Dismissed

Shri P Srikrishna v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

DRT25 Jun 2025SA/156/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's application to set aside SARFAESI enforcement measures. The court held that an unregistered agreement for sale does not create a charge over the property under Section 54 of the Transfer of Property Act, failing to establish a right to challenge the bank's measures.

What did the court decide?

Application SA.156 of 2024 dismissed; all pending IA's closed. No orders as to cost.

Shri P Srikrishna versus Ms Jaya Shanmuga Projects… — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated of 25^th day of June, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A. No.156 of 2024

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Shri. P Srikrishna, S/o. Late P. Sathyanarayan Murthy R/at. No. GF-1, “Elegant Embassy” 2^nd Main, Rama Rao Layout, BSK 3^rd Stage Bengaluru- 560085

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. . . Applicant

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Versus

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M/s. Jaya Shanmuga Projects Pvt. Ltd A company having registered O/at No.216/13, Suraj Towers, 4^th Floor 27^th Cross, 3^rd Block, Jayanagar Bangaluru-560011 Rep.by its Director, Shri Prashant Raju @ Gopinath Raju S/o. Gopinath Chengam Raju

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M/s. Canara Bank Asset Recovery Management, Branch-I, 2^nd Floor, C. O. Building NO.86, Spencer Towers, M G Road, Bengaluru-560001 Rep. by its Authorized Officer, Mr. Pawan Chaturvedi

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. . . Respondents

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SA No. 156/2024

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Ld. Counsels on record / appeared :- Counsel for Applicants :- Counsel for Respondent No.2 :-

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:- Vidhrta Law Chambers :- Sri. Vignesh Shetty

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: - O R D E R - :

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The Measures taken by the respondent under the provisions of 13(2) of

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the Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act; herein after been referred to as SARFAESI Act, leading to the procurement of Section 14 orders by the

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2^nd respondent.

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The applicant claims to have entered into an unregistered agreement for sale and had claimed to have paid an amount of Rs.40,00,000/(Rupees forty lakh only) towards the sale consideration. It is also stated that the 1^st respondent started delaying the execution of sale deed, OS. No. 5856/2018 was filed seeking specific performance.

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Along with the SA, the applicant had produced the following documents.

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i) Un registered agreement to sell dated 10.05.2013. ii) Certified copy of the plaint in OS. No.5856/18

SA No. 156/2024

iii) Certified copy of the Written Statement in OS.

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No.5856/2018.

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iv) Certified copy of the order sheet in OS. No.5856/2018

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v) Certified copy of the order sheet in Crl. MC. No. 5021/2022. vi) Certified copy of the application u/s. 14 of the Act. vii) Certified copy of the order dated 03.06.2024 in WP. No.7600/2024 by the Hon’ble High court of Karnataka.

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Hence on the above-mentioned grounds the applicant prays for setting aside the measures.

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The respondent filed their statement of objection contending that the applicant is having no cause of action to maintain the application. It is also contended that the 1^st respondent availed a credit facility for Rs.17,00,00,000/- from the Bank. It is also stated that the account full in default resulted in initiation of measures. It is also stated that the credit facility was availed on 21.10.2013.

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Along with the objection the 2^nd respondent had produced the following documents.

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i) Copy of the common Deed of letter evidencing deposit of title deeds dated 22.10.2013.

SA No. 156/2024

ii) CERSAI report.

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iii) Statement of accounts.

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Heard the Ld. counsel for both sides and the only issue that is to be gone into is whether the applicant is having any right over the property enabling him to challenge the measures.

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The applicant claims to have got executed an agreement for sale on 10.05.2013 and set up the same against the measures initiated pursuant to default in account where in the mortgage is created on 22.10.2013. Now the pivotal question is whether the agreement for sale in favour of the applicant by itself creates any charge over the property against the mortgage created subsequently. In reference to section 54 of the Transfer of Property Act, the answer would be in negative as it is clear that the agreement for sale would not by itself create any charge over the property.

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The Hon’ble Supreme Court in recent decision in “Somnath v/s Ravinder Kumar” Civil Appeal 4484 of 2025 (arising out of SLP(c) 8801/2025)” had reiterated the above position as the para 13.

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“ As per Section 54 of the Transfer of Property Act, 1882 a contract for the sale of

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immovable property is a contract that a sale of such property shall take place on

SA No. 156/2024

terms settled between the parties. It does not, of itself create any interest in or charge on such property. Thus, even if the suit for specific performance is decreed, without a specific decree for transfer of the possession of the suit property, the same can be enforced only when the court directs the judgment debtor to convey the suit property to the decree holder. It is only after registration that the transfer of title would take place from one to the other”.

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In view of the above settled legal position, this Tribunal is of the

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view that the applicant failed to establish any right over the schedule property so as to scuttle the measures initiated by the 2^nd respondent.

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In the result, SA.156 of 2024 stands dismissed, all pending IA’s stands closed. NO orders as to cost. Issue copies in accordance with rule 16 of the Debt

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Recovery Tribunal (procedure) rule.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 25^th day of June, 2025)

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

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Shri P Srikrishna v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

Case brief

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Shri P Srikrishna v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

Case brief

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