Dismissed

Yallanki Srikanth v. Union Bank of India

DRT13 Feb 2023SA/245/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application under Section 17 of the SARFAESI Act challenging a possession notice. The court held an unregistered sale agreement subsequent to a registered mortgage cannot defeat bank proceedings. As the applicant was not the borrower and the agreement was invalid/unsubsequent, the relief was denied.

What did the court decide?

Application under Section 17 of the SARFAESI Act dismissed; possession notice upheld.

Yallanki Srikanth versus Union Bank of India — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERYTRIBUNAL" I AT HYDERABAD

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DATED THIS THE 1 3TH DAY OF FEBRUARY, 2023

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.245,/2022

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Yallanki Srikanth, S/o. Koteswara Rao, Aged about 37 years, Occ: Business, R/o.H.No.S-2 -248 / N / 1, Road No.S, Srinagar Colony, Bonakal Road, Khammam.

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Applicant.

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Versus

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The Union Bank of India, Rep. by its Chief Manager, Gandhi Chowk, Khammam.

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The Chief Manager & Authorized Officer, Union Bank of India, Khammam-2 Branch, Gandhi Chowk, Khammam.

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Mallala Narsimha Rao,

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S/o. Pandurangaiah, aged about 46 yrs., Occ: Business, R/o.H.No.3-2-56 I 3 I 4, Rajivgunj, Khammam.

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Respondent.

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Counsel for the Applicant : Mr. Thomas George. Counsel for Respondent No.1 : Mr. P. Balaji.

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.:ORDERi

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1 . This application is filed by the Applicant u/ s. 17 of the SARFAESI Act, 2002, for declaring the Possession Notice dt.20.05.2o22, issued by the

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," ;"':-,": :"ln*, ,n" App,ican' :^{p,l.&r#&70&n{$p.op".ty u*'i.g H.No.5-2-248lN/1, Bonakal} BO^ff-*,^{xrrammq5$/uated in Sy.No.472& 473, admeasuring l4o.ss} :o .Ml,JA#I..d'fff-r^{schedule property)from Respondent No.3 under} lrii,friir9L.,,

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SA.No.245/2022

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an Agreement of Sale dt.2O.O2.2O2l, for a sale consideration of Rs.55,56,000 l-, and out of the said sale consideration, the Applicant paid an advance of Rs.18,30,000/- and the Applicant is in possession of the said property since one year. As Respondent No.3 failed to execute registered sale deed in favour of the Applicant, the Applicant was constrained to file a suit for specific performance of Agreement of Sale dt.2O.O2 .2021, vide OS.No.39/2O21 on the f1le of the II Additional District Judge, Khammam. After filing of the said suit, the Applicant came to know that 3.d Respondent mortgaged the schedule property in favour of Respondents No.l & 2 and so the Applicant took steps to implead Respondents No. 1 & 2 in the said suit. Even though Respondents No.l & 2 are having knowledge about the filing of the said suit, they affixed Possession Notice dt.20.O5.2O22, on the application schedule property on 21.05.2022. Hence the SA.

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The Respondent 1 & 2 Bank filed Reply Statement contending that Respondent No.3 availed Housing Loan from Respondents No.l & 2 Bank with a limit of Rs.25,00,000/- and Respondent No.3 mortgaged the application schedule property by deposit of title deeds and he also executed Memorandum of deposit of title deeds on 30.O3.2016 and same was registered before the Sub-Registrar Office, Khammam. The Respondents No. 1 & 2 also liled OA for recovery of Rs.27,08,654.63ps., and also obtained Recovery Certificate from this Tribunal. The Applicant is aware of the mortgaged created by Respondent No.3 in favour of Respondents No.l & 2 Bank. The Respondents _No.1 & 2 Bank further contends that the Respondent No.3. hffiff* licant in order to delay the proceedings i"iuAJ#& nJ ts No. 1 & 2 Bank to recover the amount tu " #"{\ .1 duijl rhe Rffiond & 2 denied that the Applicant is in pert5r. Moreover, as per the terms of the i^{the possession} of the^{property was} not t. As the Applicant is not a borrower or a ion, he is not entitled to claim any relief

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SA.No.245/2022

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against the Respondents No.l & 2 Bank. The Respondents^{No. 1} &² Bank has scrupulously followed the^procedure laid down under^the SARFAESI Act, in issuing Possession Notice dt.2O.05.2O22 for taking possession of the application schedule property.

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Heard arguments.

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Now, the points that arise for consideration are,-

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Whether the Applicant is entitled to challenge the Possession Notice dt.20.05.2o22, issued by the Respondents No.1 & 2 Bank for taking possession of the schedule^property?

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ii) To what relieP

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Polnt No.(il:-

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The specific contention of the Applicant is that, he has^purchased the application schedule property under an Agreement of^Sale dt.2O.O2.2O2l, allegedly executed by Respondent No.3. There is^no dispute regarding the fact that Respondent No.3 availed Housing^l,oan from the Respondent Bank by mortgaging the said^application schedule property. The mortgage created by^Respondent No.3ⁱⁿ favour of Respondents No.1 & 2 Bank is in the^year 2016.^{By relying} on the Agreement of Sale dt.2O.O2.2O2l, allegedly executed by Respondent No.3, the present application is filed by the Applicant challenging the Possession Notice dt.2O.O5.2O22, issued by^the Respondent Bank against the application schedule^property. -^{-'rf^r</sup>}

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application, the Applicant has enclosed certain m-;-hN*e has enclosed a copy of the Possession Notice, issued Fffi, t No. 1. The Applicant has not filed the original Sale allegedly executed by Respondent No.3 and he filed of the said Agreement of Sale. A perusal of the said t of Sale makes clear that it was executed on Rs.200/-

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SA.No.245/2022

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Stamp Paper and the sale consideration^{mentioned thereinis} Rs.55,56,0O0 l- arrd the said^{Agreement is not executed on a proper} valid document and the said Agreement^{is unregistered.A perusal of} the recitals in the said Agreement^{indicatesthat out of the sale} consideration of Rs.55,56,0OO1-, a sum^{of Rs. 18,30,000/-was paid by} the Applicant and the balance amount of^{Rs.37,26,000/- has to be} paid by the Applicant within 2 months of the said^{Agreement.It is also} specilically recited in the said^{Agreement tllat the possession of the} property shall be delivered to the vendee i.e., the Applicant^{herein only} after payment of balance sale consideration.^{It is not the case of the} Applicant that entire sale consideration^{was paid,even though there is} a specific recital in the said Agreement^{relied upon by the Applicant} that possession of the^property shall^{be delivered only after payment} of entire sale consideration. The Applicant^{is contending that he is in} occupation of the schedule^propert5r but^{he has failedto explainas to} how and when he occupied the^property.

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Mere Agreement of Sale does not create^any right, title^{or interest in} the property and it may only create a right^{to file a suit for specific} performance against Respondent No.3' The validity or otherwise^{of the} said Agreement of Sale shall be decided in^{the suit. As the Agreement} of Sale executed by the Respondent^No.3 is^{subsequent to the} registered mortgage over the schedule^property in^favourof Respondents No.l & 2 Bank, it can^{be inferred that the Applicant} might be having notice of creation of^{mortgage over the schedule} prop€rty in favour of Respondents No.l & 2 Bank and by^{no stretch of} imagination, can it be said that the Applicant^{is a bonafide purchaser} ,-.. -^{of the schedule property.So, the Applicantbeing a third-partyto the} y';s^{"'i+VAEsbryry.eedings} initiated by Respondents No.1 & 2 Bank, he is (!? title *\tnotiintiue d fo\ino' p l c hallenge the^proceedings initiated^{by Respondents} (f {strx^{1 JNffA} W "*n^{is taking possessionof the application schedule} {S - proferty byJ$uing Possession lr(rlrucNotice LrL'zv'vrr'dt.20.O5.2O22 under^the *;:;-' "T,#J:"

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SA.No.245/2022

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So, considering all the above circumstances, I am of the opinion that there are no merits in the present SA and the Applicant is not entitled to claim any relief against the proceedings initiated by Respondents No. 1 & 2 Barrk under the SARFAESI Act, against the application schedule property. So, I hold that the present SA filed by the Applicant is liable to be dismissed. Accordingly, this point is answered against the Applicant and in favour of the Respondents No.l & 2 Bank.

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Point No.llll:-

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In the result, the present Securitization Application is dismissed. Consequently, the Interlocutory Applicalions,^pending if any,^shall stand disposed of. No order as to costs.

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Communicate a copy of this order to the^{partiesconcerned.}

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(Dctated to tle Prirate Secretary, ttdrscribed bU hi'r," correded" signed and^pronoufi@d bA me ift^{the opetu court on} thi-s the 13h day of Februdry, 2023).

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sd/-

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(G. GOPICHANDI Presiding Oflicer

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Yallanki Srikanth v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Yallanki Srikanth v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Coram

Case details

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