AXIS BANK vs SRI. M.B NAGAKUMAR on 14 October 2025

: - O R D E R - :

1. This TA is originally filed before the Debt Recovery Tribunal-I, Bangalore which later transferred to this Tribunal and got numbered as above. The application is filed u/s 19 of the Recovery of Debts due to Banks Financial Institution Act 1993(as it was taken) seeking issuance of a Recovery Certificate for Rs.33,05,085/- (Rupees thirty three lakh five thousand eighty five only) claimed to be due in a Power Home Facility availed by the defendants 2 and 3 for Rs.38,40,000/- (Rupees thirty eight lakh forty thousand only).

2. The case of the applicant as stated in the application is as follows:- The defendants 2 and 3 desiring to purchase the Flat No. 210 from premier properties filed an application seeking credit facility from the applicant bank and in pursuant to the same a Power Home facility for Rs.38,40,000/- (Rupees thirty-eight lakh forty thousand only) was sanctioned.

3. It is also stated that the said Defendants had on 08.08.2008 executed the Home Loan agreement and it is also the case of the applicant that in lieu of the same Defendants 2 and 3 had created Security including mortgage over the property in relation to the Home Loan facility.

4 TA. 2134/2017

4. It is also stated that the 1st Defendant is the builder which owns the project under the name Premier Metropolis and in pursuant to the deal, a Tripartite agreement was executed between defendants 1 to 3 and the applicant on 08.08.2008 whereby the applicant was mandated to pay the loan amount to the 1st defendant. Hence according to the applicant, the deposit of Tripartite agreement and agreement for sale, the applicant is having charge over the property. It is also admitted that though by virtue of Home Loan agreement and Tripartite agreement, the defendants 1 to 3 agreed to furnish the sale deed, they failed to do so.

5. It is the specific case of the applicant that the Defendants 1 to 3 played fraud with the applicant bank by suppression of fact that the property was mortgaged with Karnataka State Financial Corporation which initiated proceedings for recovery and for enforcing the Security Interest.

6. It is also stated that since the repayment was defaulted and the defendant had failed to repay the same despite demand, this Original Application is filed seeking recovery of the amount due in the account.

5 TA. 2134/2017

7. The 1st Defendant filed the written statement denying their liability. Apart from the above, the 1st Defendant had contended that the application is filed suppressing material facts.

8. The 4th Defendant who was included in the party array contented that the 1st Defendant in collusion with defendants 2 and 3 assigned the property in his favour had filed their written statement contending that the schedule A and B properties earlier known as “Chitharanjal Mahan” were sold by previous owners in favour of Premier Film Corporation as early as on 1953. The said Premier Film Corporation in turn assigned the properties in favour of Premier Life and General Insurance Company. It is also stated that the said company had on 07.04.2010 entered into a joint development agreement. Hence according to the 4th Defendant, 1st Defendant is developer and promoter and have no authority to execute the agreement dated 10.05.2008 as contended by the applicant. It is also stated that the vendor of the 4th Defendant had apart from execution of sale deed had on 18.12.2013 executed a rectification deed rectifying the schedule. It is also stated that the 4th Defendant had by mortgaging the property availed a loan from LIC Housing Finance Ltd.

6 TA. 2134/2017

9. The applicant had let in evidence through its authorized representative and got marked the following documents in evidence. Ext.A3- Loan application Ext.A4- Annexure to loan application Ext.A5- Power Home Sanction letter dated 07.08.2008 Ext.A6- Home loan agreement dated 08.08.2008. Ext.A7- Tripartite agreement. Ext.A8- Undertaking at Annexure E Ext.A9- order dated 18.12.2015 in Wp.1763 of 2015 Ext.A10- agreement for sale dated 10.05.2008 Ext.A11- Encumbrance Certificate Ext.A12- Foreclosure Statement Ext.A13- Statement Ext.A14- Legal notice. Ext.A15- Postal receipts Ext.A16- Postal track record.

10. The applicant had also produced the CERSAI report as well as copy of FIR lodged against Defendants and copies of agreement.

7 TA. 2134/2017

11. Even though the 4th Defendant had produced the following documents, the same were not marked in evidence as the 4th Defendant did not seek any chance for defense evidence.

1. Sale deed dated 18.12.2013 in favour of 4th defendant.

2. Rectification deed

3. Encumbrance certificate dated 13.06.2016

4. Sanction letter by LIC Housing Finance dated 08.05.2012.

5. Approval of housing loan.

6. Loan sanction letter

7. Approval of loan.

12. The other Defendants, namely Defendants 1 to 3, did not file their written statements, and their opportunity to do so was closed on 10.01.2023. Furthermore, Defendants 2 and 3 failed to appear and were, therefore, set ex parte on 12.01.2024.

13. Heard the Ld. counsel for the applicant as well as the 4th Defendant. The following issues arise for consideration in the light of pleadings and evidence. i) Whether the applicant had succeeded in proving the OA claim?

8 TA. 2134/2017

ii) Whether the applicant is entitled to claim mortgage rights over the schedule property? iii) What orders as to be passed? All these issues are gone into and decided together.

14. The evidence produced by from the side of the applicant as to the availment of credit facility by defendants 2 and 3 is proved. Even the contesting Defendant, the 4th defendant is not having any challenge as to the case of the applicant, as to the disbursement of the facility and execution of loan documents and even the Tripartite agreement between the applicant and Defendants 1 to 3. The documents produced by the applicant were found to be admissible in evidence and sufficient to prove the OA claim as against Defendant no. 1 to 3. The claim put forth by the applicant is within limitation and there is no capitalization of penal interest.

15. Now the question arises as to the right of the applicant to proceed against the schedule property for realization of the debt. This question has to be viewed in the light of absence of the pleadings as to the deposit of title deeds. Even the applicant is not having a case that there is deposit of title deeds. The applicant is only claiming that there is an agreement to create mortgage and there exists in tripartite agreement.

9 TA. 2134/2017

It is also to be noted that the borrower had never acquired title over the schedule flat and hence they are not in a position to create any Security interest as contented by the applicant.

16. The evidence and pleadings in the light of documents available and sheds light to the fact that the 4th Defendant purchased the plaint schedule property from the vendor as early as on 18.12.2013. Even though the credit facility was availed by the 2nd and 3rd defendant in the year 2008, no security interest is created over the property and only an agreement for creation of security interest is executed apart from an agreement to sell the schedule property. The agreement for sale executed by the 1st defendant in favour of defendants 2 and 3 only states about the joint development agreement as the authority empowering the 1st Defendant to enter into an agreement for sale, the said document does not by any stretch of imagination create any title in favour of 1st Defendant. Hence though it is clear that the 1st Defendant was under contractual obligation to deposit the original sale deed to the Bank and the same is not done by the 1st Defendant. None of the parties have a case that the 1st Defendant is having title over the property. Even otherwise an agreement for sale or an agreement to create a mortgage

10 TA. 2134/2017

will not ipso facto create any charge over the property which could be enforced against a purchaser who is a Bonafide purchaser.

17. Hence in view of the above findings this Tribunal is of the view that the case of the applicant as to the so claimed mortgage is to be rejected.

18. In view of findings as entered herein above, the claim of the applicant as against defendants 1 to 3 is proved. However, the prayer for relief against the schedule property and 4th defendant is rejected.

19. Taking note of entire facts, this Tribunal is of the view that the applicant is entitled to pendentalite and future interest at the rate of 12% (simple) The interest is awarded at simple rate since the OA claim is arrived at by calculating interest as agreed upon which this Tribunal consider is at higher rate.

20. In view of the above

i) TA 2134 of 2017 stands allowed

ii) Applicant is permitted to recover an amount of for Rs. 33,05,085/- (Rupees Thirty-Three Lakhs Five Thousand and Eighty-Five only) together with pendente lite and further interest @ 12% p.a. (simple) from the defendants 1 to 3 personally and their assets.

iii) The claim against 4th Defendant and prayer to proceed against schedule property is declined.

11 TA. 2134/2017

iv) A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the as per the above terms.

v) Interim application pending, if any, stands disposed of in terms of this final order.

vi) The applicant is entitled for cost of this litigation for which cost memo to be filed in 7 days from the date receipt of this order.

21. 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 Py, directly on the computer, after its transcription, corrected, signed and pronounced by me in the open court on the 14th day of October, 2025)

Sd/- (T. RAJESH) PRESIDING OFFICER Applicant Witness:

AW1 –Sri. Prabhajan H, Legal officer, Applicant Bank

Witness examined for the Defendant:

-Nil-

List of Documents Exhibited for the Defendant:

-Nil-

Sd/-

(T. RAJESH) PRESIDING OFFICER