Dismissed

Anshu Gupta v. Reliance Asset Reconstruction Company Limited

DRT24 Apr 2024SA/240/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a securitisation application filed by an applicant challenging a possession notice. The court held that an unregistered Agreement of Sale, despite a subsequent decree in a civil suit, does not constitute a valid ground to quash enforcement proceedings under the SARFAESI Act.

What did the court decide?

The Securitisation Application was dismissed, and the possession notice was upheld.

Anshu Gupta versus Reliance Asset Reconstruction Company Limited — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 24TH DAY OF APRIL, 2024

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PRESENT: SH. RAMESHWAR KOTHE, B.Com., L.L.B. (Hons.), M.A. PRESIDING OFFICER

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SECURITISATION APPLICATION No. 240 OF 2022

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Between:

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Smt. Anshu Gupta W/o Sanjay Kumar Gupta Aged: Major, Occ: Business Flat No. 146, B-Block 4th Floor, Gokuldham Society Ba rkatpu ra, Hydera bad.

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....Applicant.

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Versu s

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Reliance Assef Reconstruction Company Ltd. 17th Floor, North Side, R-Tech Park Western Express Highway, Goregaon (East) Mumbai - 400063, Maharashtra Rep. by its Authorised Officer.

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Sri Rajesh Kumar Gupta S/o Late Matadin Gupta Aged: Major, Occ: Business Flat No.109, 7't Floor A- Block Go ku I ld h a m Society Ba rkatpu ra, Hydera bad.

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Smt. Sangeeta Gupta W/o Sri Rajesh Kumar Gupta Aged: Major, Occ: Business Flat No.709, 7't Floor A-Block Gokulldha m Society Barkatpura, Hyderabad.

.. ...Respondents.

$'*

sa 24o / 2022

Counsel for the Applicant : Mr. G. Ardian Kiran Raj. Counsel for 1't Respondent : Ms. Ch. Laxmi Chaya. Counsel for Respondents² & 3 : Mr. G.K. Desh Pande.

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-: o_B_qEB:-

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The Applicant filed the^present Securitisation Application^u/s.17 of the Securitization and Reconstruction of^{Financial Assetsand} Enforcement of Security Interest Act, 2002^{(hereinafterreferred} to as "SARFAESI Act 2002") assailing the Possession^Notice daled 21.07.2022 issued by 1"t Respondent u/r 8(1) of^the Security Interest^{(Enforcement)} Rules,^2002.

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The case of the applicant as^per the averments of securitisation application, in brief, is that Respondents 2 and 3 entered into an Agreement of Sale with the Applicant on 06.12.2010 for sale SA schedule property and the Applicant^paid the sale consideration in instalments, the last payment being on 26.12.2019. Since the Respondents 2 and 3 have not executed the registratlon of sale, she filed OS 32/2027 for specific^performance of contract. The oS decreed in favour of the Applicant and she has been in the process of getting the sale registered in terms of the judgement decree in OS.32llO27. However, the 1't Respondent is trying to take the possession of the schedule^property vide Possession Notice dated 27.07.2022. On enquiry, applicant came to know that respondents 2 and 3 have^given the custody of the original title deeds to 1't Respondent, who in turn enforcing the mortgage rights under the provisions of the Securitisation Act. The claim of 1't respondent being subsequent 'A\9-"'

(/ '<''!-1

sA 24O/2022

to the Agreement of Sale, it has no right over the property under the provisions of the SARFAESI Act.

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The lst respondent Company filed reply statement. The case of the lst respondent as per the averments of the reply statement in brief, is that it is the borrower who got the SA fited by the Applicant on the strength of fabricated and backed documents to stall the recovery proceedings. lv'l/s. Durga lewellers and Gems Pvt. Ltd., is the borrower from the assignor bank, The Laxmi Vilas Bank. The borrower availed various loans beginning from 2009 till 2012. Messers Sanjay Kumar Gupta, Shiva Kumar Gupta, Purushotham Das Gupta, Rajesh Kumar Gupta, Durgesh Gupta, Subhash Chand Gupta, Aila Chandrakala and Sangeetha Gupta are the g ua ra ntors/mortgago rs to the loan facilities availed by M/s. Dugra Jewellers and Gems pvt. Ltd. The alleged Agreement of Sale executed in 2010 has not seen the light till filing of OS 32/2027, i.e., after 11 years of its execution. The Suit No.3212011 ended in exparte decree with Respondents 2 and 3 choosing not to contest. The entire sale consideration allegedly paid by the Applicant without obtaining title deeds and non-registration of sale for eleven years speaks volumes of collusiveness. Even in IA.1783/2022 in this SA, action of Respondents 2 and 3 in not filing counter, amounts to toeing the line of Applicants. The SA schedule property has not been registered in favour of the Applicant till date. Applicant cannot claim any right over the property till the Agreement of Sale fructified into a Registered Sale Deed. Thls legal posltion is reiterated in the judgment of Hon'ble Supreme Court in Surai Lamp and Industries Pvt, Ltd., v. State rof Haryana -

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sA 24O 12022

(2072) 7 SCC 656.^{Hence Applicant is not entitledto any right} over the schedule^{propertybasing on an Agreementof Sale and} stall the^{present recoveryproceedings.Despite therebeinga} demand notice and^{possesslonnoticesdated07 04} '2022^and 21.07.2022, respectively,^{neither the borrowernorthe} guarantors have brought to light the^{alleged Agreementof Sale} with the Applicant.^{Applicantis the wife of lvlr. SanjayKumar} Gupta, who is the^{elder brother 2nd Respondentherein The} alleged Agreement^{of Sale has beencreated to defeat the rights} of 1't Respondent in^{recoverlng the outstanding dues amounting} to Rs.41.69 Crores.

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Right of respondents 2 & 3^{filing reply statementwas forfeited} on 09.112023.

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Both the^parties reported^{no oral arguments.Perusedthe written} arguments filed by ihe^{1't RespondentCompanyand the} material^placed on^record.

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While reiterating the^pleadings in^{the reply Statement,1't} Respondent, in its written arguments,^{submitted that upon} dismissal of 1A.787312022^{challengingtheAdvocate} Commissioner Notice dated 70.72.2022, the^{physicalpossession} of the property was taken, auctioned under^SARFAESI proceedings for a consideration of Rs.52,50,000/- and credited the same to the loan account of the borrower.

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Now the^points that arise for adjudication^are: -

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1/5.*"

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sA, 24O / 2022

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Wether the Applicant made out any valid ground for quashing the measures initiated by the respondent bank against the SA schedule property under the provisions of Securitisation Act? i, To what relie/?

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Point No.(i):

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B. In this SA, Applicant challenged possession notice dated 2r.07.2022.^pending sA, Applicant unsuccessfully challenged the action of 1st respondent from taking the physical possession of the property through Advocate commissioner both in this Tribunal as well as before the Hon,ble DRAT, Kolkata vide LA.L7B3/2022 and Appeat No.1L/2023 respectivety. The onty ground taken to challenge the securitisation proceedings is an unregistered Agreement of Sale executed by Respondents 2 and 3 in favour of the Applicant. The Agreement of Sale is dated 06.12.2010. The civil suit No.32/202L was decreed on 22.09.202t. The registered Memorandum of Deposit of Title Deeds is dated L4.08.20t2. As on the date of deposit of tifle deeds, it appears that the borrower/guarantors/ mortgagors have not disclosed the existence of Agreement of Sale to the Creditor Bank. It is not the case of the Applicant that the sale consideration was paid by cheques or Bank Drafts to establish the Agreement of sale precedes the Deposit of Title Deeds. There is no material on record to show that the Applicant took up the registration of Sale till the date of issuance of legal notice dated 28.L2.2020, i.e., for full 10 years. Applicant has not disputed that sanjay Kumar Gupta, who is her husband, is none 6K*

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sA 24O 12022

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other than^{elder brother of 2nd RespondentRespondents2 and} 3 remained^{ex-parte in o5'32/2021, avoiding filing of Replv} Statement^{in the present SA coupled with the family relationship} between^{Applicant and Respondents 2 and 3' and inaction to get} the sale deed^{registered till date despite obtainingDecreeon} 22.Og.2021,^{supports the theory of collusiveness betweenthe} borrower/Respondents^{to stall the Securitisationproceedingslt} is a matter of^{record that- Hon'ble DRAT' Kolkata in orderdated} 12.10.2023^{in Appeal No.11of 2023 referred to the findings of} Hon'ble^{Apex Court ln SuraiLamp Case(Supra)where under it} was categorically^{held that immovableproperty can be} purchased only by^{a registereddeedof conveyance'In the case} on hand, admittedly,^{the claim is being made throughan un-} registered^{agreementof sale Though culminated into a decree'} the un-registered^{agreement of sale has not fetchedsaledeedin} favour of^{the applicant The respondent is proceedlng at the} strength^{of resgistered memorandum of deposit of title deeds'}

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Further, the^{sale of SA scheduleasset has not been challenqed} either by^{the Applicant or by the Borrower/Guarantors/} Mortg a9ors.

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In the light of^{the above discussion,I find that the Applicant} failed to make out^{any vatid ground to quash the impugned} Possession Notice^{dated 27.07} '2022^{issued by the 1't} Respondent-Assignee and accordingly,^{the SA is liable to be} dismissed. Cff'^"

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sA 24O/2022

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Point No.(ii):

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