Dismissed

Mrs. Iris Joseph and Others v. M/s. Shriram Finance Ltd. and others

DRT22 Sept 2025SA/170/2024

Case brief

AI extract

What is this about?

In a Securitization Application, applicants claiming legal heirship challenged a possession notice and mortgage claim. The Debt Recovery Tribunal held it lacked jurisdiction to decide title disputes absent a merit-decided civil judgment. The application was dismissed for failure to prove title.

What did the court decide?

The Securitization Application was dismissed; interlocutory applications pending stand closed.

Mrs. Iris Joseph and Others versus M/s. Shriram Finance Ltd. and… — Property and Title | DRT (2025)

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IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

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DATED THIS THE 22ND^{DAYOF SEPTEMBER,2025}

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PRESENT: SH. RAMESHWAR^{KOTHE,B.COM,L.LB. (HONS.), M.A.} PRESIDING OFFICER

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Securitization Application^{No.17O OF 2()24}

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Irish loseph, Wo^{lateJoseph Jacob} Aged 79^years, Occ:^{Retired Teacher}

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Ida Benjamin, s/o^{Sandeep Benjamin} D/o Late Joseph Jacob,^{aged 52} Years Occ: Housewife

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Ayesha Habeeb, Wo^{K. Habeebuddin} D/o Late Joseph lacob,^{Aged 50} Years Occ:Housewife

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Annie Praveen, W/o^{Praveen Sadasivan} D/o Late JosePh Jacob,^{Aged 48} Years Occ:Housewife

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Esther Peddi, w/o^{Santhosh Peddi} D/o Late Joseph Jacob,^{Aged 44} Years Occ: Housewife

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Angela Benjamin,^{W/o Benjamin F Vinod Kumar} D/o Late Joseph -lacob,^{Aged 48 years} Occ:Banker

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All are R/o Flat No.Gz,^{PramilaResidency} Defence Colony, Sainikpuri,^{Secunderabad-500094}

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(Applicants 1 to 5 are represented^{by theirRegd.GPA} notde, Us. Angela^{Beniamin who is the ApplicantNo.6} Vide GPA darcA^{09.08.2016, bearingDocNo.9716 ot 2016)}

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Versus

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M/s Shriram City^{UnionFinanceLimited} Having its Branch^{Office at AmeerpetBranch} Hyderabad Branch,^{HyderabadDistrict} Telangana State nlp o"y eutnorized officer (Nr"g

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SA No.u0l2024

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2.M/sShriramFinance Limited
RepbyAuthorized Officer
H.No.2-22-274,3'dFloor,PlotNo.307
AlluriCentre,Opp:KPHBColony
Kukatpally, Hyderabad-500072

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Smt. Vijayalakshmi, W/o Late^{M. Ranganayakulu} Aged about 50^years, Occ:Housewife

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Mr.M.V. Gopichand, S/o Late M. Ranganayakulu Aged 30^years, Occ: Business

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Mr.M. Eswar, S/o Late M. Ranganayakulu Aged 29 years, Occ:Business (Respondents 3 to 5 are Rlo 4-74-7f5/2, Surya Nagar Colony, Hayathnagar, Ranga Reddy District)

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The 5ub-Registrar Vanasthalipuram R.R. District ,,..Respondents.

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Counsel for the Applicants : M/s T. Sridhar Reddy

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Counsel for Respondents 7 & 2: Mr.M. Indrasen Respondents 3 to 5 : Ex parte

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-: o_R_D_E_B:-

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The Applicants filed the present Securitisation Application u/s 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") to set aside^possession notice dated 01.03.2024, direct respondents I and 2 not to take physical possession and declare Memorandum Evidencing the Deposit of Title Deeds dated 19.01.2018 as null and void.

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The case of the applicants, in brief. is that they are legal heirs of late Joseph Jacob who expired on 03.07.1992. During his lifetime, Joseph Jacob acquired the schedule property by yjrtue of registered /rt(k9<".f ly''D''

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sA No.t7Ol2O24

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sale deed dated 25.02.1988^{bearingDoc'No.214611988.When the} applicants received summons^{from Civil Court,RangaReddy District} they came to know that one^{Mr. Ranganayakulugrabbed the property} and made construction thereon^{vide reqisteredsale deeddated} 72.03.?Ol4 Doc. No.4387 of^{2014 executedby Y. NarasimhaReddy} fraudulently. The applicants^{filed OS No.2004of 2016on the file of} learned Principal Senior Civil^{ludge, R.R. District at L.B.Nagarfor} recovery of^{possession and declaration of title in theirfavour. Said Y'} Narasimha Reddy being one^{of the eight owners had alreadyexecuted} sale deed Doc.No.2146 of^{1988 dated 25'02'1988in favour of late} Joseph Jacob hence^{had not right to againsell it to Ranganayakulu'} Both Narasimha Reddy and^{Ranganayakuluexpired. Respondents 3 to} 5 are the legal heirs of^{lateRanganayakulu.The respondents3 to 5} came for settlement vide^{Memorandum of Compromisedated} 09.01.2023 and a^{compromise decreein terms of thereof was passed} on 09.01.2023 as a^{result,respondents 3 to 5 delivered physical} possession to the applicants. However^{the respondenttand 2} company affixed^{possession noticedated oL.03.2024on the outer} wall of the^{property stating that Ranganayakuluand his wifeavailed} loan by mortgaging the schedule^{property vide memorandum} evidencing the deposit of^{title deeds No.792/21fg dated 19.01'2018} and defaulted. The^{respondent financialinstitution failed to verifythe} title and encumbrances^{and proceeding under the Act basing on} fraudulent documents.^{Hence this SA.}

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The respondent^{1 and 2 ("respondentFl" hereinafter) filed reply} statement denying the^{adverse avermentsof the application' The} submisslons, briefly, are^{that the applicantshave not filed the GPA} Doc.No.581/1986 dated^{26.09.1986through which Y' Narasimha} Reddy sold the^property to^{Ranganavakulueither in tDil;P olrn OS}

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sA No.170/2024

No.2004 of 2016. The sale deed is also silent on extent, exact survey numbers to which the vendors 1to 9^possessed and means of acquiring the same. The sale deed is also silent on layout approval. Sale property of sale through GPA is not valid. The compromise decree was obtained collusively by^paying Rs.3 lakhs to wife of late Ranganayakulu. Whereas Mr.Narasimha Reddy in the sale deed No.4387 lZOt4 clearly mentioned the plot No.206, extent of 300 sq. Yards, source of acquiring the property and all important details. The respondent FI is not the party to the suit hence not binding however the OS was not decided on merits. The Tribunal has no^jurisdiction to decide the title. Hence SA is liable to be dismissed.

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Respondents 3 to 5 were set ex parte on 75.07.2024 as called absent and no representation despite service of notice. 5. The 6th respondent i.e., the Sub Registrar, Vanasthalipuram filed reply statement with documents confirming execution of sale deed on 29.02.1988 by Y. Narasimha Reddy and 8 others (through GPA Narasimha Reddy) in favour of Joseph Jacob in respect of^plot No.206 admeasuring 300 square yards forming part of lands bearing Survey Nos.69. 70,79 at 14unaganoor Village in Hayathnagar Mandal, Ranga Reddy District; execution of sale deed on 12.03.2014 by^y. Narsimha Reddy in the favour of M. Ranganayakulu; execution of Memorandum Evidencing Deposit of Title Deeds on 19.01.2018 for a sum of Rs.25 lakhs and execution of General^power of Attorney registered on 09.08.2016 by applicants 1to 5 in favour of 6th applicant.

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Heard learned counsel appearing for the applicants as well as learned counsel for the respondent FI. Written arguments filed on behalf of the applicants and the respondent FI.^pFrused the same along with material documents placed on record. , 1Y "'

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SA No.170/2024

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During the course of arguments,^{learned counsel for the} applicants in reiteration of the^{contentsof the applicationcontended} that one Joseph Jacob^{purchased the property in 1988 from Y} Narasimha Reddy and 8 others^{being represented by Y. Narasimha} Reddy vide GPA. After the^{death of Mr.JosephJacobin1992, the 1$} applicant being hls^{wife and 2 to 6 beingdaughters,succeeded to the} estate of late Joseph^Jacob as^{naturalsuccessorsand have beenin} possession. Applicants 1 to 5 entrusted^{the responsibilityto look after} and sell the schedule^{propertyto applicantno.6 by registeredGPA} dated 09.08.2016. Whereas the^{vendor of the propertyY. Narasimha} Reddy in the^year 2014^{again sold the same property ln individual} capacity to M.^{Ranganayakulu who availed loan from respondentFI} by mortgaging the^{same propertyin 2018and commltteddefault} whereupon the^{respondentFI initiated Securltization proceedings'} The respondent FI totally^{overlookedthe fact that the property} belonged to Joseph^{Jacob and his legal heirswhile accepting the} mortgage in 2014.

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Learned counsel further^{contended that thoughapplicantsfiled} OS No.2004 of^{2016 it ended in compromise between the applicants} herein and LRs of^{deceased M. Ranganayakuluvide compromlse} decree dated 09.01.2023'^{The applicants could set up their/ocus} standi, right and title^{over the scheduleproperty by way of registered} sale deed Doc.No.2146^{of 1988dated 25.02.1988 which is ratifledby} the SRO, Vanasthalipuram^{who ls the custodian of public records'} Learned counsel^{relied upon the} iudgement^{of Hon'ble SuDreme Court} (2025) 4 Suoreme Court Cases 38 wherein, vide^{para 48 it was held} that the^potential criminal action^{needs to be} initiated who approves the loan without following the standardised procedures in grant of DY^"f o./

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SA No.170/2024

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public money in the larger Public Interest. With these contentions learned counsel sought to allow the SA.

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Per contra, learned counsel for the respondent FI would also reiterate the facts as stated in the reply statement and submit that the Tribunal has no^jurisdiction to decide the title of the^property of the^parties as held by Hon'ble Supreme Court in Central Bank of India & Anr. vs Smt. Prabha Jain & Ors. in civil Aopeal No.1876 of 2016 decided on 09.01.2025.

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He further submitted that M. Ranganayakulu availed loan from the respondent FI and created mortgage over the schedule property as security for repayment by executing registered Memorandum Evidencing Deposit of Title Deeds dated 19.01.2018 and depositing title deeds Doc. No.4387/2014 dated 12.03.2014 purchased from Y. Narasimha Reddy. He passed away leaving behind his wife-3d respondent and children as legal heirs. Learned counsel pointed out that Y.Narasimha Reddy described himself as GPA holder without presenting the very GPA executed by 8 others. Further no sale transaction of immovable property could take place basing on GPA as held in a number of^judgements. Hence the sale deed No.214611988 is defective and did not confer any title on late Joseph Jacob. The 3'd respondent gave a wrong statement before the learned Senior Civil ludge, R.R. District in the Memorandum of Understanding that sale deed Doc.No.4387 /2014 dated 12,03,2074 was missing in spite of the fact that she was signatory to the loan documents executed while availment of loan from the respondent FI and applicants also kept silent without taking any further action. Thus, the compromise was done in connivance between the LRs of late Joseph Jacob and late M. Ranganayakulu. The respondent FI has followed due procedure as contemplated in the provisions of the Act, 2002 and Rules thereunder ,T9-....r9

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sA No.170/2024

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while^proceeding against the^{securedasseti.e., the SA schedule} property and therefore, he^pleaded to^{dismiss the SA in the interest} of^justice.

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Now, the^points that^{arise for considerationare:-}

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(i) whether the Applicants^{have establisheda valid and} subsisting titte to^{the schedule propefty from the} competent^cnurt?

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(ii) Whether the Securitisation^{measures initiatedby the} Respondent FI suffer^{from any illegality?}

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(iii)To what relieP

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Point No.(i):-

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Admittedly the^{applicants are third parties,and legal heirs of} late Joseph Jacob.^{Accordingto them, they are successors of the} schedule^property by^{virtue of sale deed dated 25'02'1988sald to} have been executed^{by Y. Narasimha Reddy on behalf of himselfand} 8 others in favour of^{losephJacob. Same Y' NarasimhaReddy} individually executed^{anothersaledeed dated LZ'O3'2OL4 in favour of} one Ranganayakulu^{who availedloan from respondentFI and} mortgaged the^{property as security' As a consequenceof defaultin} repayment by M.^{Ranganayakulu,the respondent FI initiated} Securitization^{proceedings againstthe property'The contention of the} respondent FI ls that^{the absence of the GPAon the strength of which} sale deed was^{executed in favour of JosephJacob, makesthe sale} deed defective and^{void. This could have been the validpoint for} consideration in the os^{No.200412006filed by the applicants against} the LRs of borrower^{late M' Ranganayakuluwherein. the respondent} FI was not made^{a party'However,lt is well settled law in the light of} judgement of Hon'ble Supreme Court^{in Central Bank of India vs'} Smt.Prabha Jain's^{case (suDra), the Tribunal has no jurisdictionto} /flb..^o.t'', U/^{-.12^",}

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sA No.17012024

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decide the civil dispute involving declaratory rights over a property. The Tribunal can adjudicate the matter by examining the priority of titles, but it is not the case of the applicants that they got the clear title through the civil litigation. Though the applicants filed OS No.2004/2006 against the LRs of late M, Ranganayakulu, it ended in compromise and not on merits and no title declaration was pronounced. Hence, it is clear that the applicants have not established their title over the subject property said to be succeeded from late Joseph lacob as on date. Since the civil litigation ended and no title dispute is sub judice before the learned Civil Court, the measures of the respondent FI being secured creditor cannot be interfered with.

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Point No.(ii):

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The Respondent FI, being a secured creditor has initiated Securitization measures against the application schedule property on the strength of sale deed deposited by the borrower. The applicants have not pointed out any procedural irregularity. However, being third parties it is impermissible for them to question the procedure followed it the respondent FI.

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The applicants failed to make out their case by establishing their title over the application schedule property and accordingly SA is liable to be dismissed.

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Point No.(iii):

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