Dismissed

Shri Roshan Eknath Raikar v. Bank of India & Ors.

DRAT14 Jul 2023REGULAR APPEAL/183/2013

Case brief

AI extract

What is this about?

Appellant, claiming to be a bonafide purchaser of mortgaged property, challenged dismissal of his maintenance application under the RDDBFI Act. The Tribunal held the mortgage created prior to the sale was effective and the appeal lacked merit.

What did the court decide?

none granted

What the court decided

Shri Roshan Eknath Raikar versus Bank of India & Ors. — Banking and Recovery | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson Appeal No. 183/2013

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Between

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Roshan Eknath Raikar … Appellant/s

V/s.

Bank of India & Ors.

…Respondent/s

Mr Vijay Vitthal Chandavale along with M/s Vijay Chandavale & Associates, Advocate for Appellant.

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Mr Anant B. Shinde, i/b M/s. A. B. Shinde & Co.,, Advocate for Respondent No.1 Bank.

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-: Order dated: 14/07/2023:-

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The Appellant impugns the judgment and order dated 24.05.2011 in M.A. No. 33 of 2011 in O.A. No. 482-P/2011 on the files of the Debts Recovery Tribunal, Pune (D.R.T.).

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The Appellant claims to be a bonafide purchaser of the property described as Shop No. 3 forming part of Municipal Building No. 427, Old CTS No. 7552 and New CTS No. 2420 in South Sadar Bazar along with building known as “Heena Apartment” admeasuring 21.93 sq. mtrs in Gat No. 4/3, Barhanpur, Taluka Akkalkot, Dist. Solapur. It is alleged that he purchased the property from the sixth Respondent on 15.12.2005 as per a registered sale deed. The sixth Respondent had in turn purchased the property on 29.11.1991 from the second Respondent namely Gulab Ahmed Jahagirdar who is the sole proprietor of a construction concern namely M/s Neelu Constructions. The Appellant alleges that he came to know about the

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sale of his property in an auction conducted by the Recovery Officer to Respondents Nos 4 and 5 on 31.01.2011. The second Respondent was a builder and he borrowed money from the first Respondent Bank for construction of the building. The third Respondent stood as guarantor. A mortgage of the subject property was created by deposit of title deeds pertaining to the property in favour of the first Respondent Bank on 31.07.1990. When the second Respondent defaulted payment, a civil suit was filed by the first Respondent before the Civil Judge, Senior Division, Solapur in the year 1998 for recovery of ₹12,17,187/- against Respondents Nos. 2 and 3. The suit was later transferred to the D.R.T. and re-filed as O.A. No. 482-P/2001. 3. On coming to know about the sale of his property, the Appellant and some others filed a Writ Petition No. 3148/2011 before the Hon’ble High Court of Bombay. The Writ Petition was disposed of by the High Court directing the Appellant to seek his remedy under Sec. 19(25) of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (“RDDB & FI Act” for short). Accordingly, the Appellant filed M.A. No. 33 of 2011 before the D.R.T. for relief. The Appellant has been conducting business in Shop No. 3 situated on the property which is his only means of livelihood. The Ld. Presiding Officer vide the impugned judgment found that the mortgage was created on 31.07.1990 and the purported sale by the borrower to the sixth Respondent is on 29.11.1991 and therefore, the sale could not defeat the mortgage or the charge over the property created in favour of the Bank. The Recovery Certificate was issued on 10.06.2002 and the property was attached much prior to the sale in favour of the

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Appellant. Under the circumstances, the charge decree obtained by the Bank in O.A. No. 482-P/2001 could not be overlooked in favour of a right created by a sale deed executed in 2005. The M.A. was, therefore, dismissed. The Appellant is aggrieved and hence, in appeal.

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The Ld. Counsel Mr Vijay Vitthal Chandavale appearing for the Appellant fervently argued for the Appellant stating that due diligence was conducted for the Appellant but the existence of a mortgage by deposit of title deeds in favour of the first Respondent Bank was not revealed since it was not registered. It is also submitted that the Appellant is willing to pay the proportionate value of the shop occupied by him to get the mortgage released. The Ld. Counsel also relied upon the decision of the Hon’ble High Court of Bombay in Dr Anil Nandkishor Tibrewala & Ors. vs. Jammu and Kashmir Bank Ltd & Ors I(2007) BC 6 to argue that in a similar situation, the claim of a bonafide purchaser without knowledge of the mortgage was permitted to be agitated under the provisions of Sec. 19(25) of the RDDB & FI Act. The Ld. Counsel, therefore, submits that the appeal may be allowed and the impugned judgment set aside.

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Mr Anant B. Shinde, the Ld. Counsel appearing for the first Respondent Bank submits that the mortgage was prior in point of time created on 31.07.1990 regarding the property on which the Appellant’s shop is situated. The sale in favour of the Appellant’s predecessor is alleged to be on 29.11.1991. The sale cannot affect the mortgagee’s right over the property and hence, the Ld. Presiding Officer was justified in dismissing the M.A. The second Respondent has also opposed the contentions of the Appellant.

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Heard both sides. Records perused.

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The decision in Dr Anil Nandkishor Tibrewala (supra) holds that the remedy available to a third party to a proceeding under the RDDB & FI Act is to file a petition under Sec. 19(25) to establish that the judgment debtor had created the mortgage based on fraudulent documents while the property belonged to the petitioner who is the rightful owner of the property. In the instant case, admittedly the mortgage was created much prior to the sale of the property by the mortgagor to the sixth Respondent. Registration of the memorandum of deposit of title deeds in an equitable mortgage was not compulsory during 1990. The mortgage is shown in the city survey record which is produced by the Bank. Hence, the Appellant cannot claim to be a bona fide purchaser. His remedy against his assignor lies elsewhere. The O.A. was decreed and R.C. issued much prior to the sale in favour of the Appellant. The Appellant has not approached for setting aside the sale by depositing the entire amount under Rules 60 and 61 of the second schedule to the I.T. Act. The Appellant cannot maintain his claim over the property which was already mortgaged long prior to the sale in his favour. The Ld. Presiding Officer was justified in dismissing the M.A. and no interference whatsoever is called for.

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The appeal lacks merits and is hence dismissed.

Sd/-

Chairperson

mks-1

Shri Roshan Eknath Raikar v. Bank of India & Ors.

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Shri Roshan Eknath Raikar v. Bank of India & Ors.

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