Dismissed

Bharati Surendra Khandhar v. State Bank of India

DRAT17 Nov 2023IA/666/2023

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal dismissed an application by an appellant seeking to restrain a bank from enforcing SARFAESI measures against her properties. The court held the appellant has no prima facie case for a stay as she has a separate pending application for relief regarding the possession of the properties.

What did the court decide?

Interim request to restrain the respondent bank from proceeding under the SARFAESI Act was dismissed.

Bharati Surendra Khandhar versus State Bank of India — 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. 666/2023 (Stay) In

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Appeal No. 61/2023

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Between

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Bharati Surendra Khandhar … Appellant/s

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V/s.

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State Bank of India & Ors. …Respondent/s

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Mr Chirag Mody along with Mr Yogesh Deshpande & Mr Mahesh Karule, i/b M/s YKD & Associates, Advocate for Appellant. Mr Charles D’Souza and Ms Saraswati Rajpurohit, i/b Mr Rajkumar Shukla, Advocate for Respondent No. 1 Bank.

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-: Order dated: 17/11/2023:-

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This is an application filed by the Appellant seeking to restrain the 1^st Respondent State Bank of India (SBI) from enforcing any further action on the basis of the order passed by the District Magistrate Raigad, Ali Baug under Sec. 14 of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) against the properties belonging to the Appellant, pending disposal of the appeal.

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The Appellant states that she is neither the borrower nor a guarantor or a mortgagor of the secured asset which belongs to her. The 2^nd Respondent company of which her son the 3^rd Respondent is the director borrowed money from the SBI and defaulted repayment. The rest of the Respondents are the mortgagors/guarantors for the aforesaid debt. The SBI initiated Sarfaesi measures against the secured assets belonging to the borrowers and took symbolic possession of the

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property under the provisions of Sec. 13 (4) of the SARFAESI Act. An order under Sec. 14 was obtained from the District Magistrate for taking physical possession. The secured assets originally belonged to the Appellant and were gifted to the 3^rd Respondent, her son and the 4^th Respondent her daughter-in-law. Challenging the Sarfaesi action taken by the SBI against the borrowers, they filed Securitisation Application (S.A.) No. 189 of 2021 before the Debts Recovery Tribunal-II, Mumbai (D.R.T.) under Sec. 17 of the SARFAESI Act. No favourable orders were obtained by the Applicants in the aforesaid S.A.

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The Appellant contends that consequent to the execution of the gift deeds in favour of her son and daughter-in-law, they were not providing for her nor were they paying any maintenance to her as undertaken at the time of gifting the properties. She therefore approached the Special Tribunal constituted under the Maintenance and Welfare of Parents and Senior Citizen, Panvel against Respondent Nos. 2 and 3, and obtained an order cancelling the gift deeds. She is thus reverted as the absolute owner of the properties she had gifted to her son and daughter-in-law.

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On coming to know about the Sarfaesi measures initiated against her properties, the Appellant as an aggrieved person filed a Securitisation Application at diary No. 67 of 2023 before the D.R.T. under Sec. 17 of the SARFAESI Act. Since there was a delay of more than 200 days, he also filed an application for condoning and delay in challenging the Sarfaesi measures against her properties.

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The Appellant wanted the S.A. filed by her to be taken up with the S.A. No. 189 of 2021 filed by her son. However, that did not

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happen. Respondent Nos. 3 and 4 who are the Applicants in S.A. No. 189 of 2021, filed a written submission before the D.R.T. stating that the mother of the 3^rd Respondent had obtained an order from the Special Tribunal getting the gift deeds in favour of Respondent Nos. 3 & 4 cancelled, and as a consequence of the gift deeds being cancelled, the properties would cease to be a mortgage or security for the debt incurred by Respondents Nos. 3 and 4.

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There were however no pleadings incorporated with respect to the cancellation of the gift deeds pertaining to the secured assets in the S.A. filed by Respondents Nos. 3 and 4. Nevertheless, the Ld. Presiding Officer went into the details of the order obtained by the Appellant and made certain observations which would ultimately affect the fate of the S.A. filed by her. Hence, she is in appeal with the prayer to set aside certain observations made against the Appellant and her property in the impugned order of the D.R.T. dated 17/03/2023 in S.A. No. 189 of 2021.

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Pending determination of the appeal, she seeks an interim relief to restrain the 1^st Respondent from proceeding against her properties under the SARFAESI Act.

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The 1^st Respondent has vehemently opposed the granting of any stay of the impugned order or any interlocutory relief in favour of the Appellant. It is contended that the Appellant was herself involved in several illegal activities concerning the company of which she was a director. There were certain stringent actions allegedly taken against her company by the SEBI. Various documents are produced with regard to the action taken against the Appellant and her husband. The 1^st Respondent would rely upon those documents to prove the

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antecedents of the Appellant and to indicate that there was a collusion between the Appellant and her son to see that the measures under the SARFAESI Act with regard to the mortgaged properties are frustrated.

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In this application for stay, a detailed determination of the contentions put forth by the Appellant need not be gone into. However, I find that it was not appropriate on the part of the Learned Presiding Officer to have entered a finding regarding the validity and applicability of the order obtained by the Appellant from the Special Tribunal. More particularly so because there was no pleading in S.A. 189/2021 by the Applicants therein with regard to the order obtained by the Appellant against them from the Special Tribunal cancelling the gift deed. Written submission made at a later point in time by the Applicants in the S.A. would not form a part of the pleadings but could only be considered as part of arguments. Hence there was absolutely no necessity for a finding on the applicability of the order obtained by the Appellant. In the present appeal filed by the Appellant, she is only seeking to set aside certain observations made against the Appellant and her property in the impugned order as detailed in paragraph 5.8 of the appeal memorandum. It is also interesting to note that the Applicants in S.A. 189/2021 are not aggrieved, and have not preferred to appeal against the dismissal of their S.A. The reasons for not doing so, are obvious. In case the borrowers prefer an appeal under Sec. 18 of the SARFAESI Act, they will have to comply with the mandatory provisions of a pre-deposit to entertain an appeal, which they want to avoid, and therefore, the Appellant apparently appears to be fighting a proxy litigation for her son and daughter-in-law.

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I do not intend to go into the details of the documents produced, and I am also not inclined to enter findings regarding the applicability of the order obtained by the Appellant from the Special Tribunal at this interlocutory stage. It would suffice to indicate that the Appellant does not have any prima facie case and is not entitled to any order stalling the proceedings under the SARFAESI Act initiated by the 1^st Respondent against the Respondents Nos. 2 to 6.

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The Appellant has already exercised her remedies of being aggrieved by the Sarfaesi measures by filing a separate S.A. which is still pending consideration before the D.R.T. No irreparable injury would be cost to her in case of the Sarfaesi measures proceeding against the properties for realisation of debts due from Respondent Nos. 2 to 6. The Appellant has already pursued her remedy under Sec. 17 (3) of the SARFAESI Act to get possession of the property restored in case the findings are in her favour. The prayer in this Appeal regarding expunging the findings against her in the impugned Judgment and Order in the S.A. filed by the other Respondents 2 to 4 is something which can be considered in the appeal. The Appellant is not entitled to any stay of the Sarfaesi measures. Such remedy is to be pursued in the application filed by her.

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I.A. 666 of 2023 is, therefore, dismissed.

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mks-02

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Bharati Surendra Khandhar v. State Bank of India

Case brief

What is this about?

What did the court decide?

Bharati Surendra Khandhar v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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