Dismissed

Housing and Urban Development Corporation Limited v. Messers Landmark Establishment Pvt. Ltd.

DRAT7 Aug 2025REGULAR APPEAL/55/2018

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed the appeal filed by HUDCO against the District Recovery Tribunal's order which discharged the fourth defendant from liability. The Tribunal upheld the finding that the secured creditor failed to prove the defendant's signature as forensic evidence was unrebutted.

What did the court decide?

Impugned judgement and order of DRT Guwahati confirmed; costs easy.

Housing and Urban Development Corporation Limited versus… — Banking and Recovery | DRAT (2025)

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Reportable / not reportable

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA HON'BLE Justice Anil Kumar Srivastava, Chairperson REGULAR APPEAL No. 55 of 2018

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(Arising out of O.A. No. 63 of 2012 – DRT- Guwahati)

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07.08.2025

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Housing & Urban Development Corporation Ltd. (HUDCO), Guwahati Regional Office, at Housefed Complex, Rukminigaon, G.S. Road, Guwahati – 781 022.

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--Vs--

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M/s Landmark Establishments Pvt. Ltd. registered office at M.G.Road, Machkhowa, Guwahati – 781009.

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Sri Praban Kumar Sharma residing at 306, Anubhav Apartment, Basisthapur, Lane No.3, Beltola, Guwahati 781028.

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Smt. Rita Sharma, residing at 306, Anubhav Apartment, Basisthapur, Lane No.3, Beltola, Guwahati – 7810028.

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Md. Masrur Hussain, residing at Lakhtokia, Guwahati – 781001.

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... Respondents

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For Appellant : Ms. Poetry Dutta, Ld. Adv. For Respondent:

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The Appellate Tribunal

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Instant appeal no. 55 of 2018 has arisen against the

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judgement and order dated 28.06.2017 passed by the learned

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DRT Guwahati in O.A. No. 63 of 2012 (Housing & Urban

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Development Corporation Ltd Vs. M/s Landmark Establishment Pvt. Ltd. & Ors.) whereby learned DRT allowed the O.A. and issued recovery certificate to the extent of Rs.2,67,19,810/against defendants no. 1, 2 and 3 jointly and severally with

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pendente lite and future interest @ 13.50% quarterly rest till the realization of the amounts in full. However, respondent no.4, Md. Massur Hussain, was not held liable for any liability of defendant no.1. The charge against the property of defendant no.4 mentioned at schedule ‘A’ was also vacated.

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As per pleadings of the parties, O.A. u/s 19 of the Recovery

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of Debts and Bankruptcy Act, 1993 was filed by the appellant against defendant no.1 M/s Landmark Establishment Pvt. Ltd. through its Managing Director, Sri Pranab Kumar Sharma, and his wife, Ms. Rita Sharma, who are defendant no. 2 and 3 respectively, and defendant no.4 Md. Mastur Hussain with the assertion that defendant no.1 was the main borrower while defendant no.2 and 3 are the Managing Director and authorised

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signatories of defendant no.1. Defendant no.4 was the land owner and co-borrower of the loan. Defendants approached the appellant, Housing & Urban Development Corporation (hereinafter referred to as HUDCO), for a loan of Rs.2.00 crore for construction of residential building on 02.03.2005. After

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scrutinizing the documents, Rs.1.80 crore was sanctioned on 12.09.2005 with certain conditions, which were accepted by the

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defendants. Necessary documents were executed by the

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defendants no. 2 and 3. Defendant no.2, 3 and 4 on 22.12.2005 has submitted a letter evidencing deposit of deeds with intent to create equitable mortgage in respect of the project land described

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as schedule-A. Defendant no.2 and 3 has also deposited registered sale deed as collateral security to secure the loan on their personal capacity which are at schedule ‘B’.

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On 09.03.2006 and 30.07.2007 HUDCO amended the loan agreement dated 25.10.2005 deferring the loan drawal and repayment schedule. It was duly accepted by defendant no.1. On 10.04.2007 HUDCO also amended the loan agreement by

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including the names of land owner, namely Md. Mastur Hussain, defendant no.4, which was inadvertently not mentioned in the

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loan agreement, but duly accepted and admitted by them. Loan amount was curtailed from Rs.1.80 crore to Rs.1.53 crore. Loan amount was not paid in time. Time was sought by defendant no.2 vide letter dated 26.09.2008. Post dated cheques were deposited to repay the loan, but the same were returned with endorsement “insufficient fund”. The loan amount became irregular. A recall notice was issued by the HUDCO on

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04.09.2009 and entire loan amount was recalled on 30.09.2009.

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No payment was made by the defendants. An amount of

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Rs.1,91,10,998/- was demanded, but not paid by the defendants. Subsequently, O.A. was filed by the HUDCO for a total debt due

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of Rs.2,67,19,810/-. O.A. was contested by defendant no.1, 2

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and 3 as well as defendant no.4 on different grounds.

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O.A. was allowed against defendant no.1, 2 and 3 and

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following order was passed by the learned DRT.

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“Issue Recovery Certificate in favour of the applicant Corporation for a sum of Rs.2,67,19,810/- against the defendants no.1, 2 and 3 jointly and severally with pendentelite and future interest @ 13.50% p.a. with quarterly rest till realization of the amounts in full along with costs of the application.

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The defendant no.4 is not fastened with liability of defendant no.1. Charge on his property mentioned in schedule-A is also vacated.

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The Charge of the certificate amount be kept alive on a plot of land measuring 1 Bigha (2 plots of each measuring 2 Katha 10 Lechas) covered by Dag No. 1, Patta No.1 of village Sunsali F.S.Grant Mouza Ulubari, District-Kamrup and bounded by :

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1^st plot North : Land of Dag no.1 South : Sarat Ch. Baruah East : Pranab Kr. Sarma West : 24 ft. Road. 2^nd plot North: Land of Dag No.1 South: Sarat Ch. Baruah East: Dr. Bordoloi West : Rita Mazumdar Mortgaged with the applicant corporation [described in scheduleB annexed to the application], till the amount is realized in full, under the certificate.”

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As far as defendant no.4 is concerned, the O.A. was

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dismissed by the learned DRT holding that signatures of

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defendant no.4 are not proved as primary evidence in absence of

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witness in whose presence the documents were executed.

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Defendant no.4 has denied his signature on documents – A3, A4

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A5 and A7. Handwriting expert’s opinion was obtained by

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defendant no.4 who opined that documents executed by defendant no.4 are not bearing his signature. Accordingly, learned DRT arrived at a conclusion that the appellant HUDCO failed to prove the signatures of defendant no.4 on the documents A3, A4, A5 and A7 for creating equitable mortgage.

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Feeling aggrieved by the dismissal of O.A. against defendant no.4, appellant HUDCO preferred the appeal.

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Appeal is also preferred on the ground of rate of interest

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which was reduced from 15% to 13.50%.

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Notices are served upon the respondents in appeal, but despite service of notice, respondents did not appear in appeal.

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I have heard learned counsel for the parties and perused the records.

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Learned counsel for the appellant HUDCO would submit that

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learned DRT has placed reliance upon the report of the handwriting expert, which is simply an opinion. It is further submitted that learned DRT has not given any opportunity to

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rebut the opinion of the handwriting expert submitted by defendant no.4. Learned counsel for the appellant would further

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submit that appellant may be given opportunity to submit its own

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handwriting expert’s opinion to rebut the evidence submitted by respondent no.4, which opportunity was not given to the appellant.

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Perusal of the impugned judgement and order would reveal

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that learned DRT has simply placed reliance upon the opinion of the handwriting expert. Evidence on affidavit filed by Ms. Sangita

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Das, Senior Manager (Law) was also discarded on the ground that

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signatures on the documents were made by defendant no.4 in her presence. Learned DRT has placed reliance on the judgement of

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United Commercial Bank Vs. Kandi Ramu Naidu & Ors.

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[1999 SCC OnLine AP 241] on the ground that there is an element of fraud and forgery alleged, which can only be proved

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by the witness in whose presence signatures were put in by respondent no.4.

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Now burden of proof lies upon the appellant HUDCO to prove the signatures of respondent no.4 on the documents.

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Respondent no. 4, Md. Masrur Hussain, denied his signature on

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the documents and also submitted forensic report of handwriting

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expert. Handwriting expert’s report, produced as evidence, has

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stated that documents exhibited as A-3 Loan Application, A-4

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Loan Sanction and its acceptance, A-5 General condition and loan agreement dated 25.10.2002 and A-7 Letter evidencing deposit of Title Deeds do not bear the signatures of respondent no.4. An opportunity of rebuttal was granted to the appellant HUDCO, which was not availed by the secured creditor.

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Record of learned DRT is summoned and thoroughly perused

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the same. A specific plea was taken that defendant no.4 denied his signature on the documents. Defendant no.4 also submitted a forensic report of Mr. A.K.Barik, hardwriting expert of Central Forensic Science Laboratory, Govt. of India, Guwahati. Report is duly signed by Mr. A.K.Barik, Scientist ‘B’ and categorical finding is recorded that person who wrote “the blue enclosed signatures stamped and marked S1 to S20 and A1 did not write the red enclosed signatures similarly stamped and marked A1 to A56”. A detail ground for arriving at the conclusion is also recorded by the handwriting expert. An opportunity of cross-examination was also granted to the learned counsel for the secured creditor, who

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cross-examined the witness. Cross-examination of hand writing

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expert is relevant. I am quoting the same –“it is wrong to stay

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that I have not taken much pain to compare the documents referred to the Laboratory for examination. I have examined the documents and given my opinion vide Report No. CFSL(G)/2015/38/DOC/B/2015/27 dated 26.11.2015”. Learned counsel for defendant no. 1,2 and 3 did not cross examine the witness. It was total cross examination conducted by the

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appellant HUDCO before the learned DRT. After filing forensic report by the defendant no.4 and after being cross-examination done by the learned counsel for the secured creditor, no effort was made by the secured creditor to rebut the report of the hand

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writing expert nor any prayer was made for filing any forensic report in rebuttal. Even cross examination of the witness of forensic expert is such wherein not a single question was asked

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about the veracity of the report or on the merits of the matter or even no suggestion was given that signatures are made by the same person who made the specimen signature. It means that secured creditor accepted the report of the hand writing expert

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even by not cross-examining him on the aforesaid issue and not

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filing any evidence in rebuttal. Accordingly, I do not find any reason or ground to disbelieve the report of the forensic expert

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which is also duly accepted by the learned DRT. I do not find any

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perversity in the finding of the learned DRT.

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As far as question of testing evidence of the secured creditor

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is concerned, affidavit of evidence was filed by Ms. Sangita Das, Senior Manager (Law), who has produced the documents of the secured creditor. An I.A. No. 214 of 2016 was filed for

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summoning the person who had verified the original application

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which was dismissed by learned DRT vide order dated 23.07.2017. Learned DRT placed reliance upon the evidence adduced by the secured creditor. At this juncture it should also

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be very relevant to observe that the secured creditor despite evidence of the forensic report regarding signature of defendant no.4 did not opt to produce the concerned officer in evidence in

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whose presence allegedly defendant no.4 has put in signature on

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the documents. He could have been the best witness to prove the signatures of defendant no.4 and he should also be a primary evidence for execution of the documents. Law is settled that

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evidence should be primary in nature. If primary evidence is not

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available then secondary evidence can be adduced in accordance with law. But burden lies upon the plaintiff to prove it that

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primary evidence is not available and secondary evidence may be

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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 some importance when the handwriting expert has submitted a categorical report that documents of the secured creditor did not bear signature of defendant no.4, whose evidence was not rebutted by the secured creditor. 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 defendant no.4 has executed and signed the documents and submitted the documents with intention to create equitable mortgage. Hence, defendant no.4 cannot be held liable as a mortgager or co-borrower for non-payment of loan by borrower. Secured creditor has no charge over the property of defendant no.4.

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As far as rate of interest is concerned, learned DRT has granted interest at the rate of 13.50 per cent simple, reducing from the contractual interest @ 15%, on the decretal amount including pendente lite and future interest from the date of the

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plaint till realization or sale of mortgaged property belongs to

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defendant no.1 and hypothecated property, if any available.

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In a recent judgement in Tomorrowland Ltd. Vs. Housing

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& Urban Development Corporation Ltd. & Anr. [2025 SCC

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OnLine SC 309] decided on 13.02.2025 Hon’ble Apex Court in

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Para 49 of the judgement has placed reliance upon the Constitution Bench judgement of the Hon’ble Apex Court in

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Central Bank of India Vs. Ravindra & Ors. [(2002) 1 SCC 367] wherein it was held that award of interest pendente lite and

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post-decree is discretionary with the Court as it is essentially governed by Section 34 CPC de hors the contract between the parties. In a given case if the Court finds that in the principal sum

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adjudged on the date of the suit the component of interest is

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disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post-decree interest at a lower rate or

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may even decline awarding such interest. The discretion shall be

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exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner. Hence, I am of the view that learned

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DRT has exercised its jurisdiction to grant interest on the decretal

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amount.

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