Gita Rani Kundu vs PUNJAB NATIONAL BANK on 14 June 2019

**ORDER**

**( Delivered on 14^th June,2019)**

1. The Appellant, Gita Rani Kundu, filed the present Appeal being No. 02/1816 arising out of RC/42/2013 on 16.03.2018 under Section 30 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993(RDDBFI Act) against the Respondents, taking limitation/cause of action from the order dated 27.02.2018, certified copy delivered on 07.03.2018, praying for setting aside the setting aside the order dated 27.02.2018 passed by Learned Recovery Officer-II in the Recovery Proceedings being 22?

No. RC/42/2013, restrain the Respondents from taking any further steps pursuant to the order dated 27.02.2018 passed by Learned Recovery Officer-II, DRT-2, Kolkata in RC/42/2013, to pass an order declaring the steps taken by the Respondents are illegal and consequently direction for taking physical possession of the property be set aside, to call for the LCR(RP No. 42/2013 UBI Vs Kundu Enterprises & another) from the Recovery Officer-II, DRT-2, Kolkata.

2. The brief history of the proceedings out of which the present Appeal being No. 02/2018 has arisen is as under:

(i) The Respondent Bank i.e. United Bank of India filed an Original Application being No. 601/2009 under Section 19 of the RDBFI Act on 31.08.2009 before this Tribunal against two Defendants i.e. M/s Kundu Enterprise and Shri Asim Kumar Kundu for recovery of Rs. 26,24,649/- as on 31.03.2018 and further interest @ 15.50%p.a. from 01.04.2008 and issuance of recovery certificate accordingly.

(ii) The case of the Applicant Bank(Respondent Bank herein) as made in the O.A/601/2009 was that Shri Asim Kumar Kundu, Defendant No. 2, proprietor of M/s Kundu Enterprise, the Defendant No. 1, availed cash credit loan from the Applicant Bank for Rs. 25.00 lakhs vide sanction letter dated 19.03.2007 against security of hypothecation of assets and creation of mortgage in respect of the properties in the name of the Defendant No. 2. The Defendant No. 2 executed security documents dated 19.03.2017. The Defendant No. 2 deposited two title deeds being No. 00005 for the year 2004 and 00925 for the year 2006 for creation of equitable mortgage in respect of the properties i.e. (1) piece of land measuring one cottah eight chittaks, Mouza Mamudpur Gram, Pargana Magura, J.L. No. 7, R.S. No. 195, Touzi No. 411, 32, 23 and 69, Khatian No. 182, Dag No. 233, P.S. Behala, District South Parganas, and (2) ground floor flat measuring super built up area 550 sq.ft. Premises No. 22, Vismadev Chattopadhyay Sarani, P.S. New Alipore, Calcutta-700053 in the name of Shri Asim Kumar Kundu. Hence, equitable mortgage in respect of the properties as aforesaid was created by the Defendant No. 2, Shri Asim Kumar Kundu pursuant to the sanction letter dated 19.03.20107.

iii) The Tribunal allowed and disposed of the O.A. being No. 601/2009 vide judgment dated 06.08.2013. Vide judgment dated 06.08.2013 the Tribunal allowed equitable mortgage claim of the Applicant Bank in the O.A. created by the Defendant No. 2, Shri Asim Kunmar Kundu by depositing two title deeds being No. 00005 for the year 2004 and 00925 for the year 2006 in respect of the properties as aforesaid, in the name of Shri Asim Kumar Kundu.

(iv) The Tribunal issued Recovery Certificate being No. 42/2013 arising out of O.A./601/2009 against the Defendants/Certificate Debtors and the recovery proceedings have been initiated by the Learned Recovery Officer-2 of this Tribunal to recover the dues of the Applicant Bank/Certificate Holder Bank.

(v) During pendency of the recovery proceedings in RC/42/2013, the property in question i.e. *"Flat measuring super build up area 550 sq.ft. more or less on ground floor with undivided proportionate share of land at Premises No. 22, Vismadev Chottopadhyay Sarani, P.S. New Alipore, Kolkata-700053"* was put to sale on 24.08.2017 through e-auction vide sale notice dated 05.07.2017 by the Learned Recovery Officer on **AS IS WHERE IS** basis and subject to final approval of the Tribunal. **The reserve price below which the property shall not be sold was fixed at Rs. 16,68,000/-** On perusal of the sale notice dated 05.07.2016, it appears that there is no mentioning of existence of any encumbrances or occupancy in any form and manner in the mortgage property put to sale in the Recovery Proceedings.

(vi) The mortgage property was sold on 24.08.2017 by e-auction vide sale notice dated 05.07.2017. Vide order dated 24.08.2017 passed by Learned Recovery Officer, the sole bidder Smt. Satyabhama Khemka participated in the e-auction and offered bid amount of Rs. 16,68,000/- and she was declared the successful purchaser for the property in question. Vide order dated 07.09.2017 of Learned Recovery Officer, the successful purchaser deposited the bid amount in full within the time. Vide order dated 06.11.2017 of Learned Recovery Officer, there was no objection raised in respect of the sale of the mortgage property from any quarter within thirty days from the date of sale and accordingly the Learned Recovery Officer directed *"Let the order of Confirmation of Sale and Certificate of Sale be issued in favour of successful auction purchaser Smt. Satyabhama Khemka and hand over the same under proper acknowledgement"* Learned Recovery Officer vide order dated 06.11.2017 also directed the Learned Receiver to hand over the physical possession of the property in question to the successful purchaser, Smt. Satyabhama Khemka along with the assistance from local police station.

(vii) Learned Recovery Officer issued order of Confirmation of Sale of Immovable Property dated 06.11.2017, confirming purchase of property in question i.e. *"All that piece and parcel of Flat measuring super built up area of 550 sq.ft. more or less on ground floor with undivided proportionate share of land at Premises No. 22, Vismadev Chottopadhyay Sarani, P.S. New Alipore, Kolkata-700053"* for Rs. 16,68,000/- by Smt. Satyabhama Khemka, W/o Sri Pradip Khemka, 9B, Talbagan Lane, Kolkata-700017 through e auction sale held on 24.08.2017. Learned Recovery Officer also issued certificate of Sale of Immovable Property dated 06.11.2017 certifying and declaring that Smt. Satyabhama Khemka, W/o Sri Pradip Khemka, 9B, Talbagan Lane, Kolkata-700017 is the purchaser of the property in question as aforesaid through e-auction held on 24.08.2017.

(viii) Thereafter, on completion of the sale process vide sale notice dated 05.07.2017, the matter was taken up by the Learned Recovery Officer for hearing on 04.12.2017. Learned Receiver filed his report on 04.12.2017, confirming that he has served notice upon the Certificate Debtor to hand over physical possession of the property within fifteen days.

(ix) On 04.12.2017, the intervener, Smt. Gita Rani Kundu filed a petition submitting that she is staying in the auctioned property as a tenant and prayed for necessary order not to take physical possession of the property in question till disposal of her petition. After completion of pleadings as against the intervener's petition, the matter was finally heard on 07.02.2018 and order on the intervener's petition was reserved.

(x) Learned Recovery Officer passed detailed order on the intervener's petition on 27.02.2018. Learned Recovery Officer vide order dated 27.02.2018 recording his observation and finding on the claim of the intervener as regard her alleged tenancy in the property in question passed his order which is as under:

*"Property in question is mortgaged to the CHB and to enforce the security for recovery of dues of the CHB, the said property has been sold by this Tribunal through e-auction held on 24/8/2017 and sale has been confirmed in favour of Auction Purchaser on 6/11/2017.*

*The intervener Smt. Gita Rani Kundu has filed the petition thereafter claiming to be a lawful tenant of the said property as per tenancy agreement dated 1/1/2006.*

*The tenancy agreement relied on by the Intervener was intended to be operative for a period of 33 years. It is an unregistered instrument. I agree with the contention of the CHB that such an unregistered instrument can not create a tenancy right in view of the statutory inhibition contained in Transfer of Property Act.*

*It is observed from the first para of Section 107 of Transfer of Property Act 1882(T.P. Act) which reads as "A lease of immovable property from year to year, for any term exceeding one year, or reserving any yearly rent, can be made only by a registered instrument"*

*Further, the CHB has pointed out a number of inconsistencies in the tenancy agreement.*

*i) The stamp papers used in the Tenancy agreement is not in the name of any of the interested parties.*

*ii) The area of the premises mentioned in the tenancy agreement is 1050 sq.ft. whereas as per the Title Deed mortgaged to the CHB, area of premises is 550 sq.ft. How can the actual area of a Flat increase in Tenancy Agreement.*

*iii) There is no mention in the tenancy agreement about monthly rent to be paid by the*

*N. S. N*

tenant whereas the so called tenant used to pay monthly rent @ Rs. 6,500/- p.m. sometimes @ Rs. 10,000/- p.m. and again reverted back to pay @ Rs. 6,500/- p.m. and rent receipts issued by the landlord as full of irregularities and sometime rent receipt has been issued twice for the rent for same month.

Money Receipts issued by the landlord for a sum of Rs. 5 lacs is towards licence, and not as security deposit.

iv) The Notarized tenancy agreement has got no authenticity of the Notary Public with regard to affirmation in the agreement.

I agree with the views of the CHB regarding the above inconsistencies. Further when the property was put on sale through e-auction on three different occasions each time sale proclamation was affixed by the Learned Receiver on conspicuous part of the property and sale notice was published in the Newspapers. It is hard to believe that intervener was not aware of the Recovery Proceedings.

When the property was finally sold through e-auction on 24^th August, 2017 thereafter intervener preferred to file police complaint as well filed Civil Suit against the landlord/CD Ashim Kr. Kundu.

In accordance with Rule 11 of the Second Schedule of Income Tax Act applicable in Recovery Proceedings, I have examined the facts and circumstances of the case which are supported by documentary evidence and I am of the considered opinion that in view of the glaring inconsistencies observed in the unregistered tenancy agreement dated 1/1/2006 the same cannot be accepted as evidence of any transaction and cannot create a valid tenancy right in favour of the intervener. All other factors cited above cumulatively lead to the conclusion that the tenancy agreement is a collusive Agreement between the CD Ashim Kumar Kundu and the intervener which is not a valid document and intended to frustrate the sale of the mortgaged property. The petition filed by the intervener lacks in merit and liable to be dismissed, hence, dismissed.

Learned Receiver is directed to take further steps for handing over the physical possession of the property to the Auction purchaser with the assistance of the police as directed earlier and file his report thereafter.

With the above direction, the petition filed by the Intervener stands disposed of.

Copy of the order be given to the parties.

The order is pronounced in the open Tribunal on this 27^th day of February, 2018."

3. Being aggrieved by the order dated 27.02.2018, the intervener has filed the present Appeal being No. 02/2018 on 16.03.2018 under Section 30 of the RDDBFI Act against the Respondent Bank, the Certificate Debtors and the auction purchaser, Smt. Satyabhama Khemka. The Appellant filed affidavit of service on 26.03.2018, confirming service of notice upon all the Respondents by Speed Post, track filed according to which the item delivered.

4. The Appeal/02/2018 was heard by the Tribunal on 26.03.2018 and the Tribunal vide order dated 26.03.2018 directed the Certificate Holder Bank not to take coercive action in respect of the property in question till next date of hearing. The Appeal was again taken up for hearing on 24.08.2018 when the Respondent Bank filed affidavit in opposition. The Appellant filed affidavit in reply vide order dated 12.12.2018. The matter was finally heard on 11.01.2019 and reserved for order. The Certificate Debtors and the auction purchaser neither appeared nor have filed affidavit in opposition.

5. Now the brief history of the Appellant's case are that :

(i) The Appellant along with two daughters stay at the tenanted flat measuring 1050 sq.ft. on the ground floor consisting of three bed rooms, one kitchen cum dining room and two bath rooms at the premises No. P-828, Block P, New Alipore, Kolkata-700053(Old), Premises No. 22, Vismadev Chattopadhyay Sarani, P.S. New alipore, Kolkata-700053 by virtue of notarized tenancy agreement made on 01.01.2006 with the landlord Shri Ashim Kumar Kundu, son of Sashibhusan Kundu of 158, Roy Bahadur Road, Kolkata-700034 having right to stay/occupy the demise flat for residential purposes for a period of 33(thirty three) years from the month of January,2006 to 31^st December, 2039. The Appellant paid lump sum non-refundable amount of Rs. 5.00 lakhs (Rupees five lakhs) to Shri Ashim Kumar Kundu in respect of the flat in question. The Appellant obtained ration card, LPG connection, Aadhar Card being No. 4442 7015 8092, PAN Card No. ANVPK2007P recording the above said address. Two daughters of the Appellant also obtained EPIC Card, Driving Licence etc. recording the above said address.

(ii) The Appellant paid rent regularly to the landlord, initially Rs. 6,500/- only p.m and thereafter paid increased amount of Rs. 10,000/- p.m. for few months and reverted to Rs. 6,000/- p.m. and obtained rent paid receipts.

(iii) The landlord, Shri Ashim Kumar Kundu was creating trouble to the Appellant during the last few months and on 13.08.2017 he tried illegally and forcefully tried to oust the Appellant from her possession of the said flat. The Appellant lodged general diary with the New Alipore Police Station and ultimately instituted a Title Suit being No. 1266 of 2017 before the Learned Court of Civil Judge(Jr. Division) 2^nd Court, Alipur, South 24 Parganas. The Appellant obtained an interim order of injunction on 24.08.2017 restraining Shri Ashim Kumar Kundu from disturbing peaceful possession of Gita Rani Kundu till 23.10.2017, adjourned to 07.12.2017 and the civil suit is pending.

(iv) The Appellant found a letter dated 24.11.2017 pasted on the portion of the flat in question issued by Sri Prodyot Banerjee, Advocate addressed Shri Ashim Kumar Kundu, *N. Ra*

making a reference to RC No. 42 of 2013 before Learned r.O. DRT-II, Kolkata, informing that All that piece and parcel of flat measuring super built up area 550 sq.ft. more or less on ground floor at premises No. 22, Vismadev Chottopadhyay Sarani, P.S. New Alipore, Kolkata-700053 was sold to Smt. Satyabhama Khemka wife of Mr. Pradip Khemka by the Ld. R.O. and the sale was confirmed by Ld. R.O. on 06.11.2017 with direction to hand over the physical possession of the said property to Smt. Satyabhama Khemka.

(v) The Appellant is the lawful occupant of the flat in question being the subject matter of mortgage with United Bank of India, by virtue of tenancy agreement dated 01.01.2006. The Appellant did not get any notice issued by the Tribunal as to the recovery proceedings or sale of the flat in question and has gathered knowledge about the recovery proceedings from the letter dated 24.11.2017 of the Receiver. The Appellant cannot be evicted from her lawful possession without due process of law in force. Being aggrieved by the letter dated 24.11.2017 affixed on the flat in question, the Appellant filed an application to intervene in the recovery proceedings.

(vi) After completion of pleadings, the intervening application of the Appellant was finally heard the Learned Recovery Officer and he has passed final order on 27.02.2018.

(vii) The Appellant has submitted sufficient documents to prove her tenancy in the flat in question comprising 1050 sq.ft. as a lawful occupant thereof. The Learned Recovery Officer has passed an illegal and void order, neglecting application of provisions of the West Bengal Premises Tenancy Act, 1997. The conclusion drawn by the Learned Recovery Officer in his order dated 27.02.2018 in respect of the tenancy agreement relying upon the Rule 11 of 2^nd Schedule of Income Tax Act is wrong and illegal and is liable to be set aside. The Learned Recovery Officer has not taken into consideration the relevant materials of the tenancy agreement, the Receiver's report, the valuation report while passing the order dated 27.02.2018.

6. The Respondent Bank has filed affidavit in opposition to the Appeal. The Appellant has filed affidavit in reply to the affidavit in opposition.

7. The Appellant has filed written notes of argument. The Appellant has relied upon decision of Hon'ble Supreme Court of India in the matter of Anthony Vs K.C. Ittoop & Sons & others(decided on 21.07.2000) (2000) 6 Supreme Court Cases 394 and the decision of Hon'ble High Court at Calcutta in the matter of Ratan Kumar Khaitan Vs United Bank of India & others(decided on 17.11.2009) (2010) (1) D.R.T.C. 637(A.P.).

8. The Respondent Bank has filed written notes of argument. The Respondent Bank has relied upon the decision of Hon'ble Chennai High Court in the matter of G V Films Ltd. Vs Priyadarshan & Another (decided on 05.12.2005), C.S. No. 454 of 2005, O.A. Nos. 543 and 2302 of 2005 nd W.P. M.P. No. 19093 of 2005 and W.P. No. 175.

M. A.

9. Inspite of service, the Respondent Nos. 3 and 4 neither appeared nor filed any objection to the Appeal. Hence, ex parte order is passed as against the Respondent Nos. 3 and 4.

10. Heard the Learned Counsel for the parties, perused the papers and documents submitted in the present matter. Before recording Tribunal's observation and finding and passing final order in the present Appeal, the Tribunal is of the view that there are certain issues that need to be settled. Hence, the case records are sent back to the Learned Recovery Officer for specific purpose, verification of case records and compliance of Tribunal's order as given hereunder.

ORDER

- (1) The Receiver appointed by the Learned Recovery Officer for compliance of his order dated 27.02.2018 is discharged.

- (2) Learned Recovery Officer shall verify the case records in the light of the above said observation and finding and the report filed by the earlier Receiver and shall pass appropriate order.

- (3) Learned Recovery Officer shall appoint a Receiver to verify the present status of mortgage property. The Receiver shall record the details of occupancy, if any, in the mortgage property and shall also record (i) whether the mortgage property i.e. *"Flat measuring super built up area 550 sq.ft. more or less on ground floor with undivided proportionate share of land at Premises No. 22, Vismadev Chottopadhyay Sarani, P.S. New Alipore, Kolkata-700053"* is distinctly, separately and well demarcated, (ii) whether the mortgage property is inclusive/exclusive of the alleged tenanted property i.e. *flat measuring 1050 sq. ft. on the ground floor consisting of three bed rooms, one kitchen cum dining room and two bath rooms at the premises No. P828, Block P, New Alipore, Kolkata-700053(Old), Premises No. 22, Vismadev Chattopadhyay Sarani, P.S. New Alipore, Kolkata-700053* (iii) record other relevant facts with regard to the mortgage property as aforesaid.

- (4) The Receiver shall submit his report within one month from the date of receipt of the order of the Learned Recovery Officer.

- (5) The Appellant shall assist the Receiver as well as the Learned Recover Officer for compliance of the Tribunal's order.

- (6) The Appellant shall submit an affidavit before the Learned Recovery Officer disclosing the fact of tenancy suit as pleaded in the present Appeal, present status of the tenancy suit, the restrain order passed by the Learned Civil Court, annexing the certified copy of the order passed by the Learned Civil Court, whether the tenancy suit is pending and next date of hearing. Copy of the affidavit shall be provided to the Learned Counsel *N. S. Ch*

for the Certificate Holder Bank. Learned Receiver shall also provide the copy of the report to the Learned Counsel for the Certificate Holder Bank.

(7) The remuneration and expenses to be incurred for the Receiver for compliance of Tribunal's order shall be borne by the Appellant.

(8) Case records are remanded back to Learned Recovery Officer for compliance of Tribunal's order.

Order pronounced in open Tribunal on 14.06.2019.

Copy of the order be given to the parties.

Copy of the order be sent to the Learned Recovery Officer.

(M.S. Rao) 14.06.2019

Presiding Officer Kolkata DRT No. 2