon the basis of which the power of attorney has been executed in favour of the appellants, is original and duly matches with the record of Sub-Registrar office, as the certified copy of sale deed has been obtained from the office of the Sub-Registrar which shows that the stamps papers are similar to that of the Sale Deed, which is in possession of Sh. Kirpal Singh and possession of the property-in-question is with the appellants. Further, Ld. counsel for the appellant relied upon the Judgment of Hon’ble High Court of Calcutta in the matter of Lloyds Bank Ltd. Vs. P. E. Guzdar And Co. dated 10.04.1929 stating that it is presumed that the mortgage has to be shifted to the present appellants and accordingly, prayed for acceptance of appeal.

5. On the other hand, Ld. counsel for the respondent no. 1 bank vehemently contended that the appellants are not holding a valid title over the subject property and the appellants are relying upon the General Power of Attorney, Sale Agreement and Will etc. dated 20.01.2012, which were executed after creation of equitable mortgage in favour of the respondent no. 1 bank on 24.04.2010 with respect to the portion of 80 sq. yards belonging to Sh. Kirpal Singh. Even, Ms. Mamta Devi and Ms. Manmeet Kuar, who are present appellants, had earlier filed SA No.237/2015 which was dismissed by this Tribunal vide order dated 15.06.2017. Apart from that, one another SA bearing No.646/2011 was also filed by Kirpal Singh, being proprietor of M/s Saini Dewatering, which was also dismissed-in -default vide order dated 14.01.2015. Further, the said order dated 15.06.2017, passed by this Tribunal in SA No.237/2015 was never challenged before the Appellate Authority. Apart that, Sh. Kirpal Singh also admitted in the SA No. 646/2011 about availment of loan facility from the respondent no. 1 bank and not denied about the equitable mortgage created in favour of the bank, but the said SA was ultimately dismissed- in-default on 14.01.2015 and the said order was never challenged. It is further argued that the intention of the borrower/ mortgager has to be seen as there is clear intention of Sh. Kirpal Singh to create equitable mortgage in favour of the bank and also relied upon citation of Hon’ble High Court of Calcutta in the matter of Amulya Gopal Majumdar Vs. United Industrial Bank Ltd. & Ors. in A.F.O.D. Nos. 481 of 1972 and 127 of 1977. Once, the intention is there and the ownership was vested in the name of Kirpal Singh i.e. mortgager of the respondent no. 1 bank, then presumption is that the equitable mortgage was rightly created. It is also stated that the documents are forged and fabricated, which are in possession of the bank, but at that time Sh. Kirpal Singh was owner of the property-in-question and accordingly, he intentionally created equitable mortgage and this fact has already been decided in the OA to the effect that equitable mortgage was rightly created by Sh. Kirpal Singh in favour of respondent no. 1 bank herein and that order was not challenged before the Appellate Authority and merely on the basis of Power of Attorney, Sale Agreement and Will etc., the appellant is not entitled for stay / acceptance of the appeal as the said documents does not create any substantive right, title and interest in favour of the appellant. Further, it is also contended by the Ld. counsel for the respondent no. 1 bank that the symbolic possession of the property still vests with the bank.

6. Though, in the present matter, it is being contended on behalf of the appellants that the original title deeds are in possession of the present appellants but it is also a matter of fact that no such evidence was led before the Ld. Recovery Officer for the said documents i.e. Sale Deed executed in favour of Sh. Kirpal Singh, which is in possession of appellants, was genuine and the Sale Deed, which is in possession of the respondent bank, is forged and fabricated one. Apart that, Sh. Kirpal Singh, being proprietor of M/s Saini Dewatering, had filed an SA no. 646/2011 which was, although, dismissed in default on 14.01.2015, in the said SA, it was never denied on the part of Sh. Kirpal Singh that he has not created any equitable mortgage with the respondent bank. Apart that, one SA No. 237/2015 was filed by Ms. Mamta Devi and Ms. Manmeet Kaur which was also dismissed on merits and in the said SA, appropriate opportunity was there with the appellants herein to prove the fact that the said documents, by virtue of which, the equitable mortgage was created in favour of respondent no. 1 bank, was based on forged documents, and further, the documents, which are in possession of the appellants, were genuine one, but it is not so proved.

Apparently, even the order dated 15.06.2017 passed in SA no. 237/2015 was never challenged, meaning thereby that the findings recorded by the Ld. Predecessor of this Tribunal had attained finality and the same is binding upon the present appellants. Moreover, if the power of attorney, upon which the appellants are relying upon and claiming right over the property, meaning

thereby that they have entered into the shoes of Sh. Kirpal Singh, and if it is so, then the present appeal, being power of attorney holder of Sh. Kirpal Singh, is challenging the fact that the equitable mortgage was not created in favour of respondent no. 1 bank, which he stand estopped once it is so admitted in SA No. 237/2015. The execution of Agreement to Sell mere, does not create any right, title and interest in favour of the appellants herein. Though, the appellant has relied upon a citation in the case of Lloyds Bank Ltd. (supra), but the facts of the said case are different to the present appeal as in the said matter, the equitable mortgage was created and it was held that the respondent bank was “gross neglect” in creating equitable mortgage of the property and the charge of the respondent bank, who was guilty of “gross neglect” must be postponed to that of the appellant bank. Rather, in the present case, the appellants herein are claiming right on the basis of the GPA executed by mortgagor of the bank Sh. Kirpal Singh and he is not creating mortgage in the favour of the appellants herein, therefore, the aforesaid said citation is not applicable to the present facts. On the other hand, for the sake of arguments if it is presumed that the documents executed in favour of respondent bank are forged and fabricated one, even then, the borrower / mortgagor / Sh. Kirpal Singh and the bank were having prior right, title and interest in the said property on that day, as the appellants herein are relying upon the documents, which were executed on 02.01.2012 / 23.01.2012 i.e. GPA, Agreement to Sell, Receipt, Possession Letter / Will etc., whereas equitable mortgage was already created in favour of the bank by way of deposit of documents on 24.04.2010, therefore, by the time when it was stated to have been purchased by the appellants, the equitable mortgage of the property-in-question was already stand created in favour of respondent no. 1 bank on 24.04.2010. Even, the sale of immovable property, based on such documents, is hit by the Law laid down by Hon’ble Supreme Court in Suraj Lamp Judgment. Hence, the transaction of sale is not valid and the said documents does not create any right in the favour of the appellants in the property-in-question.

7. Further, the intention of the borrower / mortgagor has to be seen and from his act and conduct, once it is proved that he has duly executed the loan documents etc. and also executed the Memorandum of Deposit of Title Deeds in favour of the respondent no. 1 bank, this raises presumption that there was clear intention on the part of Sh. Kirpal Singh to create the equitable mortgage qua the property-in-question, to which, he was owner-in- possession on that day. In this regard, the reliance can be placed upon the citation i.e. Amulya Gopal Majumdar (supra). Therefore, it is held that the equitable mortgage was rightly created in favour of the respondent no. 1 bank by Sh. Kirpal Singh and appellants herein do not have any substantive right, title and interest in the property-in-question merely on the basis of GPA, Agreement to Sell etc. Accordingly, there is no apparent illegality or irregularity in the impugned order dated 20.06.2019 passed by Ld. Recovery Officer and the same sustains. Resultantly, finding no merits in the present appeal, the same stands dismissed with no orders to costs. File be consigned to the records.

(DHARMINDER SINGH) PRESIDING OFFICER DRT-III, DELHI (Pronounced in open court) Dated: 17.08.2019 AB