Dismissed

B.S.Gowramma v. Central Bank of India & Ors.

DRAT3 Jan 2025REGULAR APPEAL/33/2020

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed the appellant's appeal regarding a debt recovery order. The court upheld the finding that the appellant failed to prove forgery of her signature in the mortgage deposit letter, confirming her liability.

What did the court decide?

The appeal RA 33/2020 was dismissed; the impugned order of the DRT was confirmed.

B.S.Gowramma versus Central Bank of India & Ors. — Banking and Recovery | DRAT (2025)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 3^rd day of January, 2025

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PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN

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CHAIRPERSON

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RA 33/2020

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(arising out of OA 596/2009 on the file of DRT, Bangalore)

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Between

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Mrs.B.S.Gowramma, W/o.Mallikarjunaradhya, Banavadi Village, Solur Hobli, Magabi Taluk, Bangalore Rural District.

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…..Appellant

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And

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1. Central Bank of India Branch at No.78, J.C.Road Bangalore – 560 002.

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2. M/s. Fina Group,

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Represented by its Proprietor Sri B.P.Srinivas No.88, 11^th Main, 6^th Sector H.S.R.Layout, Bangalore – 560 034.

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3. Sri.B.P.Srinivas, S/o B.G.Puttaswamy Gowda Proprietor, M/s. Fina Group No.300, 3^rd Main Road, 2^nd Cross A Block, R.H.C.S. Layout Annapoorneshwari Nagar Bangalore – 560 091. …..Respondents

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Counsel for Appellant : Mr. G.Saibaba

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Counsel for 1^st Respondent bank : Mr. M.L.Ganesh

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R2 & R3 remained ex-parte.

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ORDER

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This appeal is filed under Section 20 of RDDB & FI Act challenging the final order passed by the Ld. Presiding Officer, DRT, Bangalore in OA 596/2009 dated 30.08.2013.

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This OA is filed by the respondent bank against the appellant and respondents 2 & 3 of the appeal, for recovery of a sum of Rs.27,48,098.46p with interest at the rate of 16% per annum with monthly rests from the date of application till the date of realization of the amount and other reliefs.

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After full fledge enquiry, this OA was allowed making the defendants 1 to 3 jointly, severally and personally liable for the sum claimed. Aggrieved against the said order, this appeal has been filed.

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Ld. Counsel for appellant submitted that in Para 5.11 of the OA filed, the respondent/applicant bank claimed that appellant had represented herself as the owner of the property described in the schedule to OA and offered to secure the loan by mortgage of the schedule property. Accordingly, she called on the bank on 01.08.2008 to deposit the documents of the title relating with an intention to create mortgage thereon, in favour of the respondent bank. When it is claimed as a mortgagor in the OA by the bank, in the notice sent by the bank on 28.03.2009, the appellant was claimed as a guarantor. Respondent bank is not definite as to whether the appellant is a mortgagor or a guarantor. There is also no proof produced to show service of the notice dated 28.03.2009 to the appellant.

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Continuing his submissions, he submitted that appellant's brother B.S.Ravishankar @ Sadashivaiaha intended to commence a poultry

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farming business. One Mr. Ravichandra Reddy introduced 3^rd respondent to the appellant's brother and 3^rd respondent promised him to arrange the necessary loan in IHSBC Bank and asked for security. Appellant's brother provided all the documents of his land. However, after getting the documents 3^rd respondent did not turn up. On enquiry, he informed that there is need of other property documents as a collateral security. Therefore, appellant's brother approached the appellant for original documents of the property owned by her. In the said circumstances, appellant handed over the original documents of the property to her brother and that is misused by the 3^rd respondent for getting loan. In this regard, appellant filed a Criminal Complaint against the 3^rd respondent and the Bank Manager vide CC No.399/2009 before the Janabharathi Police Station and is still pending.

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Even in the cross examination, the Bank Manager i.e., AW1, very clearly admitted that appellant has not submitted any guarantee agreement in the bank in respect of the loan transaction. He admitted that there is no signature of appellant in Ex.A-16, which is the extract of the register maintained in the bank. Further, he admitted that there is no document available in the bank signed by the appellant showing deposit of title deeds. In spite of the candid admission made by the Bank Manager that appellant had not executed any document either as a mortgagor or as a guarantor, the Ld. Presiding Officer found that appellant cannot prove the case set up by her with regard to the fraud alleged and liability fastened on the appellant. Further, Ld. counsel for appellant in support of his submissions, filed a judgement of the Hon'ble High Court of Kerala, Ernakulam in W.P.(C) No.28823/2017 in Toni Enterprises Vs. Reserve Bank of India and others for the proposition that when there are disputed transactions, it would fall

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within the sweep of zero liability as referred to in RBI Circular. In such circumstances, the remedy of the bank is to approach the Civil Court and recover the money dues from the persons who are responsible for such transactions. Drawing inference from this judgement, Ld. Counsel for appellant submitted that in this case also the transaction involved is a disputed transaction and therefore the bank has to only approach the Civil Court for recovery of the debt due and not before the Tribunal.

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Refuting the contentions of the Ld. Counsel for the appellant, Ld. Counsel for the 1^st respondent bank submitted that for the omission on part of the bank official, the bank cannot be deprived of its legitimate money advanced from public funds. It is true that the concerned bank official was not vigilant in his dealing with the loan transaction and therefore suitable departmental proceedings was initiated against him and he was suitably punished by removing him from service. There is also a Criminal prosecution launched by the appellant, which is pending against the bank official and the 3^rd respondent. The main contention of the appellant is that the documents handed over to the appellant's brother for his business purpose and securing the loan, were handed over to the 3^rd respondent and the 3^rd respondent, in turn, misused those documents. In that case, the complaint should have been given against appellant's brother as well. Conveniently, the appellant did not give any complaint against her brother and she had also not examined him as a witness with regard to the handing over of the documents to her brother and subsequent allegations of the misuse of the documents.

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The reality is that the appellant visited the Bank Manager personally on 01.08.2008 and gave a letter expressing her intention to create

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Equitable Mortgage of her properties by depositing her title deeds. The letter details about 9 documents submitted by her to the Bank Manager and the letter was also signed by her. When she disputes giving of this letter to the Bank and claims that her signature is forged, then it is primarily for her to prove this case by sending the disputed document along with her admitted signatures for a comparison to the handwriting expert. However, that was not done in this case. Rather she went to the extent of denying her signature available in Ex. A-37 & A-38, which have been sent by her to the bank and also her signature in the Vakalat filed. This shows that appellant is not genuine in her case and she wants to avoid sending the disputed document to the handwriting expert, apprehending that she would get exposed. The Hon'ble Supreme Court of India in Civil Appeal Nos. 9975-9976/2024 dated 29.08.2024 between A.B.Govardhan Vs. P.Ragothaman held that it is not necessary to register the Memorandum of Deposit of Title deeds as when the debtor deposits the title deeds of the property for the purpose of creating security with the creditor. It becomes a mortgage in terms of Sec.58(f) of the Transfer of Property Act and no registered instrument is required. The notice dated 28.03.2009 was also sent to the appellant. In the order of the Ld. Presiding Officer, DRT, Bangalore, it is very clearly stated that the order will not affect the right of the appellant to proceed against other respondents both under Civil and Criminal Law. Thus submitting, Ld. Counsel for 1^st respondent bank prayed for dismissal of this appeal.

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R2 and R3 remained ex-parte.

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Considered the rival submissions and perused the records. It is stated in Para 5.11 of the OA that when the bank insisted for payment of the debt due from defendants 1 & 2 of the OA, the 3^rd defendant i.e.,

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appellant herein, reported that she is the owner of the property described in the schedule to the OA and offered the same to secure repayment of the loan. Accordingly, she called on the bank on 01.08.2008 to deposit the documents of title relating thereto with an intention to create security thereon in favour of the bank. The same was recorded in the register maintained by the bank in its usual and ordinary course of business. Ld. Counsel for respondent bank submitted that it is not the usual practice of getting signatures of the persons who create mortgage by deposit of title deeds in this register. This register only gives the details of the documents filed in support of creation of mortgage of title deeds. The letter given by the appellant expressing her intention to create equitable mortgage by deposit of title deeds is produced in Pg. No.40 of the typed set as Annexure - II. This letter reads that the following documents have been produced by the appellant.

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Documents Deposited:

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i) Original Sale Deed Dated 12.05.2006

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ii) RTC for the year 2007 – 2008

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iii) Mutation Register Extract MR.No.29.06.2007

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iv) Patta & Receipt Book

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v) Tax Paid Receipt No.0890831

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vi) Encumbrance Certificate SA No.4042/07-08 dated 19.03.2008

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vii) Encumbrance Certificate SA No.765/08-09 dated 19.03.2008

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viii) LSR by T.Venkatesh (Panel Advocate) of date 01.08.2008

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ix) Valuation report by Registered Valuer for Rs.25,20,000/-

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of date 01.08.2008.

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The bone of contention is whether this letter was executed by the appellant or not.

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As already stated, the appellant disputes the signature in the document and claimed that it is forged. When the plea of forgery is set up, it is primarily the duty and responsibility of the appellant to prove that the document is forged. Admittedly, she has not taken any steps to get the handwriting expert's opinion with regard to the disputed document. It is also seen from Paragraph 15 in Pg.No.8 of the judgment of the Ld. Presiding Officer, DRT, Karnataka, Bangalore that appellant denies her signature in the letter of confirmation of mortgage of property in Ex.A-19 and she denies her signature in Ex. A- 37 and Ex.A-38, i.e., the letter dated 18.07.2008 issued by the appellant to the bank seeking legal opinion of the property proposed to be mortgaged and annexure giving details of the property respectively. She also denied her signature in the Vakalat executed in favour of her Advocate in the OA. These denials, apparently, show that she was not ready and willing to admit her own signatures. There is no proper explanation given for non-examination of her brother who is a material witness and who would have lent support to her case; the circumstances under which, her original documents landed at the hands of the bank. There is also no explanation as to why she omitted to give complaint against her brother, who was also responsible for this alleged fraud.

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When the bank has produced the letter given by the appellant herself evidencing creation of mortgage of deposit of title deeds in favour of the bank, the appellant cannot take a defence that she has not offered her property as security for the loan liability of R2 and R3. Further, the appellant miserably failed to establish her case and

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forgery of her signature in the letter. The Ld. Presiding Officer had discussed the other issues and found that the case of the appellant with regard to the forgery alleged cannot be accepted.

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For the reasons aforesaid, this Tribunal finds that there is no valid reason available to take a different view of the matter. In view of the same, this Tribunal confirms the order of the Ld. Presiding Officer, DRT, Karnataka, Bangalore in OA 596/2009 dated 30.08.2013 and dismiss this appeal.

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In the result, Appeal RA 33/2020 is dismissed. Parties shall bear their own costs.

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Pending IAs, if any, stand closed.

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[Dictated to Steno (DD), transcribed by her, corrected, signed and pronounced by me in open court, this 3^rd January , 2025)

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Sd/-

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(JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON

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B.S.Gowramma v. Central Bank of India & Ors.

Case brief

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B.S.Gowramma v. Central Bank of India & Ors.

Case brief

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