Dismissed

Salil Shashikant Telang and Anr. v. State Bank of India

DRT28 Feb 2024SA/109/2023

Case brief

AI extract

What is this about?

The Tribunal dismissed an application seeking to quash a possession notice and order, holding that a 2017 mortgage by the developer preceded the plaintiffs' 2019 purchase agreement. The court rejected the argument that registration discrepancies or CARMAA violations precluded recourse against specific property, citing the principle that a mortgage prior to sale prevails.

What did the court decide?

The application was dismissed; the possession notice and order dated 28.02.2023 stand maintained.

Salil Shashikant Telang and Anr. versus State Bank of India — Insolvency and Bankruptcy | DRT (2024)

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SA 109 of 2023

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI SECURITIZATION APPLICATION NO. 109 of 2023

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1. MR. SALIL SHASHIKANT TELANG, Aged 35 years, Occ: Employed

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2. MR. SHASHIKANT DAMODAR TELANG, Aged 73 years, Occ: Business Both R/o Flat No.102, 1^st Floor, Vitthal Darshan CHS Ltd., Building No.10, Off Azad Nagar Road, Opp Billabong High International School, Andheri (W), Mumbai-400053 …Applicants

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Versus

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1. STATE BANK OF INDIA, One of its Branch Stressed Assets Management Branch-II, Through its Authorized Officer, Mumbai having off. At Raheja Chambers, Ground Floor, B Wing, Free Press Journal Marg, Nariman Point, Mumbai-400021

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2. WESTIN DEVELOPERS PVT. LTD., A company registered under Companies Act, 1956, having office at 3^rd Floor, SBI Pallavi CHS Ltd., above NKGSB Co-operative Bank, Veera Desai Road, Andheri (W), Mumbai-400058 ...Respondents

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…Applicants

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...Respondents

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Counsel for the Applicant: Pradyumna N. Sharma a/w Adv. Randhir Kumar N Mandar Counsel for Respondent No.1: Fatima Lakdawala

SA 109 of 2023

O R D E R

Dated: 28.02.2024

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By way of the present SA, the Applicants prayed to quash and set aside possession notice dated 20.05.2023 issued by Ld. Court Commissioner; quash and set aside the order dated 28.02..2023 passed by Ld. Chief Metropolitan Magistrate, 19^th Court, Esplande Court, Mumbai; and other prayers.

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Facts of the SA are that the Applicants the owner and possessor of the residential premises being Flat No.102, Building No.10, Azad Nagar, Vitthal Darshan CHS. Ltd., CTS No.835, Survey No.135, J.P. Road, Off Veera Desai Road, Village Ambivali, Andheri (West), Mumbai-400053 (“flat in question”) and purchased the flat in question from the Respondent No.2 for the total sale consideration amount of Rs.1,65,00,000/-, vide registered agreement to sale dated 24.07.2019 registered with the office of Joint Sub-Registrar, Andheri No.1 bearing Registration No.8386/2019, and since the year 2019, the Applicants are in peaceful and undisturbed possession of the flat in question.

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It is also stated that the HDFC Bank Ltd. disbursed the loan of Rs.85,00,000/- after receiving the letter dated 24.07.2019 from the Respondent No.2 wherein the Respondent No.2 has stated that there was no encumbrance upon the flat in question and undertook

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It is also stated that the HDFC Bank Ltd. disbursed the loan of Rs.85,00,000/- after receiving the letter dated 24.07.2019 from the Respondent No.2 wherein the Respondent No.2 has stated that there was no encumbrance upon the flat in question and undertook and promised not to create any liability after that date. However, on 23.03.2023, the Applicants received a copy of order dated 28.02.2023 passed by Ld. Chief Metropolitan Magistrate, 19^th Court, Esplanade, Mumbai passed in Case No.199/SA/2020 (State Bank of India Vs. M/s Westin Developers and 7 others). After the perusal of

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SA 109 of 2023

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the order dated 28.02.2023, the Applicants came to know that the Respondent No.2 availed Drop Line OD Limit facility of around Rs.13,27,00,000/- from the Respondent No.1 by allegedly executing a mortgage deed on a flat measuring 997 sq. ft. towards the said loan.

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It is also stated that the Applicants issued a notice dated 26.04.2023 to the Respondent No.2 seeking information regarding the alleged mortgage of the flat in question however, the Respondent No.2 neither complied with the said notice nor replied the same.

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It is further stated that the Applicants received a Letter dated 20.05.2023 issued by the Ld. Court Commissioner, whereby, the Ld. Commissioner has informed that she has fixed the date of 16.06.2023 for the purpose of taking physical possession of the flat in question.

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It is also stated that the Respondent No.1 has violated the provisions of Section 23 of SARFAESI Act, 2002 by not specifically registering the security interest with the central registry as the actual carpet area of the flat in question is 677 sq. ft. and as per the details obtained from central registry the carpet area of the flat in question is being shown as 997 sq. ft. thus, it is stated that the flat in question is not a secured assets and it is some other flat which is registered with the central registry, thus, the Respondent No.1 is not entitled to exercise the rights of enforcement of security under Chapter 3 of the SARFAESI Act as per provisions of Section 26D of the SARFAESI Act.

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On the other hand, the Respondent No.1 has stated that the Respondent No.1 sanctioned Drop Line OD Limit Facility of Rs.6

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It is also stated that the Applicants issued a notice dated 26.04.2023 to the Respondent No.2 seeking information regarding the alleged mortgage of the flat in question however, the Respondent No.2 neither complied with the said notice nor replied the same. 5. It is further stated that the Applicants received a Letter dated 20.05.2023 issued by the Ld. Court Commissioner, whereby, the Ld. Commissioner has informed that she has fixed the date of 16.06.2023 for the purpose of taking physical possession of the flat in question. 6. It is also stated that the Respondent No.1 has violated the provisions of Section 23 of SARFAESI Act, 2002 by not specifically registering the security interest with the central registry as the actual carpet area of the flat in question is 677 sq. ft. and as per the details obtained from central registry the carpet area of the flat in question is being shown as 997 sq. ft. thus, it is stated that the flat in question is not a secured assets and it is some other flat which is registered with the central registry, thus, the Respondent No.1 is not entitled to

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SA 109 of 2023

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crores vide sanction letter dated 27.01.2017, to the Respondent No.2 and to secure the said loan, the Respondent No.2 with an intention to create mortgage of the flat in question and execute mortgage deeds and declaration cum retention deeds in respect of the various flats including the flat in question however, the Respondent No.2 committed defaults in repayment of the dues, thus, the account was classified as NPA on 27.09.2018. Thereafter, the Demand Notice dated 28.09.2018 under Section 13(2) of the SARFAESI Act, 2002 was issued to the Respondent No.2 to pay the dues but the Respondent No.2 failed to pay the dues thus, the Application filed the Application under Section 14 of the SARFAESI Act, 2002 for taking possession of the flat in question. 8. It is also stated that the mortgage created in favour of the Respondent No.1 in the year 2017 by the Respondent No.2, is prior to the alleged Agreement to sale dated 24.07.2019 therefore, the present SA is not maintainable and liable to be dismissed. It is further stated that the details of the mortgage has duly been registered with the CERSAI 9. It is further stated that the dues of the Respondent No.1 is more than Rs.12 crores thus, it is stated that the Respondent No.1 may be allowed to proceed further in respect of the flat in question. 10. I have heard the Ld. Counsel for the Applicants and Respondent and

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It is also stated that the mortgage created in favour of the Respondent No.1 in the year 2017 by the Respondent No.2, is prior to the alleged Agreement to sale dated 24.07.2019 therefore, the present SA is not maintainable and liable to be dismissed. It is further stated that the details of the mortgage has duly been registered with the CERSAI

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It is further stated that the dues of the Respondent No.1 is more than Rs.12 crores thus, it is stated that the Respondent No.1 may be allowed to proceed further in respect of the flat in question.

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I have heard the Ld. Counsel for the Applicants and Respondent and perused the record.

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Record reveals that the Applicants are claiming their right on the flat in question on the basis of Agreement to sale dated 24.07.2019 executed between the Applicants and Respondent No.2 whereas the

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SA 109 of 2023

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Respondent No.1 claiming its charge on the basis of mortgage created by Respondent No.2 in the year 2017.

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The maxim “Nemo Plus Juris Alium Transfere Potest, Quam Ipse Habet” aptly describes this situation meaning ‘one cannot transfer to another more rights than he has’. Further “Non Dat Quod Non Habet” which means that ‘no one gives what they do not have’.

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The Hon'ble Madras High Court in a similar case of S. Arunachalam V. Sivasn Perumal Asari , reported in AIR 1970 Mad at p. 230, has also held that: “It is a principle of natural justice that if rights are created in favour of two persons at different times, the one who has the advantage in time should also have the advantage in law. This rule however, applies only to cases where the conflicting equities are otherwise equal.” (emphasis added)

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Similarly, Hon'ble Andhra High Court in the case of State of Andhra Pradesh V. Shri Rajah Ram Janaradhana Krishna Rangarao Bahadur Varu , reported in AIR 1966 A.P. 233 has observed that: “ If there are successive transfers of the same property, the later transfer is subject to the prior transfer.” (emphasis provided)

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Thus, the mortgage in respect of the flat in question, created by the

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The Hon'ble Madras High Court in a similar case of S. Arunachalam V. Sivasn Perumal Asari , reported in AIR 1970 Mad at p. 230, has also held that: “It is a principle of natural justice that if rights are created in favour of two persons at different times, the one who has the advantage in time should also have the advantage in law. This rule however, applies only to cases where the conflicting equities are otherwise equal.”

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Thus, the mortgage in respect of the flat in question, created by the Respondent No.2 in favour of the Respondent No.1 in the year 2017, is prior to the alleged claim of the Applicants on the basis of Agreement to sale dated 24.07.2019, therefore, the Respondent No.1 is entitled to proceed further in respect of the flat in question.

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SA 109 of 2023

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The Applicants raised objection that the actual carpet area of the flat in question is 677 sq. ft. and as per the details obtained from central registry the carpet area of the flat in question is being shown as 997 sq. ft., thus, the Respondent No.1 is not entitled to proceed in respect of the flat in question and the same is not a secured assets and it is some other flat which is registered with the central registry, thus, the Respondent No.1 is not entitled to exercise the rights of enforcement of security under Chapter 3 of the SARFAESI Act as per provisions of Section 26D of the SARFAESI Act.

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Record reveals that the Respondent No.2 availed loan from the Respondent No.1 in the year 2017 and to secure the said loan, the Respondent No.2 created mortgage in respect of the various Flats including the flat in question. The mortgage in respect of the flat in question has duly been registered with the CERSAI, and the said fact is duly admitted by the Applicants. Further, the objection pertaining to discrepancies in actual carpet area and carpet area mentioned in central registry, is not maintainable before this Tribunal, therefore, the objection of the Applicants is hereby rejected.

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In view of the above, I do not find any merit in the present SA and the same is hereby dismissed.

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File be closed and consigned to the record room.

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Place: Mumbai. (Dr. Rekha G. Dhakar) Date: 28.02.2024 Presiding Officer, DRT-1, Mumbai.

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Salil Shashikant Telang and Anr. v. State Bank of India

Case brief

What is this about?

What did the court decide?

Salil Shashikant Telang and Anr. v. State Bank of India

Case brief

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What did the court decide?

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