ARUN VASANT NEVASKAR vs UNION BANK OF INDIA on 21 July 2022

ORDER

1. This order of mine shall dispose of I.A. No. 1318 of 2022 as well as R.A. No. 01 of 2022 vide which the Appellant has sought following reliefs :

A) The impugned Order dated 29.06.2022 passed by the Ld. Recovery Officer, Debt Recovery Tribunal - 3, Mumbai in I.A. No. 92/2022 in RP No. 69/2019 may please be set aside.

B) The sale and attachment of Scheduled property initiated/carried under present proceeding may please be set aside.

Arun 21.07.2022

C) The intervening applicant may please be allowed to redeem the mortgage by payment of Rs. 76,03,000/- and bank may please be directed to release the scheduled property i.e. ALL THE PIECE AND PARCEL of land lying and situated within the Taluka and District Nashik and within local limits of the municipal Corporation of Nashik at Lavhate Nagar bearing Survey No. 747/1+2+748/A/1+2+749/70 upon which a layout plan is duly approved and out of the layout a plot bearing No. 70 admeasuring 833.25 square meters from mortgage in favour of intervening applicant on payment of amount which bank have ready to accept in auction dated 25.05.2022.

D) The order dated 05.12.2018 passed in foreclosure suit i.e. TOA 1019 of 2016 along with Recovery certificate therein be modified/set aside to the extent of scheduled property by removing scheduled property from attachment and from sale as void-ab-initio.

E) The reasonable time of at least 45 days may please be granted to intervening applicants to submit redemption amount in Hon'ble Tribunal or Bank for redemption of scheduled property.

F) The clear title and possession of the scheduled property may please be granted to the appellant.

*Chun*

G) Pending final hearing and disposal of this application, the sale proceeding initiated by the bank may please be stayed.

1. 2. It is the plea of the Appellants that they are intervening applicant in RP 69/2019, neither borrower/guarantor nor charge debtor. The appellants are third party having charge under section 55 (6) (b) of Transfer of property act on the scheduled property and has filed intervening application for the redemption of the scheduled property under Sec. 91 of the Transfer of property act.

2. 3. According to Appellant they have right to redeem the scheduled property under the provision of the section 91 of the transfer of property act.

3. 4. The description of scheduled property is as under : ALL THE PIECE AND PARCEL of land lying and situated within the Taluka and District Nashik and within local limits of the municipal corporation of Nashik at Lavhate Nagar bearing Survey No. 747/1+2+748+748/A/1+2+749/70 upon which a layout plan is duly approved and out of the layout a plot bearing No. 70 admeasuring 833.25 square meters and assessed at Rs. 1100.00 and bounded as follows : On or towards East: By Open space followed amenity space West: By road South: By DP Road *dharm*

North: By Plot No. 69 hereinafter referred to "Scheduled Property".

1. 5. The appellants have further averred that they entered into the agreement on dated 13.12.2011 duly executed before Notary Public and duly entered in register under Serial No. 5535 dated 14.12.2011 with owner/seller namely Mr. Vijay Baliram Rane and Mrs. Vasundhara Vijar Rane, for the purchase of schedule property and they have already paid the purchase money of total Rs. 1,50,00,000/- i.e. Rs.1,40,00,000/- paid by them on 13.12.2011 on the date of agreement and further paid Rs. 10 lac after agreement dated 13.12.2011 to the owners in anticipation of delivery of the scheduled property and they have created "Charge" on that scheduled property in terms of Section 55 (6) (b) of the Transfer of property act, 1882 amended.

2. 6. It is further plea of the appellant that Union Bank of India has issued the letter dated 05.12.2011 in favour of borrower allowing him to sell schedule property directing borrower/original owners to deposit certain amount of money into the bank. As bank directed to the borrower/owners to deposit money, the intervening applicant handed over Rs. 1,40,00,000/- to the borrower/owners. The total consideration of the scheduled property is fixed at Rs. 2,90,00,000/-

3. 7. As per clause 6 of the Contract/Kararnama dated 13.12.2011, the Respondent No. 3 and 4 had assured to the intervening application that they will obtain letters from the Union Bank of India before the payment of remaining Rs. 1,50,00,000/- . The said Rs. 1,50,00,000/- was to be directly deposited in Union Bank of India and it was further assured to the intervening applicant that on payment of Rs. 1,50,00,000/- Union Bank of India would release the scheduled property.

1. 8. According to Appellants, Respondent No. 3 communicated with the bank about the sale of scheduled property to the intervening applicant and further requested to release the scheduled property by paying Rs. 1,50,00,000/- to the bank but bank failed to take any step. On the date of contract, the account of the borrower was not NPA and it became NRA subsequently when notice under Sec. 13(2) of the SARFAESI Act, 2002 was issued by the Bank on 01.07.2012. The property was thereafter put to auction and pursuant there to the Respondent No. 3 wrote a letter to the bank on 07.12.2012 received by the Bank on 13.12.2012 which specifically stated that the Respondent No. 3 had handed over the copy of Contract/Kararnama dated 13.12.2011 to the bank for requesting to stop auction of the property and to release the property in favour of the intervening applicant as intervening applicant were ready to pay Rs. 1,50,00,000/-.

2. 9. The borrower had also agreed for said release/redemption without any dispute.

10. The Appellants have alleged that Reserve Price set by the bank for scheduled property was Rs. 1,50,00,000/- and appellants through their advocate issued notice dated 10.12.2012 calling upon bank to accept balance consideration and execute sale deed in favour of intervening applicant. Even the appellants got issued various notices requesting Respondent Bank not to enter into transaction for the said property as intervening applicant has interest in said property but of no avail, thereafter scheduled property was attached by the Sales Tax Department.

11. Even the appellant tried their best to negotiate with Bank Officer and their authorized agent/asset management firm namely "Assetguru" having authorized by the Respondent Bank but no action was taken by the Bank.

12. According to Appellant the Bank filed TOA 1019 of 2016 before Hon'ble Debt Recovery Tribunal - 3, Mumbai who in turn issued Recovery Certificate No. RC/69/2019 in favour of the Bank for recovery of sum of Rs.7,46,96,475.10/- along with interest and cost thereon. In the TOA 1019 of 2016, Applicant was not made a party and Applicant came to know that property was put to auction by the Bank at much lower price and later on he came to know that the scheduled property was sold approximately for Rs.76,02,000/-. According to appellant he was ready to pay Rs.76,03,000/- for redemption of property and vide this appeal the appellants had challenged the action of Recovery Officer.

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13. Counsel for Appellant has relied upon the case titled *Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. & Ors.* decided by Hon'ble Supreme Court of India on 17.12.1999 and has also relied upon the case titled *Narayan Deorao Javle (Deceased) through LRs Vs. Krishna & Ors.* decided by Hon'ble Civil Court in Civil Appeal No. 4726 of 2021 on 17.08.2021 and has prayed accordingly.

14. Counsel for Respondent No. 1 has vehemently opposed the contentions of appellant and has candidly canvassed that no illegality has been committed by the Recovery Officer in auction of Scheduled property and Appellants are not entitled to redemption of scheduled property. Ld. Counsel for Respondent has prayed for dismissal of this appeal as well as L.A. for grant of stay.

15. This Tribunal has given due consideration to arguments advanced by respective counsel for parties and have gone through the material placed on record.

16. After appreciating the arguments and material placed on record, this Tribunal is of the opinion that Appellants are not entitled to relief claimed.

17. In this case, the Appellants entered into the agreement with the Respondent No. 4 and 5 on 13.12.2011 for the scheduled property which was already mortgaged with the Respondent No. 1 Bank. So, Appellants charge, if any, on the property is later in point of time.

*Shruti* 21.07.2022

18. Even otherwise Respondent No. 4 and 5 could not have entered into agreements with the Appellants regarding scheduled property as scheduled property was already mortgaged with the Respondent No. 1 Bank and no further charge could have been created on the scheduled property by entering into agreement with the Respondent No. 4 and 5 on payment of consideration of Rs.1,40,00,000/- out of total said consideration of Rs. 2,90,00,000/-.

19. The Appellants can claim to have created interest in the scheduled property and as per Section 91 of Transfer of property act, the Appellants could have sought the redemption of the mortgaged property but in this case, no serious effort was ever made by the Appellants/borrowers to get the property redeemed.

20. It is one of the arguments of Appellants that once they approached the Bank to redeem the property on payment of Rs. 1,50,00,000/- and according to Appellant the letter in this regard is Exh "E" and in that letter it has been mentioned by the borrower that he was assured by the Bank that upon payment of Rs. 1,50,00,000/- the bank shall release the said property favouring the proposed buyers forthwith and said buyers are ready to pay the balance amount to you against the release letter of the said property in their favour. In this letter, reference is to the visit of the Borrower to the Bank in the month of December 2011 and perusal of the letter dated 05.12.2011

*[Signature]* 21.07.2022

issued to Respondent No. 2 would show that a request was made by the borrowers for issuance of NOC for sale of the scheduled property and the borrowers were informed that the Bank had no objections to sell the scheduled property mortgaged with them as a collateral security, however, on the condition that the borrower shall deposit Rs. 200 lac on or before 31.12.2011 and thus the bank never agreed to issue NOC on payment of sum of Rs. 1,50,00,00/- . No NOC was ever issued by the Bank. NOC was to be issued on payment of Rs. 200 lac by the borrower but neither borrower nor the appellants ever bothered to get the property redeem. Thereafter on many occasion property was put to auction and ultimately the Applicant had to file TOA 1019 of 2016 with the Tribunal who passed the order dt 05.12.2018 and Recovery Certificate was issued. In execution of Recovery Certificate, the property was sold for Rs. 76,02,000/- and now the Appellants cannot claim that they are interested persons as they have entered into the agreement with Respondent No. 4 and 5, so, they are entitled to redemption of mortgaged property. The appellants could have participated in the auction proceedings which they did not do. So, now they cannot claim redemption.

1. 21. The Appellants had several opportunities with them for redemption of scheduled property but they were never serious now when the property has been auctioned at a sum of Rs. 76,02,000/-, the Appellants want to get the property redeemed to which the Appellants are not entitled as the Appellants could have redeemed the

*Chun* 21.07.2022

property before auction of scheduled property on payment of balance outstanding loan amount or the amount agreed by the bank to be paid.

22. Moreover, in this case the notice was sent by the Appellants through their counsel to the bank and Respondent No. 4 wherein the Appellants has mentioned that they entered into the agreement with Respondent No. 4 and his wife for sale of the said property for consideration of Rs. 2,90,00,000/- and Respondent No. 4 had also informed that he had availed loan from Union Bank of India and said property was charged to the said bank and Respondent No. 4 had assured the Appellant that upon payment of Rs. 1,50,00,000/- to the Bank said property shall be released and hence the execution of sale deed in favour of the client was agreed to be made within a period of three months of the date of payment of loan to the extent of Rs. 1,50,00,000/-.

23. It has also been alleged that Respondent No. 1 had given confirmation to the Appellants on telephone that no action under the SARFAESI Act 2002 shall be initiated in any circumstances on payment of Rs. 1,50,00,000/- which Appellants were ready and willing to pay but in the same notice, the Appellants have alleged that Appellants were ready and willing to pay the amount of consideration if it was reduced to balance payment of Rs. 1,00,00,000/- only instead of Rs. 1,50,00,000/- . Thus, according to Appellants they were ready and willing to get the property redeem and this notice was issued on 10.12.2012 but Appellants dhruv 21.07.2022

never made an attempt to pay Rs. 1,50,00,000/- to the bank for redemption of scheduled property. Even the bank never agreed to accept Rs. 1,50,00,000/- or Rs. 1,00,00,000/- allegedly to be paid by the Appellants rather NOC was permitted to be issued on payment of Rs. 2,00,00,000/- by the borrowers that too till 31.12.2011 but the Appellants as well as their alleged sellers i.e. Respondent No. 4 and 5 failed to get NOC, so, the Appellants should not have entered into the Contract/Kararnama with Respondent No. 4 and 5 for the property which was already mortgaged with the Respondent No. 1 Bank.

1. 24. Viewing from any angle, the Appellants cannot seek redemption of said property on payment of Rs. 76,03,000/-.

2. 25. The authorities i.e. Delhi Development Authority (Supra) and Narayan Deorao Javle (Deceased) (Supra) relied upon by Appellants are not applicable to this case and are distinguishable on facts.

3. 26. Even in this case, the agreement is not registered one and out of part payment of Rs. 1,40,00,000/- a sum of Rs. 1,25,00,000/- is shown to have been made in cash and Rs. 15,00,000/- by cheques.

4. 27. All these facts have rightly been recorded by Recovery Officer in the Impugned judgment and he has rightly observed that there was no unconditional express consent dhruv 21.07.2022

of the Certificate Holder bank for sale of the property at any point of time.

1. 28. Ld. Recovery Officer has rightly observed that bank issued conditional no objection certificate for sale of scheduled property on condition of payment of Rs. 2,00,00,000/- by 31.12.2011 and the Appellants despite having notice of this letter decided to enter into agreement with the Certificate Debtors on 13.12.2011 and no clarification was sought by Appellants from the bank.

2. 29. Ld. Recovery Officer has rightly observed that the agreement/Kararnama does not create any right in favour of the Appellants and Ld. Recovery Officer has rightly dismissed the application of the Appellants.

3. 30. This Tribunal does not find any illegality in the finding of Recovery Officer. So, findings of Recovery Officer are affirmed and accordingly R.A. No. 1 of 2022 as well as I.A. No. 1318 of 2022 stands dismissed with cost.

*Chun Kumar*

P.O. DRT - III