Dismissed

Smt Lakshmi v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

DRT25 Jun 2025SA/157/2024

Case brief

AI extract

What is this about?

The Tribunal addressed a Section 17 SARFAESI application challenging a DRT order. The applicant claimed rights based on an unregistered 2013 sale agreement, citing Section 54 of the Transfer of Property Act. The Tribunal held that a contract for sale does not create an interest or charge on the property, dismissing the application.

What did the court decide?

The Section 17 application was dismissed and all pending interim applications were closed.

Smt Lakshmi versus Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr. — Banking and Recovery | 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.157 of 2024

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Smt. Lakshmi W/o. Late Veerabrahmaiah, R/at No.G.10(8/1) Kempanna Street, Doddamavahalli, Bangalore-560004.

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. . . Applicants

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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 Ban 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. 157/2024

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

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:- Vidhrta Law Chambers :- Vignesh shetty

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: - O R D E R - :

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The applicant is impugning the measures initiated and continued by the respondent leading to the procurement of section 14 order from the Ld. Magistrate, in this application filed u/s 17 of the Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act; herein after been referred to as SARFAESI Act.

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The applicant’s case in succinctly is as follows. The applicant had on 10.05.2013 entered into an agreement for sale in respect of the schedule properties with the 1^st respondent for a total sale consideration of Rs.35,00,000/- (Rupees thirty-five lakh only). It is also contented that, out of total sale consideration of Rs.35,00,000/- a substantial portion of Rs.33,00,000/- (Rupees thirty-three lakh only) had already been paid. It

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is also contented that a suit for specific performance of the contract is filed as OS. No. 5841 of 2018.

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SA No. 157/2024

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In respect of the measures, it is contented that the mortgage in favour of 2^nd respondent. It is also stated that the bank, fully aware as to the pendency of the suit for specific performance ought and should have made the applicant a party to the section 14 application and should not have produced through the back of the applicant. It is also contented that applicant’s right is protected u/s 48 of the Transfer of Property Act.

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

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i) Copy of the unregistered sale agreement dated 10.05.2013. ii) Certified copy of the plaint in OS. No. 5841/2018

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iii) Certified copy of the written statement in OS. No. 5841/2018

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iv) Certified copy of the order sheet in OS. No. 5841 of 2018.

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v) Certified copy of the order sheet in Crl.MC.n5021 of 2022.

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vi) Certified copy of the application u/s 14 of the act filed as Crl.MC. 5021/2022.

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vii) Certified copy of the order dated 03.06.2024 in WP. No. 7276/2024 of the Hon’ble High Court of Karnataka.

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The respondent no.2 filed their objection inter alia contending that the

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respondent no.1 through its directors approached the 2^nd respondent

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SA No. 157/2024

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and availed the credit facility for a sum of Rs.17,00,000/- (Rupees seventeen lakh only) and in lieu of the security for the same, had created Security Interest over the schedule property. It is also stated that as the repayments were defaulted the impugned measures are initiated by issuing demand notice dated 23.05.2018. It is also stated that possession notice dated 02.08.2018 it is also stated that the measures

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taken by the respondent leading to the impugned order is in accordance the statute.

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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 the letter evidencing deposit of title deeds dated 22.10.2013.

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ii) CERSAI report.

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iii) Copy of statement of accounts.

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Heard the Ld. counsel for applicant and the 2^nd respondent considered the contentions in the light of pleadings and documents produced by both sides. The only issue that arise for consideration is whether the applicant is entitled to protect their right, if any against the measures initiated and continued by the 2^nd respondent.

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SA No. 157/2024

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It is to be noted that though the so claimed sale agreement is stated to have executed on 10.05.2013 prior to the creation of mortgage on 05.11.2013 the suit for specific performance was filed only in the year 2018.

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The applicant is setting up the case placing reliance on agreement for sale which according to the applicant relates prior to the mortgage. Now the question arose is whether agreement of sale, also known as a contract for sale will create any charge or interest in the property. In view of section 54 of the Transfer of Property Act ,

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54. “Sale” defined.—

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"Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.—

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Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

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In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

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Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

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SA No. 157/2024

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Contract for sale.—

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A contract for the sale of immoveable property is a contract that a sale of

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such property shall take place on terms settled between the parties.

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It does not, of itself, create any interest in or charge on such

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property.

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Hence, the agreement for sale by itself does not create any interest or charge on the property.

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In view of the discussion as held above and findings entered there in this Tribunal is of the view that the applicant is having no right to scuttle the measures as the applicant had failed to put forth any valid right as against the measures initiated by the respondent.

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In the result, SA.157 of 2024 stands dismissed, all pending IA’s stands closed.

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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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(T. RAJESH) PRESIDING OFFICER

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Sd/-

Smt Lakshmi v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

Smt Lakshmi v. Ms Jaya Shanmuga Projects Pvt. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

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