Responding to an appeal by Canara Bank against a Debt Recovery Tribunal order dismissing SARFAESI proceedings due to forged signatures, the Tribunal upheld the lower court's finding that the applicant did not execute loan documents.
Impugned order dated 21.06.2024 confirming DRT rejection of SARFAESI proceedings against applicant was confirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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Reportable / not reportable
IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA
HON'BLE Justice Anil Kumar Srivastava, Chairperson
REGULAR APPEAL No. 127 of 2024
(Arising out of S A 222 of 2018 – DRT-I Hyderabad)
19.09.2025
CANARA BANK, ARM Branch, Opp. Old MLA Quarters, Himayantnagar, Hyderabad, and SAM Branch, Secunderabad, at H. No.1-7-1, TSR Complex, Sardar Patel Road, Secundrabad, Telangana – 500003.
--Vs—
... Respondents
For Appellant : Ms. Sangeeta Ghosh, ld. Adv.
For Respondent : Mr. Pronoy Sohibi, ld. Adv. Mr. Mainak Biswas, ld. Adv.
The Appellate Tribunal
Instant appeal has arisen against the judgement and order
dated 21.06.2024 passed by the learned DRT-I Hyderabad in S.A.
222 of 2018 (Sunil Agarwal Vs. Canara Bank & Ors.) whereby
learned DRT allowed the securitization application by setting aside
all the proceedings initiated by the bank under the provisions of
SARFAESI Act, 2002 against the schedule property of the securitization applicant.
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against respondent no.1, securitization applicant in S.A., Sunil Agarwal, who alleged to be the mortgager of the credit facility availed by respondent no.2, borrower company, wherein respondent no.3, Aditya Goel, is one of the Directors. This appeal is simultaneously heard with the appeal No.126 of 2024 filed against O.A. judgement passed by the same DRT. Appeal 126 of 2024 is preferred by the same secured creditor bank against the 07 defendants out of which defendant no.5 is the same alleged mortgager, Sunil Agarwal, securitization applicant in S.A. and
respondent no.1 in the instant appeal.
bearing no.3436 of 2009. It is stated that securitization applicant
and respondent no. 3, Aditya Goel, are known to each other and
they agreed to do business in the field of Iron and Steel and
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started a company namely M/s. Deccan Metllovs Pvt. Ltd. On the
request of respondent no.3, securitization applicant had handed
over the original title deed of the schedule property for obtaining permission from the concerned government departments to convert the land from agricultural to industrial purpose for establishing a factory. Later on, some differences arose between them and company was not established, but the title deed was not returned by respondent no.3.
30.10.2013 and 12.11.2013 from the bank, he came to know
about the credit facility availed by respondent no.2 company from the appellant bank by creating equitable mortgage of his property. Mortgage documents were deposited by respondent
no.3 by forging and fabricating his signature on the relevant documents. This fact was brought to the notice to the bank vide reply notice dated 23.06.2014 and to the Head Office of the bank on 10.12.2014. Criminal complaint was also lodged on 16.01.2014 before the Central Crime Station, Hyderabad against
respondent no. 3 and other Directors of respondent no.2 company as well as Chief Manager of the bank and same was registered as FIR No. 12 of 2014, which is pending. Thereafter,
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securitization applicant also filed a suit for injunction against the
bank before the Civil Court being O.S. No. 241 of 2014 wherein interim injunction was granted and said suit is also pending. Securitization applicant also came to know that some documents were executed by respondent no.3, Aditya Goel, showing that securitization applicant is one of the Directors of the respondent no.2 company, which were never executed by the securitization applicant. It is stated that securitization applicant never acted as Director of respondent no.2 company.
report of the AP Forensic Laboratories (APFSL) dated 18.03.2014
submitted by the securitization applicant which was filed in a
criminal proceeding wherein it was held that “the person who
wrote the red enclosed signatures marked S1 to S54 did not write
the red enclosed signatures marked Q1 to Q41”. It was held that bank failed to produce concerned officer who actually was present
at the time of sanctioning the loan and in whose presence
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securitization applicant signed the documents. Bank did not file
any handwriting expert report. Concerned handwriting expert
was also not cross-examined by the bank. Accordingly, learned DRT recorded the finding that bank failed to prove that securitization applicant created mortgage of the schedule property including guarantee or executed the documents in favour of the bank. Accordingly, claim of the bank against securitization applicant along with charge on the schedule property was dismissed. So, there is no valid security interest over the schedule property of the securitization applicant in favour of the bank. Hence, bank is not entitled to proceed against the securitization applicant under SARFAESI Act.
Accordingly, all proceedings initiated by the bank are set aside by the learned DRT.
learned counsel for respondent no.1, Sunil Agarwal, and perused
the records. Respondent no.2 and 3 are served, but not represented.
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has also filed O.A. 735 of 2014 before the learned DRT against the defendant no. 1 to 7, wherein securitization applicant was the 5th defendant. Learned Tribunal allowed the O.A. against defendant no. 1 to 7. Feeling aggrieved by the judgement and order in O.A., defendant no.5, securitization applicant, namely Sunil Agarwal preferred Writ Petition No. 44276 of 2018 before the Hon’ble High Court of Telangana at Hyderabad. Hon’ble High Court vide order 03.09.2019 remanded the matter to the learned DRT for consideration afresh on merits as far as 5th defendant is concerned after giving opportunity of hearing to the parties. 5th defendant contested the O.A. by filing written statement. Learned DRT dismissed the claim of the bank against the schedule property of defendant no.5. Feeling aggrieved by the judgement and order, bank preferred an appeal 126 of 2024, which was dismissed by this Tribunal.
that learned DRT miss-appreciated the report of the handwriting expert of APFSL in ascertaining as to whether it was submitted in accordance with law or not? It is further submitted that APFSL
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report was relied upon by the learned DRT without ascertaining
as to whether the same was presented by the Handwriting Expert
and whether the Handwriting Expert was made available for cross-examination. It was alleged that original handwriting
expert report was filed before the Civil Court. It is further submitted that Handwriting Expert report is simply an opinion which could not be treated as conclusive proof rather DRT was required to arrive at its own finding individually regarding signatures of securitization applicant in the loan documents. It is further submitted that neither the original report nor its copies were exhibited before the learned DRT. In the DRT proceeding report was not presented by the handwriting expert nor the expert was made available for cross-examination. Accordingly, learned counsel submits that no opportunity was granted to the appellant bank for controverting the report of the APFSL.
submit that the appellant bank failed to produce primary evidence. Bank officer who sanctioned the loan or in whose
presence securitization applicant put in his signature has not been
produced. No ground is shown for producing secondary evidence
in accordance with law. Submission made by the learned counsel
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for the bank that report filed by handwriting expert of APFSL
could not be controverted by the bank, cannot be taken into consideration since opportunity was given to the bank for the same, but was not availed by the bank.
APFSL report was filed before learned DRT in the O.A. proceeding wherein it was specifically opined that signatures which are in dispute did not match with the admitted signatures of securitization applicant. This report was served upon the bank. Opportunity was granted, but not availed by the bank to controvert the report of the handwriting expert. A categorical finding is also recorded by the learned DRT to the effect that
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there are no reasons or ground to disbelieve the report of the
handwriting expert. Further, an observation was made that DRT itself examined the concerned documents and signatures and opined an inference on the signatures. Accordingly, report of the handwriting expert was relied upon by the learned DRT. Learned DRT recorded a categorical finding that in the absence of any material on record to controvert the same, I find no reason to disbelieve as far as report of handwriting expert is concerned.
categorical denial was made regarding signatures of the securitization applicant on the relevant documents, it was incumbent upon the bank to produce the officer in whose presence the documents were executed by securitization
applicant, but the concerned officer was not produced.
that the secured creditor bank despite evidence of the forensic report regarding signature of securitization applicant did not opt
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to produce the concerned officer in whose presence allegedly
securitization applicant has put in signature on the documents.
He could have been the best witness to prove the signatures of securitization applicant and he should also be primary evidence
for execution of the documents. Law is settled that evidence should be primary in nature. If primary evidence is not available
then secondary evidence can be adduced in accordance with law.
But burden lies upon the plaintiff to prove that primary evidence
is not available and secondary evidence may be permitted to be adduced in the matter. In the present case, neither primary evidence is produced nor any ground is shown or proved as to why primary evidence is not produced. The issue attains importance when the handwriting expert has submitted a categorical report that documents of the secured creditor did not bear signature of the securitization applicant, whose evidence
was not rebutted by the secured creditor bank. Accordingly, I do
not find any illegality or perversity in the findings of the learned
DRT wherein it was held that the secured creditor failed to prove
that securitization applicant has executed and signed the documents and submitted the documents with intention to create
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equitable mortgage. Hence, securitization applicant cannot be
held liable as a mortgager for non-payment of loan by borrower.
Secured creditor bank has no charge over the property of the securitization applicant.
as it is made. It is the duty of the opposite party to crossexamine the witness to elicit some favourable statement, but if the secured creditor bank did not choose to cross-examine the
witness, the witness statement, as it is made by securitization applicant, remains uncontroverted and cannot be disbelieved. In such circumstances, when a categorical denial of the signatures
on the documents and its execution was made by the securitization applicant and the same was not challenged by cross-examining the witness, then the statement is admissible as
evidence and it is proved as the documents were neither executed nor signed by the securitization applicant.
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that there is no valid security interest over the schedule property
having been created by the securitization applicant in favour of the bank and bank is also not entitled to enforce the schedule
property under SARFAESI Act, 2002. I do not find any illegality
or perversity in the impugned order. Accordingly, appeal is liable
to be dismissed.
O R D E R
passed by learned DRT-I Hyderabad is confirmed. Costs easy.
File be consigned to record room.
Copy of the judgement/Final Order be uploaded in the Tribunal’s website.
Order dictated, signed and pronounced by me in the open Court on this the 19th day of September, 2025.
(Anil Kumar Srivastava, J) Chairperson
Dated : 19.09.2025 /pkb
3 issues framed by the court
Whether there was any illegality or perversity in the findings of the lower tribunal regarding the forged signatures on loan documents?
Whether the appellant bank is entitled to enforce proceedings under the SARFAESI Act against the respondent applicant?
Whether the appeal preferred by the bank should be allowed or dismissed?
1 provisions across 1 enactments
Canara Bank
Sunil Kumar Agarwal
Anil Kumar Srivastava
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
