Dismissed

Anand Mohanlal Agarwal v. Cholamandalam Investment and Finance Company Ltd.

DRAT11 May 2023IA/294/2023

Case brief

AI extract

What is this about?

DRAT disposed of an interim stay application in an appeal against DRT Pune's order refusing stay on SARFAESI possession measures, upholding the right of the secured creditor to enforce measures against the property shares held by the mortgagors.

What did the court decide?

Stay on taking possession of the property refused; authorized officer can proceed against the 3/4 share held by mortgagors.

Anand Mohanlal Agarwal versus Cholamandalam Investment and… — Banking and Recovery | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present : Mr. Justice Ashok Menon, Chairperson

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I.A. No. 294/2023 (Stay) In Misc. Appeal No. 68/2023

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Between

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Anand Mohanlal Agarwal & Anr. … Appellant/s V/s. The Authorized Officer, …Respondent/s Cholamandalam Investment & Finance Co. & Ors.

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Mr. Puneet Gogad, Advocate for Appellants.

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The matter is taken up for hearing by way of Praecipe filed by the Appellants for seeking urgent relief.

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The Appellants are in appeal aggrieved by the order in Interlocutory Application (I.A.) No. 634/2023 in Securitization Application (S.A.) No. 482/2022 on the files of the Debts Recovery Tribunal (D.R.T.) Pune where the Ld. Presiding Officer while considering the application for stalling the Sarfaesi measures refused to grant any interlocutory relief to the Appellants by stating that there is an outstanding debt of ₹ 1.66 Crores on the secured assets and that steps have been taken to take over possession of the mortgaged of property which was a mortgage by the Respondent Nos.3 to 5 who did not appear to contest the matter before the D.R.T.

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The facts, in brief, are thus:

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The secured asset which is a flat in Pune was allegedly mortgaged by Respondent Nos. 3 to 5 in the year 2018 and a loan was availed. Subsequently, a top-up loan was also taken and the property was mortgaged to that extent as well. The Appellant would contend that the property was purchased in the year 2000 for valid consideration and had belonged jointly to their father late Mr Mohanlal Agarwal, and their mother Savitri Agarwal in equal shares. 3. Their father Mr Mohanlal Agarwal died on 01.05.2017, and his half share in the property devolved upon his wife Savitri and three children as Class-I legal heirs. The property was mortgaged only by one of the sons, his wife (who does not have any right over the property), and their mother Savitri Agarwal, without the knowledge or consent of the Appellants.

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The Appellants claim that they were kept in the dark about the alleged deposit of title deeds pertaining to the property for the creation of a mortgage. The Respondent Financial Institution was fully aware that the property belonged to Savitri Agarwal and her husband late Mohanlal Agarwal and that on the demise of Mohanlal, his half share in the property would devolve upon all his legal representatives equally. Without considering the fact that whether all the representatives of Mohanlal Agarwal joined in creating the mortgage, the security was accepted and the loan was disbursed exclusively to Respondent Nos.3 to 5.

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The Appellants would, therefore, contend that the Sarfaesi measures with regard to the entire mortgaged property are not binding upon them and therefore, the Sarfaesi measures will have to

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be quashed. Hence, they filed the S.A. u/s 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) challenging the Sarfaesi measures initiated by the 1^st Respondent.

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The Ld. Presiding Officer did not go into the details of the title of the parties but observed that a document was executed by the 4^th Respondent before the Executive Magistrate Pune with respect to the legal heirs of the late Mohanlal Agarwal and in that, it is admitted that the property belongs to herself and her son Mr Gopal Agarwal alone. The Financial Institution being the mortgagee should have exercised due diligence with regard to the title to the property which is sought to be mortgaged. There was, therefore, laches on their part. 7. However, even if the contentions of the Appellants regarding having shares in the property are true, they only have a minority share in the property, and going by the calculation of shares, each of the Appellants would get only 1/8 share in the property. Together they would get 1/4 share in the property. Whereas the mortgagers namely Savitri Agarwal and her son Mr Gopal Aggarwal would together be entitled to 3/4 shares in the property. The 1^st Respondent is, therefore, entitled to move against the property with regard to the shares that the mortgagers have in the property.

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Under the circumstances, the taking over possession of the property cannot be restrained. However, the Appellants are definitely entitled to exercise their rights either by way of enforcing a partition or by exercising their rights as and when the property is being proceeded against to protect their rights in the property, to the extent

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they are legally entitled to.

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With these observations, the application for a stay is disposed of preserving the rights of the Appellants to raise that claim at the appropriate stage when the property is being proceeded against. The taking over the possession of the property cannot be interfered with. 10. It is also made clear that the Bank can proceed only against the 3/4 share of the mortgaged asset which is the legally entitled right of the mortgagors in the property.

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Post on 14.06.2023 awaiting the appearance of the Respondents.

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Sd/Chairperson

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psa-05

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Anand Mohanlal Agarwal v. Cholamandalam Investment and Finance Company Ltd.

Case brief

What is this about?

What did the court decide?

Anand Mohanlal Agarwal v. Cholamandalam Investment and Finance Company Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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