In a Securitization Application filed under Section 17 of the SARFAESI Act, the Tribunal dismissed the applicant's plea challenging the bank's possession proceedings, holding the applicant had no title or right over the mortgaged property.
Application dismissed; interlocutory applications disposed of; deposited amount refunded to applicant.
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.
IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD
DATED THIS THE 17TH DAY OF FEBRUARY,2C23
PRESENT: GUMMADI GOPICHAND, PRESIDING oFFICER
sA.No.16c./2c22
Avula Venugopal Reddy, S/o. Krishna Reddy Avula, aged 48 years, Occ: Business, R/o. H.No.8-2 -269 I 3 I F / s e, 8-2-269 I 3 /F / tt, Flat No.305, NS Mountain View Apartment, Road No.2, Banjara Hills, Hyderabad.
Applicant.
Versus
Rep. by its Authorized Officer,
Narayanaguda Branch, Hyderabad.
Respondent.
: Counsel for the Applicant Counsel for Respondent No.1 : Counsel for Respondent No.2 :
: Sn A. Vijag Kuman : Si Manau Gecil Thomas. : Sri T. Vijag Kumar.
-:ORDERi
SA.Nop.160/2022
of 80 sq. yds., bearing Municipal No. 8-2-269/3/F/S & 8_2_ 269 /3 /F I 1 1, situated at Road No.2, Banjara Hills, Hyderabad. The Respondent No.2 has mortgaged the said property in favour of the l"t Respondent Bank.
o. The lst Respondent Bank filed its Reply Statement contending that, notice u/s.13(4) has to be served only upon the principal borrower and guarantors and not on the Applicant, who is not concerned with the schedule property. The Applicant is a third-party to the loan transaction. The l"t Respondent Bank has issued Demand Notice and Possession Notice to the principal borrower and guarantor, including 2"d Respondent, who is the mortgagor of schedule property and the Possession Notice was published in the newspapers. The terms of not binding on the 1st Respondent Bank and .T.rff&."ffi",;ryfu void and ab initioas it was executed by :tf#:,::#te3. o3*-" the bank and the borrower/mortsasor tit&" Rdb&r;{Fm}* 2nd Respondent herein. *f,the 4. ,rt(h$trr."o.gffiounter admitting the version or the tion of Agreement of Sale. She averred that the lst is trying to sell the schedule property without following the procedure laid down under the SARFAESI Act.
SA,Nop.160/2022
Point No,ll):-
B. Along with the Reply statement, the 1st Respondent Bank liled several
documents to establish that the 2.d Respondent has executed Memorandum of deposit of title deeds in respect of the schedule property and that the lst Respondent Bank has issued Demand Notice and the Possession Notice to the borrower and guarantors and the Possession Notice was published in the newspapers. As per the copy of Extension of Memorandum of deposit of title deeds dt. 17.06.2020, Iiled by the 1.t Respondent Bank in its documents, it is clear that the 2"d Respondent has executed the said Memorandum and he deposited the title deeds in respect of the schedule propert5r on 2l.06.2017 for the purpose of creating securit5r to the 1oan transaction and so, way back in the year ? O.l'/ itself the schedule property was mortgaged by the 1st Respondent Bank for securing
the loan. f'd. .F 9. In the is relying on an un-registered Sale dt.27 ted by the 2nd Respondent in t of the schedule property.
Admittedly, t was executed subsequent to the creation of of the schedule property in favour of the 1"t Respondent Bank by the 2nd Respondent. So, when the
SA.Nop.160/2022
schedule property was mortgaged way back in the year 2OlZ, any subsequent sale transaction in respect ofthe schedule property will be only subject to the mortgage created by the !"a Respondent in favour of the lst Respondent Bank. A perusal of the said Agreement of Sale dt.27.O5.2O2O makes it clear that it was not executed on a proper stamp paper and not registered and sale consideration was shown as Rs. 1,80,0O,O00/- and it is mentioned that out of the said consideration, Rs.36,00,000/- was paid by the Applicant towards advance. As the Applicant is a third-party to the loan transaction, there is no obligation on the lst Respondent Bank to serve on him any Possession Notice u/ s. 13(4) of the SARFAESI Act. No material is placed by the Applicant to establish that in pursuance of the said alleged Agreement of Sale, the 2nd Respondent has delivered the possession of the schedule propert5r to him. The schedule propert5r is a house property and if really the Applicant is in occupation of the schedule property, he has to establish the same by placing necessary documents. As per the documents filed by the lst Respondent Bank, it is very clear that only by following due procedure laid down under the SARFAESI Act, the 1"t Respondent Bank is trying to take physical possession of the schedule property, which is mortgaged by the 2"a Respondent. So, when the lst Respondent Bank is proceeding in accordance with law against the schedule property to recover its dues from the principal borrower and guarantor, including 2nd Respondentmortgagor, the Applicant, who is not having any right or title over the schedule property, is not entitled to challenge the said proceedings initiated -.bV ,1"-. ,1.$*Respondent Bank. If really the Applicant is inrciis&tii$tr'6rfu-dSt property, nothing prevents him to purchase ting in the auction that would be the 1 "t ndent Bank in respect of the schedule
ffi,f
So; circumstances, I hold that the Applicant enge the proceedings initiated by the 1"t Respondent Bank against the schedule property and the present SA
SA.Nop.160/2022
filed by the Applicant is liable to be dismissed. Accordingly, this point is answered against the Applicant and in favour of the l"t Respondent Bank.
Polnt No.liil:-
(Dictated to the Priuate Secretary, transcribed bg him, corrected, signed and pronounced by me in the open court on this the lVh dag of February, 2023).
sd/(G. GOPTCHANDI Presiding Oflicer
1t ftB :zvJ
TR,I., OPY
i^l'
*ml;f#mPr y
2 issues framed by the court
Whether the Agreement of Sale holder (Applicant) is entitled to challenge the bank's possession proceedings under the SARFAESI Act.
Whether the Applicant has a right to object to physical possession of mortgaged property when his title is unregistered and subsequent.
1 provisions across 1 enactments
Avula Venugopal Reddy
The Canara Bank
Pattela Sailaja
GUMMADI GOPICHAND
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
