SHASHI MODI vs BANK OF INDIA on 29 October 2026

ORDER

This appeal is filed against the order passed in SA 24/2022 by the learned Presiding Officer, DRT-II, Chennai on 30.06.2022.

2. The brief case of the appellant as per the averments made in the securitization application is that the appellant is one of the children of late Debi Dutt Saraf. She owned several properties including the properties mentioned in the schedule as items 14 to

16. These properties are purchased by late Debi Dutt Saraf through various sale deeds and he was in possession and enjoyment of the properties. On 17.07.1996, Mr. Debi Dutt Saraf died leaving behind his sons and daughters viz., (i) Santosh Kumar Saraf, (ii) Binod Kumar Saraf, (iii) Ashok kumar Saraf, (iv) Pramodh kumar Saraf, (v) Usha Gupta and (vi) Shashi Modi. One of his sons viz., Binod Kumar pre-deceased him on 29.12.2001. Appellant is entitled to 1/6th share from all the properties of her father. After death of Debi Dutt Saraf, Pramodh kumar Saraf and Ashok kumar Saraf were taking care of the business. Applicant came across the publication dated 05.07.2021 issued by the Recovery Officer for e-auction of the properties for the dues of SDS Steels Private Limited and 4 others and on enquiry, she came to know that the schedule mentioned properties i.e. 2 acres and 55 cents in Panjetti Village, Ponneri Taluk had been sold to Mrs.

Sangita w/o Mr. Pramodh Kumar Saraf and only 3 out of six legal heirs were parties to the transaction. Sangita, in turn, mortgaged the properties along with certain other properties in favour of Bank of India for availing credit facility. The first respondent Bank without properly verifying the title and entitlement of all the legal heirs created a mortgage and proceeded under the SARFAESI Act.

3. Learned counsel for the appellant in addition to the case recorded above, submitted that she is neither a borrower nor a guarantor. She filed SA 393/2021 challenging the previous sale notice dated 05.11.2021 fixing the auction sale on 25.11.2021. On the submissions made by the learned counsel for the respondent that the respondent is not proceeding in pursuance to the sale notice, the SA 393/2021 was disposed. Subsequently, this SA 24/2022 is filed challenging the fresh sale notice issued on 06.01.2022. She has 1/6th share in the properties. Sale deed had been executed and mortgage had been created behind her back and without her knowledge. Therefore, the sale deed executed in favour of Sangita and the mortgage created will not bind her. The measures taken under the SARFAESI Act, including her share is not legal and therefore, she filed SA 24/2022. Learned Presiding Officer, has not considered her case properly and dismissed the SA. Therefore, this appeal.

3 (1). Learned counsel for the appellant submitted that in the order passed by the learned Presiding Officer, it is stated that the copy of the order passed by the Recovery Officer in MA 98 and 99/2021 in DRC No.483/2016 in OA 71/2012 is produced and that the Bank has not produced the title documents from Ashok Kumar Saraf and Pramod Kumar Saraf and Rahul Saraf to show their legal entitlement to sell the properties. It is also ordered to put on hold the sale of items 11 and 12 of e-auction sale notice.

3 (2). Learned counsel for the appellant brought to the notice of this Tribunal that the counter affidavit filed by the first respondent-Bank in this appeal, wherein in paragraph-11, it is stated that Mr. Ashok Kumar Saraf, Mr. Pramodh Kumar Saraf and Rahul Saraf executed the sale deed in favour of Sangita on 05.12.2006 and in paragraph 12, it is stated that 3 sale deeds had been registered in document Nos.11052/2006, 11053/2006 and 11055/2006 on 05.12.2006 by Mr. Pramodh Kumar Saraf, Mr. Ashok Kumar Saraf and 3 others in favour of Sangita. Thereafter, Sangita in the capacity of owner created a mortgage in favour of the Bank. 3 (3). It is further submitted that in MA Nos. 98/2021 and 99/2021 filed for granting the order of Stay, deferring/cancelling the auction sale on 11.08.2021 filed by the appellant in DRC

483/2016 in OA 71/2012, the learned Recovery Officer made an observation that there is no document filed by the Bank in respect of the legal title holders in respect of properties sold by one Mr. Ashok Kumar Saraf, Promodh Kumar Saraf and Rahul Saraf. These applications were disposed stating that appellant’s claim of 1/6th share over the properties i.e. items 11 and 12 of schedule properties does not lie before the Recovery Officer. Certificate holder-Bank was directed to file necessary affidavit and valuation report for the properties mentioned as items 1 to 10 for fresh e-auction sale and further proceedings in respect of items 11 and 12 are ordered to be put on hold until a clear picture emerges as to the title as claimed by the appellant by a competent Court of Law. 3 (4). In the counter filed by the second respondent in Para- 11, it is stated that appellant’s brothers had executed sale deeds in favour of Sangita in 2006 and that the sale deeds were executed with the full consent and knowledge. The consent and knowledge claimed is not true. Appellant is not aware of the sale of the properties of her father, in which, she has 1/6th share till she comes to know about the recovery proceedings. Only thereafter, she filed application for Stay and cancelling the sale and the securitization application. She can claim her right in the properties and therefore, she filed SA 24/2022 against the measures taken under the SARFAESI Act. The learned Presiding Officer, DRT-II, Chennai, without considering the merits in her case, dismissed the securitization application mainly on the ground that the appellant has not produced the sale deed executed by her brothers in favour of Sangita Saraf. Appellant has produced the copies of sale deeds executed by her brothers in favour of Sangita Saraf as additional documents. Learned counsel for the appellant submitted that the additional documents would prove that only her brothers had executed the sale deed without involving the appellant or her sister. In the light of production of the additional evidence, learned counsel for the appellant seeks to set aside the order of the learned Presiding Officer, DRT-II, Chennai and allow the securitization application.

4. Learned counsel for the first respondent submitted that the appellant is the sister of executants of sale deeds in favour of Mrs. Sangita Saraf. Mrs. Sangita Saraf is none other than the own sister-in-law of the appellant. Appellant’s father died in the year 1996. The property was sold in favour of Sangita Saraf in the year 2006. Sangita Saraf availed loan facility in the year 2008. Only in the year 2021, appellant filed MA 98/2021 and MA 99/2021 before the DRT and the SA 24/22. Appellant cannot claim that she was not aware of the sale deed executed by her brothers in favour her sister-in-law viz., Sangita Saraf in the year 2006. Assuming that she has any right in the secured asset, her right is lost because of her acquiescence and abandonment of right in claiming share in not filing suit for partition within a period of 12 years from the date of sale. All the proceedings initiated by the appellant had been initiated only in the year 2021-2022, much beyond the period of limitation. Appellant’s brothers had stalled the recovery proceedings by initiating one proceedings or the other. Appellant is set up by her brothers to further stall the proceedings. Only during the 17th sale attempt, sale had become successful. Sale was held and possession was also delivered to the auction purchaser. Thus, the learned counsel for the first respondent seeks to confirm the order of the learned Presiding Officer, DRT-II, Chennai and for the dismissal of this appeal.

5. Learned counsel for the second respondent submitted that the second respondent is a bonafide purchaser and invested huge amount in buying the property with his hard- earned money. The SARFAESI sale cannot be set aside unless fraud, collusion, under valuation or insufficient price is/are made out. There is no plea taken that first respondent-Bank had colluded with the auction purchaser in the sale of the property.

Therefore, the auction purchaser’s right as a successful bidder has to be protected.

6. Considered the rival submissions and perused the records.

7. It is seen from the case set out by the parties, especially, the appellant, she claims that her father Debi Dutt Saraf purchased the property concerned in this case in the year 1985 and died intestate on 17.07.1996 leaving behind the appellant and her siblings. The details of the legal heirs are (1) Santhosh Kumar Saraf (2) Binod Kumar Saraf (3) Ashok Kumar Saraf (4) Pramodh Kumar Saraf (5) Usha Gupta (6) Shasi Modi - the appellant herein. It is pleaded that one of the sons of Debi Dutt Saraf viz., Binod Kumar Saraf pre-deceased him on 27.01.2001. This statement may not be correct for the reason that Debi Dutt Saraf said to have been died on 17.07.1996. If the date of death of Binod Kumar Saraf claimed as 29.12.2001 is correct, it goes without saying that Binod Kumar Saraf died only after the death of Debi Dutt Saraf.

8. Be that as it may, the appellant has produced the copy of the sale deeds in the name of Debi Dutt Saraf in document Nos.1556/1985, 1558/1985 and 1582/1985. There is absolutely no dispute with regard to the fact that Debi Dutt Saraf is the absolute owner of the properties purchased under these sale deeds, which included the properties concerned in this appeal. The death certificate of Debi Dutt Saraf shows that he died on 17.07.1996. The legal heir certificate shows that he was survived by his sons and daughters namely (1) Santhosh Kumar Saraf, (2) Usha Gupta, (3) Shashi Modi, (4) Ashok Kumar Saraf & (5) Pramod Saraf. It is recorded that Binod Kumar Saraf was dead on 29.12.2001. Appellant is shown as son instead of daughter in the legal heir certificate.

9. The learned Presiding Officer dismissed the securitization application primarily on the ground that the sale deeds executed by appellant’s brothers in favour of Sangita Saraf had not been produced. Other reasons were that the appellant has not chosen to lodge any complaint against her brothers, who had acted against her interest and her brothers were not impleaded as respondents in the securitization application and therefore, the application has to be rejected for the non-joinder of necessary parties. Yet another reason given was that the appellant though furnished SR.No.2302/2022 to show that she filed a suit for partition, no particulars with regard to number of the suit and the stage of the suit was furnished.

10. Appellant has now produced copy of sale deeds executed by her brothers Mr. Ashok Kumar Saraf, Pramod Kumar Saraf and Ragul Saraf, S/o Binod Kumar Saraf in favour of Sangita Saraf dated 05.12.2006 registered as document Nos.11053/2006 and 11055/2006 registered at SRO, Redhills.

11. The reading of the sale deeds shows that the vendors claimed that Debi Dutt Saraf was the owner of the properties sought to be sold and he died intestate on 17.07.1996 leaving behind the vendors as his legal heirs to succeed to the estate. Vendors 1 and 2 viz., Ashok Kumar Saraf and Promodh Kumar Saraf are the sons of Debi Dutt Saraf and Vendor-3 is the son of late Binod Kumar Saraf, who is the brother of vendors 1 and 2. These recitals did not show the existence of other legal heirs i.e. the appellant and her sister- Usha Gupta. The Bank had not produced any document to show that appellant and her sister-Usha Gupta had relinquished or released their right in the properties by executing some documents. It is no doubt that each legal heir i.e. the appellant, her sister and brothers are entitled to 1/6th share in the properties left by Debi Dutt Saraf as per Hindu Succession Act 1956. Therefore, there is no doubt that the appellant, as per the Hindu Succession Act 1956, is entitled for 1/6th share in the properties left by her father Debi Dutt Saraf. Still, whether the appellant can question the

SARFAESI proceedings belatedly is the question that has to be considered now.

12. Debi Dutt Saraf died on 17.07.1996. Appellant’s brothers sold the properties on 05.12.2006 in favour of Sangita Saraf, who is none other than her sister-in-law. Appellant is not a third party. She is the sister of vendors and sister-in-law of the vendee. Therefore, she cannot seek innocence or ignorance on the execution of sale deeds by her brothers through registered sale deeds on 05.12.2006. Registration of sale deed amounts to Publication of the fact that the properties covered in the sale deeds had been sold by the brothers of the appellant in favour of her sister-in-law. This public notice is meant to the appellant as well.

13. Strangely appellant has not challenged the sale deeds immediately after execution or atleast within the period of 12 years. Only in the year 2021, she filed MA 98/2021 & MA 99/2021 in DRC No.483/2016 in OA 71/2012 for Stay and deferment of sale dated 11.08.2021. The securitization application was filed in the year 2022. It is not known as to how she came to know about the sale of the properties with the issuance of sale notice dated 06.01.2022 and filed SA 393/2021 and SA 24/2022 in the year 2022. It is also not known as to how the appellant came to know about the DRC proceedings in DRC No. 483/2016 and filed MA 98/2021 & MA 99/2021. The only way to get the information about the recovery proceedings and the SARFAESI Proceedings are that the details of these proceedings should have been shared to her by her brothers. Therefore, there is every possibility to suspect and subscribe to the view of the learned counsel for the respondents that the appellant was set up by her brothers to initiate the proceedings challenging the recovery and SARFAESI measures to thwart the sale attempt and recovery of first respondent’s legitimate dues. Even before this appellate Forum, appellant is not able to produce the number of the suit filed for partition on the file of the Sub Court, Ponneri. Therefore, an adverse inference has to be drawn against appellant that the appellant is set up by her brothers on initiating these proceedings. In the said scenario, this Tribunal is not inclined to go into the merits and demerits of the suit said to have been filed by the appellant claiming partition.

14. Appellant has not challenged or found any defect in the measures taken under the SARFAESI Act for the sale of the property, except claiming 1/6th share in the property,. There is no dispute with regard to the fact that maximum share holders sold their shares in favour of Sangita Saraf and she had availed the loan facility from the first respondent-Bank by mortgaging the properties sold to her. On her default to pay the loan amount, the account was classified as NPA and recovery proceedings had been initiated under the SARFAESI Act. Therefore, this Tribunal is not inclined to interfere with the order passed by the learned Presiding Officer, DRT-II, Chennai in dismissing the securitization application and on the ground of delay, latches, waiver and abandonment of right. However, the appellant can claim her right of 1/6th share in the suit said to have been filed by her against her brothers and the auction purchaser. Thus, this appeal is liable to be dismissed and accordingly dismissed.

15. In the result,

This appeal is dismissed by confirming the order dated 30.06.2022 passed by the learned Presiding Officer, DRT-II, Chennai, in SA 24/2022.

Parties are directed to bear their own costs.

Pending IAs if any shall stand closed. [Dictated to Steno (ra), transcribed by her, corrected and signed by me in open Court, , this 29 day of October , 2026) Sd/- [Justice G. Chandrasekharan] CHAIRPERSON