SMT USHA DEVI vs ORIENTAL BANK OF COMMERCE on 14 November 2019

**FINAL ORDER**

The present appeal has been filed by the appellant under Section 30 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the impugned order dated 27.04.2018 passed by the Ld. Recovery Officer in RC No. 227/2015 dismissing the objections / applications filed by the appellant along with other relief(s).

14/11/2019

Appeal No. 14/2018

2. The brief facts of the case are that instant appeal is being filed against the impugned order dated 27.04.2018 passed by Ld. Recovery Officer-II, DRT-III, Delhi, wrongly, erroneously and arbitrarily dismissing the objections / applications preferred by the appellant herein *inter alia* invoking Rule 11 of the 2^nd Schedule to the Income Tax Act 1961 assailing and challenging the execution proceedings and actions towards attachment and sale of the residential Flat of the appellant i.e. Flat No. 432, 3^rd Floor, Pocket A, Sector D, Shalimar Bagh, Delhi (hereinafter referred to as 'property-in-question'). It is stated in the appeal that specific directions were contained in the Order / Judgment dated 12.02.2018 passed by Hon'ble DRAT while allowing the appeal of the appellant herein and setting aside the Order dated 08.08.2016 passed by Ld. Recovery Officer in RC No. 227 of 2015 and the Order dated 26.07.2016 passed by Ld. Presiding Officer, DRT-III in appeal No. 44/2016 in directing remand of the matter to the Recovery Officer. It is further stated in the Appeal that the Hon'ble DRAT by its order / judgment also gave specific directions on the matters to be adjudicated and inquired into by the Recovery Officer and more so keeping in view the judgements and ratio and the law decided *inter alia* by the Hon'ble High Court of Delhi. But, in utter defiance of the Order / Judgement dated 12.02.2018 passed by Hon'ble DRAT, the Recovery Officer in the 14/11/2018

present case has proceeded illegally, capriciously and in a most arbitrary manner in passing the impugned order.

3. The factual matrix giving rise to file present appeal are that appellant's father and elder sister were in acquittance of the respondent no. 2 herein / Sh. Sukumar Bagh. Owing to such acquaintance, the appellant herein joint the service as a part time teacher in Rishi Arbindo Public School and as a coordinator of Yuva Vikas Welfare & Educational Trust, both the institutions were being under the stated Chairmanship of the respondent no. 2 herein. The respondent no. 2 held out and represented to the late father of the appellant as also the appellant that he was the owner and in occupation of the property-in-question and was desirous of selling all his rights, title and interest in the same. Thereafter, respondent no. 2, on 11.08.2004 sold, conveyed and transferred all of his rights, title and interest in respect of the property-in-question in favour of the appellant and also handed over the vacant and peaceful possession of the same to the appellant and hence certain documents were duly executed by respondent no. 2 in favour of appellant herein on 11.08.2004 viz. registered agreement to sell and purchase; registered general power of attorney; registered special power of attorney and registered WILL. It is stated that though a Receipt A handwritten signature in black ink, consisting of stylized loops and a horizontal line, followed by the date "14/11/2018" written below it.

Appeal No. 14/2018

was also executed confirming receipt of the sale consideration, but same is not presently traceable by the appellant, however, same is of no consequence in view of the fact that the said registered Agreement to Sell dated 11.08.2004 itself records, acknowledges and confirms the receipt of the said total sale consideration and factum of receipt of total sale consideration also finds mention in the Judgment dated 17.02.2014 passed by Id. Trial Court in Suit No. 102 of 2013. But the Ld. Recovery Officer in passing the impugned order has placed unnecessary emphasis of the absence of the separate receipt. It is further stated that the appellant and her family shifted into the said Flat immediately on execution and registration of said documents on 11.08.2004 and since then she is the lawful owner and in possession of the property-in-question.

4. Further, it is also submitted that the appellant was married on 16.12.2004 from the said property and the appellant and her husband were blessed with a daughter on 17.06.2006 and in any event documents including but not limited to various bills, wedding card of the appellant, daughter's birthday card, telephone bills, LIC receipts, passports, election cards, Aadhar Cards, Gas connection bills etc. would establish the same beyond even any iota of doubt. The fact that possession of the property- 14/11/2018

in-question was delivered by none else than the respondent no. 2 to the appellant, was not denied or disputed by the respondent no. 2, but rather categorically admitted by him and in any event proved by the appellant. In any event, the respondent no. 2 could not be heard on matters clearly decided against him by the said Judgment dated 17.02.2014 passed by the Civil Court against him in his own Suit, which was final and binding and of which, no challenge was even stated to have been made by the respondent no. 2. Hence, any such self-serving statements purportedly made and recorded by the Recovery Officer ought to have been disregarded and discarded. It is further stated that before any alleged mortgage was to be attached by the respondent bank as had been allegedly offered to it by the respondent no. 2, due diligence of the records of the concerned Sub Registrar, inspections, valuation reports relating to the property-in-question would necessarily have been sought for and obtained by the respondent bank and it is unbelievable that a proper inspection of the said records would not have revealed the said documents executed in favour of the appellant and the rights and interest created by the respondent no. 2 in favour of the appellant. The respondent bank, in any event, is deemed that it had notice of the same inter-alia by virtue of the relevant explanation to Section 3 of the Transfer of Property A handwritten signature in cursive script, followed by a diagonal line and the date "14/11/2019" written below it.

Act, and all relevant case law cited by the appellant before the Ld. Recovery Officer. Further, as part of any process of considering requests for loans and of creation of mortgage over any property, all banks or FIs or such like creditors including the respondent bank always and in any even in the ordinary course engage valuers from their approved panel and depute the same for the purposes of valuations, inspections of the entire property proposed to be accepted as fit to be acceptable for mortgage as security for any loans or facilities. If any actual valuer had been deputed, it would have undoubtedly revealed the occupancy of the appellant and her family in the property-in-question and the interests that she had in relation to the property-in-question. Further more, though all such inspection reports, non-encumbrance reports as obtained from its panel advocate(s) and/or valuation reports of the relevant dates ought to have been in the power and possession of the respondent bank, the same were not pleaded, produced or proved in the entire proceedings upto the proceedings before the Hon'ble DRAT or thereafter after remand, to the Recovery Officer and the respondent bank did not produced any such valuation reports or inspection reports or alleged non-encumbrance reports. The Recovery Officer ought to have taken an adverse view and inference against the respondent bank and clearly, the principles of Section 114(g) of the Evidence Act, 14/11/2018

was attracted in the present case against the respondent bank. It is also stated that in the present case, the principles inter-alia of Section 48 and also Section 78 of the Transfer of Property Act would apply to the present case in favour of the appellant and against the respondent bank.

5. It is stated in the appeal that it is a clear case of fraud and manipulations attributable to the respondent bank and respondents no. 2 & 3. Having sold, transferred and conveyed all his rights, title and interest of whatsoever nature in respect to the property-in-question in favour of the appellant and that, too prior to the alleged date of alleged mortgage, the respondents no. 2 & 3 had no mortgageable rights, title or interest in the said property-in-question.

6. In 2005, persons claiming to be the officers of the respondent bank, came to the property-in-question stating that the respondents no. 2 & 3 had purportedly taken a loan for the purchase of the property-in-question and had also allegedly mortgaged the property-in-question to the Bank. After putting the Bank to notice by herself and her advocate inter-alia by Notice dated 07.09.2005 of her ownership of the property-in-question and providing copies of all the said documents that had been executed in her favour, as advised, the 14/11/2019.

Appeal No. 14/2018

appellant filed a suit being Civil Suit no. 198/2005 on or around 21.09.2005 inter-alia against the respondent no. 2 and the respondent bank herein.

7. The respondent no. 1 is the bank that claims and alleges that the respondents no. 2 & 3 obtained a Loan on or around 10.01.2005 to the extent of Rs. 12.0 lac and that too for the alleged purposes of purchasing the property-in-question by the respondent no. 1. The respondents no. 2 & 3 are husband and wife. Though, conveniently avoiding the execution proceedings before the Recovery Officer, the same had also sought to resist the petition and motions filed by the appellant. The respondent no. 4 is the alleged auction purchaser who claims to have participated in an alleged auction conducted under the orders passed by Ld. Recovery Officer. In fact, the respondent no. 4 was aware at the time he sought to participate in the impugned auction, that the appellant herein was in actual and continuous physical possession of the property-in-question. Though, the respondent no. 4 was not impleaded as a party to the appeals preferred by the appellant giving rise to the orders preceding the earlier orders passed by the Recovery Officer and the Order dated 21.02.2017 passed in the earlier appeal filed by the appellant before Hon'ble Tribunal being Appeal No.57 of 2016, however, in view of the peculiar facts and circumstances of the instant case, 14/11/17

as also the reliefs sought for, the respondent no. 4 was joined as a respondent in Appeal that was preferred before Hon'ble DRAT being Appeal No. 98 of 2017 being a necessary and proper party to the instant Appeal. Thus, to avoid any technical objection that may be taken at a later stage, the respondent no. 4 has been impleaded to the present Appeal as well.

8. It is stated in the Appeal that on 21.09.2005, the appellant herein filed a suit for permanent injunction before Ld. Senior Civil Judge, being Civil Suit No. 198 /2005 titled as *Mrs. Usha Devi Vs. Sh. Sukumar Bagh & Anr.* Since the appellant / objector was subsequently embroiled in the litigation with the respondent bank owing to the latter's initiation of actions and measures under the SARFAESI Act, the attention of the appellant had been diverted to save her property from the onslaught of the respondent bank by recourse to the provisions of the SARFAESI Act 2002, she lost track of the suits filed by her and this Suit got dismissed for non-prosecution on 19.12.2013. Further, the suit being Civil Suit No. 2322/2009 (renumbered as Suit No. 102 of 2013) on or around 12.10.2009 filed by Sh. Sukumar Bagh, the respondent no. 2 herein / CD No. 1, against the appellant herein for recovery of possession, injunction, declaration and damages came to be dismissed by a detailed Judgment & Decree dated Handwritten signature and date. The signature is a stylized script, possibly reading 'A. G.' or similar. Below the signature, the date '14/11/2018' is written in a cursive style.

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17.02.2014 passed by Sh. Sanjeev Aggarwal, ADJ-03, Rohini Courts. The findings in Judgment & Decree dated 17.02.2014 notes that suit is of utmost importance and in any even also vindicate the contentions of fact and law urged by the appellant, however, the Ld. Recovery Officer in passing the impugned order has avoided dealing with all such facts and circumstances raised before him by the appellant as also the effect of all such findings and decision of the said Civil Court.

9. It is further stated in the appeal that while the Suit filed by the appellant herein was pending adjudication, as also the Suit filed by the respondent no. 2 filed against the appellant, the respondent bank proceeded to file an OA under Section 19 of the RDDB&FI Act, 1993 being OA No. 195/2010 before Ld. DRT-III, which gave rise to an ex parte Final Order and Recovery Certificate in its favour and later giving rise to execution proceedings before the concerned Recovery Officer, being RC No. 227/2015. The appellant herein was admittedly not a party to the said OA and is not a CD and appellant was / is not a borrower / guarantor / mortgagor qua the respondent bank. No orders passed in the said OA nor the RC issued pursuant to Final Order can be held to be binding on the appellant and the appellant herein was intentionally and deliberately not arrayed as a defendant, contrary to all canons A handwritten signature in dark ink, followed by the date "11/11/14" written below it.

of law and principles of Order 34 Rule 1 CPC. It is pertinent to note that on the date of filing of the aid OA, the respondent bank herein as the applicant to the OA claimed an amount of Rs. 18,58,118/- and the said OA proceeded exparte against the defendants arrayed thereto being Sh. Sukumar Bagh and his wife. It is stated that the respondent bank, despite being aware of the rights, title and interest being agitated by the appellant / objector herein in the said Suit in which the respondent bank was impleaded as a defendant and whose application under Order 7 Rule 11 CPC was still pending on the date of filing of the OA, intentionally and deliberately did not array the appellant / objector herein as a defendant in the said OA and the respondent bank was aware of the rights and interest being agitated by the appellant that she was in continuous possession of the property since 11.08.2004.

10. It is also stated in the appeal that on 15.10.2011, the appellant herein received notice of the Receiver appointed by Ld. ACMM, Delhi to take possession of the property-in-question. It is stated that the respondent bank filed an application under Section 14 of SARFAESI Act, wherein the respondent bank deliberately did not disclose the possession of the appellant and her family while filing the said application. As advised, on 14.10.2011, the appellant preferred an SA under Section 17 of the A handwritten signature in black ink, followed by the date 14/11/2019 written below it.

SARFAESI Act 2002 before the Ld. DRT-III being SA No. 555/2011 and vide interim order dated 14.10.2011, Ld. DRT-III directed the respondent bank herein not to proceed against the property-in-question subject to the appellant / objector herein depositing an amount of Rs. 3.50 lac in the manner as directed within 30-days. The respondent bank, in its reply, did not disclose the filing of the OA, the proceedings that were being conducted thereunder and it was during the pendency of the SA that on 10.06.2015, the respondent bank obtained an ex parte Final Order in the OA that had been filed by it and consequent issuance of the Recovery Certificate dated 27.07.2015. Despite passing of said Final order in the OA and issuance of the RC and the steps being taken towards the auction of the property-in-question before the Recovery Officer, the material facts relating thereto were not disclosed and the respondent bank waited till the property had been auctioned by the Recovery Officer in execution of the RC till such disclosure was made before the Presiding Officer before whom the SA was pending and interim order passed on 14.10.2011 was still in operation and subsisting. It is further stated that as per the directions given by Ld. DRT-III on 14.10.2011 in the SA No. 555/2011 filed by the appellant / objector, the appellant undisputedly deposited the entire amount of Rs. 3.50 lac with the respondent bank at its Rohini Branch by two A handwritten signature in dark ink, followed by the date "14/11/2018" written below it.

payments of Rs. 2.0 lac and Rs. 1.50 lac. It is also stated that receipt(s) of the amount of Rs. 3.50 lac is not in dispute and the interim order dated 14.10.2011 remained operative and was not modified or vacated upto the dismissal of the SA on 26.07.2016, however, no direction was passed in respect of the said amount of Rs. 3.50 lac deposited by the appellant pursuant to the order dated 14.10.2011 as a deposit for grant of the interim relief. It is further stated that at no point of time was there any order of appropriation of the said amount and there could have not been any such direction towards any adjustment or appropriation of the said amount of Rs. 3.50 lac since the appellant / objector was neither a borrower, guarantor or mortgagor qua the respondent bank. It is also stated that rate of the FDR of any nationalized bank interest being 7% - 8% compounded quarterly must be afforded to be appellant and accounted for by the bank besides the principle amount of Rs. 3.5 lac, which as stated had come to be deposited on 15.11.2011. Further, it is also pertinent to state that the suit filed by the appellant herein for specific performance of contract being Suit No. 399 of 2007 also came to be dismissed for non-prosecution on 25.03.2013. So far as said SA No. 555/2011 was concerned, without prejudice to the rights and contentions of the appellant herein, an endeavor was made by the appellant to arrive at an amicable A handwritten signature in black ink, followed by the date "14/10/2018" written below it.

settlement and the matter was referred to the Lok Adalat / Recovery Camp and the respondent bank agreed to accept a full and final amount of Rs. 20.86 lac before 31.12.2014 towards release of all its claims qua the said property and as per the Affidavit dated 08.10.2015 and the statement of account filed with the Ld. Recovery Officer, the respondent bank had declared that a total sum of Rs. 22,27,400.42 was acceptable / due but due to financial difficulty, the appellant was unable to arrange the funds in time. Thereafter, the appellant later on arranged the money and presented the cheques before the Ld. DRT-III in SA No. 555/2011 on 07.01.2015, however, the then Presiding Officer stated that the appellant being a third party, could not be called upon to make payment. Thus, thing stood for no fault of the appellant.

11. Further, it is also pleadings that so far as proceedings before Ld. Recovery Officer are concerned, on 12.12.2014 the respondent bank obtained a Valuation from P&A Valuetech Pvt. Ltd. which was obtained much prior to the passing of the final order and issuing of RC in the OA filed by respondent bank. Further, the said Valuation Report clearly shows the possession of the flat by the appellant / objector and her husband, however, Ld. Recovery Officer has miserably failed in its 14/11/2018.

functioning as an unbiased and impartial quasi-judicial authority.

12. It is also stated in the Appeal that on 10.06.2015, without notice to or the knowledge of the appellant / objector and without even disclosing the same before the Hon'ble DRT before which the SA was pending, the respondent bank proceeded with the OA and obtained a Final Order dated 10.06.2015 and thereafter the Recovery Certificate was issued on 27.07.2015. It is further stated that even at the time of issuing RC, the respondent bank did not intimate or inform the Ld. Recovery Officer of the pending SA, filed by the appellant / objector herein or the interim order passed therein. It is stated that the entire order sheets of the Ld. Recovery Officer file is conspicuous by the absence of any reference to the said SA and the interim order passed on 14.10.2011 and disclosure is only made of the dismissal of the SA, much later after the said Flat came to be auctioned. Apparently and clearly taking advantage of the absence of the appellant qua the pending execution recovery proceedings pending before the Ld. Recovery Officer in RC No. 227/2015, the Recovery Officer at the instance of the respondent bank initiated attachment and auction proceedings qua the said Flat. It is stated that all the proceedings and orders in relation to the said OA continued in the absence of the appellant 14/11/2018

and behind her back and without any notice or information to the appellant and this is also an illegal act attributable to the respondent bank and also an act of blatant fraud, being also intentional concealment, suppression and clearly malafide hence, any orders obtained by the respondent bank including the Final Order and Recovery Certificate or any acts based thereon cannot be binding on the appellant herein. Further, on 30.09.2015, the Recovery Officer issued a notice for settling a sale proclamation to the respondents no. 2 & 3 herein calling upon them to disclose any encumbrances, charges, claim or liabilities to the property-in-question. However, respondents no. 2 & 3 did not disclose the fact of possession by the appellant herein since 11.08.2004 to the Recovery Officer. Further, on 08.10.2015, the respondent bank filed an Affidavit for reserve price and auction particulars before the Recovery Officer wherein the details of concerned officer to be contacted by the interested bidders for property related query, such as detailed terms and conditions and inspection of the property was mentioned. It is pertinent to note that the respondent no. 4 admittedly, did not bother to exercise the right and liabilities granted to him before purchasing the property-in-question. Had the respondent no. 4 been diligent enough, he could have become aware of the fact of the appellant being in possession of the property-in-question.

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18Appeal No. 14 2018

13. It is also stated in the appeal that in the first proclamation and order of sale dated 16.10.2015 (based on the Valuation Report dated 12.12.2014), the records of the Recovery Officer would reveal that the first proclamation of the sale of the Flat came to be issued in respect to the said Flat by an order dated 16.10.2015. Admittedly, the said proclamation of sale did not disclose the possession of the appellant / objector and her family which was within the knowledge of the respondent bank and also the valuation report itself clearly mentions the possession of the said Flat with the appellant and her husband by name. There are also other clear violations of the relevant provisions of the 2^nd Schedule to the Income Tax Act 1961 as to the requirements of the proclamation of sale etc. The auction date of the Flat in terms of the order dated 16.10.2015 was fixed on 01.12.2015 with a reserve price of Rs. 68.0 lac. The property-in-question was sought to be sold on "as is where is basis and as is what is basis" which is clear from a bare perusal of the terms of the proclamation of sale itself. The respondent bank did not inform the then Ld. Recovery Officer of the actual physical possession of the appellant / objector and her family at any stage of the execution proceedings of the Recovery Officer, leading to auction notices and proclamation of sale of the property-in-question. On the other A handwritten signature in black ink, appearing to be "A. G." or similar, followed by a date "14/11/2018" written below it.

hand, the then Ld. Recovery Officer having scant or no regard to his duties and obligations in law, also did not even care to read the valuation report(s), which clearly indicated the possession of the property-in-question with the appellant / objector and her husband. No due diligence whatsoever has ever been stated to have been carried out at any stage by the Auction Purchaser / respondent no. 4 herein. It is stated that Section 3 and explanations thereof of the Transfer of the Property Act, 1882 would also be attracted qua the auction purchaser / respondent no. 4 herein in the present case and it cannot be heard to contend that he is bonafide auction purchaser "without notice". The record of RC reveals that the auction that was scheduled to be held on 01.12.2016 did not culminate in any bids and failed. Then the respondent bank asked the then Ld. Recovery Officer to reduce the reserve price and an order dated 03.12.2015 was passed by the then Ld. Recovery Officer, which clearly shows that as on 03.12.2015, the only valuation that came to be filed by the respondent bank was the valuation report dated 12.12.2014. Thus, no fresh valuation report was obtained by the respondent bank, nor placed before the Ld. Recovery Officer. The second proclamation of sale was ordered on 04.12.2015 and reservice price was then fixed at Rs. 61.20 lac and the date of auction being 22.01.2016. Clause 9 stated that "the property shall be sold at as is where A handwritten signature in dark ink, consisting of stylized letters, is positioned above a horizontal line. Below the line, the date "14/11/2018" is handwritten.

is basis and as is what is basis". Hence, the mandatory rules regarding service of proclamation, fixation were again flouted. There is no report / order relating to failure of the auction that was scheduled on 22.01.2016. Apparently, the auction that was scheduled on 22.01.2016, also did not go through and no affidavit was filed by the respondent bank. The respondent bank then filed another valuation report dated 08.02.2016 obtained through one Ramesh Kumar Arora (Second Valuation Report dated 08.02.2016). Interestingly, the respondent bank this time discarded the use of the earlier valuer and even the earlier valuation report was not shared with this valuer for comparison or otherwise. The said 2^nd Valuation Report, on the face of it demonstrate that the same was prepared without actually visiting the property-in-question and was prepared within the cool confines of the air-conditioned office of the Valuer / Branch Manager. The said valuation report was filed on 07.03.2016 as it appears from the order dated 08.03.2016. It is further stated that the then Ld. Recovery Officer merely recorded the submissions of the respondent bank and simply permitted reduction of the reserve price from the earlier amount of Rs. 61.20 lac to R. 38,42,213/-. This is a clear drop of nearly 50% of the original reserve price and 40% of the last reserve price and that too, for no justifiable reason to be found recorded by the then Ld. Recovery A handwritten signature in black ink, followed by the date "14/11/2018" written below it.

Officer. This is yet another example of the then Ld. Recovery Officer flouting the orders and directions passed by Hon'ble DRAT in a catena of cases. It is stated that all these matters were brought to the notice and attention of the present Ld. Recovery Officer, as also finding clear mention in the note of written arguments and not even dealt with it in passing the impugned Order dated 27.04.2018. Further, on 07.03.2016, the respondent bank filed an affidavit for valuation and e-auction particulars before the Recovery Officer, however, respondent no. 4 admittedly, did not bother to exercise the rights and liabilities granted to him before purchasing the property-in-question. Had the respondent no. 4 been diligent enough, he would have become aware of the fact of the appellant being in possession of the property-in-question. On 11.03.2016, the then Recovery Officer passed order / proclamation giving reserve price and fixing date of auction as 26.04.2016. It is also pertinent to note that the realizable value shown as 85% of the fair market value and no justification to give a distress value of Rs. 38,42,213/- was even provided. It is to be noted that what justification to reduce the reserve price from Rs. 61.20 lac to Rs. 38,42,213/- was and still remains totally conspicuous by its absence from the records of the present case. Even, the ordersheets of the Ld. Recovery Officer clearly reveals that there was no application of mind 14/11/18.

by the then Recovery Officer, and rather exposes, how arbitrarily and illegally the Ld. Recovery Officer was proceeding in the matter, as also the arbitrary and malafide conduct of the respondent bank. The Sale Proclamation dated 11.03.2016 in RC No. 227/2015 was then affixed on the property-in-question of the appellant. Even this proclamation of sale as per the specific terms cautions all intending bidders that the property-in-question is sought to be sold on "as is where is and as is what is basis". It is stated that the orders of the Ld. Recovery Officer or for that matter, the entire file of the RC proceedings, do not reflect satisfaction of the requirements and service as mandated by law before the auction is intended to be held.

14. It is stated in the appeal that on 19.04.2016, the appellant / objector filed her first set of objections before the then Ld. Recovery Officer praying therein that the auction stated to be conducted on 26.04.2016 ought to be cancelled, however, due to some clerical errors, the said application could not be listed. Thereafter, on 22.04.2016, the appellant / objector filed a fresh set of objections before the then Ld. Recovery Officer praying *inter alia* that the auction stated to be conducted on 26.04.2016 ought to be cancelled, as she is the rightful owner of the property-in-question and in its continuous possession since its purchase A handwritten signature in dark ink, consisting of stylized loops and a horizontal line, followed by the date "19/11/2019" written below it.

by her in August 2004. Notwithstanding the title / heading of the application, the said application necessarily was required to be considered as one under Rule 11 of the 2^nd Schedule to the Income Tax, 1961. However, without staying the scheduled auction, notice of the application was only issued. The auction was allegedly conducted on 26.04.2016 during the pendency of the said application and the respondent no. 4 is alleged to have emerged as the highest bidder. Thereafter the auction was confirmed in favour of respondent no. 4 by the Ld. Recovery Officer and consequently, a sale certificate was also purportedly issued in favour of respondent no. 4. The said amount was of Rs. 38,92,213/- as against the reserve price of Rs. 38,42,213/-, a mere Rs. 50,000/- higher. No report was filed by the respondent bank that pursuant to the proclamation of sale issued pursuant to the orders passed by Ld. Recovery Officer, how many bids in all were received by it. Clearly, the whole process was being orchestrated. Further, on 02.05.2016, the appellant herein filed her further objections vide diary no. 4712. Her earlier application was still pending and in any event, required investigation and adjudication in terms of the judgments and law laid down by the Hon'ble High Courts in terms of Rule 11 before any confirmation of auction was to be done. On 03.06.2016, the respondent bank filed its reply to the objections filed by the appellant herein. On A handwritten signature in black ink, followed by a horizontal line and the date 14/11/16 written below it.

13.06.2016, the then Recovery Officer, without appreciating the facts and circumstances of the matter, and the applicable law, dismissed the objections filed by the appellant / objector herein. In the said order, the Id. Recovery Officer, completely ignored the law laid down as to Rule 11 of the 2^nd Schedule and how such investigation is to be proceeded and adjudicated upon, accordingly, being aggrieved by the Order dated 13.06.2016 passed by the Ld. Recovery Officer, the appellant preferred an Appeal being Appeal no. 44/2016 before the Ld. Presiding Officer on 24.06.2016 under Section 30 of the RDDB&FI Act praying for setting aside the said order. The then Ld. Presiding Officer DRT-III, Delhi vide its order dated 26.07.2016 disposed off the Appeal No. 44/2016 and remanded the matter back to the Ld. Recovery Officer for fresh consideration of the objections filed by the appellant in accordance with law as per the 2^nd Schedule.

15. Further, it is submitted that simultaneously, on same day itself i.e. 26.07.2016, the SA No. 555/2011 filed by the appellant herein was taken up and respondent bank through an advocate made a statement before the Ld. Presiding Officer that the property-in-question / Flat had been sold by the Recovery Officer in RC No. 227/2015 and on the basis of said statement, the then Ld. Presiding Officer 14/11/2018

Appeal No. 14/2018

dismissed the SA no. 555/2011 of the appellant herein as being infructuous. As stated, the amount of Rs. 3.50 lac in any event could not have been appropriated by the respondent bank, and had been earning or should have been earning interest therein since the deposit in 2011, yet no order was made by the Id. Presiding Officer, hence, this amount and all interest accrued thereon, must necessarily be directed to be refunded to the appellant. Thereafter, pursuant to the Order dated 26.07.2016 of remand and despite specific directions by the then Ld. Presiding Officer vide order dated 26.07.2016, the Ld. Recovery Officer again vide Order dated 08.08.2016, illegally and arbitrarily rejected the applications / objections preferred by the appellant again and also erroneously sought to uphold his own Order dated 13.06.2016. The Order dated 08.08.2016 passed by the Ld. Recovery Officer, the appellant preferred an Appeal under Section 30 of RDDB&FI Act being Appeal No. 57/2016 before Ld. Presiding Officer, DRT-III. On 12.08.2016, the Ld. Presiding Officer was pleased to grant stay in Appeal No. 57/2016 of the operation of the Order dated 08.08.2016 passed by Id. Recovery Officer. On 23.08.2016, the respondent bank filed its reply to the appeal and thereafter on 14.12.2016, the appellant herein filed its written arguments along with relevant case laws. Thereafter, on 21.02.2017, the Ld. DRT-III pronounced in open Court that the A handwritten signature in dark ink, followed by the date "14/11/17" written below it.

appeal no. 57/2016 is dismissed. The appellant herein received a copy of Order dated 21.02.2017 only on later afternoon of 22.02.2017. On the same day itself i.e. on 21.02.2017, the Id. Recovery Officer, without receiving the duly signed copy of the Order dated 21.02.2017 passed by the then Presiding Officer, arbitrarily appointed a Receiver to take physical possession of the property-in-question. On 22.02.2017, the Receiver affixed a notice directing the appellant to vacate the premises within 24-hours of the notice. In the circumstances, on the same day i.e. 22.02.2017, the appellant herein approached the Id. Recovery Officer and filed an application submitting that 24-hours was not sufficient time to avail remedies available to her under law but the Id. Recovery Officer, without appreciating the fact that 24.02.2017 (Friday) was a gazette holiday (Shivratri) and no court / appellate Tribunal would be operational, only extended the time by 2-days and fixed the date to vacate the property on 25.02.2017.

16. Further, by the Order dated 21.02.2017 passed by this DRT-III in Appeal No. 57/2016, as also the orders in RC No. 227/2015, including but not limited to the auction / sale of the property conducted on 26.04.2016 in favour of respondent no. 4 herein, issuance of sale certificate, appointment of Receiver, the appellant herein preferred an appeal being 14/11/2018,

Appeal No. 14/2018

Appeal No. 98/2017 before Hon'ble DRAT on or around 23.02.2017. On 27.02.2017, Hon'ble DRAT granted a stay in favour of appellant qua the impugned order dated 26.07.2016 and 08.08.2016, subject to deposit of Rs. 15.0 lac. In compliance of said order, the appellant herein deposited the amount of Rs. 15.0 lac with the Registrar, DRAT on 07.03.2017 and affidavit of compliance was also filed before Hon'ble DRAT on same date. On 07.03.2017, the respondent no. 4 herein / auction purchaser filed reply to the appeal before Hon'ble DRAT and on 21.03.2017, the respondent bank also filed its reply to the appeal before Hon'ble DRAT. Thereafter, on 31.03.2017, the appellant filed rejoinder to the reply filed by auction purchaser. During the course of arguments, the appellant placed before Hon'ble DRAT a detailed list of orders and written submissions and arguments along with a compilation of relevant and applicable judgments. On 12.02.2018, the Hon'ble DRAT allowed the appeal no. 98/2017 and set aside the Order dated 08.08.2016 passed by Ld. Recovery Officer and the order dated 26.07.2016 passed by Ld. Presiding Officer, DRT-III.

17. On passing the said judgment / order dated 12.02.2018 by Hon'ble DRAT, the matter was remanded back to the Recovery Officer and detailed arguments were addressed before Ld. Recovery 14/11/2018.

Officer on 12.03.2018 by the Ld. Senior counsel on behalf of the appellant herein. Further, the Ld. Sr. Counsel on behalf of appellant also addressed further arguments before the Recovery Officer on 14.03.2018. Thereafter, on 26.03.2018, the respondent bank addressed arguments partly before Ld. Recovery Officer and also submitted written arguments and concluded its arguments on 27.03.2018. Thereafter, on 04.04.2018, the rebuttal arguments were made by counsel for appellant. However, no reply, documents or rebuttal evidence was filed either by respondents no. 2 and 3 or by respondent no. 4, nor any arguments or submissions addressed orally or in writing. Also, none of the respondents even filed their rebuttal affidavits or affidavits in opposition to the Affidavit filed by the appellant herein on 12.03.2018. Further, on 04.04.2018, the Recovery Officer, whilst noticing that respondents no. 2 & 3 had not been appearing before the Recovery Officer since long, issued a show cause notice to arrest against respondent no. 2 and listed the matter on 10.04.2018, however, respondent no. 2 did not appear before the Recovery Officer on 10.04.2018 hence once again show cause notice of arrest was issued against the respondent no. 2 and listed the matter on 13.04.2018. Moreover, on 10.04.2018, the Recovery Officer also verified the documents filed by the appellant in support of her being residing in the 14/11/2018

property. Thereafter, on 13.04.2018, respondent no. 2 appeared and certain queries were raised by Id. Recovery Officer. It is stated that by seeking to elicit a statement from the respondent no. 2, the self-serving answers necessarily had to be rejected, more so for the reasons that no replies or evidence had been filed or adduced by respondent no. 2 and further he could not be heard to say things or matters which had been covered by the said judgment passed against by him by Id. Civil Court, and of which, no appeal had been preferred or even stated to have been filed by him.

18. It is stated in the appeal that admittedly, the appellant is not even alleged to be a "borrower" in any capacity, whether as Principal Borrower, Guarantor or mortgagor. The appellant was not arrayed in the OA nor is a Certificate Debtor. In her capacity, as an objector – appellant, no amount can be said or held to be due from her towards the respondent bank nor in relation to the said Final Order and / or Recovery Certificate. In the facts and circumstances of the present case, the requirement of making any deposit as contemplated under Section 30 A of the Act would not be attracted. Hence, the appellant herein is challenging the impugned order dated 27.04.2018, in its entirety, passed by the Ld. Recovery Officer, while dismissing the objections filed by the appellant 14/11/2019.

herein. Accordingly, prayed for acceptance of appeal thereby setting aside the impugned order of dismissing the objections and also prayed for setting aside the entire auction proceedings.

19. Notice on this appeal were issued to the respondents no. 1 to 4 who appeared through their respective counsels. Though, respondents no. 1 & 4 filed their separate reply(s), however, no reply has been filed on behalf of respondents no. 2 & 3. Though on 25.10.2019, Ld. counsel for respondents no. 2 & 3 appeared before this Tribunal, but when this Tribunal passed an order that Sh. Sukumar Bagh shall appear in person on next date fixed, however, no one turned up i.e. neither the counsel nor Sh. Sukumar Bagh and failed to argue the matter.

20. On behalf of the respondent no. 1 bank, the detailed reply has been filed raising preliminary objections that the present appeal is liable to be dismissed as the appellant herein is the illegal occupant and a rank trespasser having no right, title & interest in the property-in-question and had suppressed material facts from this Tribunal. Further, the appellant herein has no locus standi to sue as the appellant has been claiming her rights on the basis of the documents i.e., agreement to sell, GPA, Family Will, all dated 11.08.2004 coupled with the possession as per the agreement was executed 14/11/2019

for meagre consideration amount of Rs. 1.00 lac, whereas, the value of the property was more than Rs. 12.00 lac. Admittedly, no receipt for consideration was filed by the appellant till the date whereas the entire chain documents were lying with the answering respondent since 10.01.2005.

21. Further, it is submitted that vide letter dated 24.03.2004, DDA written a letter to original allottee i.e., Shashi Madan regarding allotment of flat and further letter dated 16.09.2004, DDA asked Shashi Madan to take possession within 90-days on 27.11.2004 and DDA, in fact, given the possession to original allottee vide letter dated 30.11.2004. Thereafter, on 01.12.2004, conveyance deed was executed in favour of Shashi Madan through DDA who later on through her attorney executed the sale deed dated 10.01.2005 in favour of Sh. Sukumar Bagh and handed over the possession to the respondent no.2 herein i.e. Sh. Sukumar Bagh who had availed the housing loan facility from the answering bank. Further, it is submitted that when DDA was in possession of the flat in question and did not allot the same to anybody in August 2004, and the DDA actually given possession to the original allottee to 24.11.2005 then how the appellant could take the possession of the flat on 11.08.2004, therefore, all the documents are forged Handwritten signature and date: 14/11/2018

and fabricated by the appellant and the respondent no.2 as there was active collusion between them. Further, it is also submitted that till date no FIR has been lodged and as there was a fraud, accordingly the fraud vitiates all the contracts *ab-initio*.

22. On merits, the answering bank submitted that the order passed by Ld. Recovery Officer, DRT, Delhi were passed in length and it was rightly held that the appellant was not in physical possession of the property in question on 11.08.2004 and accordingly, on 16.05.2018, the interim relief was declined by this Tribunal in the present appeal. Thereafter, the order dated 16.05.2018 was challenged before the Hon'ble DRAT and Hon'ble DRAT had rightly dismissed the appeal. In fact, during the course of argument in the appeal no. 229 of 2018, the appellant not only argued the main appeal but also argued the matter on which the Hon'ble DRAT passed the order dated 12.02.2018 and further, Hon'ble DRAT passed the order dated 03.12.2018 holding the appellant as rank trespasser. Further, it is also submitted that the appellant admitted her relation with respondent no.2 and failed to explain as to why the FIR has not been lodged by her till date inspite of the fact that she gained knowledge in 2005 that the flat is not owned by respondent no.2 on 11.08.2004 and she also failed to show as to how 14/11/2019.

Appeal No. 14/2018

she has taken the possession of the flat on 11.08.2004 when the DDA had given the possession to the original allottee Shashi Madan on 24.11.2005. Further, admittedly, Suit no. 102 of 2013 was time barred and was filed in collusion between the appellant and respondent no.2 without impleading the bank as necessary party. Apart that, the appellant was well aware that she has filed her suit before Civil Court which was dismissed on 25.03.2013 and this fact was kept suppressed from all the concerned courts. Even alleged documents dated 11.08.2004 were cancelled by respondent no.2 vide letter dated 13.10.2005 written to Sub-Registrar.

23. On behalf of the answering bank it is also submitted that the judgement dated 17.02.2014 was passed exparte and appellant did not lead any evidence in the case admittedly knowing that the same is time barred. Even in the said judgement, the Ld. Court raised question regarding transfer of possession from respondent no.2 to appellant therefore, there was commission of fraud so that hurdles could be placed before the answering respondent towards realizing its outstanding. It is also submitted that both the parties i.e., appellant and respondent no.2 intentionally did not disclose the fact that the property was mortgaged with the bank and the original title documents were in control A handwritten signature in dark ink, followed by the date "14/11/18" written below it.

and custody of the answering bank. Further, the order passed in the Suit for specific performance filed on behalf of the respondent no. 2 was never challenged on behalf of the appellant. Therefore, the Section 43 & 53 does not come to the help of the appellant herein. Once, the appellant failed to prove that she was in possession of the property on 11.08.2004, accordingly, prayed that the present appeal be dismissed being false and frivolous one.

24. So far as, respondent no. 4 / auction purchaser is concerned, he has also filed his reply stating therein that he participated in the public auction held on 26.04.2016 in respect of property-in-question and he was turned out to be successful bidder and the entire bid amount of Rs. 38,92,213/- along with admissible poundage fees was deposited with this Tribunal before the due date. In pursuance to successful bidding process, the DRT(RO) issued a Sale Certificate on 13.06.2016 in favour of auction purchaser, however, even after making payment of entire sale consideration, the auction purchaser is not enjoying the fruits of same as the physical possession of the property-in-question has not been handed over despite the passage of almost 3 1/2 years. It is stated in the reply that the appellant herein is claiming to have bought the property-in-question for a meagre sum of Rs. 1.0 lac along with a Santro Car from Sh. Sukumar Bagh / CD or 14/11/2018

respondent no. 2 herein, who has taken the housing loan from CH bank, whereas, the actual value of the property-in-question was on a much higher side. Further, the appellant is claiming the title on the basis of documents like Agreement to Sell, General Power of Attorney, Family Will etc. reportedly executed on same date i.e. 11.08.2004, which itself raises a question mark on their validity in the eyes of law. In fact, the respondent bank has termed these documents as forged and fabricated by the appellant in connivance with respondent no. 2, who are admittedly known to each other. On the contrary, the chain of original documents right from allotment letter of DDA to Sale Deed dated 10.01.2005 available with CH Bank / respondent no. 1, which demonstrate the legitimate ownership of the property-in-question. Further, all the alleged documents dated 11.08.2004, produced by the appellant, were subsequently cancelled by Sh. Sukumar Bagh / respondent no. 2 and reportedly lodged a police compliant in this regard. The mere fact that the appellant is in possession of the property-in-question since 11.08.2004, as claimed by her, does not entitle her to be the legitimate owner of the house. Further, it is stated that the appellant herein, having being declared the rank trespasser, may be asked to pay the market rent i.e. Rs. 30,000/- per month or any appropriate amount, as deemed fit by this Tribunal, from the date of A handwritten signature in black ink, consisting of stylized letters, followed by the date "14/11/2018" written below it.

auction to the date of disposal of the case. Accordingly, it has been prayed to provide the possession of the property-in-question to the auction purchaser as quickly as possible and appellant herein be asked to deposit the market rent to the auction purchaser from the date of auction to be date of disposal of the case.

25. Appellant herein has also filed rejoinder to the reply filed on behalf of respondent no. 1 bank denying the allegations levelled against it and reiterating the averments made in the Appeal.

26. Heard Ld. counsels for the parties and the record has been thoroughly perused. In the present matter, Ld. Senior counsel for appellant / Usha Devi vehemently contended that Usha Devi is in possession of the House bearing no. MIG Flat No. 432, 3^rd Floor, Block D, Pocket A situated at Hyderpur, Shalimar Bagh, Delhi, which was purchased by her by way of Agreement to Sell; registered GPA; registered SPA, registered WILL, receipt etc. from respondent no. 2 herein i.e. Sh. Sukumar Bagh on 11.08.2004 and actual possession of the property-in-question was handed over by Sh. Sukumar Bagh to appellant herein on 11.08.2004. Further, it is submitted that the appellant herein even got married in the same property and her 14/11/2018

daughter was born while the appellant and her husband were residing in the same Flat and accordingly wedding reception card, invoice with respect to purchase of certain electricity items, LIC policies and MTNL connection and date of birth certificate of daughter of appellant borne on 17.06.2006, invitation card, election card, passport of appellant are existing in same address, whereas, the alleged mortgage was created much after the contract which was executed between Sh. Sukumar Bagh as well as appellant herein afterwards the sale of said Flat in her favour and the actual physical possession was with the appellant, therefore, in the said circumstances, the provision of law i.e. Section 3 of Transfer of Property Act, 1882 (TPA Act) is duly applicable and as per Sections 43, 48, 78 and 53A of TPA Act, Section 17 & 49 of the Registration Act are very much applicable and the transfer is apparently valid in view of the documents i.e. Agreement to Sell etc. which were duly registered and the possession was delivered to the appellant herein. Further, it is contended that the appellant herein filed a suit for permanent injunction before Ld. Civil Judge i.e. Suit No. 198/2005 titled as Mrs. Usha Devi Vs. Sh. Sukumar Bagh & Anr. , but since the appellant was subsequently embroiled in the litigation with the respondent no. 1 bank owing to taking actions / measures under SARFAESI Act by the respondent no. 1 bank, the attention of the appellant was

14/11/2018

diverted, accordingly, said suit was dismissed for non-prosecution on 19.12.2013, but the principle of *re-judicata* is not applicable because the dispute pertaining to the property between the appellant and respondent no. 2 herein was not finally adjudicated. Thereafter, even respondent no. 2 also filed a Civil Suit bearing no. 2322 of 2009 before Ld. Trial Court seeking recovery of possession and permanent injunction and while the Ld. Civil Court deciding the case vide its Judgement dated 17.02.2014, rendered specific findings regarding the collusive acts of the respondent no. 1 bank & the respondent no. 2. The respondent bank herein was very much arrayed as party in the above mentioned suit no. 198/2005, whereas the application under Order 7 Rule 11 CPC was filed by respondent bank herein on the ground that the said suit was not maintainable against the respondent bank, accordingly, the Suit was dismissed vide order dated 15.01.2011 against the bank. While the above suit filed by the appellant herein was pending, present OA No. 195/2010 was filed before this Tribunal on 27.07.2010 and the final order was passed on 10.06.2015, accordingly, RC no. 227/2015 was also issued on 27.07.2015 but in the said OA, respondents no. 2 & 3 herein were proceeded ex-parte, and the respondent no. 1 failed to implead the appellant herein as a party in spite of the fact that the bank was aware of the fact that the A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

appellant herein was claiming right, title and interest in the property. Therefore, it is claimed that in such an eventuality, the final order as well as recovery certificate is not binding upon the appellant herein, as the appellant was in continuous possession of the property-in-question. Accordingly, the objections were filed under Rule 11 of the 2^nd Schedule of the Income Tax Act 1961 and the same have been rejected by Ld. Recovery Officer without considering all the facts & circumstances as the said provisions under Rule 11 were duly applicable and the said objections were to be decided on the basis of the principle laid down in the cases of ***Shyam Swarup Sharma and Anr. Vs. Canara Bank and Ors. 2002 (65) DRJ 7 (DB) [Order dated 12.07.2002]; Swaraj Kishore Arora & Ors. Vs. Indian Bank and Ors. (2016) 230 DLT 269 (DB) [ Order dated 13.05.2016] and Raj Kumar Vij Vs. Kotak Mahindra Bank & Ors. in WP(C) No. 6881 of 2014 (order dated 30.05.2016 passed by Hon'ble High Court of Delhi).***

27. Ld. counsel for appellant herein also argued that in the meanwhile, the respondent no. 1 bank also got appointed Receiver from the court of Ld. ACMM, Delhi for taking actual and physical possession of the property-in-question on Handwritten signature and date: 14/11/17.

15.10.2011 under SARFAESI Act, accordingly, appellant herein filed SA No. 555/2011, wherein interim order dated 14.10.2011 was passed by this Tribunal and the actions / measures of the respondent no. 1 bank were stayed subject to deposit of Rs. 3.50 lac within a period of 30-days. Though, the said order was passed on prepared on 25.10.2011, but the same was delivered to the appellant herein on 14.11.2011, accordingly, the amount of Rs. 3.50 lac was deposited by the applicant in SA. Even then, the respondent bank failed to implead the appellant herein as a party in the said OA and the order in the said OA was passed on 10.06.2015 and RC was issued on 27.07.2015. However, the Securitization Application remained pending till 10.06.2015, which was filed in October 2011 and the amount of Rs. 3.50 lac is still lying with the respondent no. 1 bank and interest might have accrued thereon. It is also contended that during all these proceedings, the Suit filed on behalf of appellant being Suit No. 399 of 2007 against the respondent no. 2 herein for specific performance of contract was dismissed for want of prosecution on 25.03.2013 and thereafter, on 17.02.2014, Ld. Civil Judge had also dismissed the Suit No. 102 of 2013 filed by respondent no. 2 for seeking recovery of possession and mandatory injunction. By way of detailed judgment dated 17.02.2014, Ld. Civil Judge also pleased to hold that respondent no. 2 was 14/11/2018

ostensible owner of the property and was further pleased to uphold the possession of the appellant herein. In the entire Suit, the sale consideration as well as possession was admitted by Sh. Sukumar Bagh and there was also cross-examination of the Manager of the respondent no. 1 bank as the Ld. Civil Court dealt with documents relied upon by the respondent no. 2, respondent bank as well as Auction Purchaser, therefore, the possession of the appellant herein was very much proved on the property-in-question, but the Ld. Recovery Officer ignored the said fact & evidence illegally & malafidely and wrongfully put the property on auction without mentioning the fact that appellant herein was in peaceful possession of the property-in-question. Therefore, gross illegality & irregularity has been committed by Ld. Recovery Officer.

28. Further, it is also argued that Ld. Recovery Officer, after the OA was decreed on 10.06.2015 and RC was issued on 27.07.2015, failed to obtain the fresh valuation of the property-in-question, which was worth more than it was mentioned in the Valuation Report dated 12.12.2014 i.e. prior to passing of final order as well as issuance of recovery certificate, that too by the bank. It is contended by Ld. counsel for appellant that Ld. Recovery Officer was required to obtain fresh Valuation Report of the 14/11/2015

property-in-question before proceeding further, therefore, Ld. Recovery Officer failed to apply its mind judiciously and in this regard Ld. counsel for appellant has relied upon a citation i.e. ***Pee Gee Exports (P) Ltd. Vs. Gargaya Research Instruments & Another passed by Hon'ble DRAT in Appeal No. 102/2007 (Order dated 05.08.2008)*** and the judgment passed by ***Hon'ble High Court of Delhi in the case titled as A.K. Jain Vs. Canara Bank in WP (C) No. 6575/2006 decided on 14.09.2007***, therefore, contended that the valuation of the property-in-question was not rightly got done. It is also contended that first proclamation was issued on 16.10.2015 on the basis of Valuation Report dated 12.12.2014, which was clear violation of the 2^nd Schedule of the Income Tax Act 1961 being prior to even passing of the final order dated 10.06.2015 and in the said auction notice, as the factum of possession of the appellant was not mentioned in spite of the fact that in the said Valuation Report, the possession of the appellant herein was visible, therefore, there was intentional and deliberate concealment of the facts attributable to the respondent no. 1 bank and as such the fraud vitiates the entire proceedings. Ld. counsel for appellant also relied upon a citation i.e. ***S.P.Chengalvaraya Naidu (Dead) Vs. Jagannath (Dead) by LR's passed by Hon'ble Supreme Court of India on***

14/11/2019.

**27.10.1993.** Apart that, it is also argued that the property-in-question is sold on "as is where is basis and as is what is basis" therefore, the intending buyer / auction purchaser is to make due enquiries before participating in the auction proceedings but, no due diligence has been carried out by the auction purchaser, therefore, in such circumstances, Section 3 and explanations thereof of the TPA Act very much comes into play and auction purchaser cannot be heard to contend that he is a bonafide auction purchaser without "notice". Thereafter, second sale proclamation was issued on 04.12.2015 and by that time no fresh valuation report was obtained by respondent no. 1 bank and the valuation report was of 12.12.2014 only and in the 2^nd Sale Proclamation, the sale was ordered to be done on 04.12.2015 with reserve price of Rs. 61.20 lac. Thereafter, second Valuation Report was obtained on 08.02.2016, but the same demonstrate that the same was prepared without actually visiting the property-in-question and is based on the external visit, as it is mentioned in the report that there was some litigation pending with regard to title deeds of the property-in-question as per CM ARMB Sh. Anil Verma and for detailed report, access to the property was to be arranged. By virtue of the said Valuation Report, the reserve price of Rs. 61.20 lac was extremely reduced to Rs. 38,42,213/- and there was clear drop of nearly 50% of the original reserve price and 40% of the last 14/11/2019.

reserve price, which is not justifiable, as no reason given by the Ld. Recovery Officer while relying upon the said Valuation Report. Accordingly, on 11.03.2016, order / proclamation was issued by the Ld. Recovery Officer for fixing the date of auction as 26.04.2016 which was pasted on the property-in-question on "as is where is basis and as is what is basis". Thus, Sh. Vikas Vashishta / respondent no. 4 was declared as alleged highest bidder for an amount of Rs. 38,92,213/- against the reserve price of Rs. 38,42,213/- and he participated in that auction knowingly that the same is being auctioned "as is where is and as is what is basis".

29. Ld. Senior counsel also contended that thereafter, on 02.05.2016, the appellant herein filed the objections vide diary no. 4712 and her earlier objections were still pending and in any event, required investigation and adjudication in terms of law laid down by Hon'ble High Court of Delhi and in terms of Rule 11 before any confirmation of auction was to be done, but the Ld. Recovery Officer, vide order dated 13.06.2016 dismissed the objections filed by appellant herein without appreciating the facts and circumstances of the matter and completely ignored the law laid down under Rule 11 of 2^nd Schedule of Income Tax Act. Thereafter, being aggrieved by said order of Ld. Recovery 14/11/2019

Officer, an appeal no. 44/2016 was preferred before this Tribunal for setting aside the said order, accordingly, Ld. Predecessor of this Tribunal on 26.07.2016 remanded back the matter to Ld. Recovery Officer for fresh consideration of the objections filed by appellant herein. Simultaneously, on the same date, SA No. 555/2011 was taken up in view of the fact that Ld. Recovery Officer auctioned the property, accordingly, in view of the said submissions and at the instance of respondent no. 1 bank, this Hon'ble Tribunal dismissed the SA of the appellant herein being infructuous. Pursuant to said order dated 26.07.2016, Ld. Recovery Officer again without deciding the case of the appellant, in accordance with law, dismissed the objections relying on the Rules 60 & 61 of the 2^nd Schedule of the Income Tax Act, which were not at all applicable in the facts and circumstances of the case and the order was absolutely contrary to the facts and the law laid down by Hon'ble High Court in several judgments. Thereafter, again Appeal No. 57/2016 was filed against the order dated 08.08.2016 passed by Ld. Recovery Officer and the respondent bank filed its reply on 23.08.2016 and the written arguments along with relevant judgments were filed by the appellant herein on 14.12.2016 and this Tribunal pleased to pronounce that the Appeal preferred against order dated 08.08.2016 stand dismissed, as A handwritten signature in dark ink, followed by the date "14/11/2017" written below it.

per order dated 21.02.2017. In view of the same, Ld. Recovery Officer, without obtaining the duly signed order passed by this Tribunal, arbitrarily appointed a Receiver to take actual & physical possession of the property-in-question and the Receiver affixed the notice dated 22.02.2017 directing the appellant herein to vacate the premises within 24-hours of the notice. On the same date, the appellant approached the Ld. Recovery Officer and submitted that 24-hours was not sufficient time to avail remedies available to her under the law, but Ld. Recovery Officer without appreciating the fact that on 24.02.2017, which was a gazetted holiday being Shivratri, fixed the date to vacate the premises by 25.02.2019. Aggrieved by the Order dated 21.02.2017 passed by Hon'ble Tribunal in Appeal no. 57/2016 and also in RC No. 227/2015, preferred an appeal before Hon'ble DRAT by way of Appeal No. 98/2017, wherein stay was granted vide order dated 27.02.2017 subject to deposit of Rs. 15.0 lac. The appellant herein complied with said order and accordingly, by order and judgment dated 12.02.2018, pleased to allow the appeal preferred by appellant and set aside the order dated 08.08.2016 passed by Ld. Recovery Officer and order dated 26.07.2016 passed by this Tribunal & the case was remanded back to Recovery Officer with specific directions. Thereafter, the matter was got listed for the first time after remand before the Recovery 14/11/2019

Appeal No. 14/2018

Officer on 19.02.2018. However, the arguments were heard on 12.03.2018 and evidence by way of affidavit and written submissions were filed by the appellant with advance copy to Ld. counsel for respondent no. 1 bank. Arguments were concluded on behalf of appellant on 14.03.2018, whereas the arguments on behalf of respondent bank were heard in part on 26.03.2018. It is pertinent to note that no documents except a few judgments were filed by the respondent no. 1 bank, when leave was granted by the Ld. Recovery Officer and thereafter on 27.03.2018, arguments were concluded on behalf of respondent no. 1 bank. On 04.04.2018, rebuttal arguments were advanced on behalf of appellant. Further, show cause notice to arrest was issued to the respondent no. 2 on 04.04.2018 & 10.04.2018 but there was no appearance on behalf of respondent no. 1 bank on 13.04.2018 and the matter was reserved for judgment on 27.04.2018. Parties were granted liberty to file the written submissions, but on 23.04.2018, i.e. one day before the impugned order was passed by Ld. Recovery Officer, a liberty was wrongfully granted to the respondent bank to file additional documents i.e. Agreement to Sell dated 11.08.2004 allegedly executed between Smt. Shashi Madan and Sh. Sidharth Yadav, GPA, affidavit, SPA, Will, Allotment letter dated 24.03.2004 by DDA to Shashi Madan to Lucknow address, letter dated 16.09.2004, letter

10/11/2019

dated 25.11.2004 issued by DDA for correction of address, possession slip dated 27.11.2004, Conveyance Deed dated 01.12.2004 etc. before the Ld. Recovery Officer. The copies of same were never provided to either the appellant herein or her counsel, therefore, Ld. Recovery Officer failed to give the appellant a fair & impartial opportunity to rebut those documents and Ld. Recovery Officer, relying upon those documents, rejected the objections, therefore, fair opportunity has not been given by Ld. Recovery Officer judiciously to the appellant herein. Thereafter, the said order was challenged before this Tribunal by way of filing an appeal, but apparently no interim stay was granted by this Tribunal and vide order dated 16.05.2018, this Tribunal rejected the prayer of the appellant for grant of stay. Being aggrieved by order dated 16.05.2018, appellant herein preferred an appeal No. 229/2018 before Hon'ble DRAT, wherein, vide order dated 17.05.2018, the interim order granting status quo was passed, however, vide order dated 03.12.2018, the entire appeal was dismissed by Hon'ble DRAT. The said order of Hon'ble DRAT was ultimately challenged before Hon'ble High Court of Delhi in WP(C) No. 13200 of 2018 on 06.12.2018 by the appellant herein, wherein Hon'ble High Court passed order to maintain status quo. Thereafter, in the said WP(C), Hon'ble High Court of Delhi vide its order dated 16.09.2019 set-aside the order dated A handwritten signature in black ink, followed by the date 14/11/2028 written in a similar style.

Appeal No. 14/2018

03.12.2018 passed by Hon'ble DRAT in Appeal No. 229/2018 as well as Order dated 16.05.2018 passed by this Tribunal in the present appeal, and directed as follows :- *11. In the circumstances, the Court set aside the impugned orders dated 16^th May 2018 of the DRT and 3^rd December 2018 of the DRAT and considers it appropriate to direct that the interim order dated 6^th December, 2018 passed by this Court in the present petition will continue till the disposal by the DRT of the appeal pending before it filed by the present Petitioner against the order dated 27^th April, 2018 of the RO.*

*12. Considering that the auction purchaser had deposited the money way back in 2016, the Court considers it appropriate to direct the DRT to dispose off the appeal pending before it on or before 15^th November, 2019. All the contentions of the parties are left open to be urged before the DRT, which will consider those submissions while disposing of the appeal on merits uninfluenced by its previous order dated 27^th April 2019, or by any observations of the DRAT in the impugned order.*

Accordingly, matter was remanded back to decide the appeal pending before this Tribunal on or before 15.01.2019 and this Tribunal to consider the submissions uninfluenced by the previous order dated 27.04.2018, or by any observations made by DRAT in the impugned order.

30. Ld. counsel for appellant also argued that in view of Section 25 of RDDB&FI Act, only the 14/11/2019.

property of respondent no. 2 i.e. CD can be attached and sold not of the third party. Therefore, the appellant being third party, who is neither the borrower nor mortgagor nor guarantor, therefore, the possession cannot taken up. Ld. counsel or appellant has relied upon the citations **T. Vijendra Das V. M Subramanian (2007) 8 SCC 751, Laxshman Dass Vs. Basrat 6 Bom 168 (188) decided on 09.10.2007.** It is also argued that the explanation to Section 3 of Transfer of Property Act is very much relevant in the present matter as the execution of registered documents was there and if such registered documents are there, then auction purchaser must have knowledge of the fact that appellant is in possession of the property-in-question by virtue of sale deed executed on 11.08.2004, which was executed between Usha Devi & Sh. Sukumar Bagh , therefore, it was the duty of the proposed auction purchaser to verify the same and bank has also mortgaged the property-in-question after knowing the fact that same was already sold by their mortgagor / guarantor Sh. Sukumar Bagh to Smt. Usha Devi on 11.08.2004, therefore, the proposed mortgagee i.e. bank was entitled to make due enquiry. In the present matter, before creating mortgage by Sukumar Bagh, it was in the knowledge of the bank that appellant herein was in possession of the property-in-question, which casts duty upon the bank while sanctioning of loan facility to make A handwritten signature in black ink, followed by the date 14/11/2019 written below it.

due enquiry as to who is in actual possession of the property-in-question, therefore, the said property could not sold or mortgaged, hence, the prior right in the property-in-question has already been created. In such like circumstances, Section 48 and 53 A of TPA very much comes into play.

31. Further, it is also argued that since the contract entered into between the appellant herein and Sh. Sukumar Bagh was registered and the possession was delivered to the appellant, therefore, in such like circumstances, Section 53 A of TPA , Section 48 and 78 of TPA also stands applicable in the present matter as the alleged date of creation of mortgage is 10.01.2005 and prior to that, right & interest was there with the appellant herein, who already purchased the property-in-question by way of execution of above said documents and this fact also stands established from the Civil Suit filed by either of the parties i.e. Usha Devi against Sh. Sukumar Bagh and Sh. Sukumar Bagh Vs. Usha Devi, wherein respondent bank was a also a party therein. Accordingly, Ld. counsel for appellant has relied upon a citation i.e. ***S. Arunachalam Asari (Died) Vs. Sivan Perumal Asari and Anr. AIR 1970 Mad 226 decided on 07.08.1968***, wherein it is held *where the prior transferee is guilty of fraud and misrepresentation or gross-negligence as a result of which the subsequent transferee is induced*

14/11/2019.

*to enter into a transaction with the owner of the property as through there is no other prior transfer.* Section 78 also contains a similar provision. Ld. counsel for appellant has also relied upon a citation in the case of **Shri G.R. Malhotra and Anr. Vs. Canara Bank and Ors. passed in WP (C) 3459/20011 of Hon'ble High Court of Delhi decided on 06.05.2015.** Accordingly, it is contended by Ld. counsel for appellant herein that appellant cannot be construed to held to be either holding the property a trespasser or in illegal occupation or on behalf of the certificate debtors and in fact, the appellant was the bonafide purchaser of the property-in-question by virtue of Agreement to Sell and other documents executed between Sh. Sukumar Bagh and appellant herein on 11.08.2004, and appellant is in possession of the property-in-question since then. Accordingly, prayed that the present appeal be accepted by setting-aside the impugned order as well as the present auction.

32. On behalf of respondent no. 1 bank, it is being vehemently contended that the impugned order passed by Ld. Recovery Officer is based on evidence as well as facts and a detailed well reasoned order has been passed by the Ld. Recovery Officer. Further, it is also argued that in the present matter, Smt. Usha Devi could not be stated to be a legal owner-in-possession, rather, she is a 'rank 14/11/2018

trespasser' as the Agreement to Sell, SPA, WILL etc., upon which appellant herein is relying upon, were fraudulently executed on 11.08.2004. DDA neither had handed over the actual & physical possession of the property-in-question to actual allottee i.e. Ms. Shashi Madan, to whom said Flat was allotted on lease basis. Conveyance Deed was executed on 01.12.2004 and the possession was given on 24.11.2004 before the execution of Conveyance Deed and thereafter the Sale Deed was executed between Smt. Shashi Madan & Sh. Sukumar Bagh on 10.01.2005, therefore, by that juncture Sh. Sukumar Bagh was neither the owner of the property-in-question nor in possession of the property-in-question, therefore, he could not transfer the valid right, title and interest in favour of Smt. Usha Devi. Further, it is also argued that so far as Civil Suit No. 198/2005 filed between the parties, which was filed by Smt. Usha Devi against Sh. Sukumar Bagh & Smt. Uma Devi for Permanent Injunction and the same was filed on 21.09.2005, however, same was dismissed for non-prosecution on 19.12.2013. During the pendency of above said Suit of permanent injunction, on 13.08.2007, one another suit being Suit no. 399 of 2007 was filed on behalf of appellant herein against Sh. Sukumar Bagh for Specific Performance, however, the same was also dismissed for non-prosecution vide Order dated 25.03.2013. Apart that, one Civil Suit was also filed 14/11/2019.

on behalf of Sh. Sukumar Bagh i.e. Suit No. 2322/2009 (later on renumbered as 102/2013) on 12.10.2009 against the appellant herein for recovery of possession and injunction, but the said Suit was decided against the appellant herein vide order dated 17.02.2014. It is further argued that there was active connivance between Smt. Usha Devi as well as Sh. Sukumar Bagh as they were well aware of the fact that the bank is contesting the SA and OA, whereas Sh. Sukumar Bagh was very much party, but in spite of that bank was never impleaded as party in the Civil Suit No. 2322/2009, hence, the same is not binding upon the respondent bank. Further , it is also argued that the said Suit was time barred , but the respondent bank was not a party therein, therefore, the said Civil Suit could not be challenged on behalf of bank on that ground. Had the respondent bank would have been party the said the issue with respect to limitation would also been decided in the said matter. Therefore, the said decree cannot be stated to be binding upon the respondent bank herein. Further, it is also argued on behalf of Ld. counsel for respondent bank that the Agreement to Sell, though it was stated to be registered, the sale consideration was merely Rs. 1.0 lac, whereas Sh. Sukumar Bagh himself purchased the said property-in-question for a sum of Rs. 12.0 lac and in between the duration was of 4-months and in the said period, it could not be stated that the 14/11/2019.

price of the property-in-question was so escalated that it comes to Rs. 12 lac from Rs. 1.0 lac, which is beyond imagination.

33. Further, it is also argued that the appellant herein is relying upon a Deed of Family WILL of same date i.e. 11.08.2004, wherein apart from bequeathing the property-in-question, it is also being stated that one Santro Car bearing registration no. DL 3C AB 6128 was also given to the appellant herein by way of said WILL, therefore, the entire transaction was fraudulent-in-nature and appellant herein was holding the property-in-question on behalf of Sh. Sukumar Bagh. Apart that, in the said Suit no. 2322/2009, it was pleaded on behalf of Sh. Sukumar Bagh in Para 12 that he approached the office of Sub-Registrar and cancelled the said documents, upon which, the appellant is relying upon i.e. Agreement to Sell, GPA. SPA, WILL, Family WILL etc. vide Cancellation Deed dated 23.09.2009. Therefore, once there was cancellation of documents on behalf of Sh. Sukumar Bagh; no right, title and interest in the property-in-question stand vests in favour of appellant herein. In fact, at the juncture, when present case has gone in number of litigations and this fact was very much in the knowledge of the appellant herein and she is relying upon the Agreement to Sell, SPA as well as WILL, where as the previous original chain documents of the 14/01/2019.

property-in-question were also in possession of the respondent bank, she could not allege that the documents were clandestinely placed on record.

34. in the same context , It is also argued that so far as all the documents, being placed before Ld. Recovery Officer, were very well received by the appellant herein after having a receipt of the same as the same were received by earlier counsel Sh. Nayyar and copy of the same was duly signed, therefore, it could not be said that any injustice has been caused to the present appellant by placing such documents at later stage , when it was already fixed for arguments by Ld. Recovery Officer. Ld. counsel for respondent bank also argued that nothing has been suppressed by the respondent bank. Accordingly, it has been prayed to dismiss the appeal.

35. Whereas , It is being contended on behalf of Ld. counsel for appellant that matter was reserved for orders by Ld. Recovery Officer on 27.03.2018 and the documents were filed on behalf of respondent bank on 23.04.2018 just before passing of the order, as the matter was stand adjourned for pronouncement of orders for 27.04.2018 and during this period arguments were heard on behalf of respondent bank without affording due opportunity to rebut the same. In the present matter, 14/11/2019

apparently, said copy has been placed on record, wherein counsel Sh. Nayyar has duly received the said documents, as apparent from the signatures received from Sh. Nayyar, which is in possession of the respondent bank. Further, said documents pertain to property-in-question i.e. allotment letter of DDA, Conveyance Deed, possession slip dated 27.11.2004. These documents are public documents lying in the public domain of DDA, therefore, appellant herein was claiming right, title and interest in the property-in-question, therefore, it could not be stated that such public documents were placed clandestinely and filed by the respondent bank without giving any fair opportunity to the appellant herein to rebut the same, therefore, there is no force in the contention of Ld. counsel for appellant that no such documents were received and the same were filed at the back of the appellant herein. Hence, the said arguments stand discarded and it is held that Ld. Recovery Officer gave a full opportunity to contest and argue all the contentions of the appellant herein.

36. Further, it is also contended that the appellant herein never produced any receipt of sale consideration of Rs. 1.0 lac, however, the same has been filed just now along with the rejoinder. The said receipt was never produced before any authority since 2005 either in the Civil Suits agitated 14/11/2019.

by either of the party or SA or anywhere else. Hence, the said receipt never seen the daylight and now when the respondent bank raised objections, the receipt came into picture all of sudden. The said receipt is nothing, but fabricated documents. Therefore, it is also surprising that the sale consideration of the property-in-question is Rs. 1.0 lac , but, Sh. Sukumar Bagh has also given one Santro Car to Smt. Usha Devi. Hence, there is nothing on prove that the appellant herein is legal owner of the property-in-question, rather, she is a trespasser to the property-in-question, accordingly, prayed that there is no illegality or irregularity in the order passed by Ld. Recovery Officer, accordingly, prayed for dismissal of the present appeal.

37. Further, it is also argued on behalf of Ld. counsel for respondent no. 1 bank that while relying upon the citation in the case of ***Harminder Singh Vs. OBC of Hon'ble Supreme Court of India in SLP (5810-5811/2018) decided on 22.02.2019***, wherein it is held that Ld. Recovery Officer is entitled to decide even the title of property-in-question and as to whether the objector has right, title and interest in the property or not, as held in the present judgment. He has also relied upon the ***judgment dated 12.05.2017 passed by Hon'ble High Court of Delhi (D.B.) in the case titled as Munish Grover Vs. State Bank of***

A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

**Indore & Ors.** It is also argued that though the Civil Suit filed by Sh. Sukumar Bagh being Civil Suit No. 2322/2009 for seeking recovery of possession and permanent injunction has already been dismissed, therefore, the same facts cannot be agitated in any other Forum being barred under Order 9 Rule 9 of CPC.

38. Ld. counsel for respondent bank also argued that permission has to be obtained from DDA for any such property, being leasehold. In the present matter, possession of the property-in-question was delivered by the DDA to Smt. Shashi Madan on 27.11.2004 after the Agreement to Sell dated 11.08.2004 upon which the appellant is relying upon, which is not possible. Further, it is also argued that in the Civil Suit no. 2322/2009, the issue pertaining to limitation was not framed, rather the issue pertaining to Section 10 of CPC was framed and the same was decided in favour of the respondent i.e. appellant herein, therefore, the said Suit, even otherwise, which has been dismissed on the ground of the fact that the other Suits were pending, the Decree can not have been binding effect.

39. Further, it is also contended on behalf of respondent bank that Hon'ble Civil Court, while passing order in Civil Suit No. 2322/2009, has 14/11/2019

categorically held that the delivery of the possession to the appellant herein was doubtful and it is further held that bank was a necessary party, but the bank was not made a party therein in order to arrive at just conclusion of the matter as the bank was claiming mortgage over the property-in-question. Apart that, it is also argued that the Agreement to Sell does not create any right, title & interest in the property-in-question, because the said documents are merely contract to enter into the further contract and for execution of the Sale Deed. In the present matter, in the Sale Deed executed between Smt. Shashi Madan and Sh. Sukumar Bagh, it is mentioned that the possession of the property-in-question was delivered to Sh. Sukumar Bagh on 10.01.2005 and not prior to that, he could not be in possession of the property, therefore, once Sh. Sukumar Bagh was not in possession of the property-in-question, then how he could deliver the actual and physical possession of the property-in-question to the appellant herein. Apart that, Smt. Usha Devi was in acquaintance of the respondent no. 2, thus she was mere stayed by Sukumar Bagh in the property and the documents were prepared fraudulently to defraud the creditors i.e. respondent bank.

40. Further, it is argued that the documents upon which the appellant is relying upon are being A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

registered in Book Nos. 3 & 4 to which the other party / public is not having access, therefore, it could not be stated that while mortgaging the property-in-question, due diligence was not adopted by the bank, rather, on behalf of appellant due diligence was not adopted because she never verified from the DDA by writing application as to whether Sh. Sukumar Bagh was owner of the property or not and Sh. Sukumar Bagh was holding any right, title & interest in the property-in-question or not, as to who was in actual possession of the property-in-question, therefore, the appellant herein was not diligent which clearly proves that there was active connivance between them. Further, the electricity bill dated 09.11.2005 was registered in the name of Sh. Sukumar Bagh and all the documents, upon which the appellant herein is relying upon, were prepared afterwards of the mortgage created in favour of respondent bank and the wedding card etc. are nothing, but that can be fabricated later on which are of 18.12.2004, 20.12.2004, 30.12.2004, LIC policies pertains to 2005, and Birth Certificate dated 20.04.2007 etc. therefore, the appellant herein is nothing , but a rank trespasser in the property-in-question.

41. Ld. counsel for respondent bank also contended that though it is being claimed on behalf of Ld. counsel for appellant that in SA No. 555/2011, 14/11/2018.

stay was granted by Ld. Predecessor of this Tribunal with a condition that appellant herein shall deposit a sum of Rs. 3.50 lac and after depositing the said amount, an affidavit-cum-undertaking should be filed thereby stating that said amount has been deposited within the period of one month, as directed in order dated 14.10.2011, but the appellant herein never disclosed the fact about depositing the amount of Rs. 3.50 lac and for the first time, it was disclosed before Ld. Predecessor of this Tribunal, who was having charge of this Tribunal in 2016. Further, the said amount was not deposited directly with the respondent bank, rather, the said amount of Rs. 3.50 lac was deposited in the NPA account of Sh. Sukumar Bagh, clandestinely and no intimation was given either to bank or this Tribunal. Even otherwise, the said amount of Rs. 3.50 lac was not deposited within the stipulated period of 30-days. Apart that, the same pertains to actions / measures under SARFAESI Act, therefore, the said order does not come in the way of proceedings under RDB&FI Act. Hence, it is prayed that the order passed by the Ld. Recovery Officer is well-reasoned, accordingly, prayed for dismissal of the appeal.

42. From the pleadings of respective parties, in the present matter, following questions are to be determined :- A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

(I) Whether the appellant herein is having right, title and interest in the property-in-question and she is in possession of the property-in-question since 11.08.2004 ?

(II) Whether the auction proceedings, in the present matter, have been carried out by Ld. Recovery Officer illegally and malafidely or not ?

(III) Whether the appellant herein is entitled to challenge the auction proceedings or not ?

(IV) Relief ?

43. Before embarking upon the discussion, it would be appropriate to go through the orders passed by ***Hon'ble Supreme Court of India dismissed the SLP No. 5808 to 5811 titled as Harminder Singh Vs. OBC and Ors. vide Order dated 22.02.2019, whereby the judgment assed in FAO No. 303/2017 i.e. OBC Vs. Sh. Hardminder Singh & Ors. passed by Hon'ble High Court of Delhi stand upheld***, wherein, it is categorically held that *the Recovery Officer, under RDDB&FI Act, is entitled to look into the title and possession of the properties in terms of which equitable mortgage has been created and whether the objectors are legally having the right, title and interest in the same or not*. Now in the light of the 14/11/2019.

abovesaid principle, all the above said issues are being dealt herein.

**POINT NO. I :**

44. In the present matter, though on behalf of appellant herein it is established that the Agreement to Sell, GPA, SPA, WILL, Deed of Family WILL etc., all dated 11.08.2004, were executed between Sh. Sukumar Bagh and appellant herein and the same was duly registered. However, it is also matter of fact that the chain of title documents with regard to the property-in-question are in possession of the respondent no. 1 bank i.e. Allotment Letter, Conveyance Deed dated 01.12.2004 as well as Sale Deed dated 10.01.2005 executed between Smt. Shashi Madan & Sh. Sukumar Bagh / respondent no. 2 herein. Admittedly, Sh. Sukumar Bagh for purchasing the property-in-question from Smt. Shashi Madan, had obtained a loan facility from respondent no. 1 bank i.e. OBC, accordingly, the said amount was transferred by OBC in favour of Smt. Shashi Madan, who executed the Sale Deed dated 10.01.2005 in favour of Sh. Sukumar Bagh and the property-in-question was equitably mortgaged by the respondent no. 2 / Sh. Sukumar Bagh with the respondent no. 1 bank OBC by way of depositing all the title documents including Conveyance Deed dated 01.12.2004 and Sale Deed 14/11/2018

dated 10.01.2005 etc. On behalf of respondent no. 1 bank, it is also proved on record that earlier the property-in-question was allotted by DDA in favour of Smt. Shashi Madan and the same was a leasehold property till the Conveyance Deed dated 01.12.2004 was executed by DDA in favour of Smt. Shashi Madan. It is also matter of fact that no right, title and interest in the leasehold property can be created unless the prior permission is being obtained from DDA. In the present matter, the possession over the property-in-question, as provided on record, was delivered to Smt. Shashi Madan on 24.11.2004. Subsequently, Sale Deed between Smt. Shashi Madan & Sh. Sukumar Bagh was executed on 10.01.2005 and in the said Sale Deed, it is clearly mentioned that Smt. Shashi Madan handed over actual & physical possession of the property-in-question to Sh. Sukumar Bagh on the date of execution of the Sale Deed, whereas the appellant herein is claiming that the possession of the property-in-question was delivered to her on the date of execution of the Agreement to Sell, GPA, SPA, WILL etc. by Sh. Sukumar Bagh in her favour on 11.08.2004.

45. Apparently, it is surprising enough that the person, who himself was not having any right, title, interest and possession over the property-in-question, how he could transfer valid right, title and 14/11/2019.

interest in the same to Smt. Usha Devi / appellant herein. No doubt, in the present matter, there was *inter-se* litigation between Sh. Sukumar Bagh and Smt. Usha Devi were going on by way filing Civil Suits i.e. Suit No. 198/2005, which was filed on behalf of appellant herein against Sh. Sukumar Bagh titled as *Mrs. Usha Devi Vs. Sh. Sukumar Bagh and Anr.* for permanent injunction against respondents no. 2 & 3 on 21.09.2005 but the same was ultimately dismissed on 19.12.2013. Further, another Civil Suit No. 399/2007 filed by appellant herein for specific performance on 13.08.2007, was also dismissed for non-prosecution vide order dated 25.03.2013. The appellant herein never moved any application for restoration of aforesaid Suits for permanent injunction and specific performance. In the meanwhile, one Civil Suit bearing no. 2322/2009 (later on re-numbered as Suit No. 102/2013) was filed on behalf of Sh. Sukumar Bagh against Smt. Usha Devi for recovery of possession and injunction on 12.10.2009, however, same was also ultimately dismissed on 17.02.2014. Though, the respondent bank filed the OA no. 195/2010, wherein Final Order was passed on 10.06.2015 & RC No. 227/2015 was issued. No doubt, the respondent bank did not prefer to implead Smt. Usha Devi as a party herein in the OA, once they have come to know the factum of pendency of suit for specific performance as well as suit for permanent injunction, which were filed by A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

the appellant herein and in one of the matter i.e. Suit No. 198/2009 filed by Smt. Usha Devi against Sukumar Bagh for permanent injunction, the respondent bank filed an application under Order 7 Rule 11 CPC for rejection of Suit, however, said Suit was ultimately dismissed against the bank. No doubt, the present bank did not implead the appellant a party in the OA and ultimately Decree was passed, but said Final Order as well as RC have never been challenged by the appellant herein by filing Civil Suit for setting aside the Decree by way of obtaining the same on forged basis, as alleged by appellant herein. Had, the same would have been challenged by Civil Suit, then a situation might have been different. Thus, the present appellant cannot challenge the legality of the final order. Even, the appellant did not prefer to be party despite the fact that she filed the SA No. 555/2011. Simultaneously, the present appellant filed suit for specific performance, but did not implead the respondent bank knowingly the fact that original deeds were with the respondent bank and not with Sh. Sukumar Bagh. Similarly, Sh. Sukumar Bagh as well as present appellant did not prefer to implead the bank as a party in Civil Suit No. 2322/2009 on the basis of which it is being claimed by the appellant herein that the possession of the appellant herein has been upheld by Ld. Civil Court in the judgment passed on 17.02.2014. In the present matter, appellant herein 14/11/2025.

was well aware of the fact that the property-in-question is being claimed by the respondent bank as the mortgage was created by Sh. Sukumar Bagh, but none of them i.e. appellant herein as well as Sh. Sukumar Bagh have ever impleaded OBC as party in the Suits filed by them. Therefore, in the present matter, the said judgment dated 17.02.2014 on the basis of which it is being claimed that possession is upheld in favour of appellant herein by Ld. Civil Court, is not binding upon the respondent no. 1 bank.

46. In the present matter, even otherwise in the judgment dated 17.02.2014, in Para 21, it is held by Civil Court that it is not clear if the plaintiff (the present appellant ) was in possession of the suit property on 11.08.2004 and how he handed over the suit property to the appellant herein on the said date, therefore, there was mere a representation on behalf of Sh. Sukumar Bagh in spite of the fact that he was not in possession of the property-in-question, as the same was handed over to him by Smt. Shashi Madan on 10.01.2015. Further, the Suit was dismissed not only on that ground, but also on the ground, as per Para 26, that the bank was proper & necessary party for enabling this Court to effectively and completely settle all the questions between the parties with respect to the Suit property and no reason has been given by the plaintiff why 14/11/2019

the said proper and necessary party was not added in the present suit. Apart that, the said Suit No. 2322/2009 was also dismissed on the ground that the already the similar proceedings were pending and the same was barred under Order 10 CPC. Further, it is also to be mentioned, in this context, that OA No. 195/2010 was filed on behalf of respondent no. 1 bank herein against Sh. Sukumar Bagh and Smt. Uma Devi / respondents no. 2 & 3. Therefore, as held by Ld. Civil Court that the bank was a necessary party, but the bank was not made a party, for the reasons best known to the plaintiff, because there was a connivance between the appellant herein as well as Sh. Sukumar Bagh, which also stand reflected from the Complaint (Ex. PW-1/D 10), which was moved by Sh. Sukumar Bagh against Smt. Usha Devi as stated in Para 22 of above said Judgment. Apart that, the property-in-question was purchased by Sh. Sukumar Bagh for a sum of Rs. 12.0 lac as proved from the Sale Deed dated 10.01.2005, whereas, Agreement to Sell dated 11.08.2004 between Sh. Sukumar Bagh and Smt. Usha Devi has been executed for a sum of Rs. 1.0 lac and apart that in the WILL dated 11.08.2004 it is also mentioned that one 'Santro Car' was also given to the appellant herein though earlier it was contended in all the Civil Suits that the property-in-question was purchased by the appellant, as already claimed in the present objections before the Ld.

14/11/2019.

Recovery Officer, but it raises serious doubt, how a person would sell the property for Rs. one lakh, which he himself is purchasing for a sum of Rs. 12.0 lac. All these facts, as stated above shows that there was not a genuine agreement to sell or SPA executed between Sh. Sukumar Bagh as well as Smt. Usha Devi.

47. Further, no doubt, it is being argued on behalf of appellant herein that one SA no. 155/2011 was filed on behalf of appellant herein, wherein stay was granted vide order dated 14.10.2011 and the respondent bank was directed not to take possession of the property-in-question subject to deposit of Rs. 3.50 lac within 30-days, but the said amount was not deposited till 14.11.2011, rather, the same was deposited on 15.11.2011, as admitted by appellant herein. Merely, it is being stated by Ld. counsel for appellant that the order was prepared on 25.10.2011 and the amount was deposited on 15.11.2011, does not appeal to this Tribunal because of the reason that in such like circumstances, order might have been passed in the presence of the parties herein as the stay was granted. Even, after depositing the amount, no affidavit was filed before this Tribunal, as directed to intimate. Hence, there was intentional suppression of fact at every step on the part of the present appellant. Further, the said SA was also dismissed A handwritten signature in dark ink, followed by the date 14/11/2019 written below it.

purportedly being infructuous vide order dated 26.07.2016. Moreover, the said amount of Rs. 3.50 lac was not deposited with the respondent bank, but the same was deposited in NPA account and no such intimation was either given to the bank as well as to the Tribunal, as directed. Apart that, mere the fact that stay was granted, that shall not create any right, title and interest in favour of the appellant herein. Granting of stay of against action / measures under SARFAESI Act, does not mean that Ld. Recovery Officer can not proceed with the property. Two remedies under two different Acts are totally separate. Moreover, the amount was not deposited within the stipulated period and act of depositing the amount on subsequent date does not extend the stay automatically unless specific order is obtained.

48. Further, though on behalf of appellant herein, it is being contended that right, title and interest stand created by way of Agreement to Sell dated 11.08.2004, as it is settled preposition of law that Agreement to Sell does not create any right, title & interest, when it is also held that possession could not have been merely delivered by Sh. Sukumar Bagh to Smt. Usha Devi on 11.08.2004, as he himself was not at all in possession of the property-in-question. That possession itself was handed over by predecessor-in-interest i.e. Smt. Shashi Madan to 14/11/2019.

Sh. Sukumar Bagh on 10.01.2005 and not on 11.08.2004, as even by that time, the possession was not delivered by the DDA to Smt. Shashi Madan, as the same was delivered on 24.11.2004. Further, the Suit for Specific Performance has already been dismissed , which was never got restored . Similarly, Civil Suit No. 2322/2009 , which was also dismissed without impleading the bank as party, could not be binding upon the bank . Hence , the bank also could not challenge the findings there in the judgment dated 14.02.2014 because of the reason that bank was not a party .

49. Though, Ld. counsel for the respondent bank argued that the contentions regarding possession & interest raised by the appellant, cannot be raised being barred under Order 9 Rule 9 CPC as both the suits i.e. Suit for permanent injunction and Suit for specific performance were dismissed. However, The Ld. Counsel for the appellant relied upon the following citations i.e. ***Ram Gobinda Dawan & Ors. Vs. Smt. Bhaktabala 1971 1 SCC 387, Barathan Vs. Guruswamy Pillai 2016 SCC Online Mad 12508 and Shyamal Bhattacharjee Vs. State of Tripura 2019 SCC Online Tripura 2*** and argued that the principle of res-judicata is not applicable as per principle laid down in the abovesaid citation as the suit for specific performance & permanent injunction were not 14/11/2024

decided on merits and were merely dismissed in default. No doubt, the abovesaid suits filed on behalf of the present appellant were dismissed in default, but the effect of the abovesaid dismissal in default proved that there was no readiness & willingness on the part of the present appellant to get the sale deed executed in her favour, which itself creates as serious doubt about the due execution of the agreement to sell etc. by Sh. Sukumar Bagh in favour of the present appellant. So far as the citation referred above are concerned, there is no dispute about the principle laid down therein and in view of the same it could be said the dismissal of the said suits does not operate as res-judicata in the proceedings herein. Therefore, both the appellant as well as the creditor i.e., the respondent bank are entitled to raise all issues regarding fair execution of the sale agreement, GPA as well as Will etc., dated 11.08.2004 by Sh. Sukumar Bagh in the favour of present appellant.

50. In reference to the present matter, it would be also appropriate to go through Section 53 of Transfer of Property Act which is as under:

**"53. (Fraudulent transfer)**

***(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. Nothing in this***

14/11/2019.

*sub-section shall affect any law for the time being in force relating to insolvency. A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors.*

*(2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made."*

51. From the bare perusal of the abovesaid Section, it is apparent that a transfer of property if any made by any person with an intent to defeat or delay his creditors, then, certainly, the abovesaid section comes into play. In this regard, reliance can be placed on citation i.e. **Jayakrishna Debata vs Chaitan Pani AIR 1973 Ori 229**, wherein it is laid down, "In view of the law as well settled in the above-mentioned decisions this contention is not acceptable, as for the purpose of avoiding a transfer by a debtor, under Section 53 of the T.P. Act, it is not necessary that the money claims put forward against him should have been proved and decreed in the Civil Court or that the transferor should have been actually indebted at the time he makes the transfer. Moreover, as seen from the above 14/11/2029

decisions the word "creditor" in Section 53 of the T. P. Act would include even the "**future or subsequent creditor**". In the above view of the matter the defendant, being a subsequent decree-holder, is in the position of a subsequent creditor in relation to Jagannath, the judgment-debtor in the Money Suit." Simultaneously, in the case reported in **Kallubandi Nanjamma v. Kethe Rangappa AIR 1954 Mad 173 at p. 176**, their Lordships have observed that *under Section 53 of T. P. Act it is not merely the creditors who are in existence at the date of the transfer but also subsequent creditors that are entitled to avoid it.* The same principle is also laid down in citation, i.e. **Ramdas & Others Vs Debu & Others AIR 1930 Allahabad 610**. Therefore, it can be put broadly that a man may have it in mind to defraud his future creditors by means of transaction carried out by him while not actually indebted, but in anticipation of future indebtedness.

52. From the principle laid down, it is established that it is not necessary that a man should be actually indebted at the time when he makes the transfer for if he does so with a view to being indebted at a future time his conduct may be equally fraudulent. In this context, it is worthwhile to mention that 'fraud' is seldom susceptible of being proved by direct evidence and the same has to be inferred from the surrounding circumstances. Fraud 14/11/2019.

cannot be proved by direct and positive evidence. To find out whether a particular transaction is fraud upon the creditors or not all facts should be considered in relation to each other and has to be made as whole. The secrecy, haste or period with which the document is executed and the subsequent negotiations with the creditors. It is sufficient if the evidence adduced is such as leads inference that fraud has been committed. In the present matter in hand, there was grossly inadequate consideration, the period was very short in between the execution of the abovesaid alleged agreement dated 11.08.2004 as well as obtaining loan from the respondent bank and the act & omission of the present appellant of not obtaining the original documents and not going through the documents with the DDA or predecessors-in-interest. Thereafter, the act of appellant not bringing the suit for specific performance to its logical end, act of executing agreement to sell, GPA etc., instead of execution of sale deed and after filing of the suit for possession by Sh. Sukumar Bagh, which was apparently time barred and dismissal of the same, thereafter, act of keeping mum and not challenging the said order by way of filing appeal against the said judgement are itself are evidence of bad faith, which coupled with its effect are bringing the abovesaid transaction within the purview of Section 53 of the Transfer of Property Act. In the present A handwritten signature in black ink, consisting of stylized loops and lines, is positioned above the date. The date "14/11/2028" is written in a similar handwritten style, with the year "2028" appearing to be a typo for "2018".

matter in hand, as already discussed above that the abovesaid transaction that is agreement to sell, GPA, Will etc., are suspicious in nature and the same appears to have been executed between both Sh. Sukumar Bagh as well as Smt. Usha Devi in a malafide intent to defraud the future creditors, therefore, the abovesaid transaction is voidable at the option of the present respondent bank, though, the loan in the present matter was advanced by respondent bank to Sh. Sukumar Bagh is later in time to that of the agreement to sell, GPA etc. dated 11.08.2004. Further, till date the electricity connection of the premises exists in the name of Sh. Sukumar Bagh as established from the bill dated 09.11.2005 placed on record by the appellant herself. In the given facts and circumstances, the principle laid down by Hon'ble Division Bench of Hon'ble High Court, Delhi in citation **Manish Grover Vs. State Bank of Indore & Ors 2017 Lawsuit (Delhi) 1783** is squarely applicable. Hence, apparently, the abovesaid transaction between Smt. Usha Devi and Sh. Sukumar Bagh was nothing, but fraudulent in nature.

53. Further, on behalf of the appellant herein, the reliance has been placed upon citation "**Subraj Kishore Arora Vs. Indian Bank 2016, (230) DLT 269, DB, Rajkumar Vij Vs. Kotak Mahindra WP no. 6881 of 2014 date of order 30.05.2016**

14/11/2019

*Ram Vilas through LR Vs. Smt. Bano & Ors. 2000 6(SCC 685), Faki Ibrahim Vs. Faki Gulam Mohammadeen AIR 1921 Bombay 459/ ILR 45 Bombay 910, Mummidi Reddi Papannagiri Yella Reddi Vs. Sala Subbireddy & Ors AIR 1954 AP 20, RK Mohammaed Ubaidullah & Ors. Vs. Hajee C Adbul Wahab(D) & Ors 2000 6 SCC 402, Ganeshdas & Ors. Vs. Kamlabai AIR 1952 Nagpur 29, Mt. Renukabai Vs. Bheosan Hapsaji Junghare & Ors. AIR 1935, Nagpur 132, Churaman Vs. Balli 1887 ILR 9 Allahabad 591, Mt. Raju Kuer & Ors. Vs. Brij Bihari Prasad & Ors. AIR 1962 Patna 236, Kondiba Bin Babaji Vs. Nana Shidrao & Ors. 1903 ILR 27, Parvathathammal Vs. Sivasankara Bhattar & Ors AIR 1952 Madras 265, Ramkrishna Singh Vs. Mahadei Haluai & Anr. AIR 1965, Patna 467, Mahadeo Keshav Langarkar Vs. Shamrao Balwant Kesarkar AIR 1972 Bombay 100, Lachhman Dass Vs. Jagat Ram & Ors. 2007 10 SCC 448, Nagubai Ammal & Ors. Vs. B. Shama Rao & Ors. AIR 1957, SC 593, Mohammad Mehaz Talukdar & Ors. Vs. Rash Bihari Majumdar & Ors. AIR 1932 Calcutta 561"* and stressed upon the argument that the mortgage in the present matter was created after the agreement to sell dated 11.08.2014 was executed between Sh. Sukumar Bagh and the present appellant with the respondent bank, 14/11/2018

therefore, once the registered agreement to sell has been executed and the appellant has been put in possession, therefore, the same amounts to a notice as per explanation II of Section 3 of Transfer of Property Act, which lays down that the actual possession is notice of title of the person in possession, therefore, due diligence was not adopted by the respondent bank while the mortgaging the property-in-question on 10.01.2005. Therefore, the right, title & interest stands created in the favour of the appellant herein and accordingly, the Ld. Recovery Officer has committed grave error in considering the same. Similarly, laid stress upon the argument that Section 43 of Transfer of Property Act comes into play which creates two equities, that is first equity is between the transferee and his privies on the one hand and the transferee on the other hand. The other equity in the favour of bonafide purchaser for consideration without notice of the equity in the favour of first transferee and whenever, there is fraudulent or erroneous representation from the transferor that he is authorized to transfer certain immovable property and does so for consideration and such transfer operates at the option of transferee on any interest, which the transferor may acquire later while the contract of transfer subsists. Accordingly, it is argued that respondent bank was having a sufficient notice as the appellant was in possession of the 14/11/2019

property in question and the same cannot be disturbed by the Ld. Recovery Officer in the RC proceedings. There is no dispute about the principle laid down in the abovesaid citations qua explanation II of Section 3 of Transfer of Property Act, but, in the present matter, it is already discussed above that the predecessor in interest of the present appellant i.e., Shashi Madan was also not ever in physical possession of the property in question on the date, when the abovesaid agreement to sell dated 11.08.2004 was executed between Sh. Sukumar Bagh and the present appellant. On the said date, the possession was still with the Delhi Development Authority, which stand proved from the letter dated 16.09.2004, which was written by DDA to Smt. Shashi Madan for taking the possession of the flat-in-question within 90 days. Further, on 24.11.2004, the actual and physical possession was given by DDA to the original allottee i.e., Smt. Shashi Madan, who is predecessor-in-interest of Sh. Sukumar Bagh. The said factum also proved from letter dated 30.11.2004. Further, in the present matter, conveyance deed was executed by DDA On 01.12.2004 in the favour of Smt. Shashi Madan who through her attorney executed the sale deed dated 10.01.2005. Till 01.12.2004, the property was leasehold property. Thus, Sh. Sukumar Bagh himself had obtained the possession of flat in question from Smt.

A handwritten signature in black ink, followed by the date 14/11/2019 written below it.

Appeal No. 14/2018

Shashi Madan on the date of execution of the sale deed as proved from the same.

54. Since, neither Shashi Madan nor her power of attorney holder nor Sh. Sukumar Bagh was in possession of the property on 11.08.2004, then how, Sh. Sukumar Bagh can transfer physical possession to Smt. Shashi Madan, i.e., present appellant. In this context, it is also to be mentioned that once all the chain documents were handed over to the respondent bank by Sh. Sukumar Bagh while obtaining the home loan facility and the said amount was transferred to Smt. Shashi Madan by the OBC Bank and accordingly, the sale deed dated 10.01.2005 was executed between Smt. Shashi Madan and Sh. Sukumar Bagh. Apparently, in the present matter, DDA allotted the said flat to Smt. Shashi Madan and the Conveyance Deed was executed just about 40-days before execution of the Sale Deed dated 10.01.2005 and there was only one allottee and Sh. Sukumar Bagh, during this interval, therefore, there was no logic to go to the Sub-Registrar for verification, whether any other document has been executed by the original allottee or any other predecessor-in-interest in favour of any person. Hence, mere that due diligence report has not been filed or obtained by the OBC Bank does not adversely effects its right in the property. Had Smt.

A handwritten signature in black ink, followed by the date 14/11/2019 written below it.

Shashi Madan would have executed any registered document in favour of any person, then, certainly the situation would have been different, but, in the present matter, the person (Sh. Sukumar Bagh), who was neither the owner of the property-in-question nor in possession of the same, how he could transfer a valid right title & interest and possession in the favour of the present appellant. Further, the appellant herein neither obtained the original chain of documents nor verified the title from the DDA before entering into the agreement to sell, as DDA record was clearly recording that on the said date, the lease holder was Smt. Shashi Madan and not Sh. Sukumar Bagh, therefore, the present citations rather applicable against the present appellant, who entered into agreement to sell with Sh. Sukumar Bagh without adopting due diligence. In this context , it is also worthwhile to mention that the sale consideration qua the agreement to sell dated 11.08.2004 was only a sum of Rs. 1.00 lac whereas, Sh. Sukumar Bagh himself purchased the said property vide sale deed dated 10.01.2005 for a sum of Rs. 12.00 lac, which creates a serious doubt about the genuine intention of the abovesaid parties regarding execution of the same. Apart that, where the entire consideration has already been passed and possession has been delivered then what were the reasons why the sale agreement was merely executed instead of sale A handwritten signature in black ink, followed by the date 14/11/2018 written below it.

deed between them. Further, existence of electricity connection in the name of Sh. Sukumar Bagh clearly established that there was ulterior motive between the parties regarding the execution of said sale agreement. Hence, by no stretch of imagination, it could be said that the abovesaid agreement to sell was executed for a valid consideration between the parties. Further, though, the suit for permanent injunction & suit for specific performance were filed on behalf of the present appellant, but the same were never brought to a logical end, therefore, the abovesaid agreement to sell, GPA, Will etc., were executed between Sh. Sukumar Bagh and Smt. Usha Devi with the ulterior intent to defraud the respondent bank. Hence, in the given facts and circumstances, the abovesaid citations are not helpful to the appellant herein.

55. Further, the Ld. Counsel for respondent bank relied upon ***Maya Devi Vs. Lalita Prasad 2015 (5) SCC 588*** and contended that sale agreement/conveyance deed etc., executed prior to *Suraj Lamp judgement* are not covered under the said judgement. There is no doubt in the principle laid down in the judgement but, as already discussed above, that the abovesaid Agreement to Sell, GPA, Will dated 11.04.2005 executed between Sh. Sukumar Bagh and Smt. Usha Devi are not genuine transactions, therefore, the same are covered under 14/11/2019.

the Suraj lamp judgement and accordingly, the present citation is not helpful to the present appellant.

56. Ld. Senior Counsel Shri. Mehra further vehemently argued that the final order as well as the RC obtained in OA No. 195/2010 is based on fraud as the respondent bank knowingly did not implead the present appellant as party in the said matters, therefore, the abovesaid final order as well as the RC is not binding upon the right, title & interest of the appellant. The Ld. Counsel for the appellant also relied upon citation ***SP Chengalvaraya Naidu (Dead) by LRs. Vs. Jagannath (Dead) by LRs. 1994 1 SCC 1, AV Papayya Sastry & Ors. Vs. Govt. of AP & Ors. 2007 4, SC 221.*** However, in the present matter, the final order as well as RC are not being challenged by the present appellant, rather, she is claiming right, title & interest on the basis of the agreement to sell dated 11.08.2004. No doubt, the bank was aware of the fact that the proceedings between Sh. Sukumar Bagh and present appellant are pending i.e., suit for permanent injunction, which was ultimately dismissed prior to that OA. Had, the final order as well as RC would have been challenged before the Ld. Civil Court on the basis of fraud, the situation would have been otherwise, but the final order has never been challenged. Accordingly, now, by virtue 14/11/2018.

of the present objections or appeal, the said final order cannot be challenged at all. Therefore, the abovesaid citation are also not helpful to the present appellant in the given facts & circumstances.

57. In the given facts & circumstance, where it is already held that the abovesaid transaction of execution of agreement to sell & GPA dated 11.08.2004 are fraudulent in nature. Thus, the application of Section 48, 53A & 78 of the Transfer of Property Act does not come to rescue the present appellant herein. Accordingly, the citations, referred on this aspect on the fact of the appellant, are not helpful to her. Apparently, these all transactions by no stretch of imagination could be said to be 'sale' of Flat-in-question, accordingly, it could also be said that Sukumar Bagh and Smt. Usha Devi intended to defraud the bank. Resultantly, it is held that the sale agreement /WILL/GPA were outcome of fraudulent intentions of both Sukumar Bagh and Smt. Usha Devi, who were hand-in-glove to defraud the respondent bank. Thus, the present appellant was merely holding possession of the property-in-question with the connivance of Sukumar Bagh and that too after the property-in-question was already mortgaged. As, the appellant was not put in possession prior to creation of equitable mortgage with the respondent bank, by her predecessor-in-interest Sh. Sukumar Bagh, thus, 14/11/2029

the simple contract of sale of immovable property also does not itself create any interest or charge on such property. In support of this, a reliance can be placed in the citation **Satyabrata Ghose Vs. Mugneram Bangur & Co. AIR 1954 SC 44.** Hence, it is held that the appellant has no locus standi to challenge the said sale / auction on the basis of said Agreement to Sell. This issue stands decided against the present appellant and in favour of respondent bank.

**POINT NO. II & III :**

58. Both these points are being discussed together being inter related. Now, whether Ld. Recovery Officer committed illegality / irregularity while not deciding the abovesaid objections under Rule 11 prior to putting the property on auction. No doubt, it was required to decide before proceeding further, but once the matter was remanded back to Ld. Recovery Officer by the Predecessor of this Tribunal, accordingly, on remanding back, the parties were heard at length by the Ld. Recovery Officer, then certainly, it could not be said that any illegality or irregularity has been committed as fair opportunity has been given to the present appellant. Moreover, the said order dated 26.07.2016 in Appeal No. 44/2016, was never challenged before any higher authority. Further, in an Appeal no. 98/2017 in 14/11/2018.

Appeal No. 57/2016 (DRT-III), the Hon'ble DRAT vide order dated 12.02.2018 remanded back the matter to the Recovery Officer for passing a fresh order on the objections. The said order was also remained unchallenged. Hence, it could not be agitated now, even otherwise. Further, had any right or title or interest of the present appellant would have been stand proved (which is not proved, as discussed above), the entire proceedings including Auction would have been set aside. Hence, no illegality stands committed by Ld. Recovery Officer while deciding the said objections and putting the property on auction.

59. Further, it is being contended by the appellant herein that Ld. Recovery Officer relied upon the Valuation Report dated 12.12.2004 of the property-in-question, which was filed before passing of final order in the OA No. 195/2010 and, accordingly, first auction was held on the basis of first Valuation Report, which is totally illegal as no mind was applied by the Ld. Recovery Officer while affixing valuation of the property-in-question. Further, it is also one of the contention of the appellant herein that in the Valuation Report, the appellant herein has been shown in possession of the property-in-question, however, while making the publication in the present matter, this fact has not been A handwritten signature in dark ink, followed by the date 14/11/2018 written below it.

mentioned, therefore, the entire auction proceedings are also illegal and malafide one. Ld. Counsel for the appellant also relied upon citation, ***Pee Gee Exports Pvt. Ltd. Vs. Gargaya Research Instruments & Anr. 2008 2 DRTC 485, AK Jain Vs. Canara Bank & Ors. WP C no. 6575 of 2006 Ram Kishan & Ors. Vs. State of Uttar Pradesh & Ors. 2012 11 SCC 511 and K. Balan Vs. SBI Thrikkidiri, Kerala High Court, 2011 3 KLJ 88.*** There is no dispute about the principle laid down in the abovesaid citations that the Ld. Recovery Officer by putting the property on auction has to apply judicial mind towards assessing the valuation of the property-in-question so that the maximum amount could be fetched. No doubt, in the present matter, auction was conducted first time on 01.12.2015, however, the proclamation and order for sale was issued on 16.10.2015 fixing the reserve price as Rs. 68.0 lac and Valuation Report dated 12.12.2014 was relied upon. No doubt that act was illegal on the part of the Ld. Recovery Officer; as he should have obtained a fresh Valuation Report after passing of the final order, but the said auction was failed, therefore, no adverse inference needs to be drawn to that extent. Thereafter, the second proclamation of sale was issued on 04.12.2015 and the reserve price was fixed as Rs. 61.20 lac, however, the said auction scheduled on 22.01.2016 was also failed. Thereafter, 3^rd proclamation of sale was issued on A handwritten signature in black ink, followed by the date 14/11/2019 written below it.

11.03.2016 and by that time the 2^nd Valuation report was obtained on 08.02.2016 and the auction was to be held on 26.04.2016. It is being contended on behalf of Ld. counsel for appellant that same was prepared without actually visiting the Flat and was prepared within the cool confines of the air-conditioned office of the valuer / Branch Manager. Apparently, it is general practice, being adopted by the Recovery Officers with DRT, that the valuations are being obtained from the bank and the valuation, though has been decreased from Rs. 61.20 lac to Rs. 38,42,213/-, but the same was put on auction twice, but both the auctions were failed and this was the 3^rd auction and apparently, Sh. Sukumar Bagh, who was watching and contesting the litigation never raised any objection regarding the valuation of the property-in-question. Even Sukumar Bagh as well as Smt. Usha Devi also never preferred to file any Valuation Report. Hence, in the absence of any reliable evidence on behalf of Sh. Sukumar Bagh or appellant herein, it could not be stated that the property-in-question was sold for a meagre amount. Further, once it is held that the appellant herein has no right, title and interest on the basis of Agreement to Sell dated 11.08.2004 executed between Sh. Sukumar Bagh and appellant herein, therefore, the contract between the applicant herein and Sh. Sukumar Bagh was fraudulent in nature and accordingly, the appellant was rank trespasser, A handwritten signature in black ink, consisting of stylized loops and a horizontal line, followed by the date "14/11/2028" written in a similar style.

therefore, she has no locus to challenge the said auction proceedings. Even otherwise, where number of litigations are going on with respect to the property in question, certainly, no buyer would come forward to purchase such like property, therefore, certainly, the valuation has to be too less in comparison to the property which are undisputed in nature, therefore, this Tribunal is of view that in given facts and circumstances, the Ld. Recovery Officer did not commit any illegality or irregularity with respect to the fixation of the auction price as assessed from the valuation report dated 08.02.2016. Both these issues also stand decided against the appellant and in favour of respondent bank.

**RELIEF :**

60. In sequel of above said discussions, this Tribunal is of affirm view that the Ld. Recovery Officer – II did not commit any illegality or irregularity while dismissing the objections filed on behalf of present appellant and putting the property-in-question on auction for a reserve price of Rs. 38,42,213/-.

61. Resultantly, this Tribunal does not find any merit in the present appeal of the present appellant, 14/11/2019

Appeal No. 14/2018

accordingly, the same stands dismissed, with no orders to costs.

62. So far as, the amount deposited by the appellant herein, in compliance of order dated 27.02.2017 passed by Hon'ble DRAT in Misc. Appeal No. 98/2017, is concerned, the appellant is entitled for refund of the same.

63. A copy of order be sent to Ld. Recovery Officer - II for placing the same on records of RC No. 227/2015.

File be consigned to records.

14/11/2019.

(DHARMINDER SINGH) PRESIDING OFFICER DRT-III, DELHI

(Pronounced in open court) Dated: 14.11.2019

AB