DR PRANJIVAN P ZAVERI vs DENA BANK on 13 January 2021

**ORDER**

1. 1. This order of mine will dispose of Appeal No.25 of 2007 filed the applicants against the Respondent No.1 Bank with a request to quash and set aside the action taken by the Respondent No. 1 Bank under the provisions of Securitization Act.

2. 2. The Applicants are husband and wife and claiming themselves as purchasers of property on which Respondent No.1 bank is claiming its mortgagee rights and have invoked jurisdiction of this Tribunal under Section 17 of the SARFAESI Act, 2002 against the Securitization process of Respondent no.1.

3. 3. Earlier Respondent no.1 was Dena Bank, but due to amalgamation of the said bank to the Bank of Baroda, now has been represented as such. So, in this case, wherever word 'Respondent Bank No.1' appears that will include Dena Bank wherever context so admits.

4. 4. Respondent no.2, i.e. Smt.Prabhaben Prahladbhai Patel (now represented by her legal heirs, but the said legal heirs facilitated ex-parte proceedings) mortgaged her property in favour of the Dena Bank and also sold the property to Applicants during the pendency of proceedings filed under section 19 of Act 1993 and after initiation of Securitization process under Securitization Act 2002. Respondent no.2, Smt. Prabhaben Prahladbhai Patel died leaving behind her legal heirs, which were brought on record as Respondent no.2(a) & 2(b), whereas Respondent no.3, Surendranagar District Central Co. Op. Bank is also claiming its rights over the property on the grounds that Respondent no.2 obtained loan from the said Co. Op. Bank. Further, under Arbitration Proceedings under Co. Operative Societies Act, the said bank got the property in question attached under the provisions of the Co. Operative Societies Act.

1. 5. At the outset, it is to be recorded that this case has been registered as Appeal, whereas this is an application filed under Section 17 of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. So misnomer used at the time of registration of case is required to be clarified.

2. 6. That it is an agony of the system that despite the orders of Hon'ble High Court of Gujarat, this Tribunal could not decide this Securitisation Application/Appeal within the stipulated period.

3. 7. The undersigned joined this Debts Recovery Tribunal-I, Ahmedabad on 20.11.2017 and thereafter put his best efforts to adjudicate this matter expeditiously, but as this Tribunal was having additional charge and due to one reason or other, same could not be decided. It is indeed regrettable on the part of the this Tribunal and when after conclusion of hearing, this Tribunal was to dictate final order, and after perusal of records, it has came out that Respondents i.e. legal heirs of Respondent No. 2 and Respondent No 3 were added in this Securitisation Application by way of impleadment and after their impleadment, the said Respondents could not be served or no notice was issued to them. So to avoid technicalities and to **observe** judicial decorum and principles of justice, this Tribunal issued notice to the said Respondents and Applicant took steps, thereafter legal heirs of Respondent no.2 facilitated ex-parte proceedings, whereas Respondent no.3 put its appearance. Now after COVID-19 pandemic restrictions, again this case has been taken up for hearing and it **was** reminded to the Ld. Counsel to the parties that earlier arguments could not be considered as those were made in the absence of all the parties. So Ld. Counsel for the parties argued afresh.

1. 8. Further it is required to be recorded that earlier this Tribunal dismissed this Appeal/Securitisation Application vide order dated: 31.07.2007 and Appeal preferred by present Applicants was dismissed by Hon'ble Appellate Tribunal on 15.04.2010. Thereafter, the Applicants preferred one SCA No. 4822 of 2010 before the Hon'ble High Court and the Hon'ble High Court vide order dated 25.04.2011 with certain observations remanded this case for fresh adjudication in view of the findings recorded in the order of Hon'ble High Court of Gujarat. Against the said order, bank preferred one *SLP (C) No. 19546 of 2011* before the Hon'ble Supreme Court and Hon'ble Supreme Court on 17.02.2015 passed following orders:- *\*Heard learned counsel for the parties.*

*We do not find any reason to interfere with the impugned order passed by the High Court.*

*The special leave petition is accordingly dismissed.*

*All questions are left open for determination by the Debt Recovery Tribunal in*

*terms of the order of the High Court.*

*It is made clear that any observations made by the High Court will not come in the way of adjudication by the Tribunal.*

*Parties will maintain status quo with regard to the possession until the decision of the Tribunal."*

1. 9. In nut shell, the order passed by this Tribunal and Hon'ble Debts Recovery Appellate Tribunal, had been set aside by the Hon'ble High Court and have become non-existent and in view of orders of Hon'ble Supreme Court, the observations made by Hon'ble High Court are subject to the orders of Hon'ble Supreme Court. In the back drop of above, we can certainly say that, this Securitisation Application is as good as fresh Securitisation Application to be decided in terms of orders of Hon'ble High court but without being influenced by observations made by Hon'ble High court and in fact that would serve the ends of justice and would help this Tribunal to decide this matter in a judicious manner, as such the parties argued at length their case to their satisfaction keeping in view certain directions given by the Hon'ble High Court.

2. 10. Now coming to the facts of the case, that the Petitioner No.1 was working with Gujarat Agricultural University at Dantiwada as a Scientist Class-I. It is pleaded that he has his own independent profession and engaged in the activity of research and development in seeds and marketing of the improved seeds and knowledge. Petitioner No.2 is the wife of Petitioner No.1 and she is assisting in the business of her husband. Petitioners were in search of a residential premises.

They read an advertisement published in the newspaper by Respondent No.2 through one broker for sale of residential property namely 13-A, ShyamSattadhar Cooperative Housing Society Limited, Sola Road, Bhuyangdev, Ahmedabad. This advertisement was published in Gujarat Samachar, a vernacular local newspaper, Ahmedabad edition on 10.9.2006. Petitioners approached the broker through whom the advertisement was published and the broker in turn gave physical inspection of the bungalow to the petitioners and also copy of title documents, including title clearance report obtained by Respondent No.2, copy of original share certificate, etc. Petitioners ultimately settled the deal and bought the property in question for Rs.17.51 lacs. Respondent No.2 executed sale deed in favour of the petitioners dated 10.10.2006. Petitioners wanted to avail loan facility from the Bank of Maharashtra for the purpose to purchase the said property and therefore Respondent No.2 handed over file containing various documents, including title report of one Advocate named Vijay A. Patel on 21.6.2006. Petitioners approached Bank of Maharashtra, Gandhinagar Branch with a request to grant housing loan of the sum of Rs.12 lacs, and an application alongwith necessary documents was submitted. Bank of Maharashtra through their panel Advocate one Shri Narendra H. Soni obtained title report in respect of the said property. On 22.11.2006, Bank of Maharashtra released a cheque of Rs.12 lacs towards the sale consideration. The balance amount out of Rs. 17.51 lacs was paid by cheques from the accounts of the petitioners maintained with State

Bank of India. It appears that Respondent No.2 also gave solemn declaration declaring that the property in question is in her name and she is the sole owner of the property, free of all encumbrances and there is no charge over the said property of any bank or any financial institution. Respondent No.2 also declared that she has not availed of any loan facility whatsoever from any bank, government or semi-government office or institution. After execution of the sale deed, the possession of the property was handed over to the petitioners and they started residing in the premises after carrying out necessary renovations. One fine day, to the utter shock and dismay of the petitioners, officers of Respondent No.1-Bank came down at the residential house of the petitioners and informed the petitioners that the disputed property is under mortgage with Dena Bank (now Bank of Baroda) executed by Respondent No.2. Petitioners were shocked upon hearing this as they have invested their entire savings of life in the said property, and over and above they have also availed of loan facility of Rs.12 lacs from Bank of Maharashtra by creating equitable mortgage on the same disputed property.

The record reveals that the petitioners immediately filed Special Civil Suit No.330 of 2006 in the Court of Civil Judge (SD), Ahmedabad Rural seeking injunction against the Respondents No. 1 & 2 from dispossession. The Suit was contested by Respondent No.1-Bank on the ground that Civil Court has no jurisdiction against the action of Respondent No.1 - Bank under Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest, Act (54) 2002 (for short "the SARFAESI Act"). The Civil Judge dismissed the Suit on the threshold by rejecting the plaint under Order 7 Rule 11 of the Civil Procedure Code. Record further reveals that Respondent No.1 - Bank filed Miscellaneous Civil Application No. 187 of 2006 under Section 14 of the SARFAESI Act before the learned Chief Metropolitan Magistrate, Ahmedabad seeking directions from the Court to take physical possession of the disputed property and hand over the same to Respondent No.1-Bank. Petitioners were also joined as party Respondents in the said Application and the petitioners resisted the Application on various grounds available. However, Chief Metropolitan Magistrate passed an order dated 22.3.2007 allowing the Application of the Respondent No.1-Bank with direction to the concerned police station to provide help for taking possession of the property. On 25.3.2007 Respondent No.1-Bank took over the possession of the property from the petitioners.

On 7.4.2007 petitioners preferred this present Appeal No.25 of 2007 before the Debts Recovery Tribunal, Ahmedabad (for short "DRT") under Section 17 of the SARFAESI Act and sought various reliefs. The Appeal before the DRT was substantially on the following grounds:

*(a) Respondent No.2 played fraud not only with the Petitioners but with Respondent No.1 - Bank also, because the documents relating to the title of the property produced by Respondent No.2 before Respondent No.1-Bank while creating equitable mortgage are found to be bogus, concocted and they are not original title deeds.*

*(b) Respondent No.2 created multiple mortgages in respect of the disputed property. Many lenders were duped by mortgaging the same property.*

*(c) Petitioners are bona fide purchaser of the property for value without notice of any right, title or interest in the disputed property by Respondent No.1 inasmuch as petitioners approached Respondent No.2 pursuant to the advertisement published by her through a broker and after obtaining title clearance report issued by Respondent No.2. Not only that, but Bank of Maharashtra also obtained title clearance report through their Advocate at the instance of the petitioners at the time of availing of the loan facility.*

*(d) It was brought to the notice of DRT that Section 13 of SARFAESI Act could get attracted only if security interest is created in favour of the secured creditors. Secured creditor has right to exercise powers under Section 13 of the Act only if security interest is created on the property, meaning thereby security interest must be created legally and validly as per Section 58 of the Transfer of Property Act in case of equitable mortgage by deposit of original title deeds.*

*(e) It was brought to the notice of DRT that Respondent No.1-Bank created mortgage on forged documents namely share certificate and forged letters of society. It was brought to the notice of the Tribunal that the original share certificate issued by the society is with the petitioners and the forged and concocted share certificate was produced before Respondent No.1-Bank. This was supported by documentary evidence produced by the Petitioners, including the affidavit of the Chairman of the society, who clearly declared on oath that his signatures have been forged and the documents are not issued by the society.*

11. The Respondent No.1 Bank appeared and filed reply at Exh.R/06, denying the averments made by the applicants in the Appeal and submitted that the Appeal as filed is hopelessly time barred and applicants have come in active collusion with the Respondent no.2 with malafide intention and oblique motive to frustrate and delay the recovery of public money of more than Rs.99.81 Lakhs initiated by the Respondent No.1 Bank under the Securitisation Act. It is further submitted that the applicants have not come to this

Tribunal with clean hands and submitted that the Dena Bank granted loan of Rs.49.50 Lakhs approx., for which initially Respondent no.2 created mortgage on 11.09.1996 and thereafter mortgage was extended on 18.11.2000 and the bank obtained the title clearance and marketable title, free from all encumbrances and Respondent no.2 also made declaration to that effect. The Respondent no.1 bank submitted it has taken following documents and has also annexed all such documents.

<table border="1"> <thead> <tr> <th>Sr. No.</th> <th>Particulars</th> <th>Date</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>True copy of Memorandum of Entry recorded by Dena Bank</td> <td>11.09.1996</td> </tr> <tr> <td>2.</td> <td>Memo.of Entry by Extension drawn by Dena Bank</td> <td>18.11.2000</td> </tr> <tr> <td>3.</td> <td>Affidavit signed &amp; sworn by Respondent No. 2</td> <td>06.09.1996</td> </tr> <tr> <td>4</td> <td>Certificate issued by the society</td> <td>16.08.1996</td> </tr> <tr> <td>5</td> <td>Letter issued by society to Dena bank</td> <td>20.08.1996</td> </tr> <tr> <td>6</td> <td>Certificate issued by the society</td> <td>11.11.2000</td> </tr> </tbody> </table>

The Respondent No.1 Bank also disclosed the filing of Original Application for recovery of dues of Rs.99,80,687/- before Debts Recovery Tribunal under RDB Act, 1993 as Original Application No.378 of 2001 and submitted that DRT vide its orders dtd:31.08.2001 was pleased to issue injunction preventing alienation of the mortgaged immovable properties by the parties including the Respondent no.2. It is further submitted that the Respondent no.2 failed and neglected to repay the dues of the bank and Respondent no.1 bank issued Demand notice dtd:07.08.2006 under Section 13(2) of the SARFAESI Act and further issued letter dated 13.10.2006 informing to deliver the possession to the bank on

27.10.2006. Thereafter on 27.10.2006, the Respondent no.1 bank took the possession of the factory premises, but the Bunglow No.A-13 in Shyam Sattadhar Coopearative Housing Society Limited at Ghatlodiya, the property in question was found locked, so on 27.10.2006, the bank took the symbolic possession after making affixation of the possession notice and thereafter published possession notice in two newspapers on 28.10.2006. Further on 06.11.2006, husband of the Respondent no.2 sent letter to the Respondent no.1 bank for compromise and bank filed reply to the said letter on 09.11.2006. It is further pleaded that the Respondent no.1 bank was shocked to know that the Respondent no.2 in collusion with the applicants have sold the said property in question and on 22.11.2006 on the strength of agreement to sell dated 10.10.2006, Respondent no.1 bank sent letters to the Chairman of the Housing Society and Sub Registrar Office on 12.12.2006. Thereafter, the Respondent no.1 bank initiated process under Section 14 of the SARFAESI Act by filing Misc. Application No.187 of 2006 to take physical possession. Respondent no.1 bank also lodged a criminal complaint against the applicants with police authorities for offences of criminal breach of trust, fraud, forgery and cheating. The applicants appeared before the Ld. Chief Metropolitan Magistrate and filed reply, but Ld. Chief Metropolitan Magistrate passed order to take the possession of the property in question under Section 14 of the SARFAESI Act. The Respondent no.1 Bank claimed its mortgagee rights over the property in question and ultimately prayed for dismissal of the Appeal/Securitisation Application.

I have not narrated the facts in details, as the Respondent No.1 bank has filed written arguments in detail and this Tribunal has opted to reproduce the said arguments in verbatim.

1. 12. The Respondent no.2 has failed to put their appearance despite service, thus, the case was proceeded ex-parte against Respondent no.2 due to their non-appearance. Further, Respondent no.3 filed its written submissions at Exh.R/66, wherein it has responded to the submission made by the Respondent no.1 bank, as both the banks are claiming their respective rights over the same property.

2. 13. On 31.12.2020, before this Tribunal urged all the Ld. Counsels to lis argued the matter afresh for fair adjudication and accordingly, with the concurrence of all the Ld. Counsels, the matter was heard at length on 11.01.2021 also. The Ld. Counsel for the applicants submitted fresh written submission at Exh.A/67, which is reproduced as under:- **"SUMMARY OF WRITTEN SUBMISSIONS BY APPLICANTS/APPELLANTS**

*The appellants beg to submit summary of their written submissions filed vide Exh.-A/44 with list of documents vide Exh.A/45, supporting the Appeal filed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act') as under. In furtherance thereof the applicants hereby submit summary of their submissions as under:-*

1. 1. *The appellants are the purchasers of disputed residential property from respondent No.2 situated at 13A, Shyam Sattadhar Co-operative*

*Housing Society Limited, Sola Road, Bhuyangdev, Ahmedabad, which is a tenement. The respondent No.1 Bank claimed mortgage over the said property and has taken possession of the disputed property from the appellants which is the subject matter of challenge in the present appeal on various grounds.*

2. *Following important questions of law arise for the kind consideration of this Hon'ble Tribunal.*

- (A) *Respondent No.1 bank created alleged mortgage by Memorandum of Entry in respect of collateral security which is residential property in question, by deposit of fake and forged Share Certificate No. 182, fake letter of society that no lien/charge of bank and fake duplicate allotment letter and possession letter as mentioned in Memorandum of Entry. Legal and valid mortgage has not been created by Respondent No.1 bank on disputed property. Author of Share Certificate and letters of Sattadhar Society namely Chairman of Society Rameshbhai Bhanjibhai Patel clearly declared by affidavit (Exh.A/11) as well as Affidavit-Cum-Declarations of said Chairman Rameshbhai Bhanjibhai Patel made before Hon'ble DRAT, Mumbai filed with amendment applications as Annexues (Exh.A/22) clearly proves beyond reasonable doubt that title documents with Respondent No.1 bank are fake and forged.*

- (B) *Handwriting expert opinion of Mr. J.J. Patel, Retd. Acting Chief Examiner of Questioned Documents FSL, Government of Gujarat dated 05/07/2010 (Annex. N) clearly give opinion that signatures of Share certificates and letters with Respondent No.1 bank do not tally with original signatures with chairman of the society Shri. Rameshbhai B. Patel. (See Exh.A/45, List of Documents).*

- (C) *Judgement of Apex Court in case of A.B. Papayya Sastry and others [(2007) 4 SCC 221] clearly held that fraud vitiates all judicial acts whether in rem or in personam. Judgement, decree or order obtained by fraud has to be treated as non est and nullity, whether by court of First Instance or by the Final Court. It can be challenged in any court at any time, in appeal, revision, writ or even in collateral proceedings. (See Exh.A/45, List of Documents).*

- (D) *In the present case mortgage claimed by Respondent No.1 bank is based on fake and forged documents which vitiates agreement of mortgage between Respondent No.1 Bank and borrower, Respondent No.2 in view of*

Section 23 of Contract Act.

(E) Hon'ble Gujarat High Court in case of Shoklingam Kappuswami Mudliyar versus Indian Bank and Ors. In Special CA No. 13347 of 2007 clearly held while interpreting provisions of securitization act that mortgage created by deposit of xerox copy of conveyance deed is illegal and does not create legal and valid mortgage in favor of bank and it does not create security interest within the meaning of sections 2(zf) of Securitization Act. A copy of said judgement dated 16/10/2017 is annexed here to as ANNEXURE-A for ready reference.

(F) Division Bench of Hon'ble Gujarat High Court while remanding matter before this Hon'ble Court observed as under.

"12.....We cannot ignore other documentary evidence more particularly the affidavit filed by Chairman of the society, wherein, he has said in so many words that his signatures have been forged, and perhaps this would lead us to believe that the so called Share Certificate, which has been relied upon by the Bank, is also a false document because it contains forge signature of the Chairman of the society, who has issued the share certificate. There is no reason why the Chairman of the Society to file a false affidavit."

The Hon'ble High Court in Paragraph-18 gives finding and held that it is within the powers of the DRT to adjudicate the issue of legality and validity of mortgage and the legality and validity of security interest created in the favor of the Respondent No.1 bank. On this issue as regards the fraud and legality and validity of security interest in respect of disputed property remand has been made for fresh decision by this Hon'ble Tribunal.

(G) The Hon'ble Apex Court while dismissing SLP (Civil) No.19546 of 2011 by dated 17/02/2015 of the resp. no.1 bank clearly observed that all questions are left open for determination by the Debt Recovery Tribunal in terms of order of the High Court. Thus this Hon'ble Tribunal will decide all questions in terms of the order of the High Court. Of course it is also observed that observations made by the High Court will not come in way of adjudication by the Tribunal. A copy of said order of Hon'ble Apex Court is annexed here to as ANNEXURE-B.

(H) The objection of Respondent No.1 about maintainability of present appeal has already been rejected specifically by Hon'ble High Court in the judgment while remanding matter. However even Apex Court has also clearly held while interpreting 'Any person' mentioned in sec.17 of the Act, in paragraph 16 and 17 in case of Jagdish Singh V/s. Heeralal reported in 2014(1)SCC 479 and held that any person who may be affected by action taken U/s. 13(4) of the Securitization Act is entitled to file application U/s. 17 of the Act. Copy of the judgement is marked as ANNEXURE-C.

(I) The Ld. Advocate for the Respondent No.1 bank while making oral submission argued that the appellants received share certificates and title deeds from Social Co-Operative Bank through borrower upon payment of dues. Hence it is alleged that there is collusion between borrowers and purchaser appellants. It means that Respondent No.1 bank clearly admits and agrees that Respondent No.1 bank did not have original share certificate as title deed at the time of creating mortgage.

The allegation of collusion made by Respondent No.1 has no substance and is baseless allegation. The appellants read small advertisement published in newspaper given by broker of Respondent No.2 for sale of tenement which is disputed property. In that way the appellants came into contact with Respondent No.2 and her husband. After negotiations sale price of tenement was fixed and the appellants approached Bank of Maharashtra for housing loan. The Bank of Maharashtra obtained title report through their advocate and upon verification loan was sanctioned by equitable mortgage on the property. The Respondent No.2 executed Regd. sale deed in the favor of the appellants upon receipt of full sale consideration as per market price. Hence the judgment cited by Respondent No.1 bank (2016 SCC online-Guj.296) is not applicable in the facts of the case.

(J) Letter of social co-operative bank dated 29/12/2007 addressed to the chairman of Sattadhar Co-operative Society clearly states that Respondent No.2 borrowed loan of Rs.5,00,000 on 10/02/2002 which has been repaid with interest on 29/02/2007. Hence it is one more evidence on record Respondent No.1 bank did not have original share certificate and allotment letter.

(K) Section- 78 of Transfer of Property Act provides for postponement of prior mortgagee. Where through the fraud,

*misrepresentation or gross neglect of prior mortgagee another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee to the subsequent mortgagee. Under the circumstances Bank of Maharashtra will have exclusive right on the disputed property who has given loan at the instance of appellants.*

- (L) *The appellants have produced copy of original Share Certificates along with Share Certificates of two other members of same society namely Kantibhai I Patel and Sanjay Hiralal Patel which is identical and similar to share certificate produced by the appellant to prove the original share certificate in possession of the appellant. This documents are submitted again along with List of Document (Exh.A/45).*

- (M) *Is mortgage executed by respondent No.2 in favour of respondent No.1 Bank on the basis of forged title document valid in view of affidavits of Rameshbhai Bhanjibhai Patel (Annex.G, Page-51 to SA), Affidavits cum declarations Rameshbhai Bhanjibhai Patel, Chairman of Society filed before DRAT, Mumbai filed with Amendment application (Exh.A/22) who is author of title documents viz. share certificate and letter of society, being Chairman of the society specifically and categorically disowns and denies the signatures on share certificate and letter of society with opp. No.1 Bank which are forged.*

- 3. *The appellants have already submitted written submissions (Exh. A/44) which may be treated part of this submissions and be considered as part of submissions.*

- 4. *Division Bench of Hon'ble High Court of Gujarat in case of Lalitkumar Jivabhai Thakkar V/s. State Bank Of India reported in 2009(2) GLR 1667 "tribunal if finds that mortgage has been created fraudulently and sham and bogus documents were produced before the Tribunal to get favourable orders to the prejudice of a third party, that fact can always be brought to the notice of the Tribunal. Tribunal has an obligation to see that its process be not abused.'*

- 5. *As far as interim injunction order granted in O.A. is concerned, it is submitted that it was confining to mortgaged property and that too is subject to final outcome of the O.A. When the title documents are found to be forged and mortgage itself is void, it does not give any power or authority to respondent No.1 Bank to take any action*

*against disputed property under the Act, such order will not come in way of deciding finally by this Hon'ble Tribunal granting protection to the appellants. Without prejudice it is submitted that as held by Apex Court in case of Thomson Press (India) Ltd V/s. Nanak Builders and Investors Pvt. Ltd; reported in 2013 (5) SCC 479 that any transfer in breach of injunction is not void ab initio or illegal ipso jure but remains subservient to pending litigation. Hence, as mortgage is illegal and does not create any right in favour of resp. no. bank, it does not effect sale in favour of appellants.*

1. 6. *The appellants submit that judicial pronouncement as directed by the Hon'ble High Court based upon the observations are required to be given by this Hon'ble Tribunal finally in favour of the appellants declaring that so-called mortgage in respect of disputed property is void and respondent No.1 Bank has no authority and/or power to take any action under the Securitisation Act.*

2. 7. *This Hon'ble Tribunal may be pleased to allow the Appeal, quash and set aside action of Resp. No.1 by directing restoration of possession of the disputed property with compensation and cost in favour of the appellants for showing thorough negligence by the officers of the respondent No.1 Bank who has deprived the appellants from their property which is a fundamental right under the Constitution as declared by the Apex Court.*

*In view of above submissions, this Hon'ble Tribunal may be pleased to allow the present Appeal with cost."*

1. 14. Further, Ld. Counsel appearing for the Respondent No.1 Bank submitted that since he has already submitted his written submissions at Exh.A/46, he does not want to file any fresh written submissions and relied on the same. The same are reproduced hereunder in verbatim to avoid repetition :

1. 1. *The respondent No.1 Bank begs to submit its written submissions, through its advocate, opposing the appeal filed by the alleged purchaser of the disputed property as under.*

18APPEAL NO. 25 OF 2007

1. 2. The respondent No.1 begs to submit relevant facts in brief as under.

2. 3. Present appellants are claimed to have derived their alleged rights over the residential property being Bungalow No.17-B, known as Niketa in ShyamSattadhar Cooperative Housing Society Limited, Sola Road, Ghatlodiya, Ahmedabad, which, hereinafter, is referred as the "said property" on the basis of so called sale deed dated 22.11.2006 allegedly executed by the respondent No.2 - borrower of the respondent No.1 bank.

3. 4. It is submitted that the said property was mortgaged by the respondent No.2 with the respondent No.1 Bank on 11.9.1996 and the said equitable mortgage was further extended by the respondent No.2 on 18.11.2000 in favour of the respondent No.1 Bank to sanction and disburse financial assistance of Rs.49.50 lakh to M/s Robust Cement Private Limited of which the respondent No.2 and her husband Mr. Prahladbhai Ambalal Patel are the partners of the said company. The respondent NO.2, her husband Mr. Prahladbhai Ambalal Patel and their son Mr. Ashok Prahladbhai Patel stood as guarantor in their personal and individual capacity. On 11.9.1996, the respondent No.2 deposited original title deeds and documents of title of her said immovable residential property and thereby, created first charge over the said residential property in favour of the respondent No.1 Bank with an intention to secure the due repayment of entire outstanding of the said credit facility. At their request, the respondent No.1 Bank had also granted further ad hoc credit facility of Rs.5 lakh aggregating to Rs.54.50 lakh in the year 2000.

4. 5. It is contended by the respondent No.1 Bank that the respondent No.2 had signed an affidavit dated 6.9.1996 to this regard, inter alia, declaring on oath that she is the sole and absolute owner and occupier of the said residential property and her titles are clear, marketable and free from all encumbrances and further, she undertakes not to transfer, convey or part with the possession of the said property during the continuance of said mortgage. In this connection, ShyamSattadhar Cooperative Housing Society Limited (hereinafter referred to as "said Society"), in which the said residential property is situated, has also issued certificate dated 16.8.1996.

5. 6. It is submitted that since the borrower and the guarantors failed to repay the outstanding dues, the respondent No.1 Bank filed OA No.378 of 2001 on 20.8.2001 against the borrowed company and guarantors including the defendant No.2 in the Hon'ble Debts Recovery Tribunal - I for recovery of Rs.99,80,687/- and in the above OA proceedings, the learned Presiding Officer vide order dated

31.8.2001 was pleased to issue injunction preventing alienation of the mortgaged property by the defendants including the present respondent No.2.

1. 7. The learned Presiding Officer, Debts Recovery Tribunal - I has passed judgment on 15.2.2008 allowing the said OA with costs directing the defendant Nos.1 to 4 and 6 jointly and severally to pay Rs.99,80,687/- with simple interest at the rate of 9% per annum from 28.8.2001 till realization. It is further ordered that the applicants shall be entitled to sell the scheduled property for realizing all the certified dues and issued recovery certificate under section 19(22) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "Securitization Act"). I crave leave to refer to and rely upon the entire paper book of the said OA at the time of hearing of this appeal.

2. 8. It is submitted that since the said borrower and the guarantors including the respondent No.2 failed and neglected to repay the dues, the respondent No.1 initiated measures under the Securitization Act by issuing demand notice dated 7.8.2006 to the said borrower and the respondent No.2, demanding repayment of Rs.99.81 lakh plus further interest within a period of 60 days. All the respondents have been duly served with the demand notice. The respondent No.1 Bank issued letter/intimation to the respondent No.2 to deliver to the bank the physical and actual possession of her mortgaged residential property on 27.10.2006 under section 13(4) of the Securitization Act. On 27.10.2006, the said residential property was found locked and therefore, the respondent No.1 took symbolic possession by drawing panchnama and also taking photographs. The respondent No.1 bank issued the possession notice in the daily newspaper dated 28.10.2006 in English and Gujarati (vernacular) language daily newspapers.

3. 9. It is respectfully submitted that the respondent No.1 Bank was shocked and surprised to know that the respondent No.2 in collusion with the appellants, have illegally sold the said residential mortgaged property to the appellants. The respondent No.1 Bank on 12.12.2006 also sent letters to the Chairman/Secretary of the said Society and also to the Sub Registrar of the Assurance, Ahmedabad stating that the illegal sale transaction has taken place of the mortgaged property without consent and information and written permission of the respondent No.1 Bank (mortgagee).

4. 10. It is further respectfully submitted that thereafter, on 15.12.2006, the respondent No.1 Bank filed Misc. Application No.187 of 2006 before the learned Chief Metropolitan Magistrate, Ahmedabad under section

14 of the Securitization Act for taking actual and physical possession of the said residential property. The learned Chief Metropolitan Magistrate, Ahmedabad was pleased to issue notice to the appellants and the respondent No.2, which were duly served upon them by Ghatlodiya police authorities on 18.12.2006. Thereafter, the respondent No.1 Bank also lodged criminal complaint against the present appellants on 21.12.2006 and the respondent No.2 and her husband for committing alleged offence of criminal breach of trust, fraud, forgery and cheating. The appellants appeared through their advocate and filed reply, to which the respondent No.1 Bank also filed rejoinder affidavit. After hearing the concerned advocates, learned Chief Metropolitan Magistrate, Ahmedabad was pleased to allow said Misc. Application filed by the respondent No.1 Bank, inter alia, directing the police authorities to deliver the physical possession of the property in question to the respondent No.1 Bank. Accordingly, the respondent No.1 Bank got physical and actual possession of the aforesaid property on 25.3.2007. Paper publication was made in two daily newspapers regarding taking of the actual and physical possession.

1. 11. It is respectfully submitted that thereafter, registered sale deed dated 22.11.2006 was executed by the respondent No.2 in favour of the appellants i.e. after issuance of statutory demand notice dated 7.8.2006 and possession notice dated 27.10.2006. This is clearly in breach of provisions of section 13(13) of the Securitization Act and therefore, alleged sale deed is null and void. Section 13(13) prohibits the borrower from transferring the secured assets after receipt of the demand notice without prior consent of the secured creditors. In the present case, no such written permission is obtained from the respondent No.1 Bank - original secured creditors. The contravention of these restrictive provisions by the borrower is made punishable under section 29 of the Securitization Act. Further, any dealing with the secured assets by the borrower in a manner contrary to section 13(13) would be void and of no effect by virtue of section 23 of the Contract Act irrespective of whether the third party benefiting from such dealing has notice of such contravention.

2. 12. It is respectfully submitted that the entire case of the appellants is based on this illegal transaction of sale deed executed in contravention of section 13(13) of the Securitization Act and also in contravention of injunction granted by the Hon'ble Debts Recovery Tribunal in OA NO.378/2001 filed by the respondent No.1 Bank. The order of the learned Presiding Officer in OA has not been challenged by the borrowers in higher forum and therefore, it has become final. It is respectfully submitted that the appellants have not derived any legal rights and titles over the said property. It is specifically contended that they are not bona fide purchaser of the property for the value paid and without knowledge of the existing first charge/ mortgage of the respondent No.1 Bank. In fact, the appellants are in clear collusion with the respondent No.2 and have entered into fictitious transaction of illegal transfer of the property in question to nullify the action of the respondent No.1 Bank to recover its legitimate dues due and payable by the respondent No.2. The alleged said transaction is for Rs.17.51 lakh as against Rs.33.50 lakh, which was sold by the respondent No.1 Bank at distressed sale value in public auction held on 19.6.2017. The adequate sale consideration has not been paid by the appellants knowing fully well the actual mortgage value of the said property and having conscious knowledge of issuance of demand notice under section 13(2) on 7.8.2006 and taking of the symbolic possession on 27.10.2006. The public notice of symbolic possession was issued on 27.10.2006 and the agreement to sell was entered into on 10.10.2006 and sale deed dated 22.11.2006. The respondent No.1 Bank had taken actual possession as per the order of the learned Chief Metropolitan Magistrate passed on 22.3.2007 and the possession notice thereof was also published in two daily newspapers, out of which, one is in vernacular language on 28.10.2006. Thus, taking into consideration entire facts and circumstances of the case, it clearly appears that the sale transaction is fraudulent and in collusion with respondent No.2.

1. 13. It is respectfully submitted that the appellants, in collusion with the respondent No.2 - owner of the residential property duly mortgaged to the defendant No.1 Bank, had filed Appeal No.25 of 2007 challenging the action/measure of the respondent No.1 Bank taken under Sections 13(3) and 13(4) of the Securitization Act before the Hon'ble Debts Recovery Tribunal, Ahmedabad. Learned Presiding Officer of the Debts Recovery Tribunal has considered the pleadings, documents produced on records and the written submissions filed by the appellants as well as the respondent No.1 Bank, and has dismissed the appeal holding that the appellants are not entitled to relief, as prayed for, by them on the ground that they had purchased the disputed property knowing fully well that the respondent No.2 had defrauded many banks including the respondent No.1 Bank. It is further held by the learned Presiding Officer that the respondent No.2 had skillfully kept herself away from the scrutiny of the Court and the appellants could not produce any evidence to show that they have carried out honest and proper inquiry before entering into the transaction with the respondent No.2. The said property was purchased at

*inadequate sale consideration against the real market value of the property in contravention of the provisions of section 13(13) of the Securitization Act and against the injunction granted by the Hon'ble Debts Recovery Tribunal in OA filed by the respondent No.1 Bank.*

1. 14. *It is respectfully submitted that assuming for a moment that the appellants have been cheated and the respondent No.1 has committed fraud with them, they have no right to file appeal under section 17 of the Securitization Act. If at all, they have a case against the respondent NO.2, they can file appropriate proceedings in the competent Court for claiming damages. Because, the appellants have not stated anywhere in their appeal, written submissions that the fraud is committed with them by the respondent No.1 Bank. There is no allegation of fraud by the respondent No.1 Bank with the appellants and therefore, their appeal under section 17 of the Securitization Act claiming relief against the respondent No.1 Bank is devoid of merits. Therefore, it is respectfully submitted that the appellants have no locus standi whatsoever to file such collusive appeal before the Hon'ble Tribunal. I crave leave to refer to and rely upon the detailed judgment dated 31.7.2007 passed by the Hon'ble Debts Recovery Tribunal - I in Appeal No.25 of 2007.*

2. 15. *It is respectfully submitted that the appellants filed Appeal No.291 of 2007 before the learned Debts Recovery Appellate Tribunal, Mumbai challenging the order of the learned Debts Recovery Tribunal - I, Ahmedabad. The learned Chair Person, after considering all the facts, circumstances, pleadings, contentions and documentary evidence at threadbare scrutiny, held that there is no error in the judgment passed by the learned Debts Recovery Tribunal in rejecting the appeal and thus, Appeal No.291 of 2007 filed by the appellants before the learned Debts Recovery Appellate Tribunal was dismissed with costs. I strongly rely upon the oral judgment passed by the learned Debts Recovery Appellate Tribunal and the findings at the time of hearing of this appeal.*

3. 16. *It is respectfully submitted that the learned Debts Recovery Appellate Tribunal has categorically held that the alleged sale deed is not a genuine one and such sale consideration is half of the distressed value at which the respondent No.1 Bank sold the property in public auction. The time gap of the purchase of the said property at Rs.17.51 lakh and the sale by the respondent No.1 Bank in public auction at Rs.33.51 lakh was only seven months. Thus, within a period of seven months, the disputed property was sold by the respondent No.1 Bank for double price mentioned in the sale deed. If the copy of the sale deed is perused in para 9 and 14, there is*

an undertaking to indemnify the vendees i.e. the appellants in case if there is any defect in the vendor's title in the disputed property or the encumbrances thereon. On the same date of the sale deed, such a declaration was also given by the respondent No.2 to the vendee that she will indemnify the vendee in case he suffers any loss, damages etc. To utter surprise, the appellants have no grievance against the respondent No.2, who has clearly committed fraud even according to their allegations. However, the respondent No.1 Bank is targeted against whom there is deliberate attempt made by both the appellants and the respondent No.2. It is respectfully submitted that the learned Debts Recovery Appellate Tribunal has closely scrutinized two affidavits of Mr. RameshbhaiBhanjibhai Patel, Chairman of the said Society, in which the disputed property is situated. The learned Debts Recovery Appellate Tribunal has found that the appellants have no locus standi to challenge the mortgage in favour of the respondent No.1 Bank and the issue of validity of the mortgage cannot be reopened at the behest of the appellants, who were not parties to the transaction or mortgage, which has been upheld by the learned Debts Recovery Tribunal, Ahmedabad. It is further respectfully submitted that the appellants were having knowledge regarding the alleged mortgage created by the respondent No.2 in favour of another Bank Social Cooperative Bank and on repayment made by the respondent No.2, the original share certificate was handed over by the said Bank to the appellants and the respondent No.2 had, in turn, passed over said original share certificate to the appellants. This shows clear collusion in unequivocal terms. The learned Debts Recovery Appellate Tribunal has clearly stated that in the entire facts and circumstances of the case, the appellants, who are the purchasers of the disputed property, can seek redressal of their grievance by filing a suit for recovery of their amount against the respondent No.2 - seller. However, with clear mala fide intention, both of them have targeted the respondent No.1 Bank to have declaration that the action of the Bank is void, as it has no security interest in the said property.

17. It is respectfully submitted that against both the orders passed by the learned Debts Recovery Tribunal and learned Debts Recovery Appellate Tribunal, the appellants filed Special Civil Application No.4822 of 2010 before the Hon'ble High Court of Gujarat. The Hon'ble High Court of Gujarat by order dated 25.4.2011 quashed and set aside both the said orders of the learned Debts Recovery Tribunal and learned Debts Recovery Appellate Tribunal respectively for the purpose of remanding the matter back to the learned Debts Recovery Tribunal with a direction that the learned

*Debts Recovery Tribunal should examine all aspects including the aspect of creation of security interest in the said property. It is kept open that all the grounds can be raised in the proceedings under section 17 of the Securitization Act before the learned Debts Recovery Tribunal and the learned Debts Recovery Tribunal is directed to decide in each case whether the action of the bank/financial institution was in accordance with the provisions of the said Act and to give independent findings. It is respectfully submitted that the respondent No.1 Bank preferred Special Leave to Appeal (civil) No.19546 of 2011 before the Hon'ble Supreme Court. The Hon'ble Supreme Court was pleased to dismiss the said appeal with a direction that all the questions are left open for determination by the Debts Recovery Tribunal in terms of the order of the High Court. It is made clear by the Hon'ble Supreme Court that any observations made by the High Court will not come in the way of adjudication by the Tribunal. It is respectfully submitted that in view of the above clear cut order of the Hon'ble Supreme Court, we humbly pray to this Hon'ble Tribunal to kindly take into consideration the judgments of the Hon'ble Debts Recovery Tribunal and Hon'ble Debts Recovery Appellate Tribunal along with the judgments of the Hon'ble High Court of Gujarat without being influenced by the observations made by the Hon'ble High Court of Gujarat in the aforesaid Special Civil Application and adjudicate all issues afresh. The respondent No.1, therefore, respectfully submits that following issues are required to be considered by the Hon'ble Tribunal by perusing entire record and proceedings of the appeal so as to adjudicate the present appeal.*

1. a. Whether the appellants have locus standi to challenge the action/measure taken by the respondent No.1 Bank under section 13(2) and 13(4) of the Securitization Act, merely by alleging fraud against the respondent No.2?

2. b. Whether the respondent No.2 and the appellant No.1 are in collusion of each other with an intention to dupe the borrowed funds of the respondent No.1 Bank by the respondent NO.2 and purchasing subject disputed property at half of the value of the property by entering into fraudulent sale deed clearly in violation of section 13(13) of the Securitization Act and in clear violation of the injunction granted by the Hon'ble Debts Recovery Tribunal in OA No.378 of 2001?

3. c. Whether the appellants are entitled to claim any relief from this Hon'ble Tribunal against respondent No.1 Bank, even though, without admitting, the respondent No.2 has

*committed fraud with the respondent No.1 Bank in submitting title deeds of the property?*

*Resp. No. 1 relies upon judgment of Hon'ble Guj. H.C. confirmed by Hon'ble SC, reported in 2016 SCOnlineGuj. 2976, enclosed herewith."*

15. Further, the Ld. Counsel for the Respondent no.3 submitted that his earlier written submissions filed at Exh.R/66 may be treated as final written submissions. Accordingly, the same are reproduced hereunder :

**"AFFIDAVIT-IN-REPLY CUM WRITTEN SUBMISSIONS ON BEHALF OF RESPONDENT NO.3 - SURENDRANAGAR DISTRICT CO-OP. BANK LTD.**

*I, Raghuvirsinh R. Parmar aged about 59 years, Residing At Block No. 5, Mandavrayji Society, Ratanpar, Surendranagar, Gujarat, and working as Chief Executive Office of the Surendranagar District Co-Op. Bank Ltd. - Respondent No.3bank, do hereby solemnly affirm and state an oath as under:*

1. 1. *That I am the Respondent No.3 and being fully aware of the facts of the case, am competent to file the present affidavit.*

2. 2. *That unless specifically admitted herein, the averments and allegations raised in the Appeal are denied as if set out and traversed seriatim.*

3. 3. *That the Appeal do not deserve the consideration of this Hon'ble Tribunal, as the Appeal is without merit and none of the reliefs as sought for may be granted by this Hon'ble Tribunal.*

4. 4. *Without prejudice to file detail reply, at this stage the answering respondent submits its preliminary reply and also submissions as to the maintainability of the present appeal as hereunder:*

5. 5. *The answering respondent most respectfully submit that predecessor of the present appellant had availed loan facility from the answering respondent bank but miserably failed to repay it and therefore answering had filed one Lavad case no. 1019 of 2001 before the Board of Nominees, Rajkot. That, on 16.07.2002, an order came to be passed by Board of Registrar Nominees, Rajkot Division, Rajkot in Lavad Case No. 1019 of 2001 Surendranagar Co-operative Bank Ltd. Versus Prabha Salt Suppliers and others. That Hon'ble Board of Registrar had allowed the same in favour of the Respondent No. 3 - Surendranagar District Co-operative Bank. Copies of the relevant documents pertaining to the loan and order dated 16.07.2002 are annexed herewith and*

marked as **Annexure-R1 (colly.).**

1. 6. That in accordance with order dated 16.07.2002 Japta (Recovery) Notice dated 01.06.2004 and dated 24.05.2007 came to be issued under Rule 96(3) of Gujarat Co-operative Societies Rules, 1965. The Japta (Recovery) notice are ample clear to indicate the description of the property i.e. A13, Shyam Satadhar Co-operative housing society, Sola road, Ahmedabad, is in mortgage in favour in answering respondent Bank. That the subject matter of the said Japta (recovery) notice indicates that Rs. 31,57,944/- is recoverable from Prabha sault suppliers and others at that point of time. A copies of Japta (Recovery) notices are annexed with and mark as **Annexure-R2.**

2. 7. The answering respondent most respectfully submits that on 04.02.2005 answering respondent bank had wrote a letter to chairman secretary to Shyam Satadhar Co-operative society to register encumbrance (BOJA) upon Banglow no. 13 of said society. That the said letter clarified that property should not be transfer in favour of anyone else and to register any further encumbrance in society book. A copy of the letter dated 04.02.2005 is annexure herewith and mark as **Annexure-R3.**

3. 8. The answering respondent most respectfully submits that, as per the best information and knowledge of the answering respondent the Order passed in Lavad Case 1019/2001 has been challenged by predecessor of the present appellant before Hon'ble Co-operative tribunal by way of Appeal No. 670/2005 and therefore in that case also this Hon'ble Tribunal has no Jurisdiction to try this appeal. That the order passed in Lavad Case will remain in force until quashed and set aside by any competent court or authority and therefore as it is in force this Hon'ble tribunal has no jurisdiction to dealt with present appeal since the competent authority has passed the order on same subject matter and by which the rights of the answering respondent are more crystallised. A copy of the letter dated 12.06.2005 by the advocate of the predecessor of the present appellant stating that order passed in Lavad Case 1019/2001 has been challenged by predecessor of the present appellant the predecessor of the present appellant before Hon'ble Co-operative tribunal by way of Appeal is annexed hereto and annexed as **Annexure-R4.**

4. 9. The answering respondent most respectfully submits that, even otherwise in view of order passed by Competent authority in Lavad Case, answering respondent has prior and established right over the property and no other bank or institution can have more or prior rights than answering respondent.

5. 10. That on 21.06.2005 answering respondent bank had again wrote a reminder letter to Shyam satadhar co-operative society to make entry of BOJA upon Bunglow no. 13. A copy of the latter dated 21.06.2005 is annexed herewith and marked as 27APPEAL NO. 25 of 2007**Annexure-R5.**

1. 11. *In response to the same Shyam satadhar co-operative society send a letter dated 25.06.2005. A copy of the latter dated 25.06.2005 is annexed herewith and marked as Annexure-R6.*

2. 12. *That thereafter on 11.05.2007 present appellant had addressed a letter to present respondent which states that present appellant came to know about loan given and Boja/Encumbrance entry based there on by the present respondent no.3 bank. The said letter further states that there is no Boja/Encumbrance entry of the Dena Bank in the society records. Therefore, it appears that Dena Bank having failed to exercise their rights to mutate Boja Entry and therefore cannot claim any rights over the subject property. A copy of the letter dated 11.05.2007 with relevant documents by the present Appellant is annexed hereto and marked as Annexure-R7.*

3. 13. *That the answering respondent most respectfully submits that the answering respondent bank is having charge over property and as the loanee had not paid the loan amount within stipulated time period and therefore he has intentionally defaulted the loan amount.*

4. 14. *The answering respondent most respectfully submits that the appellant is not bonafide purchaser of the property and has suppressed material thing from this Hon'ble tribunal and therefore their conduct itself disentitles them from seeking any relief as it prayed for.*

5. 15. *That it is the duty of the buyer that to verify and check title of the property properly, more particularly record of rights registered and society registered of the property and even otherwise something comes on record adversely which uncleared the title in that case also the concept of buyer beware is applicable and therefore also the appeal is required to be rejected.*

6. 16. *Its further submits that on the basis of the principle of "buyer beware" the appellant was under obligation to be vigilant with respect to the property purchased by him and accordingly the Appeal filed on behalf of the appellant is bad in law and the same should be dismissed with cost.*

7. 17. *That the answering respondent reserves his rights to file additional and further affidavits and to produced evidence as and when required.*

*Without prejudice to aforesaid, the respondent no. 3 craves leave to amend and file additional rely as and when required."*

The parties to lis filed the following documents in the present case.

28APPEAL NO. 25 of 2007*List of documents produced by applicant with Appeal/Securitization Application.*

<table border="1"> <tr><td>1</td><td>Title clearance opinion dated 21.06.2006 by Mr. Vijay A. Patel Advocate</td></tr> <tr><td>2</td><td>Title search report dated 20.11.2006 by Sri Narendra H. Sony, Advocate</td></tr> <tr><td>3</td><td>Agreement to sale dated 10.10.2006 between applicant and defendant no. 2.</td></tr> <tr><td>4</td><td>Copy of sale deed executed by defendant no. 2 in favour of applicant executed by respondent no. 2 duly registered with Sub Registrar, Vadaj</td></tr> <tr><td>5</td><td>Declaration of respondent no. 2 dated 22.11.2006.</td></tr> <tr><td>6</td><td>Letter of Sham Sattadhar Cooperative Housing Society Limited dated 12.04.2007 at page no. 50 of SA.</td></tr> <tr><td>7</td><td>Copy of one affidavit filed by Ramesh Bhai Bhanji Patel filed in Civil Suit No. 330/2006.</td></tr> <tr><td>8</td><td>Certificate dated 16.08.1996 issued by Society in the name of respondent no. 2</td></tr> <tr><td>9</td><td>Letter dated 20.08.1996 issued by Society address to Dena Bank.</td></tr> <tr><td>10</td><td>Letter dated 11.11.2020 issued by the Society</td></tr> <tr><td>11</td><td>Affidavit filed by applicant before the CMM in the proceeding filed under section 14 of the SARFAESI Act</td></tr> <tr><td>12</td><td>Application filed by Dena Bank in the proceeding under section 14 of the SARFAESI Act</td></tr> <tr><td>13</td><td>Order passed by the Ld CMM</td></tr> <tr><td>14</td><td>Representation made by applicant before the Ld CMM</td></tr> <tr><td>15</td><td>Receipt of LIC Housing Finance Ltd</td></tr> <tr><td>16</td><td>Letter of the Surendranagar District Cooperative Bank regarding of mortgage of property in question with said Bank .</td></tr> <tr><td>17</td><td>Letter of Municipal Cooperation</td></tr> <tr><td>18</td><td>Order of Board of Nominees in Arbitration case no. 2914/2003 Social Cooperative Bank Ltd Vs. Respondent No. 2 &amp; Ors.</td></tr> <tr><td>19</td><td>Letter to Chairman Sham Sattadhar Cooperative Housing Society Ltd for marking lien on the property of Social Cooperative Bank Ltd</td></tr> <tr><td>20</td><td>Notice Under section 13(2) issued by Dena Bank.</td></tr> <tr><td>21</td><td>Public Notice for sale of assets by Dena Bank dated 11.04.2007</td></tr> </table>

*List of documents by applicant at Exhibit A/45*

<table border="1"> <thead> <tr> <th>Sr. No.</th> <th>Date</th> <th>Particulars</th> </tr> </thead> <tbody> <tr><td>1</td><td>28.6.1993</td><td>Share Certificate of Respondent No. 2</td></tr> <tr><td>2.</td><td>28.6.1993</td><td>Copy of Original share Certificates issued by society by Respondent No. 2 in possession of appellant</td></tr> <tr><td>3</td><td>30.6.1990</td><td>Copy of original share certificate issued to other member Kuntibhai I. Patel</td></tr> <tr><td>4</td><td>5.4.1994</td><td>Copy of original share certificate issued to other Member Sanjay Hiralai Patel</td></tr> <tr><td>5</td><td>5.7.2010</td><td>Hand writing Expert opinion of Mr. J.J. Patel with verified documents</td></tr> <tr><td>6</td><td>25.4.2011</td><td>Order of Hon'ble High court of Gujarat in S.C.A No. 4822 of 2010</td></tr> <tr><td>7</td><td>17.2.2015</td><td>Order of Hon'ble Supreme Court of India Dismissing SLP (Civil)No. 19546 of 2011</td></tr> <tr><td>8</td><td></td><td>Copy of Judgement reported in (2007) 4 SCC 221</td></tr> <tr><td>9</td><td></td><td>Copy of Judgement of Division Bench of Gujarat high Court report in 2009 (2) GLR 1667</td></tr> </tbody> &lt;/</table>

Further, the Ld. Counsel for the Respondent no.1 Bank have submitted the following documents - <table border="1"> <thead> <tr> <th>Sr. No.</th> <th>Particulars</th> <th>Date</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>Memorandum of Entry recorded by Dena Bank</td> <td>11.9.1996</td> </tr> <tr> <td>2.</td> <td>Memo.of Entry by Extension drawn by Dena Bank</td> <td>18.11.2000</td> </tr> <tr> <td>3.</td> <td>Affidavit signed &amp; sworn by Respondent No. 2</td> <td>6.9.1996</td> </tr> <tr> <td>4.</td> <td>Certificate issued by the society</td> <td>16.8.1996</td> </tr> <tr> <td>5.</td> <td>Letter issued by society to Dena bank</td> <td>20.8.1996</td> </tr> <tr> <td>6.</td> <td>Certificate issued by the society</td> <td>11.11.2000</td> </tr> <tr> <td>7.</td> <td>Injunction Order issued by Debts Recovery Tribunal</td> <td>31.8.2001</td> </tr> <tr> <td>8.</td> <td>Demand notice issued by Respondent No.1</td> <td>7.8.2006</td> </tr> <tr> <td>9.</td> <td>Letter demanding possession issued by Respondent No.1</td> <td>13.10.2006</td> </tr> <tr> <td>10.</td> <td>Possession Notice &amp; Panchmama drawn by respondent No. 1</td> <td>27.10.2006</td> </tr> <tr> <td>11.</td> <td>Photographs of possession taken on 27.10.2006</td> <td>27.10.2006</td> </tr> <tr> <td>12.</td> <td>Possession Notice published in News papers</td> <td>28.10.2006</td> </tr> <tr> <td>13.</td> <td>Letter issued by respondent no.1 to society</td> <td>12.12.2006</td> </tr> <tr> <td>14.</td> <td>Letter issued by Respondent No. 1 to Sub Registrar</td> <td>12.12.2006</td> </tr> <tr> <td>15.</td> <td>Letter for settlement issued by husband of the respondent No. 2</td> <td>6.11.2006</td> </tr> <tr> <td>16.</td> <td>Reply sent by respondent No. 1 to husband of the respondent No. 2.</td> <td>9.11.2006</td> </tr> </tbody> </table>

Further, the list of documents submitted by Respondent No. 3 are as follows - <table border="1"> <thead> <tr> <th>Sr. No.</th> <th>Particulars</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>Copies of the relevant documents pertaining to the loan and order dated 16.07.2002.</td> </tr> <tr> <td>2.</td> <td>A copies of Japta (Recovery) notices</td> </tr> <tr> <td>3.</td> <td>A copy of the letter dated 4.2.2005.</td> </tr> <tr> <td>4.</td> <td>A copy of the letter dated 12.6.2005 by the advocate of the predecessor of the present appellant stating that order passed in Lavad Case 1019/2001 has been challenged by predecessor of the present appellant the predecessor of the present appellant before Hon'ble co-operative Tribunal by way of Appeal</td> </tr> <tr> <td>5.</td> <td>A copy of the latter dated 21.06.2005</td> </tr> <tr> <td>6.</td> <td>A copy of latter dated 25.06.2005</td> </tr> <tr> <td>7.</td> <td>A copy of the letter dated 11.5.2007 with relevant documents by the present Appellant</td> </tr> </tbody> </table>

16. I have heard the Ld. Counsel for the parties and also gone through the records. Vital question before this Tribunal are -

- iv) Right of Applicants to question validity of mortgage, particularly when there is Recovery Certificate in favour of Respondent no.1 issued by this Tribunal under Act, 1993 upholding its mortgagee rights;

- v) Effects of rights of Respondent no.3 in the present proceedings;

- vi) Effects of order dated 31.8.2001 on the rights of the applicants if any. Scope of proceedings under section 17 of Securitization Act.

- vii) Relief if any.

All the issues are interconnected, so I am not giving issue wise findings but have tried to give separate findings of all such issues.

17. The Applicants have approached this Tribunal under Section 17 of the SARFAESI Act, 2002 and it is argued on behalf of the Respondent no.1 that the Applicants have no locus to question the validity of mortgage created in their favour and have no locus to approach this Tribunal.

18. At this juncture, I would like to reproduce Section 17 of SARFAESI Act, 2002 - *"17. Right to appeal.—*

*(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:—(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken." 2[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.] 3[Explanation.—For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of*

APPEAL NO. 25 of 2007

*reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.[3]Explanation.—For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.]"* *4[(2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder.*

*(3) .....*

.....

*(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.]"*

- 19. The Legislature, in clear words, candidly used borrower or any other aggrieved person, so the applicants who are claiming themselves as bona fide purchaser of property and are in possession of the property, have every right to question the validity of Securitisation process on merits by invoking the jurisdiction of this Tribunal. Further there are certain judgements, wherein Higher Courts have pleased to hold that the subsequent purchaser has no right to question the validity of mortgage. But in this case, after hearing the Ld. Counsel for the parties, it has come out that there is dispute about possession of original documents and there is dispute as to whether on the basis of fake documents, valid equitable mortgage can be created and further whether the applicants are claiming themselves in possession of original documents, so under peculiar facts and circumstances of the present case,

I am of the opinion that the present applicants have every right to question the validity of mortgage.

20. The applicants are the purchasers of the property on which Respondent No. 1 bank has claimed its mortgagee rights. The Respondent No. 1 bank initiated process under Securitization Act and no notice under Securitization Act was ever served upon the applicants.

The applicants have approached this Tribunal after the orders passed under section 14 of SARFAESI Act, 2002 and after loosing actual possession and initially they have filed Civil Suit also. Keeping in view the continuous efforts made by the applicants in pursuing their cause and further in view of direction of the Hon'ble High Court to decide this matter on merits, delay if any in filing of this Securitization Application is condoned with liberty to parties to agitate their matter on merits.

21. Respondent no.1 is claiming mortgage in its favour on the strength of mortgage created on 11.09.1996. It was equitable mortgage created by way of deposit of titles and it is the case of the Respondent no.1 that subsequently on 18.11.2000, mortgage was extended to secure loan of Rs.49.50 Lakhs to one M/s.Robust Cement Pvt. Ltd. and also granted adhoc limit of Rs.5.0 Lakhs. Respondent no.2 and her husband were Directors of the said company and Respondent no.2, her husband and sons stood as guarantors in their individual capacity. It is the case of the Respondent No. 1 Bank that they granted an aggregate amount of Rs.54.50 Lakhs to the borrower and upon commission of default, Respondent no.1 filed one O.A. No.378/2001 on 20.08.2001 before this Tribunal for recovery of Rs.99,80,687/- and in the said proceedings, vide orders dtd:31.08.2001, this Tribunal issued injunction restraining Respondent no.2 not to alienate the mortgaged property and ultimately this Tribunal allowed the said Original Application vide its order dtd:15.02.2008 directed the defendants no.1 to 4 & 6 to pay the dues of the bank jointly and severally and it was also held that the bank would be able to recover its dues by sale of mortgaged property.

22. It is the case of the Respondent no.1 that they issued Demand Notice under Section 13(2) of the SARFAESI Act, 2002 on 07.08.2006 and took the symbolic possession of the property in question on 27.10.2006 and subsequently issued possession notice in two newspapers as per the requirement under Rule 8(1) & 8(2) of Security Interest (Enforcement) Rules, 2002 on 28.11.2006 and the applicants in collusion with Respondent no.2 have come with the plea of execution of sale deed of mortgaged property executed on 22.11.2006 and Respondent no.1 on 12.12.2006 wrote letter to Society and Sub-Registrar Office to question the illegal sale transactions taken place in respect of mortgaged property without the consent and information of the mortgagee i.e. Respondent no.1 Bank. Further, it is the case of the Respondent no.1 that on 15.12.2006, Respondent no.1 Bank filed application before the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act, 2002 and Respondent no.1 also lodged a criminal complaint dtd: 21.12.2006 against the applicants and Respondent no.2 and her husband for committing alleged offence of criminal breach of trust, fraud, forgery and cheating and the applicants appeared before the Ld. Chief Metropolitan Magistrate. It the case of the Respondent no.1 bank that the sale deed dated:22.11.2006 was executed by the Respondent no.2 in favour of the applicants after issuance of Demand notice dtd:07.08.2006 and Possession notice dtd:27.10.2006 is clearly a breach of provisions of Section 13(3) of the Securitisation Act, which prohibits such transfer of assets. It is further the case of the Respondent No.1 bank that findings recorded in O.A, No.378/2001 have not been challenged by the borrower in Higher Forum and as such are binding upon the applicants.

23. Whereas, it is the case of the applicants that they purchased the property with due care and caution through broker after coming to know about the sale of the property through public notice published in 'Gujarat Samachar' and obtained loan from the Bank of Maharashtra and they are in possession of the original documents. It is the case of the applicants that they paid the entire sale consideration and are not in possession of the original documents and bank took possession from them under section14 of Securitisation Act. Further it is the case of the applicants that bank is claiming its mortgagee rights on the basis of fake documents.

24. In this case, the Hon'ble High Court in SCA No.4822 of 2010 on 25.04.2011, was pleased to make certain observations about the status of documents lying with the Respondent no.1 bank and status of documents of property in possession of the applicants. The relevant portion of order of Hon'ble High Court of Gujarat is as under:- *"For this reason, we passed an order on 18.3.2011 saying that the Bank may produce the documents to suggest that the borrowers have created secured interest in the property in question.*

*In response to this, learned Counsel for the Respondent No.1-Bank produced the documents to convince us that a valid security interest has been created. We took possession of the documents and asked the registry to place them in the sealed cover. We would not like to comment much on the documents because we want that the whole issue be reconsidered by DRT by carefully perusing each and every document on which the bank proposes to rely upon to make good their case that a valid equitable mortgage was created in their favour by Respondent No.2. All we would like to say at this stage is that even DRT in its order dated 31.7.2007 has observed:*

*"It is true that multiple mortgages came to be created in respect of the disputed property. In other words, many lenders were duped by mortgaging the same property. As far as the lenders are concerned, they have to work out the remedy either amicably or by litigation." We are of the view that having come to this conclusion, it was not just and sufficient for DRT and DRAT to say that - as documents have been executed and as title deeds have been deposited, they by themselves constitute a valid equitable mortgage creating the security interest in favour of the Respondent Bank. We cannot ignore other documentary evidence more particularly the affidavit filed by Chairman of the society, wherein, he has said in so many words that his signatures have been forged, and perhaps this would lead us to believe that the so called share certificate, which has been relied upon by the Bank, is also a false document, because it contains forge signature of the Chairman of the society, who has issued the share certificate. There is no reason why the Chairman of the society to file a false affidavit. The matter does not rests here. The case of the petitioners and the Chairman of the society is further fortified by Respondent No.3, who also claims that they have created a security interest as the same property*

*has been mortgaged with them also by Respondent No.2 and has availed for the loan facility.*

*13. We also take notice of the fact that over and above Respondent No.1-Bank, Respondent No.2 obtained loan from Social Cooperative Bank Limited, LIC Housing Finance Limited, Surendranagar District Cooperative Bank Limited and Indus Ind. Bank by creating equitable mortgage on the same property by producing forge title deeds and share certificates. As against this, shockingly, the petitioners have also produced the share certificate in their possession, which the Chairman of the society certifies it to be true and correct. The affidavit and the say of the Chairman of the society has been completely brushed aside. We can understand that in a given case, some flimsy case may be made out by persons like petitioners to get out of the wriggles of the fact. But that does not appear to be so in the present case considering the material on record. It was therefore necessary for DRT and DRAT to look into this aspect seriously and in detail.*

*14. One another contention canvassed on behalf of Respondent No1-Bank is that DRT and DRAT are justified in saying that they cannot go into the legality and validity of the mortgage because DRT has already allowed Original Application No. 378 of 2001 in favour of Respondent No.1 filed against Respondent No.2, by judgment and order dated 15.2.2008. We are afraid even this contention cannot be accepted because the petitioners were admittedly not party to the said Recovery Proceedings filed under Section 19 of Recovery of Debts Due to Banks and Financial Institutions, Act, 1993. Secondly, the issue of legality and validity of mortgage was not under challenge and was not the subject matter of adjudication in the said proceedings. Therefore, any decision of DRT in OA No. 378 of 2001 will operate as a bar to resjudicata while deciding specific issue about the legality and validity of mortgage in favour of Respondent No.1-Bank."*

25. By virtue of the orders of Hon'ble Supreme Court, this Tribunal is to assess the validity of mortgage independently without being influenced by the above said observations after evaluation of evidence on record. Applicants produced an affidavit of Chairman of the Society, wherein the Chairman of the Society has categorically denied his signatures on the documents lying deposited with Respondent no.1 and simultaneously he admitted genuineness of documents in respect of ownership of property in question, which are in possession of the applicants.

26. The Chairman of Shyam Sattadhar Cooperative Housing Society Ltd., Rameshbhai Bhanjibhai Patel filed an affidavit before the Hon'ble Civil Judge (SD) at Ahmedabad Rural in the Special Civil Suit No.330 of 2006, stating that the so-called documents of the Society produced by the Respondent no.2 are not genuine documents. The translation of the said affidavit is reproduced as under :- *"I, the undersigned, Rameshbhai Bhanjibhai Patel, aged about adult, Hindu by religion, residing at D/2, Shyam Sattadhar Society, Ghatlodiya, Ahmedabad, do hereby solemnly affirm and state on oath that :-*

*(1) In this matter Dena Bank, has produced some documents with the list of dated 26.12.2006, out of which, sr.no.4 (dated 16.08.1996), Sr. no.5(dated 20.08.96) sr. no.6 (dated 11.11.2000, are seen by us. From the said documents, Sr. no.4 is Zerox of Certificate in Gujarati, of Shyam Sattadhar Co. Operative Ho. So. Limited, produced in the matter in the same way, sr. no.5 is zerox copy of letter written in English by the said Society to the bank and Sr. no.6 is also zerox copy of Letter written in English, by the Society to the bank are produced in the matter. We very humbly submit that society has never issued any Certificate vide Sr. no.4 and 6. Moreover in the said Certificate Shri Rameshbhai Bhanjibhai Patel is said to have signed in, as Chairman of the said Society. But the said signatures are not our signatures, we have not issued any such Certificate of Sr. No.4 and 6 or written any Letter of sr. no.5 to the bank. Documents of sr. no.4 and 6 are not true and correct, but fake, false and fabricated and facts mentioned in it are not true and correct.*

*(2) Original owner of the said property Prabhaben Prahladbhai Patel has never sought the permission of the said society for obtaining loan against said property, and even said society has never given any sanction or permission for it. In the same way Dena Bank has never conducted any inquiry for any such loan upon the said property, or never asked any prior permission to sanction loan, from society and Society had not issued any such permission, even Dena Bank has not mentioned society to record any encumbrances as such and even as per the society record no such encumbrances is recorded.*

*All the above stated facts are true and correct.*

Place Ahmedabad Date: 29.12.06

-sd- Shyam Sattadhar Co. Op. Housing Society Limited. Chairman/Secretary (Rameshbhai Bhanjibhai Patel)

Further, the Chairman also filed an affidavit before this Tribunal on 02.07.2007 and the same is also reproduced as under:- "AFFIDAVIT OF RAMESHBHAI BHANJIBHAI PATEL IN SUPPORT OF THE DOCUMENT FILED BY THE APPELLANT

*I, Rameshbhai Bhanjibhai Patel aged 45 years, residing at Shyam Sattadhar Co. Op. Hou. Soc. Ltd. Ghatlodia, Ahmedabad-61, do hereby on solemn affirmation state on oath as under.*

1. 1. I say that appellant has approached with me with certain documents, having letter head of society and bearing my signature, with a request to verify the genuineness of the said documents.

2. 2. I say that I have gone through the said documents produced by respondent with its list at item no. 4, 5 and 6. and annexure G and I produced by appellant. I say that as those documents pertains to society and same bears my signature and as I am conversant with the said documents I, file this affidavit as to the correctness of said documents as under.

3. 3. I say that document produce by bank at serial no. 4, certificate issued by society, is shown to me. I say that in said certificate signature of Rameshbhai Bhanjibhai Patel, as chairman is forged and fabricated one. I am in capacity to say so as I do not sign in the manner same is signed. Same does not bear my signature. Respondent no. 2 must have got it forged one with help of some one or by respondent no. 2 himself to suit it purpose. I say that said certificate dated 16-08-96 is bogus one. Same is not issued by the society at all. I do not know who has written the same. I say that, in capacity of chairman I have not issued the said certificate. I say that contents thereof are also got up and concocted one. I say that similarly document at Sr. no. 5 produced by respondent no. 1 with its list, which is shown to me, is purported to be on the letter head of society, which bears the signature of Rameshbhai Bhanjibhai Patel, dated 20-08-96 is also forged one. I say that same is also not signed by me. Said signature of Rameshbhai Bhanjibhai Patel is also forged and got up one. I say that I capacity of chairman of the society I have not issued the document at Sr. no.5. I say that contents of said letter are also got up and concocted one. I say that same must have forged by respondent no. 2 to suit its purpose. I say that in similar fashion document at Sr. no. 6 produced by the respondent is also forged and got up one. I say that certificated dated 11-11-2000, which bears the signature of Rameshbhai Bhanjibhai Patel in capacity of chairman is forged one. I say that I have not signed the said certificate. I say that I have not issued the said certificate in capacity of chairman of the society. I say that contents of the said documents are not true and not correct. I say that society has never given any permission to create any mortgage over the Tenement no. A-13. I say that society has not given any consent to Dena Bank respondent no.1 to create any charge over the said tenement no. A-13. Such permission produced by respondent no. 2 with respondent no. 1 is forged and got up one. There is nothing on record of society as to respondent no. 2 or respondent no. seeking the permission to create any charge, lien or mortgage over the property. There is nothing on record of society respondent bank having written any letter to society about registering its charge over the property. I say that all said three documents produced at Sr. No. 4,5 and 6 are forged one and got up one. Society has not issued the same. I have, as capacity of chairman has not signed the same.

4. 4. I say that I am shown the document at Annexure F produced by the appellant with Appeal. I say that same bears my signature. I say that same is issued by the society on its letter head. I say that same is written to the respondent no. 1 bank to inform that society has on its record charge of other bank as far as Tenement no. A-13 is concerned. Bank is therefore cautioned not to transfer the same. I say same bears my hand writing. I say that contents thereof are true and correct. I say that I am shown Annexure G produced with appellant list. I say that said Annexure G is the copy of the affidavit sworn in by me in the judicial proceedings before the Hon'ble Civil Judge (S.D) at Ahmedabad (Rural) in C.S. no. 330/06. I say that contents of said Annexure G are true and correct. I say that same bears my signature. I say that same is dated 29-12-06 duly affirmed before the Notary Public S.D. Dalwadi. I say that I have signed before him and also has signed in the book maintained and kept by the Notary Public Shri Dalwadi as directed by him. I say that Annexure G also shown to me by the appellant which is produced with its list with appeal memo. I say that Annexure H, I and J are the copies of the documents at Sr. no. 4, 5 and 6. I say that I have already deposed in this affidavit at para 3 that those documents are forged and got up one. I am shown annexure K collectively produced by the appellant with its list. I say letter issued by the SURENDRANAGER Dist. Co. Op. Bank is on record of the society and that I have verified the records of the society and I say that same is received by the society. Similarly, social Co. Op. Bank has also registered its charge with society. letter evidencing the same is produced by the appellant at annexure K Colle. Both of said letter are issued to appellant on its request.

5. I am given to understand by the appellant, that he has lodged a criminal complaint against the respondent no. 2 for the alleged forgery and cheating and creating bogus documents. I say that appellant has also given the copy of the FIR to the society for the record purpose. I said connection I say that I have not lodged any other complaint against the respondent no. 2 for forging my signature vide documents are Sr. no. 4, 5 and 6 produced by respondent no. 1 along with its list. I say that police authority has also recorded my statement while inquiring into said complaint lodged by appellant against respondent no. 2.

What is stated herein above is true and correct."

27. The Chairman of Shyam Sattadhar Co. Op. Housing Society Limited., Rameshbhai Bhanjibhai Patel filed affidavit thrice with regard to the genuineness of the documents in respect of the property in question and as per the chairman of the society, the documents in possession of the applicant are genuine documents, however despite that the Respondent no.1 bank failed to make any effort to rebut the said affidavits in any manner and just harped upon that it has its documents of title and order in its favour in Original Application. But surprisingly enough bank has failed to place on record copy of the order passed by this Tribunal in Original Application 378/2001 passed on 31.8.2001, so it would be hard for the bank to claim any strength to its mortgagee rights on the basis of the said order and we can say that there exist only pleadings qua said order passed by this Tribunal that too in reply to other miscellaneous applications and at the time of hearing. The said pleadings produced by the Respondent no.1 bank are rebuttable in nature and are not conclusive proof in themselves, because the applicants were not party before DRT in the proceeding initiated under Section 19 of RDB Act, 1993 and once in this Appeal/Securitisation Application, Respondent no.1 bank has failed to file positive evidence to negate the genuineness of the documents lying with the Respondent no.1 bank, its difficult to bank upon arguments only. It was the duty of the Respondent no.1 bank to counter such evidence effectively. The applicant along with the exhibit Ex A/45 has placed on record coloured photo copies and share certificate along with the report of the handwriting expert Shri Mr. J.J. Patel to prove signatures of chairman of society are genuine on the documents in possession of applicants. But to my opinion no reliance can be made on so filed expert opinion, because if at all applicants intend to prove on record expert opinion, they should have taken prior permission of this Tribunal and this Tribunal should have followed requisite procedure for qua expert opinion. So this Tribunal has not banked upon the alleged report of the handwriting expert to arrive at any conclusion positive or negative. Fact remains that there exist affidavit of chairman of the society and it was the duty of the respondent bank to counter such evidence. The bank has utterly failed to do so.

28. Further, the documents deposited with the Respondent No. 1 as document of title and documents produced by the applicants in their possession, as document of title are similar as far as the contents are concerned, but there exist difference of mode of writing and appearance. The Chairman of the Housing Society has acknowledged the genuineness of the documents produced by the applicants and handed over to them by the seller, whereas he has denied the genuineness of the documents in possession of the Respondent No.1 Bank. Had the bank approached the society to verify the genuineness of documents produced for the creation of equitable mortgage, fabrication and forgery would have been easily detected at first instance. So it was the lapse on the part of the bank and in the absence of any evidence contrary to the evidence produced by the applicants, this Tribunal has no reason to disbelieve the affidavit filed by the applicants at different stages admitting genuineness of the documents produced by them.

Once the Hon'ble High Court made prima facie observations about genuineness of documents and applicants filed affidavit before this Tribunal to prove their contentions independently, it was the duty of the Respondent no.1 bank to counter and rebut the said evidence, rather now the Respondent no.1 Bank has quoted one judgment of Hon'ble Debts Recovery Appellate Tribunal, Allahabad in the matter of *UCO Bank V/s. State Bank of India & Ors* in Appeal No.R-1200 of 2010 decided on 04.01.2012, wherein it was held that deposit of original documents is not a condition precedent, once there is intention to create mortgage, that shall prevail.

*UCO BANK v. State Bank of India & Others*

Appeal No. R. 1200 of 2010.

Decided on 4^th January 2012

*Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Section 18-Appeal-Grant of loan-Creation of first charge over mortgaged property-Respondent No.3 purchased property in auction sale through registered sale deed on 13^th August, 1997 and created mortgage on same property on 3^rd October, 2001 with Appellant Bank-Respondent No.3 in relation to same property created mortgage in favour of Respondent No.1 on 6^th April, 2002-Dispute between two banks regarding first charge over property-Deposit of title deed is not a condition precedent for purpose of creating a valid mortgage-Intention of creating a mortgage over property for securing loan has to be ascertained-since there was intention of Respondent No.3 to create mortgage even though no valid title deed deposited, mortgage cannot be said to be invalid and inoperative-since there was first charge of same property with appellant bank it would have every right to proceed to recover its dues and first charge holder would have better right-Respondent No.3 was also impleaded as one of the Respondents before Tribunal but he never denied the mortgage no privity and contract between two Banks-Privity of contract was between Appellant Bank and Respondent No.3-It cannot be held that charge which was created in favour of Appellant-Bank by Respondent No.3 was invalid.*

I would like to reproduce Section 58(f) of Transfer of Property Act, which reads as under:- **"Section 58 - Mortgage , mortgagor , mortgagee , mortgage-money and mortgage-deed defined.**

**5(i)f) Mortgage by deposit of title-deeds.-** Where a person in any of the following towns, namely, the towns of Calcutta, Madras [and Bombay], 7\*\*\* and in any other town which the 8[State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds."

29. To claim valid equitable mortgage, three ingredients are required, when such mortgage is created by way of delivery of documents by title in the Notified Block Head Quarters -

1. i. Deposit of documents of title;

2. ii. Intention to create mortgage;

3. iii. To secure a debt

For the valid equitable mortgage, deposit of documents and title deeds with intention to create equitable mortgage to secure the debt are the three necessary ingredients and all such requisites are required to be fulfilled in their meticulous form. The absence of any element would be fatal to the mortgage so claimed. If there is any intention without documents of title deeds to secure the debt, there would not be any mortgage.

If there is deposit of documents and title deeds without any intention to create security, in that event also despite existence of debt, no mortgage can be claimed and if there is deposit of title deeds without intention to secure debt, in that event also mortgage would be meaningless.

The documents must be documents of title in original and if not original, there should be some explanation as to why the mortgagor has not deposited the original documents. In the absence of any such explanation, it would be hard to accept any equitable mortgage legally enforceable by mortgagee. Further, if a person has deposited fake documents to secure the debt, it clearly reflects that he had no intention to create mortgage, but to defraud the creditor. Fabrication and forged documents on the basis of which alleged mortgage was created is itself sufficient to kill the elements of intention as such. Further as discussed supra, Respondent No. 1 failed to act diligently. Had respondent no. 1 verified the genuineness of the documents in the year 1996 itself, there would not have been any occasion for extension or acceptance of the mortgage, even at relevant time. This judgement cited on behalf of the respondent No. 1, in case of UCO v/s State Bank of India of Hon'ble Debt Recovery Appellate Tribunal, Allahabad, seems to be *per incuriam* in my humble opinion and is against the basic requirements and structure of law in respect of equitable mortgage and provision of Transfer of Property Act. If such propositions of law is accepted that would prompt a person to commit fraud with the bankers as well as innocent purchasers. The delivery of the original document at the time of mortgage or at the time of sale to the mortgagee or seller, respectively has its own importance, significance, relevance, consequence and substance. In this case, the applicants are/was in possession of the original documents of title, the entire case would be on different footings if they are not in possession of the original documents and likewise if bank is not in possession of the original documents and there is evidence that bank has accepted fake documents for mortgage without verification of authenticity and genuine, bank should suffer its consequences and bank is estopped from relying the judgement, which has some other narrative in contrast to the basic law and common man's understanding about equitable mortgage. So the said judgement would not be helpful to the respondent No. 1 in any manner.

1. 30. The respondent No. 1 bank by its own act and conduct facilitated respondent No. 2 to sell the property to the applicants despite alleged mortgage. But once the original documents were handed over to the applicants, Respondent No. 1 is estopped from claiming its rights as mortgagee or any security interest over the said property due to its own act and conduct. It is not out of place to mention here **that** on 31.8.2001, respondent No. 1 was the owner of the property and this Tribunal granted injunction against the said person.

1. 31. So document of title and their delivery/ deposit, either physical or constructive is required for valid equitable mortgage. In book on Transfer of Property Act, by Mulla, it is written that equitable mortgage can be created even with a copy of title deeds, provided there is intention to create security for debt, but in that case, mortgagor should satisfy the mortgagee about the fate or loss of original documents of title. So *prima facie*, for a valid equitable mortgage, a person is required to deposit documents of title and to avoid fraud, the creditors used to call for original documents of title. In this case, there is material on record and evidence on record which suggests that the documents lying with the Respondent no.1 Bank are not original documents. Once mortgage was created on the basis of fake documents, the transaction itself has become void. This is one aspect of the case.

2. 32. Now let us come to the bona fide of the Applicants. The Respondent no.1 Bank has failed to establish any nexus between the applicants and Respondent no.2 since 2006 when the sale deed was executed and now we are in the year 2021.

Respondent no.1 Bank has failed to establish that applicants and seller i.e. Respondent no.2 was linked or are linked with each other, except their relationship as seller and purchaser of the property. The applicants purchased the property in question after going through a public notice appeared in 'Gujarat Samachar', published through broker. By that time, Respondent no.1 Bank had already initiated process under Securitisation Act and its Original Application under Act, 1993 was also pending. The Respondent no.1 Bank failed to take cognizance of the said public notice and failed to get marked its charge/liens over the property in question in the records of Registrar, Co.Operative Society or with the Society itself. Even the public notice could be countered with a public notice itself. The mortgage was created on 11.09.1996 and was extended on 18.11.2000 and bank obtained injunction order from DRT on 31.08.2001. Despite such mortgage and injunction, Respondent no.1 bank has failed to get marked its liens in the records of the concerned Housing Society and even the Respondent no.1 bank had not informed the Society about the injunction order passed by this Tribunal on its property. The Respondent no.1 bank wrote its first letter on 12.12.2006 to the Housing Society and Sub-Registrar Office about its alleged claim over the property in question i.e. after the sale made by the Respondent no.2 in favour of the applicants. So it cannot be said that Respondent no.1 bank acted diligently.

33. The applicants have purchased this property by taking loan from a bank and have paid the entire sale consideration through cheque or draft through loan granted by the Bank of Maharashtra. So the judgement of Hon'ble High Court of Gujarat in the matter of *Authorised Officer V/s. Dilipbhai Jayantilal Sanghavi & 1* reported in 2016 SCC Online Guj 2976, cited on behalf of the Ld. Counsel for Respondent no.1 Bank would not be applicable to the facts and circumstances of the present case, as in that case, the Hon'ble High Court was pleased to come to the following conclusion - *Debt, Debt Recovery and Relief-Securitisation and Reconstruction of financial Assets and enforcement of Security Interest Act, 2002-Ss. 13(2),14- Recovery of dues-Auction by Bank-Fraud committed by mortgagor in connivance with applicant with malafide intention to dupe legitimate dues of Bank-Securitization application is not maintainable.*

*-Applicant claims to have purchased the mortgaged property in question by registered sale deed-No sale consideration was paid by the original Applicant 1 at the time when the sale deed was executed in his favour- At the time when the Bank officers went to take the possession of the mortgaged property in question, in the month of February 2016, wife of the original owner/mortgagor was present in the bungalow/mortgaged property and the original applicant was not in possession of the mortgaged property in question-Admittedly, before entering into transaction in favour of the applicant, which is after notice under S.13(2) of SARFAESI Act, prior written consent of Bank-secured creditor had not been taken - under circumstances, transaction in favour of applicant is absolutely nullity and void -Applicant cannot get any right, title or interest in mortgaged property on basis of such purchaser only with a view to dupe realization of legitimate dues to Bank from e auctioning mortgaged property in question at instance of applicant whose transaction is a nullity-Impunged order restraining Bank from proceeding further with e-auction of mortgaged property which was mortgaged by mortgagor while taking huge loan/credit/financial assistance,being erroneous is liable to be set aside.*

*Standard chartered Bank V. Noble umar,(2013) 9 SCC 620; Tax Recovery Officer II v Gangadhar Vishwanath Ranade, (1998) 6 SCC 658) Lakshmi Products V. State bank of India, 2007 AIR (Madras) 148; P Vinodh Kumar V. Recovery Officer Debts Recovery Tribunal, Manager Indian Bank and D. Mohan,2012 AIR (Madras) 46, referred to*

Further, once it has come on record that original documents are lying with Bank of Maharashtra i.e. mortgagee of applicants, the mortgage claimed by the Respondent no.1 bank has some element of fraud or misrepresentation or forgery, in that event we can rely upon Section 78 of Transfer of Property Act, which reads as under:- *"Section 78 - Where, through the fraud, misrepresentation or gross neglect of prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee."*

1. 34. Section 78 of Transfer of Property Act is an exception to the general provisions of law that prior mortgage should prevail. In this case, initial mortgage was created by Respondent no.2 in favour of Respondent no.1 Bank in the year 1996 and same was subsequently extended in the year 2000 for enhanced credit facilities. Respondent no.1 Bank believed Respondent no.2 and documents submitted by Respondent no.2 for creation of equitable mortgage, but at said occasion, Respondent no.1 Bank had failed to verify the genuineness of said documents from Society itself. So it cannot be said that Respondent no.1 Bank, at the time of acceptance of mortgage or upon its subsequent extension, acted diligently and prudently.

2. 35. Under these given circumstances, this case would come within the ambit of gross negligence on the part of the Respondent no.1 Bank, as Respondent no.1 Bank, at the time of acceptance of mortgage, failed to verify the genuineness of documents and further applicant tendered affidavit of chairman of society in evidence to prove genuineness of documents. Respondent no.1 Bank failed to rebut the said documents. Meaning thereby, the sale made by the Respondent no.2, in favour of the applicants, on the basis of genuine documents and subsequent mortgage by applicants in favour of the Bank of Maharashtra would prevail and once the mortgage created in favour of Respondent no.1 bank is based upon fake documents with forgery, fraud and fakeness, that would vitiate the mortgagee rights allegedly claimed by Respondent no.1 bank and entire action on the basis of alleged mortgage.

1. 36. The applicants have relied upon the judgement of Hon'ble Apex Court in the matter of *A. V. PapayyaSastryVs. Government A.P. [(2007)4 SCC 221]*, wherein it is held that fraud vitiates all judicial acts whether in rem or in personam.

2. 37. Further, to access the genuineness of the applicants, we can look into the duties and obligations of seller/borrower. No doubt, Respondent no.2 duped Respondent no.1 bank as well as applicants as Respondent no.2, without disclosing the factum of loan, on the basis of fabricated documents, sold the property in question to applicants, but Respondent no.2 on obtaining genuine original documents from seller, had been relieved from their duty and obligations under Section 55 of Transfer of Property Act. Once they got the original documents, it cannot be said that they have not acted in bonafide manner.

Admittedly, in this case appellants paid sale consideration through Bank and also from their own pocket that too from the account maintained in the State Bank of India and further mortgaged their property with the Bank. The respondent no. 1 till December, 2006 i.e. after the purchase of property did not inform even society about its lien over the property. Further, it is not the case of the respondent no. 1 that applicants are negligent to perform any of their duty or obligation as per section 55 of TPA. To sum up section 55 of TPA following tables will help us to arrive at right conclusion.

**II. After Completion.**

<table border="1"> <thead> <tr> <th></th> <th>Seller' Liabilities</th> <th></th> <th>Buyer's liabilities</th> </tr> </thead> <tbody> <tr> <td>Section 55(1)(f)</td> <td>To give possession.</td> <td>Section 55(5)(c)</td> <td>To bear loss to the property</td> </tr> <tr> <td>Section 55(2)</td> <td>Implied covenant for title.</td> <td></td> <td></td> </tr> <tr> <td>Section 55(3)</td> <td>To deliver title deeds on receipt of price.</td> <td>Section 55(5)(d)</td> <td>To pay outgoings</td> </tr> <tr> <td></td> <td>Seller's right</td> <td></td> <td>Buyers' right.</td> </tr> <tr> <td>Section 55(4)(b)</td> <td>Charge for price not paid</td> <td>Section 55(6)(a)</td> <td>Benefit of increment.</td> </tr> </tbody> </table>

**II. Before Completion.**

<table border="1"> <thead> <tr> <th></th> <th>Seller' Liabilities</th> <th></th> <th>Buyer's liabilities</th> </tr> </thead> <tbody> <tr> <td>Section</td> <td>To disclose</td> <td>Section</td> <td>To disclose facts</td> </tr> </tbody> </table>

<table border="1"> <tr> <td>55(1)(a)</td> <td>material defects.</td> <td>55(5)(a)</td> <td>materially increasing value</td> </tr> <tr> <td>Section 55(1)(b)</td> <td>To produce title deeds</td> <td></td> <td></td> </tr> <tr> <td>Section 55(1)(c)</td> <td>To answer question as to title.</td> <td></td> <td></td> </tr> <tr> <td>Section 55(1)(d)</td> <td>To execute conveyance</td> <td>Section 55(5)(b)</td> <td>To pay price</td> </tr> <tr> <td>Section 55(1)(e)</td> <td>To take care of the property.</td> <td></td> <td></td> </tr> <tr> <td>Section 55(1)(g)</td> <td>To pay outgoings.</td> <td></td> <td></td> </tr> <tr> <td></td> <td>Sellers' right</td> <td></td> <td>Buyers' right</td> </tr> <tr> <td>Section 55(4)(a)</td> <td>To take rents and profits</td> <td>Section 55(6)(b)</td> <td>Charge for price prepaid.</td> </tr> </table>

The above tabulation is the extract of Section 55 of the Transfer of Property Act. So having original documents of property in hand coupled with physical possession after paying sale consideration, the applicants will certainly have upper hand upon respondent no. 1, had there been fake documents or no documents of title in the hands of the applicant despite presence of all other requisites of payment of sale consideration and possession, matter would have different.

In this case, Respondent No. 1 vehemently argued about value of properties and it is the case of the respondent no. 1 that applicants purchased the property at through away price but to my **utter dismay**, Respondent no. 1 has failed to place on record any documentary evidence or valuation to substantiate its contentions on this aspect. So I find no merit in the arguments so advanced on behalf of the respondent no. 1.

38. Now the question is what would be the effect of orders passed by this Tribunal on 31.08.2001 on the rights of applicants and what would be the effect of Securitisation process on the rights of the Applicants. Certainly, there was no valid security interest in favour of the Respondent no.1 bank. The existence of valid security interest is sine qua non for initiation of process of recovery or otherwise under Securitization Act 2002. In the absence of valid security interest, a creditor cannot claim itself as secured creditor and further would not be able to proceed under the Securitisation Act 2002, for recovery or otherwise against a property which is not mortgaged/secured with it. However, if a debtor has property in his hands, which is not secured, a creditor despite not having any security interest over said property still has right to proceed against unsecured property but not under special legislation i.e. Securitization Act 2002 but in general law in accordance with law. Process initiated under the Securitisation Act would not sustain, as to proceed under Securitisation Act, there must be valid security interest in favour of the creditor, so it would be hard to accept the contentions raised on behalf of the Respondent no.1 Bank that sale made by the Respondent no.2 in favour of the applicants would be hit by the provisions of Section 13(3) of the SARFAESI Act. The Securitisation process itself has become infructuous, once this Tribunal has recorded findings that there was no valid security interest in favour of the Respondent no.1 bank. But certainly, the injunction order granted by this Tribunal vide orders dtd:31.08.2001 would have some implications on the rights and obligation of respective parties. But under Section 17 of the SARFAESI Act, this Tribunal has limited scope to access the validity of Securitisation process undertaken under Section 13(2) & Section 13(4) of SARFAESI Act and Rules framed there under, so I should not go into such intricacy. The parties would be at liberty to proceed in accordance with law to safeguard their respective rights.

It is made clear that the said competent authority having jurisdiction over the matter would adjudicate issue, if any, brought before that authority in accordance with law without being prejudiced with the observations made in this order and certainly would be able to look into the enforceability of order dated 31.08.2001, upon applicants or their predecessors in interest as it has not been brought to the notice of this Tribunal that said order dated 31.8.2001 was ever served upon the stake holders in that litigation filed under section 19 of Act 1993 at relevant time. Further, as applicants before this Tribunal in this Securitization Application purchased the property after fulfilling requisites under section 55 of Transfer of Property Act and they would be able to establish their bonafide and non-applicability of effects of order dated 31.8.2001, upon them in accordance with law.

The said authority will look into the factor as to why respondent No. 1 failed to implead present applicants in the proceedings under section 19 of Act 1993 and whether limitation would affect the rights of respondent No. 1 in any manner to proceed against this property as despite having knowledge of sale deed dated 22.11.2006, the respondent No. 1 failed to act further. All such questions are open and cannot be decided in the limited scope of applicant under section 17 of Securitization Act 2002.

39. It is not out of place to mention here that Dena bank now Bank of Baroda granted credit facilities to M/S Robust Cement Pvt. Ltd, a company of Respondent No. 2 and her husband for which, sons of Respondent No. 2 stood as guarantors in their individual capacity. Loan was utilized by the said company and it is/was a family concern of Respondent No. 2, her husband, and her sons. Apart from Respondent No. 1, some other financial institutions i.e. Life Insurance Corporation of India, Surrendranagar Cooperative Bank, Indus Ind Bank, Social Co-operative Bank are also claiming mortgage of this very property apart from applicants who have come as Bonafide purchasers. So it can be said that borrower company and its directors and guarantors in connivance with each other defrauded various public institutions. There is no specific material on record about alleged rights of other financial institutions as disclosed by applicants in para 5 of their Securitization application. Certainly the directors and guarantors of borrower company are the key managerial persons responsible for all the acts of borrower company and as such if there is any fraud, they are liable to be prosecuted for cheating, forgery, fraud, fabrication, criminal breach of trust and conspiracy in accordance with law. It is an appropriate case to apply Doctrine of Lifting of Corporate Veil and it is expected that Respondent No. 1 would pursue, its cause in accordance with law and would take further action to send all such culprits behind the bars and should make endeavors to recover its dues by availing appropriate legal remedy against personal properties of said borrowers/guarantors in accordance with law.

1. 40. It appears that in pursuance of orders passed under section 14 of Securitization Act, Respondent No.1 Bank took physical possession of the property from applicants. In view of findings recorded in this order, Respondent No 1, having no locus to proceed or continue with the process under Securitization Act is required to restore back possession to the applicants. The Respondent No. 1 bank is directed to restore back possession within 10 days.

2. 41. So far as the Respondent no.3 is concerned, it has claimed certain credit facilities granted to borrower and has claimed certain arbitration proceedings. The objections of Respondent no.3 are not sustainable, as Respondent no.3 has failed to avail efficacious legal remedy under Section 17 of the SARFAESI Act, but it would not debar the Respondent no.3 to avail efficacious remedy in accordance with law in light of injunction order passed by this Tribunal dated:31.08.2001, if such remedy is available to the Respondent no.3.

42. Now this Tribunal has already granted Recovery Certificate, upholding mortgage in favour of Respondent no.1 bank and that judgement /order is also a main bone of contention between both the parties. The Original Application was decided ex-parte and prior to issuance of Recovery Certificate on 15.08.2008, As per the pleadings and submissions made on this on behalf and it is astonishing that respondent bank has not placed on records certified copy of the judgement dated 15.8.2008 on the record of this case. Respondent no.1 bank came to know about the transfer of mortgaged property, but surprisingly enough, Respondent no.1 bank made no endeavor to implead present applicants before this Tribunal as party respondents although apprised Tribunal under section 19 of Act 1993 about sale of the mortgaged property, as appears from the arguments advanced before this Tribunal. To satisfy myself and to impart justice suo moto, I have called the records of Original Application 378 of 2001 decided on 15.02.2008 from record room and in the said case bank has filed Suit Claim Affidavit on 27.6.2005 in respect of its claim but they have not deliberately impleaded the applicants as respondent in that matter or tried to question the validity of the sale in favour of the applicants by impleading them respondents. In Exhibit A/15 of the Original Application 378/2001 filed on 8.6.2007, the respondent no. 1 bank requested to initiate contempt proceedings against the defendants in that case for disobedience of order dated 31.8.2001 and also placed on record factum of the sale by respondent No. 2 in favour of the applicants and further place on record copy of the sale deed in favour of the applicants and Demand notice issued under section 13(2) of Securitization Act. Once respondent No. 1 bank came to know about the sale of the mortgaged property and so aware about all such facts, it was the duty of the respondent No. 1 to implead the applicants for fair adjudication of rights over the mortgaged property. Particularly when prior to execution of the said affidavit, present applicant had already filed Civil Suit 330/2000 before the Civil court and respondent No. 1 bank was contesting.

43. It was the duty of the Respondent no.1 bank to inform this Tribunal in the proceedings under section 19 of Act 1993, about all material subsequent events that took place with the securities claimed in the Original Application. At this juncture, I would like to reproduce Section 44 of the Evidence Act, which reads as under:- ***"Section 44 in The Indian Evidence Act, 1872***

*44. Fraud or collusion in obtaining judgment, or incompetency of Court, may be proved.—Any party to a suit or other proceeding may show that any judgment, order or decree which is relevant under section 40, 41 or 42 and which has been proved by the adverse party, was delivered by a Court not competent to deliver it, or was obtained by fraud or collusion."*

44. In view of the Section 44 of Evidence Act, the findings recorded qua mortgage in favour of the Respondent no.1 bank can be ignored in these collateral proceedings and as such are being ignored, but certainly on date of sale, the seller was bound by the injunction granted by this Tribunal vide orders dated 31.08.2001 and its legal effects if any in accordance with law and any person claiming rights under seller is bound by such injunction is a subject to be decided by appropriate forum in accordance with law, if parties opt to avail such remedy subject to observations made in foregoing paras of this orders, I feel fair to allow the present Appeal/Securitisation Application with no order as to cost. Accordingly, the entire alleged Securitisation process of Respondent no.1 Bank is quashed in the absence of no valid security interest in respect of this very property subject matter of this Securitisation Application and would not affect qua other assets if sold already. Further, bank is directed to restore back possession to the appellants within 10 days. At this stage, Ld. Counsel for respondent No. 1 submitted that at least 15 days' time may be granted to restore back possession. At his request, such time is granted but with condition that, in case the respondent No. 1 bank fails to restore back possession within 15 days from today, respondent No. 1 bank would be liable to pay damages of Rs. 2000/- per day to the appellants. It is further made clear that order regarding damages would be prospective in nature i.e. would be applicable after expiry of the 15 days from today.

Securitisation Application is accordingly disposed of. Let copy of this order be supplied to the parties as per Rules.

Given under my hand and the seal of this Tribunal on this date: 13.01.2021

Dictated on 13.01.2021

**(VINAY GOEL)** **PRESIDING OFFICER** **DRT-I, AHMEDABAD**

Corrected and signed by me on 15.01.2021

**(VINAY GOEL)** **PRESIDING OFFICER** **DRT-I, AHMEDABAD**

*(initials)*