MS SATGURU FOUNDATION (REGD.) vs STATE BANK OF INDIA AND ORS. on 15 September 2026

1. The respondent no.1 State Bank of India has filed O.A. bearing No. 31/2019 titled as **State Bank of India & others v. M/s Aashra Foundation and others** which is stated to be pending before DRT-II, Chandigarh.

2. The appellant filed an application under Section 19(25) of Recovery of Debts Due to Banks & Financial Institutions Act, 1993 read with Rule 4 of the DRT (Procedure) Rules, 1993 for impleading i.e. M/s Satguru Foundation as one of the necessary party of the present proceeding arising out of O.A. No. 31/2019. It was pleaded in the application that the appellant is a society registered with Registrar Firm and Society, Punjab vide certificate of registration dated 10.10.1995. The appellant also entered into the Memorandum of Understanding with respondent no.2 M/s Ashara Foundation on 25.03.2017 for the purpose of taking on lease the land situated at Desh Bhagat University at village Sountin, Amloh Road, Mandi Gobindgarh, District Fatehgarh Sahib, Punjab for the purpose of running a Dental College under the name & style of Desh Bhagat Dental College and Hospital. The lease was granted for a period of 10 years with a payment of quarterly rent of Rs.10.00 lacs included water and electricity charges. The appellant also entered with the respondent no.2 a lease dated 10.10.2017 for a period of 10 months i.e. 10.10.2017 to 09.09.2018 which was subsequently renewed.

3. The appellant came to know that respondent no.1 has initiated proceedings under the SARFAESI Act which was without discloser and consent of the appellant. The respondent no.1 also published the possession notice under Section 13(4) for taking over the Symbolic possession of the subject property. The appellant has also filed a Securitization Application bearing S.A. No. 249/2019 titled as **M/s Satguru Foundation (Regd.) & another v. State Bank of India & others** which is stated to be pending before DRT-II, Chandigarh. The appellant came to know about the pendency of the present proceedings and accordingly prayer that the appellant be impleaded as necessary party as the appellant is having valid right over the mortgaged property as detailed herein above.

4. The respondent no.1 State Bank of India has filed reply to the said application wherein stated that the respondent no.2 M/s Ashara Foundation was granted financial facility and the appellant is only a tenant in some portion of the property which was mortgaged with the respondent no.1. The respondent no.1 is claiming itself is the *dominus litis* and has not sought any relief against the appellant. The appellant has already filed S.A. bearing No. 249/2019 for determination of their rights. There was no privity of contract between the appellant and the respondent no.1. The respondent no.1 also denied other allegations as contained in the application.

5. DRT-II, Chandigarh vide order dated 23.08.2023 has dismissed the I.A. bearing No. 538/2023 which was filed by the appellant for impleading as a necessary party in the O.A. bearing No. 31/2019. It was argued on behalf of the appellant that the appellant being a tenant in the subject property is a necessary party in the O.A. bearing No. 31/2019. It was argued on behalf of respondent no.1 that the appellant was neither a necessary party nor a proper party as the appellant has already filed S.A. bearing No. 249/2019 to protect their right in the subject property, if any. DRT-II, Chandigarh vide order dated 23.08.2023 dismissed the application by observing that no relief has been claimed against the appellant and the respondent no.1 being the OA applicant is the master of the Original Application. The appellant being aggrieved filed the present appeal.

6. Sh. Vipul Gupta, Counsel for the appellant argued that the appellant is having the interest in the subject property being the lessee in terms of lease deed dated 10.10.2017 and Memorandum of Understanding executed with the respondent no.2 dated 25.03.2017. It is further argued that if the appellant is not allowed to be impleaded as necessary party then it will result into multiplicity of the litigations. The appellant is having the direct interest in the subject property and, as such, it requires to necessary party in O.A. bearing No. 31/2019. Accordingly, it is prayed and argued that the impugned order be set aside.

7. Sh. Arvind Gupta, Counsel for respondent no.1 argued that the loan facility was granted to the respondent no.2 and the subject property was mortgaged by the respondent no.2 as a security. The appellant does not have any right or interest in the subject property except claiming to be tenant in some portion of the subject property. It is further argued that the respondent no.1 has not claimed any relief in the Original Application against the appellant and the respondent no.1 being the *dominus litis* has not impleaded appellant as one of the parties in the Original Application. It is further argued that there was privity of contract between the respondent no.1 and the appellant. It is accordingly prayed that the present appeal be dismissed.

8. It is reflected from the record that the respondent no.1 has advanced the loan facility to the respondent no.2. The subject property was mortgaged for security of the loan amount. The appellant is claiming to be the lessee of the property in terms of lease deed dated 10.10.2017 and Memorandum of Understanding dated 10.10.2017. There was no privity of contract between respondent no.1 and the appellant and the loan was not advanced to the appellant. The respondent no.1 is the *dominus litis* and cannot be compelled to implead the appellant as one of the necessary party in the O.A. bearing No. 31/2019. The appellant has already filed S.A. bearing No. 249/2019 wherein, it has claimed for protection its right in respect of the subject property. There is no illegality or infirmity in the impugned order which warrants any interference by this Tribunal. The appeal is dismissed accordingly.

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**(Dr. Justice Sudhir Kumar Jain)** **Chairperson**

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