Allowed

Madan Gopal Chug v. Shriram Housing Finance Limited

DRT5 Feb 2025SA/517/2024

Case brief

AI extract

What is this about?

In this Securitization Application, the Tribunal examined whether an auction purchaser was entitled to relief after discovering the underlying security deed used by the bank was forged and executed by a deceased person. The court held the sale was void due to fraud and directed a refund.

What did the court decide?

Refund of sale consideration of Rs. 1,60,10,000 with 12% interest and compensation of Rs. 2 lacs to the Applicant within 15 days.

Madan Gopal Chug versus Shriram Housing Finance Limited — Banking and Recovery | DRT (2025)

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SA/517 /2024

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DEBTS RECOVERY TRIBUNAL-JI, CH/\NDJG/\RH

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SA/517/2024

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LIMITED MADAN OOPAL CIIUO Vs SIJRIRAM IIOUSfNO FINANCE

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05.02.2025

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ITEM No.24

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Argued by: Ms Tanya Kapoor Advocate for the Applicant (SA)

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Ms Usha Singh Advocate for Respondent No. I (through VC)

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Financial Assets and Enforcement of Security Interest Act, 2002 Madan Gopal Chug (Applicant) has filed this Securitization Application under Section 17 of the Sccuritization and Reconstruction of (SARF AES! Act), against Shriram Housing Finance Limited (SHFL) (Respondent FI).

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Banking Financial Institutions of India. The facts of this case present a sorry state of affairs of the Non-

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Applicant is the Auction Purchaser.

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Sector-28 admeasuring 200 sq. yards having total covered area of 1000 sq. feet, Housing Board Colony, Faridabad, Haryana in favour of SHFL by repayment and SHFL initiated the SARFAESI action. On 14.09.2023, by notice under Section 13(4) of the Act on 01.12.2023. On 14.09.2023, 4. The background facts are that on 30.09.2021, SHFL advanced credit facilities to the tune of Rs. 1,15,90,295/- to 'Mis Dynamic Tools and Technologies' owned by Mr. Manish Kumar Pandey, who, in order to secure the loan, created security interest in House No. 2161, Type MIG, depositing sale-deed dated 15.09.2021 alleged to have been executed by Mr. G.L. Dogra in his favour. Mr. Manish Kumar Pandey did not make the SHFL issued the notice under Section 13(2) of the Act which was followed SHFL filed the application under Section 14 of the SARF AESI Act before the OM, Faridabad, 1-Iaryana which was allowed vide order dated

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SA/517 /2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH 29.12.2023. ln pursunnce to this order, Nnib Tehsildar delivered the propc1ty for auction. E-auction was held on 06.04.2024 and applicant was Auction Purchaser deposited whole of the sale consideration and on 22.04.2024, SHFL issued the sale certificate in his favour. SHFL also handed over all the original title-deeds to the Applicant. auction notices dated 20.01.2024 und 18.03.2024, SlfFL put up the the highest bidder who gave the highest bid of Rs. 1,60, I 0,000/-. The possession of the secured nsset to the Authori1.ed Officer of Sf rPL. Vide E-

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As per the Applicant, on 07.07.2024, he approached Estate Manager, name. On 18.07.2024, the Estate Manager Housing Board issued the notice and ors.' (Civil Suit No. CS/337/2022) and 'Rasmi Dogra Vs. Manish High Court by filing CWP No. 29565 of 2024 titled 'Madan Gopal Chug Housing Board, Faridabad with the request to transfer the property in his to the Applicant stating that the property cannot be transferred due to the Kumar Pandey and ors.' (Civil Suit No. CS/1049/2024) are pending. On of 18 per cent per annum and also for compensation of Rs. 5 lacs for mental to the said notice and stated that the auction had been conducted properly. It was also stated that any order passed in the case would not bind SHFL. Vs. Estate Officer and Another' for setting aside the reply dated 18.07.2024 issued by Estate Manager Housing Board, Faridabad and for direction to the Estate Manager Housing Board, Faridabad to register the property in his name. fact that two Civil Suits titled 'Rasmi Dogra Vs. Manish Kumar Pandey 30.07.2024, Applicant also served a legal notice to the SHFL demanding the refund of sale consideration of Rs. 1,60, 10,000/- with interest at the rate agony and Rs. 51,000/- as legal charges. On 07.08.2024, SHFL responded Thereafter, the Applicant approached the Hon'ble Punjab and Haryana

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SNS 17/2024

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DEBTS RECOVERY TRIBUNAL-II, CH/\NDJOARH Tribunal for declaring nll the nctions nnd measures as illegal, null and void and for the refund of Rs. 1,60, I 0,000/- with interest at the rate of 18 per cent per annum. Applicant also prayed that he be awarded a compensation On 09.09.2024, Applicant also filed the present _SJ_ before this of Rs. 5 lacs and costs etc. This deserves to be mentioned here that on 09.01.2025, a rejoinder was filed by the Applicant wherein it was alleged that on 06.11.2024, Housing Board, Faridabad, had made the following

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submission in the Hon'ble High Court:

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"the plot had been originally allotted to G.L. Dogra who expired on 16.08.2020. Thereafter, the property was transferred in the name of his son Narinder Dogra on 23.02.2021. Narinder Dogra also expired on 15.07.2021 and on 08.02.2022 the property was transferred in the name of Rashmi Dogra who is the widow of Narinder Dogra. As the property stands in the name of Rashmi Dogra, the borrower Manish Kumar Pandey had fraudulently secured the asset. There are two civil suits pending as well as criminal case registered as FIR No.285 by Rashmi Dogra against Manish Kumar Pandey who is stated to have purchased the plot from the original allottee G.L. Dogra but at the time of execution of the sale deed on 15.09.2021 both G.L. Dogra and his son Narinder Dogra had already expired. Therefore, Rashmi Dogra had filed an FIR as well as two civil suits against Manish Kumar Pandey wherein the respondent-Financial Institution and other financial institutions were made parties. "

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Court in CWP No. 29565 of2024 is Annexure-A2). (A copy of the order dated 06.11.2024 passed by the Hon'ble High

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In fact, it was revealed that Mr. Manish Kumar Pandey had created security interest in favour of SHFL on the basis of sale-deed dated 15.09.2021 alleged to have been executed by Mr. G.L. Dogra who in fact had already died on 16.08.2020 and the question of Mr. G.L. Dogra having

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SN517/2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH executed any sale-deed in favour of Mr. Mnnish Kumar Pandey, did not

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arise. On these facts, Applicnnt prayed thnt he be refunded the sale consideration with interest etc.

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SHFL in its reply hus stntcd thnt the property was sold on 'AS fS WHERE lS DASIS'. Applicnnt is in possession. The SA is not maintainable and the remedy of the Applicant is by way of writ in the Hon'ble High Court which he has already withdrawn. SHFL in its reply has admitted that it had granted the loan to Mr. Manish Kumar Pandey who in order to secure the same had created security interest in respect of the prope1ty in question in its favour. However, it has not been specifically denied that the sale-deed dated 15.09.2021 alleged to have been executed by Mr. G.L. Dogra in favour of Mr. Manish Kumar Pandey is a forged and

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fabricated document as on 15.09.2021 Mr. G.L. Dogra was not alive. 6. I have heard Ms Tanya Kapoor, counsel for the Applicant and Ms Usha Singh, counsel for the Respondent FL 7 (i). Ms Tanya Kapoor counsel for the Applicant has argued that in fact SHFL has played a fraud with the Applicant. SHFL sold the property to the Applicant representing that it was a mortgagee. In fact, neither Mr. G.L. Dogra nor his son Mr. Narinder Dogra ever executed the sale-deed in favour of Mr. Manish Kumar Pandey. Accordingly, the question of Mr. Manish Kumar Pandey creating the security interest in favour of SHFL on the basis of sale-deed dated 15.09.2021 did not arise. Counsel farther submitted that the Applicant is entitled to the refund of the earnest money along with interest and compensation.

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7 (ii). Per contra, Ms Usha Singh counsel for the Respondent FI has argued that the FI had sold the property as per the provisions of the SARF AESI Act. SHFL had advanced the money to Mr. Manish Kumar Pandey who had created security interest in favour of SHFL. Since, Mr.

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SNS 17/2024

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Manish Kumar Pandey fuiled to make the payment, SHFL sold the property• Counsel for the Respondent Fl further argued that the property was sold on 'AS IS WIIERE IS BASIS'. The Applicant should have made proper inquiry. Applicant foiled to make the inquiry and he is not entitled to DEBTS RECOVERY TRIBUNAL-II, Cl IANDIGJ\RH any relief.

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l have considered the rival contentions.

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l am of the considered view that this application under Section 17 deposited a forged sale-deed alleged to have been executed by Mr. G.L. the execution of the sale-deed and the question of his having executed the sale-deed in favour of Mr. Manish Kumar Pandey, did not arise. It is also apparent from the above that SHFL did not make proper inquiry before accepting the security from Mr. Manish Kumar Pandey in its favour. I am of the considered view that there is no force in the contention of Ms Usha certificate issued by SHFL in favour of the Applicant, it cannot be said that there is also no force in the contention of Ms Usha Singh Advocate that the SA is not the proper remedy in this case. Under Section 17, the measures SA is maintainable. I am of the considered view that this SA is within limitation as the Applicant came to know of the fraud by SHFL much later. 10. 9. deserves to be allowed. It is apparent that Mr. Manish Kumar Pandey had Dogra in his favour. In fact, Mr. G.L. Dogra had died prior to the date of Singh, counsel for the FI that the Applicant should have taken proper care . Whenever, a person sells a property, he gives an implied undertaking that he has a title to the property. The fact remains that on the basis of the sale taken under Section 13 and all connected matters are covered. As such this In these circumstances, it is hereby ordered that SHFL would refund the sum of Rs. f:,H.i,l@,QOer- with interest at the rate of 12 per cent per he has become the owner of the property. I am of the considered view that

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~ - 1;60// o /90() /-annum from the date of deposit till the date of payment along with C()JfJcRC:md b)t ()~ /f,02•'25 f~5 cy-- ?.{').

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SA/517 /2024

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DEBTS RECOVERY TRIBUNAL-II, CIIANDIGARH compensation of Rs. 2 lacs to the Applicant within 15 days from today. On documents handed over by SI !FL to him. Applicant would also deliver the possession to Ms Rasmi Dogra who is the owner. Applicant has also drawn security interest in respect of this very property in favour of other Financial the payment being made by SI IFL, Applicant would return all the my attention to the fact that Mr. Manish Kumar Pandey has also created

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Institutions on the basis of forged documents. I3e that as it may, the S/\ is

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allowed with costs.

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File be put up before the learned Registrar on 05.03.2025. In case, SHFL fails to make the payment by that date, Registrar would write to the

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RBI for taking appropriate action in the matter against SHFL.

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Learned Registrar would send a copy of this order to the Applicant;

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Respondent FI; Housing Board, Faridabad and Ms Rashmi Dogra directly

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or through Housing Board, Faridabad.

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Pronounced in the open Tribunal

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Dated: 05.02.2025

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(A.S.Na~ Presiding Officer DRT-2, Chandigarh (Additional Charge)

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ANJ

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Madan Gopal Chug v. Shriram Housing Finance Limited

Case brief

What is this about?

What did the court decide?

Madan Gopal Chug v. Shriram Housing Finance Limited

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

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Case details

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