Dismissed

Ap State Financial Corporation Ltd. and Anr. v. Smt Rita Kaur and Ors.

DRAT15 Sept 2022REGULAR APPEAL/46/2019

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed an appeal filed by A.P. State Financial Corporation against the DRT's order setting aside an auction sale. The core dispute involved whether the bank could mortgage and sell property belonging to a third party, Rita Kaur, who was neither a borrower nor a guarantor, when it was included in a mortgage deed executed by her spouse, Avtar Singh. The Tribunal held the mortgage was invalid regarding the third party's share, thus vitiating the SARFAESI proceedings.

What the court decided

AI extract

Ap State Financial Corporation Ltd. and Anr. versus Smt Rita… — Banking and Recovery | DRAT (2022)

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Appeal No. 46 of 2019-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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(Appeal No. 46 of 2019)

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(Arising out of S.A. 132 of 2016 in DRT-1, Hyderabad)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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The Authorised Officer, A.P. State Financial Corporation, D. No. 6-2-136, Opposite Zilla Parishad Subashnagar, Nizamabad – 503 002;

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A.P. State Financial Corporation, D. No. 6-2-136, Opposite Zilla Parishad Subashnagar, Nizamabad – 503 002.

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… Appellants

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-Versus-

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Smt. Rita Kaur, son of Inder Singh, Resident of 2-6-95, Sikhwadi, Kaimnagar – 505 001, Telangana State;

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Sri Avtar Singh, Wife of Sardar Avtar Singh, Resident of 2-6-95, Sikhwadi, Kaimnagar – 505 001, Telangana State;

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M/s. Balaji Pipe Industries, represented by Proprietix Smt. B. Sunita, H. No. 5-3-347, Vidya Nagar Colony, Kamareddy – 503 111 Telangana State;

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Sri Ravinder Singh, Son of Laxman Singh, Resident of H. No. 2-6-58, Sikhwadi, Kaimnagar – 505 001, Telangana State.

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… Respondents Counsel for the Appellants … Mr. Nemani Srinivas Counsel for Respondent No. 1 … Mr. Ambadipudi Satyanarayana Mr. Pankaj Kumar Mukherjee Counsel for Respondent No. 4 … Mr. G.S. Pal Mr. P. Koley JUDGMENT : 15^th September, 2022

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THE APPELLATE TRIBUNAL :

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The instant Appeal has arisen against judgment and order passed by Learned DRT-1, Hyderabad in S.A. 132 of 2016 (Smt. Rita Kaur -vs- The Authorised Officer & Others)

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Appeal No. 46 of 2019-DRAT-Kolkata dated 16^th May, 2019 allowing the SARFAESI Application of the SARFAESI Applicant.

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2. As per the proceedings, the facts of the case are that the SARFAESI Applicant, Smt. Rita Kaur, (Respondent No. 1), wife of Respondent No. 2, Avtar Singh, is neither borrower nor guarantor nor mortgagor but is a third party to the loan transaction between the Appellant, A.P. State Financial Corporation, and Respondent No. 2, Avtar Singh. A Partnership Firm, in the name and style of M/s. Hotel Niranjan at Karimnagar, was formed by Sardar Avtar Singh, Sardar Sajjan Singh, Sardar Kulwant Singh and Sardar Charanpal Singh, who are real brothers and sons of Late Sardar Inder Singh. Smt. Niranjan Kaur is their mother. A partnership property was partitioned in O.S. No. 147 of 1990 by virtue of a final decree regarding Municipal Door Nos. 2- 6-109 to 2-6-109/4 (Old) or 2-6-111 to 2-6-115 (New). They availed the loan facility from the A.P. State Financial Corporation and started construction of the hotel premises.

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3. Partners of the firm jointly sold some of the portions of the aforesaid premises in D. Nos. 2-5-110, 2-6-111 and 2- 6-112 in favour of third parties through Registered Sale Deeds. The Partnership Deed was reconstructed on 1^st July, 2000 with the unsold premises which is shown in the schedule known as Hotel Niranjan by admitting two new partners, viz., their mother, Niranjan Kaur and Rita Kaur (the SARFAESI Applicant) by allotting them 10 paise and 5 paise shares out of 25% share of Avtar Singh. Subsequently, Sardar Sajjan Singh, Sardar Kushwant Singh

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Appeal No. 46 of 2019-DRAT-Kolkata and Sardar Charan Pal Singh retired from the partnership firm by Retirement Deed dated 31^st July, 2001. Thereafter, Avtar Singh, Niranjan Kaur and Rita Kaur reconstituted the Partnership Firm vide Partnership Deed dated 1^st August, 2001.

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4. Subsequently, some dispute arose amongst them and the Partnership was dissolved by a Dissolution Deed dated 9^th November, 2001 which was filed before the Registrar of Firms. Due to dissolution of the firm, all the three persons became owners of the said property to the total extent of 245.50 square yards with structures thereon bearing Municipal Nos. 2-6-114 and 2-6-115 situated at Municipal Water Tank Road, Karimnagar Town, Karimnagar. Registered Partnership Deed bearing Document No. 6806 of 2001 was executed by and between the parties. In the said Partition Deed an extent of 210 square yards with RCC Building thereon bearing No. 2-6-115, i.e. Schedule B property falling in the share of Avtar Singh while the remaining 35 sq yards with RCC shop as Municipal No. 2-6114, i.e. Schedule A property has fallen in the share of the SARFAESI Applicant, Rita Kaur. An amount of Rs.50,000.00 was allotted to the share of Smt. Niranjan Kaur. Accordingly, Applicant became the sole owner of the property shown in Schedule A property and was in possession and enjoyment of the same. Applicant Rita Kaur and Avtar Singh are not having cordial relations.

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5. Subsequently, SARFAESI Applicant came to know that the Appellant, A.P. State Financial Corporation, had sold the

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Appeal No. 46 of 2019-DRAT-Kolkata Schedule ‘A’ and ‘B’ property to recover the debt alleged to have been availed by Respondent No. 3, M/s. Balaji Pipe Industries. On enquiry it was revealed that Respondent No. 2, Avtar Singh, had mortgaged the entire property, i.e. 244.5 square yards, shown in Schedule A and B, in favour of the Appellant, A.P. State Financial Corporation, to secure the alleged credit facilities availed by the Respondent No. 3, Balaji Pipe Industries.

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6. Respondent No. 3, Balaji Pipe Industries, had committed default in repayment of the outstanding dues. Appellant Corporation was proceeded under SARFAESI Act, 2002 and the entire property, as shown in Schedule A and B, was sold on auction on 15^th March, 2016 pursuant to the sale notice dated 14^th February, 2016. Thereafter, Respondent No. 1, SARFAESI Applicant, filed a SARFAESI Application before the Learned DRT challenging the sale notice as well as the auction.

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7. Appellants filed counter affidavit before the Learned DRT wherein it was stated that M/s. Balaji Pipe Industries had availed a Term Loan to the tune of Rs.225.00 lac from the Appellant wherein Avtar Singh stood as guarantor and mortgaged the house, bearing D. No. 2-6-125, measuring 210 square yards situated near Municipal Water Tank Road, Karimnagar Town, Karimnagar by depositing the title deed registered on 28^th June, 2012. Memorandum of deposit of Title Deed was registered as Doc. No. 7042 of 2012 before SRO. Karimnagar. Since the borrower and guarantor defaulted in payment of the loan amount, the account was

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Appeal No. 46 of 2019-DRAT-Kolkata classified as N.P.A. and SARFAESI proceedings were initiated by Appellants by issuing Demand Notice dated 12^th November, 2013 under Section 13 (2) followed by Possession Notice dated 24^th February, 2014 under Section 13 (4) of the SARFAESI Act 2002. A writ petition No. 24170 of 2014 was filed before the Hon’ble High Court at Hyderabad which was dismissed on 1^st September, 2014. 8. Thereafter, a public notice was made by the Appellant on 14^th February, 2016 by publication in newspaper fixing auction of the property on 15^th March, 2016 wherein Ravinder Singh and Others stood as successful bidders. Avtar Singh challenged by filing Writ Petition No. 8591 of 2016 before the Hon’ble High Court at Hyderabad wherein vide order dated 16^th March, 2016 the Hon’ble High Court directed the Respondent No. 3, Avtar Singh to pay the amount which the highest bidder has offered within 15 days from the date of the order. In case of default, Appellant Corporation would be at liberty to receive the balance 75% of the bid amount and execute the Sale Certificate, register and deliver vacant possession of the property to the auction purchaser without further reference to the Court. Condition was not complied. Accordingly, Appellant Corporation received the balance 75% of the sale consideration and executed sale certificate on 2^nd April, 2016 in favour of the successful bidder. This auction was further challenged by Avtar Singh by filing a writ petition No. 10015 of 2016. 9. It is further stated that due to oversight Appellant, A.P. State Financial Corporation, published the name of

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Appeal No. 46 of 2019-DRAT-Kolkata SARFAESI Applicant, Rita Kaur, in the auction notice in respect of Schedule B property on the presumption that she may claim the property, being the wife of Avtar Singh, who is guarantor to the loan transaction. Addition of her name was neither intentional nor deliberate. Appellant Corporation had sold Schedule B property only which was registered in the name of Avtar Singh and the sale certificate was also issued against that property only.

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10. After hearing the Learned Counsel for the parties and perusing the record, Learned DRT came to the conclusion that sale notice, issued on 12^th February, 2016, was bad in law; consequently, the auction conducted on 15^th March, 2016 and the Sale Certificate dated 2^nd April, 2026, issued by the Appellant/Corporation, were liable to be set aside and were set aside. A.P. State Financial Corporation was directed to refund the sale proceeds of Rs.1,36,00,000.00 deposited by the auction purchaser with 9% interest per annum from the date of deposit till the date of refund. 11. Feeling aggrieved, Appellant has preferred the instant appeal.

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I have heard the Learned Counsel for the parties and perused the record.

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12. Admittedly, SARFAESI Applicant, Rita Kaur, who is Respondent No. 1 in this appeal, is neither borrower nor guarantor or a party in the loan proceedings. Credit loan was sanctioned by the, A.P. State Financial Corporation, in favour of Respondent No. 3, M/s. Balaji Pipe Industries wherein Respondent No. 2, Avtar Singh, stood as guarantor.

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Appeal No. 46 of 2019-DRAT-Kolkata It is also not disputed by the Appellants before the Learned DRT that initially a partnership firm was constituted by the four brothers of the Respondent No. 2, Avtar Singh, for construction of Hotel Niranjan wherein the other partners, brothers of Avtar Singh, got retired and hence a new partnership firm was constituted amongst Rita Kaur, Respondent No. 1, Avtar Singh, Respondent No. 2 and his mother Niranjan Kaur. Subsequently, they entered into a Partnership Deed wherein the property bearing No. 2-6-115 was partitioned between them. It was also registered as Document No. 6806 of 2001. Deed of Partition, a registered Deed, which was executed on 19^th November, 2001, was made part of the record before the Learned DRT. Parties to the deed were Sardar Inder Singh, Smt. Niranjan Kaur, wife of Inder Singh, Sardar Avtar Singh and Smt. Rita Kaur, wife of Avtar Singh. As per the deed following property was given to Sardar Avtar Singh :

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‘A’ Schedule Property fell to the share of First Party Sardar Avtar Singh

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R.C.C. building bearing Municipal No.2-6-115, Plot along with open area total area 210 Sq.Yards or 176.1 Sq. Mtrs. of Ground Floor, First Floor and Second Floor -

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The Plinth area of Ground Floor : 1500 Sq.feet The Plinth area of First Floor : 1500 Sq.feet The Plinth area of Second Floor : 1500 Sq feet Total area : 4500 Sq.feet

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Situated at near the Municipal Water Tank Road, Karimnagar Town under Sub-Registration District and Registration District, Karimnagar.

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Description

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1. Open area : 44 Sq Yards 2. Plinth area of Ground Floor : 1500 Sq.feet 3. Plinth area of First Floor : 1500 sq. feet 4. Plinth area of Second Floor : 1500 sq. feet

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Appeal No. 46 of 2019-DRAT-Kolkata Total area : 4500 sq. feet 5. Total area of open area plinth area : 210 Sq Yards 6. Municipal No. 2-6-114 and 2-6-115 of R.C.C. Building 7. Annual rental value : Rs. 4,500.00 8. Market Value : Rs, 26,73,000.00

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Boundaries

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East : Plot of Sardar Laxnan Singh West : 50-0" Wide Road and shop of 2^nd party fell to the share of 2^nd party North : House No.2-6-113 of Sardar Charan Pal Singh South: Shop No.2-6-114 fell to the share of Party No.2 and H. No.2-5-116 of Sardar Kundan Singh fallen to the share of Avtar Singh in the annexed plan shown as red colour.

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‘B’ Schedule Property fell to the share of 2^nd Party Sardar Rita Kaur

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R.C.C. Shop No.2-6-114 measuring 35.50 Sq. Yards or 34 Sq. Metres situated at near the Municipal Water Tank Road, Karimnagar Town under Sub-Registration District and Registration District

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Description

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1. Open area : 17.73 Sq. Yards 2 Plinth area of Ground Floor : 17.77 Sq. Yards 3. Total area : 35.50 Sq. Yards or 30 Sq.mts 4. Municipal Number : 2-6-114 5. Market value : Rs.2,00,000.00

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Boundaries

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North : Open place and building No.2-6-115 of 1^st Party fell to the share of 1^st Party. East : House No.2-6-115 of 1^st party South : H. No. 2-6-116 of Sardar Kundan Singh West : 50'-0" Wide Road fallen to the share of Rita Kaur party No. 2 in the annexed plan shown as green colour.

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(C) Schedule

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Net-Cash of Rs 50,000-00 on hand at the time of dissolution of the firm allotted to Smt. Niranjan Kaur.

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In Witness whereof the parties to this deed declare that the partition hereby affected out of their free will and that it is final and irrevocable.

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Appeal No. 46 of 2019-DRAT-Kolkata 13. It is also not in dispute that Respondent No. 1, Rita Kaur, was neither borrower nor guarantor in the loan transaction of Respondent No. 3, M/s. Balaji Pipe Industries; rather, Avtar Singh, Respondent No. 2, stood guarantor for the loan advanced by the Appellants to M/s. Balaji Pipe Industries, Respondent No. 3.

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14. The whole dispute arose when the loan account of Respondent No. 3 was classified as N.P.A. and the Appellant proceeded under the provisions of SARFAESI Act, 2002. Sale notice was published by the Appellants in the newspaper wherein the description of the property was as under:

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All that Municipal D.No. 2-6-125 admeasuring 245.50 Sq. yards (as per document) 210 Sq. Yards (Actual Land Available) and RCC building with Ground floor 1500 sq.ft.

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First floor : 1500 sq.ft 2nd floor : 1500 sq.ft plinth area situated at Near Municipal Water Tank Road, Karim Nagar Town, Karim Nagar District

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Bounded by East : Land of Sardar Kundan Singh, West : 50’-0’ Wide Road, North : House of Sri. S. Charan Pal Singh & Kalyan Lodge. South: House of Sardar Kundan Singh.

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Prior to this, a notice was also sent by the Appellant on 11^th November, 2013 which was addressed to Avtar Singh, Son of Inder Singh and Smt. Rita Kaur, wife of Avtar Singh, which reads as under :

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“ You are aware of that M/s. Sri Balaji Pipe Industries, availed an amount of Rs. 3,75,01,000.00 towards Term loans and Working Capital Term Loans to meet their working capital requirements of the unit situated at Plot No.30, IDA Kamareddy -503 111, Nizamabad District against equitable mortgage of land admeasuring 243055 Sq yards covered by plot No.30, IDA, Kamareddy, Nizamabad District together with buildings

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Appeal No. 46 of 2019-DRAT-Kolkata constructed and hypothecation of plant and machinery, testing equipment, dies & inserts, both existing and all future acquisition of fixed assets in nature and equitable mortgage of the properties as collateral security. In which you have offered the below mentioned property as collateral security. (emphasis supplied)

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Plot area 210 Sq yards and RCC building with Ground Floor 1500 sft, First Floor 1500 sft and 2^nd floor 1500 sft plinth area covered with municipal no. 2-6-115 (Old), 2-6-125 (New) situated at near the Municipal Water Tank Road, Karimnagar Town under the Sub-Registration District and Karimnagar District (Presently running Murthy Mess") and bounded by East: Land of Sardar Laxman Singh, West: 50' wide road, North: Mugli of Sri S. Charan Pal Singh & Kalyan Lodge, South: House of Sardar Kundan Singh.”

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15. In the Possession Notice, the description of the immoveable property is shown as under :

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Description of the Immovable Property

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Plot area 210 Sq yards and RCC building with

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Ground Floor : 1500 sft, First floor : 1500 sft 2nd floor : 1500 sft plinth area covered with municipal no. 2-6-115 (Old), 2-6-125 (New) situated at near the Municipal Water Tank Road, Karimnagar Town under the Sub Registration District and Karimnagar District ("Presently running Murthy Mess") and Bounded by:

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East : Land of Sardar Laxman Singh, West : 50' wide road, North : Mugli of Sri. S. Charan Pal Singh & Kalyan Lodge and South: House of Sardar Kundan Singh.

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In the Sale Certificate, description of the immoveable property is

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as under :

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All that Land and Buildings in D.No.2-6-125 admeasuring 210 Sq. yards situated at Near Municipal Water Tank Road, Karim Nagar Town, Karim Nagar District and bounded by :

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East : Land of Sardar Kundan Singh West : 50’-0" Wide Road North : House of Sri, Sardar Charan Pal Singh and Kalyan Lodge

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Appeal No. 46 of 2019-DRAT-Kolkata South: House of Sardar Kundan Singh.

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16. In the letter dated 15^th March, 2016, issued by the Appellant, A.P. State Financial Corporation, to Sardar Ravinder Singh and Others asking them to make payment of the balance amount, schedule of property is shown as under:

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All that Municipal D.No. 2-6-125 admeasuring 245.50 Sq. yards (As per Document) 210 Sq.yards (Actual Land Available) and R.C.C building with Ground floor 1500 sft, First floor 1500 sft & 2nd floor 1500 sft plinth area situated at Near Municipal Water Tank Road, Karim Nagar Town, Karim Nagar District and bounded by

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East: Land of Sardar Kundan Singh, West: 50'-0" Wide Road,

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North: House of Sri. S. Charan Pal Singh & Kalyan Lodge, South: House of Sardar Kundan Singh

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17. Learned Counsel for Appellant submits that the loan was sanctioned by the Appellant in favour of Respondent No. 3 wherein Respondent No. 2 stood as guarantor wherein equitable mortgage was created by him. Learned Counsel submits that the property of the Respondent No. 1 was neither mortgaged nor sold by the Appellant; rather, the property of Respondent No. 2, Avtar Singh, was put to auction. Accordingly, only 210 square yards property was auctioned and was sold. Learned Counsel has further placed reliance upon the judgment of the Hon’ble High Court of Adjudicature at Hyderabad passed on 16^th March, 2016 in Writ Petition No. 8591 of 2016 (Sardar Avtar Singh -vs- A.P. State Financial Corporation) wherein the Hon’ble High Court had allowed fifteen days time to the petitioner to deposit the

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Appeal No. 46 of 2019-DRAT-Kolkata same amount of money which the highest bidder has offered to M/s. A.P. State Financial Corporation in the auction that was conducted on 15^th March, 2016. Avtar Singh was also directed to undertake to pay interest of existing 9% of the amount which was already deposited by the auction purchaser. In case of default, Financial Corporation would be at liberty to receive the balance 75% of the bid amount and execute the sale certificate, register it and deliver vacant possession. Learned Counsel submits that the Hon’ble High Court has affirmed the proceedings of sale which, cannot be now re-agitated. It is further submitted that Respondents No. 1 and 2 are in collusion with each other. When Respondent No. 2 failed to deposit the amount, he prompted Respondent No. 1 to prefer the SARFAESI Application. It is further submitted that the SARFAESI Application was filed with a mala fide intention.

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18. Learned Counsel further submits that boundaries were changed and correctly described in the sale certificate issued on 2^nd April, 2016 when total amount of Rs.1.36 lac was deposited with the Appellant by the auction purchaser.

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19. Per contra, Learned Counsel for Respondents submits that the boundaries, as mentioned in the sale notice and all the subsequent documents also includes the shop which came in the share of Respondent No. 1 in the partition amongst Respondents No. 1, 2 and Niranjan Kaur. It is further submitted that Respondent No. 2 had, from the very beginning, included the share of Respondent No. 1 in the mortgage deed and all the documents. Appellants were

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Appeal No. 46 of 2019-DRAT-Kolkata under obligation to verify the ownership of Respondent No. 2 at the time of creating equitable mortgage; which was not done. It is further submitted that in all the documents share of Respondent No. 1 is included which is against the law and notice under Section 8(6) is bad.

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20. The only point to be looked into in this appeal is whether the share of Respondent No. 1 was also included by the Appellant in the sale notice and all the subsequent proceedings conducted on the basis of the auction sale notice. At the time of creating the mortgage on 28^th June, 2012, the details of the property are mentioned as under :

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Memorandum of deposit of title deeds in respect of free hold interest in Plot area 210 Sq.yards and R.C.C building with Ground floor 1500 sq.ft, First floor, 1500 sft and 2^nd floor 1500 sq.ft plinth area covered with Municipal No. 2-6-115 (old) 2-6125 (new) and Shop Plot area of 35.5 sq yards, plinth area of 160 sq.ft in ground floor (illegible) yards bearing 2-6-114 (old) 2-6-125 (new) situated at near the Municipal Water Tank Road, Karimnagar Town under the Sub- Registration District and Karim Nagar District ("Presently running Murthy Mess") and bounded by

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East: Land of Sardar Laxman Singh, West: 50'-0" wide Road, North: Mulgi of Sri. S. Charan Pal Singh & Kalyan Lodge South: House of Sardar Kundan Singh together with buildings constructed/to be constructed thereon with all easementary rights.

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It specifically shows that shop plot area 35.00 sq. yards was also included in the mortgage property. The total boundaries includes the shop which came in the share of Respondent No. 1. In the list of documents, original Partnership Deed No. 6806 of 2001 dated 19^th January, 2001 was also deposited by Respondent No. 2. Deed of Partition specifically mentions that the boundaries of the property mentioned at

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Appeal No. 46 of 2019-DRAT-Kolkata

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Schedule ‘A’ which came in the share of Avtar Singh is butted and bounded by:

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East : Plot of Sardar Laxnan Singh: West : 50-0" Wide Road and shop of 2^nd party fell to the share of 2^nd party North : House No.2-6-113 of Sardar Charan Pal Singh South: Shop No. 2-6-114 fell to the share of Party No.2 and H.No. 2-5-116 of Sardar Kundan Singh fallen to the share of Avtar Singh in the annexed plan shown as red colour;

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while boundaries in the share of Respondent No. 1, Rita Kaur, are butted and bounded by:

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North : Open place and building No.2-6-115 of 1^st Party fell to the share of 1^st Party. East : House No.2-6-115 of 1^st party South : H. No. 2-6-116 of Sardar Kundan Singh West : 50'-0" Wide Road fallen to the share of Rita Kaur party No. 2 in the annexed plan shown as green colour;

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which clearly specified the extent of the property which was given in the share of Respondents No. 1 and 2. Respondent No. 2, Avtar Singh, had no authority or legal right to mortgage the property of his wife, Rita Kaur, as guarantor in the loan of Respondent No. 3. At the very root of the matter, the Appellants have taken the property of Respondent No. 1 as collateral security for the loan advanced to Respondent No. 3 while Rita Kaur was neither guarantor nor she had mortgaged her property. Hence, mortgage created by Respondent No. 2, Avtar Singh, including the property of Respondent No. 1, Rita Kaur, was bad in law.

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21. In the Writ Petition No. 8591 of 2016 (Sardar Avtar Singh -vs- A.P. State Financial Corporation), the Appellant, Smt. Rita Kaur, was not a party. Directions were issued by the Hon’ble High Court of Judicature at Hyderabad on 26^th

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Appeal No. 46 of 2019-DRAT-Kolkata May, 2016 to the effect that the petitioner, i.e. Avtar Singh, was accorded time of fifteen days to offer exactly the amount which the highest bidder had offered to the A.P. State Financial Corporation in the auction; which had not been compiled by the petitioner, Avtar Singh. No doubt, Appellant, Rita Kaur, is the wife of Sardar Avtar Singh but since she was not a party to the writ petition, the directions issued by the Hon’ble High Court of Judicature at Hyderabad, are not biding upon her, hence the Respondents cannot take any advantage out of the same.

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22. Valuation report is filed by the Respondents in appeal. It is settled legal proposition that the Appellate Court shall proceed with the matter on the basis of the evidence filed before the Learned DRT. No doubt, either of the parties is at liberty to file additional evidence in appeal under Order 41 Rule 27 C.P.C. If a party desires to place reliance upon a particular piece of evidence, which could not be produced before the Learned DRT, a proper application under Order 41 Rule 27 C.P.C. should be moved. When such an application is moved and allowed by the Appellate Tribunal, only then additional evidence can be considered. At this stage, it is pertinent to mention that if an additional evidence is taken on record, pending appeal, the other party has a right for rebuttal. Merely attaching a document along with the Memo of Appeal in the paper book does not give any right to the Appellant to place reliance upon the same. Such document, if filed without the leave of the Appellate Tribunal, is nothing but a waste paper in the file of Appellate Tribunal and as

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Appeal No. 46 of 2019-DRAT-Kolkata such, the valuation report, filed by the Appellant along with the Memo of Appeal, could not be taken on record for want of an application under Order 41 Rule 27 C.P.C.

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23. On the basis of the discussion made above, it is expressly clear that in the partition deed amongst Avtar Singh, Rita Kaur and Niranjan Kaur, property mentioned in Schedule ‘B’ measuring 35.50 square yards with the boundaries by North : Open place and building No.2-6115 of 1^st Party fell to the share of 1^st Party; East:House No.2-6-115 of 1^st party; South :H. No. 2-6-116 of Sardar Kundan Singh; West: 50'-0" Wide Road fallen to the share of Respondent No. 1, Rita Kaur, which is also shown as property of Avtar Singh in the sale notice, sale certificate as well as in the mortgage deed. This property is included by Avtar Singh in the mortgage deed which was also accepted as secured asset by the Appellant, A.P. State Financial Corporation. Such inclusion of the share of Rita Kaur in the mortgage deed as well as in the sale notice and sale certificate vitiates the SARFAESI actions initiated by the Appellant. Proceedings under Section 8 (6) of the Act are accordingly vitiated.

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24. In my view, Learned DRT has arrived at a right conclusion. I do not find any infirmity or illegality in the order 16^th May, 2019 passed by the Learned DRT. Accordingly, the appeal lacks merit and is liable to be dismissed.

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Appeal No. 46 of 2019-DRAT-Kolkata

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O R D E R

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The appeal is dismissed. The order and judgment dated 16^th May, 2019, passed by the Learned DRT, is hereby affirmed.

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Copy of the order be supplied to Appellants and the Respondents and a copy be also forwarded to the concerned DRT.

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Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.

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