VIJAYA BANK vs GIBRAN JOSEPH TAN & ORS on 19 June 2026

:FINAL ORDER:

1. This OA is originally filed before DRT-I and got numbered as OA.No.908/2017 by the erstwhile Vijaya Bank which the transferred to this Tribunal and got re-numbered as TA.No.1138/2017.

2. This application is filed with the prayer for recovery certificate for Rs.21,76,449/- and for a relief permitting to recover by the same by proceeding against the mortgage properties.

3. The applicant case is that, the defendant approaches the erstwhile Vijaya Bank for a mortgage loan (housing) of Rs.22,85,000/- and the said facility has been disbursed pursuant to the execution of the loan documents and also creation of equitable mortgage by deposit of title deeds pertaining to the schedule properties on 11.02.2005.

4. It is further case of the applicant that, defendant having availing the facility agreeing to repay the same as promptly and regularly failed in making the repayments resulting chronic defaults compelling the bank to issue a demand notice on 28.11.2013 and despite the same, the amounts were not paid resulting filed this OA.

5. After issuance of summons the defendant entered appearance and defendant Nos. 1 to 3 filed written statement, contending inter alia that, the bank had filed this OA raising a false claim. It is also stated that, the documents pertaining to the apartment sought to be purchased were handed over to the panelled lawyer of the bank for scrutiny who had given a scrutiny report stating that, the property is free from all the encumbrances. Hence, according to the defendant the property had been purchased by the defendant on good faith based on the scrutiny report of the bank’s counsel and upon the Vijay Bank releasing the amount of Rs.22,85,000/- by way of Demand Draft in favour of the vendor. According to the defendant the original title documents were handed over directly to the bank by the vendor and the bank allowed the vendor to withdraw all the proceeds of same.

6. It is further case of the defendants that, on May 2015, the bank received a notice on the competent authorities, Smugglers and Foreign Exchange Manipulators Forfeiture of Property Act, stating that, the attachment of the savings bank of the vendor and property is also sought to be attached. It is also stated that, the subject matter of the attachment is seized with the appellate authority constituted under the said provision wherein according to the defendant, the applicant bank having received the notice chosen not to appeared before the said authority.

7. Hence, according to the defendants if the bank’s panelled Advocate had not given a clearance certificate, the defendant would not have executed the loan documents and bank would not have release the amount. On the basis of the above, it is contended by the defendant that, the bank is also guilty is not getting proper legal certification in respect of the property then sought to finance.

8. This matter had been adjourned from time to time and as the matter seized by the Hon’ble High court on 20.04.2026, the Ld. Counsel for the applicant present and submits that, as on date there is no order of restrain the Tribunal to proceeding with the OA and based on which, the matter was listed for defendant evidence on 13.05.2026. on 13.05.2026 there was representation for the defendants and hence defense evidence of the defendant closed and matter was taken for orders.

9. The applicant had already let in evidence and got marked documents as exhibit A3 to A26, no defense evidence is adduced despite granting sufficient opportunity.

10. Heard the submissions of the applicant counsel and perused the available records.

11. The orders of the Hon’ble High Court as produced by the parties is clear that that Hon’ble High Court has passed an order directing the parties there is to maintain status quo in respect of the properties “in relation to the property in dispute”. It is also clear from the order that the bank is not a party to the said proceedings before the Hon’ble High Court.

12. The applicant had filed the proof affidavit in confirmation of the pleadings of the OA and had relied upon the documents including the sanction ticket, which bears the signatures of the defendants. The articles of agreement along with undertaking and letter of repayment and letter of guarantee got marked as Ex. A4 to A7 evinces the defendants had obliged themselves to pay back the amount in terms of the loan agreement without fail, the acknowledgement liability A8 to A16 also establishes the case of the applicant as set up in the OA. The applicant contends that, the mortgage of the property is evidenced as Ex. A11 to A13. The statement account as produced by the applicant evidences that the amount as stated in the sanction ticket had been disbursed to the loan account and further that the defendant had committed the default in the loon account and as claimed int eh OA outstanding int eh account. It is clear that, there is no capitalization of the penal interest.

13. Even though, the defendants had filed written statement, they have not adduced any evidence in support of their evidence. Even otherwise the contention as stated in the written statement that, the property purchased by them was having some defects as the same is attached as per the provisions of Smugglers and Foreign Exchange Manipulators Forfeiture of Property Act does not exonerate that the defendants liability. The defendant had purchased the property and only because the bank’s paneled lawyer given a legal vetting about the non-encumbrance of the property also will not come in the aid of defendant, getting himself exonerated from the liability as the facility got sanctioned by execution of necessary documents. Even going by the case of the defendant that, measures as per the provisions of the Smugglers and Foreign Exchange Manipulators Forfeiture of Property Act has been commenced a subsequent to the purchase of the property and hence by no stretch of imagination the same can be attributable to any negligence on the part of the panel lawyer of the applicant bank. Even otherwise, the person who purchased the property should be aware as to the nature of the property as it is the principle of Caveat emptor which says “let the buyer beware”

14. Taking into the consideration that, the entire facts as discuss above, this Tribunal is of the view that, the applicant is entitled to succeed in their claim as set up the OA and is entitled for recovery certificate of Rs.21,76,449/-. From the proceedings it is clear that the bank is not a party even before the Hon’ble High Court and the order of status quo is passed only against the parties to the said petition. Be that the case there is nothing available on record for restraining the bank from proceeding against the property which is mortgaged to them. Taking note of the fact that, the credit facility availed is housing loan and also that the borrower could not get the fruits of the credit facility as the property is entangled him the subsequent litigation. This Tribunal is of the view that, pendalite and future interest can be awarded at 6%p.a.

15. In the result, TA.No.1138/2017 stands allowed. i) The applicant is allowed to recovery an amount of Rs.21,76,449/- (Rupees Twenty One Lakh Seventy Six Thousand Four Hundred and Forty Nine only) under Overdraft facility with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from defendants, after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule property. The schedule to the OA be the schedule to the Recovery Certificate. ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants jointly, severally, personally and other their assets are liable for all such amounts due under the loan accounts. iii) The applicant bank is allowed cost of the proceeding which applicant to file cost memo within 7 days from the date of receipt of the order. iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

16. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993. [Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 19th Day of June 2026].

(T. RAJESH) PRESIDING OFFICER ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Abhaya Mishra, Senior Manager of the applicant bank.

Exhibits on the part of the Applicant: Annexur e Particulars A1 Applicant Evidence A2 List of Documents A3 Sanction Letter Dated 10.02.2005 A4 Articles of Agreement dated 10.02.2005 executed by 1st and 2nd defendants in favour of the applicant A5 Letter of undertaking dated 10.02.2005 by the 1st and 2nd defendants A6 Letter of terms of repayment dated 10.02.2005 A7 Letter of guarantee by defendant No.3 dated 10.02.2005 A8 Acknowledgment of liability dated 09.02.2008 by defendant Nos. 1 and 2 A9 Acknowledgment of liability dated 18.04.2013 by defendants No.1 and 2 A10 Acknowledgement of liability dated 18.04.2013 by defendant No.1 and 2 A11 Memorandum of deposit of title deeds dated 11.02.2005 by defendants 1 and 2 A12 Exchange deed dated 24.11.1966 between Col k.M. Shomanna and M. Appayanna A13 Sale deed dated 20.03.1997 executed by E.G. Govious, GPA of K.S. Bhoappa and others in favour of Mrs. Fathima Kauser Ismail and Mohammed Ismail Shabandri A14 Khata certificate issued by BBMP on 29.12.2004 A15 Khata extract dated 29.12.2004 issued by BBMP A16 Tax paid receipt dated 15.12.2004 A17 E.C for the period from 1.4.1990 to 31.03.2004 dated

05.01.2005 A18 E C for the period from 01.01.2004 to 3.2.2005 A19 Sale agreement executed by Fathima Kauser Ismail and Mohammed Ismail Shabandri in favour of Winston Tan and Gibran Joseph Tan dated 09.12.2004 A20 Endorsement issued by DC dated 17.12.2014 A21 Three GPA by K.S. Bhoopanna Mrs. Kaveri and C. Madan Somanna in favour of E.G. Goveas dated 26.02.1995 A22 Sale deed executed by Fathima Kauser Ismail and Mohammed Ismail Shabandri in favour of Winston Tan and Gibran Joseph Tan dated 10.02.2005 bearing Document No.5559/04-05 A23 Carbon copy legal notice dated 28.11.2013 issued to defendants No.1 to 3 A24 Two postal acknowledgments of defendants 1 and 2 A25 Certified of the statement of accounts in respect of the defendant’s loan account from 02.12.2010 to 31.05.2016

(T. RAJESH) PRESIDING OFFICER