Housing Development Finance Corporation Ltd vs Punjab and Sindh Bank and Ors on 12 December 2025

JUDGMENT

1. 1. This Appeal has been preferred by the Appellant against the order dated 24-07-2009 passed by Ld. Recovery Officers, DRT-II, Ahmedabad in R.P. No: 279 of 2006 arising out of O.A. No: 68 of 1997 whereby the objections filed by the Appellant were rejected and the sale of the property **Flat No. 3B, Shree Apartment, University Ring Road, Raiya Road, Rajkot** was confirmed in favour of Respondent No.2.

2. 2. The Appellant is a company incorporated under the Companies Act, 1956, having its registered office at Ramon House, H.T. Parekh Marg, Backbay Reclamation, Churchgate, Mumbai and having a branch office at Ahmedabad. The Respondent No.1 is a Nationalized Bank, the Respondent No.2 is the Auction Purchaser of the property in dispute and Respondent No.3 is the borrower of the Appellant.

3. 3. It is the case of the Appellant that in August 2007, the Appellant sanctioned a **Housing Loan of Rs. 5,00,000/-** to Respondent No.3 vide Loan A/c No. 243833394. The Respondent No.3 executed all necessary documents including Loan Application dated 25.07.2007, Sanction Letter dated 09.08.2007, Loan Agreement dated 30.08.2007, Promissory Note dated 31.08.2007 and Title Clearance Certificate dated 21.08.2007 with the Appellant. To secure said loan, Respondent No.3 mortgaged the property by depositing **original title deeds** dated **13.08.2007** with the Appellant, thereby creating a valid equitable mortgage. The Appellant remains in possession of the original title deeds, including the Sale Deed dated 13.08.2007.

4. 4. The Appellant has stated that in the first week of April 2009, Appellant was informed for the first time by Respondent No.3 that the subject property had been listed for auction by Respondent No.1 and Auction notice was published on 02.03.2009 and auction scheduled on 21.04.2009. On 15.04.2009, the Appellant lodged its

objections with the Recovery Officer along with an application to produce original deeds (Exh. T/26).

1. 5. The Appellant has submitted that the Respondent No: 3 Mr. Jagat Bhupatbhai Vyas had purchased the said property vide Registered Sale Deed No: 9843 dated 13-08-2007 from Mr. Jayesh R. Patel and the said property was purchased by Mr. Jayesh R. Patel from Mrs. Ramaben J. Patel bearing Registered No: 12899 dated 08-09-1995. It is further submitted that Mrs. Ramaben J. Patel had purchased the said property from M/s. Shree Construction Co. vide Registered No: 9759 dated 16-10-1993 and all the original documents were deposited with the Appellant at the time of mortgage creation.

2. 6. It is further submitted that Respondent No: 1 claims that in OA No: 68/1997, Defendant No: 5 (Mrs. Ramaben j. Patel) created an equitable mortgage in the year 1995 and the Respondent is relying only on photocopies and an unregistered deed. It is further submitted that Respondent No.1 had never produced original title deeds, which is mandatory for creation of an equitable mortgage and thus, no valid or legal mortgage exists in favour of Respondent No.1.

3. 7. It is further submitted that pending Appellant's objection The Rajkot Nagrik Sahkari Bank Ltd had also filed an objection stating that the said property was mortgaged with them but however, the Recovery Officer rejected the objections vide order dated 24-07-2009 and confirmed the sale of the said property in favour of Respondent No: 2 Auction Purchaser for Rs.7,18,000/-.

4. 8. The Appellant has further submitted that the impugned order was passed mechanically rejecting the objections of the Appellant. The Appellant has raised following main grounds :

1. (a) That the Ld. Recovery Officer failed to consider original title documents and relied mechanically on the photocopies submitted by Respondent No.1.

- (b) That the Respondent No.1 never possessed the original deeds; therefore, no equitable mortgage existed in its favour.

- (c) That the Ld. Recovery Officer failed to ascertain status of property prior to attachment.

- (d) Even though the Recovery Officer verified the originals, he rejected the objections without proper reasoning.

- (e) That the Ld. Recovery Officer stated that since the Hon'ble Presiding Officer had passed the decree in favour of Respondent No: 1, he cannot go beyond the Recovery Certificate.

- (f) That the Ld. Recovery Officer ought to have considered that prior to filing of OA No: 68 of 1997, Mrs. Ramaben J. Patel had already sold the property to Mr. Jayesh R. Patel on 08-09-1995 and hence inclusion of the property in O.A. is not maintainable.

- (g) That the auction sale confirmed in favour of Respondent No: 2 is void because the Respondent No: 1 had not created equitable mortgage by depositing documents other than title deeds.

9. It has been submitted that the impugned order dated **24-07-2009** is invalid and accordingly, it is prayed to be set aside and cancellation of impugned sale certificate and restoration of property to Respondent No: 3 and interim protection restraining selling or transfer of property, is also prayed.

10. Per contra, the Ld. Counsel for the Respondent Bank has opposed the appeal mainly on grounds of maintainability, limitation, and priority of mortgage rights over the disputed property i.e. **Flat No. 3B, Shree Apartment, University Ring Road, Raiya Road, Rajkot** and that the appeal is filed beyond the limitation period

prescribed under Section 30 of Recovery of Debt due to banks and Financial Institution Act, Act, 1993.

1. 11. The Respondent Bank has submitted that it does not admit or accept that the Opponent No. 2 to 5 are borrowers and Opponent No. 6 as guarantor. The Respondent submitted that Opponent No. 7 is the auction purchaser of Flat No. 38, Shree Apartment, University Ring Road, Village Raiya, Rajkot. It has further submitted that the Hon'ble Tribunal, vide order dated 10.08.2006, passed a decree in favour of the Respondent Bank against Opponent Nos: 2 to 6 and in the said decree, the property belonging to Opponent No. 6, i.e. Flat No. 3B, Shree Apartment, University Ring Road, Raiya, Rajkot, was included as a secured asset, as Opponent No. 6 had voluntarily deposited original title documents and thereby created an equitable mortgage in favour of the Respondent Bank.

2. 12. The Ld. Counsel for the Respondent has submitted that Respondent Bank did not have any knowledge of the alleged housing loan of Rs.5,00,000/- advanced by the Applicant to one Shri Jagat Bhupatbhai Vyas in August 2007 being A/c No. 243833394. The Respondent therefore disputes the Applicant's claim that the said Mr. Vyas executed documents with the Applicant on 21.08.2007 and that these facts are not true. It is further submitted that the alleged mortgage in favour of the Applicant does not constitute a valid and lawful charge over the disputed property, as the Applicant is not in possession of the original title deeds.

3. 13. The Ld. Counsel for the Respondent Bank has submitted that the original index copy and title documents relating to the said property were already deposited with the Respondent Bank on **02.02.1995** by the original owner **Smt. Ramaben J. Patel**, clearly with an intention to create an equitable mortgage in favour of the Respondent Bank. He further submitted that merely depositing a **copy of a sale deed dated 13.08.2007**, as relied upon by the Applicant, does not and cannot create a valid mortgage. He has further submitted that the true copies of the

documents evidencing creation of mortgage in favour of the Respondent Bank have already been placed on record and are annexed at Annexure A to L.

1. 14. He has further submitted that the Respondent Bank initiated recovery before the Recovery Officer, DRT Ahmedabad and the property was auctioned on 21.04.2009, after public notice dated 02.03.2009 and the Appellant bank had filed objections before the Recovery Officer, which were dismissed on 24.07.2009 and the sale was confirmed in favour of the Auction Purchaser (Opponent No.7).

2. 15. He has further submitted that the said property was mortgaged to Respondent Bank for credit facilities given to **M/s. Park Apparels under Sale Deed dated 16/10/1993** and the loan account became NPA, leading to **OA No. 68/1997**. The Respondent Bank has submitted that the Recovery Officer has rightly rejected the objection of the Applicant by order dated 24.07.2009, and the appeal filed by the Applicant has no merit. The impugned order confirming the equitable mortgage in favour of the Respondent Bank is lawful because Opponent No.6 (Ramaben J. Patel) had validly created a mortgage on the flat by depositing essential title documents with the Respondent Bank in 1995, even though the original sale deeds were with the Sub-Registrar for valuation. The Respondent Bank had priority charge over the property and is a secured creditor prior to the Applicant bank and therefore, auction of the flats for recovery was proper and that this Tribunal has not committed any error.

3. 16. Since there exists a valid equitable mortgage, the applicant has no prima facie case, no balance of convenience in its favour, and is not entitled to any relief or interim relief. The appeal is also barred by limitation because the original order was passed in 2006, and no sufficient grounds for condonation of delay were shown. Hence, the appeal deserves to be dismissed with costs.

1. 17. He further submitted that the Appellant (HDFC) later granted a loan to Shri Jagatbhai Vyas, even though the property continued to remain under mortgage with Respondent Bank. The Appellant also failed to take recovery action against its borrower and had not produced documents or impleaded him. It is further submitted that the mortgage in favour of Respondent Bank has already been upheld in OA No. 68/1997. Therefore, such findings cannot be reopened in the present appeal and the appropriate forum would be DRAT and hence, the appeal is not maintainable in law.

2. 18. It is further submitted that the Auction Purchaser has taken possession of the property, and even the borrower (Shri Jagatbhai Bhupatbhai Vyas) had not challenged the auction and only the Appellant has raised these objections.

3. 19. On these grounds, he has prayed that the present appeal be dismissed with cost.

4. 20. I have heard the Ld. Counsels for both the parties and perused the records of this Appeal and also the records of RP No: 279/2006 arising out of Original Application No: 68/1997 for deciding this appeal. In views of this Tribunal, one point of determination appears to be necessary to be dealt with and decided for just and proper adjudication of this Appeal :- **I. Whether Ld. Recovery Officer has got any power to go beyond the Recovery Certificate i.e. decree :**

It is a settled principle of law that the executing Court cannot go beyond the decree. The judgement and Recovery Certificate passed in OA No: 68/1997 is a decree in the eyes of law and the Recovery Officer is the executing authority of the Tribunal . Whatever action he has taken in furtherance of the Recovery Certificate to recover the dues of the certified creditor, has been done to achieve the mandate of execution of the Recovery Certificate. The Appellant on the other hand has filed objection before the Recovery Officer that the property against which the judgement and Recovery Certificate has been issued by this Tribunal in OA No: 68/1997 has a primary charge of the

Appellant and it has been submitted before the recovery Officer not to sale the charged assets in impugned order. The Ld. Recovery Officer vide impugned order dated 24-07-2009 has rightly observed that he has no authority to go beyond the decree. This is the only, ground on the basis of which the impugned order against the Appellant has been passed and this Tribunal finds no illegality in this observation of the Ld. Recovery Officer, in this regard.

1. 21. It will not be out of place to mention here that the Appellant in this case appears to have not chosen the right course of challenging the judgement/Recovery Certificate passed in OA No: 68/1997 before appropriate forum of jurisdiction and their objection before the Recovery Officer was not maintainable under law. Accordingly, this Tribunal finds no illegality in the impugned order rejecting the objection of the Appellant.

2. 22. In the facts and circumstances of this case, in the considered views of this Tribunal, the present appeal is devoid of any merit and the objection filed by the Appellant before the Ld. Recovery Officer was not maintainable under law and it was rightly rejected by impugned order. Accordingly following order is passed :

**ORDER**

1. 1. The Appeal No: 18/2009 is hereby rejected with no order as to cost.

2. 2. Interim protection, if any, shall also be deemed to be withdrawn with rejection of the Appeal.

3. 3. Let the file of the RP No: 279/2006 be returned back to the Ld. Recovery Officer with a copy of this judgement for the needful.

4. 4. File be consigned to records.

Pronounced in the Open Tribunal on **12^th December, 2025**

**(PANKAJ KUMAR UPADHYAY)** **PRESIDING OFFICER,** **DRT-II, AHMEDABAD.**

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