Dismissed

Mrs.M.Revathy v. State Bank of India

DRT27 Mar 2026APPEAL/1/2023

Case brief

AI extract

What is this about?

In an appeal against a Recovery Officer's dismissal of a third-party claim petition, the DRT upheld the validity of a restraint order on property allegedly transferred by a debtor to his spouse to defeat the bank's secured claim. The court rejected allegations of fraudulent transfer.

What did the court decide?

The appeal was dismissed, the impugned order of the Recovery Officer was upheld, and any interim stay was vacated.

Mrs.M.Revathy versus State Bank of India — Banking and Recovery | DRT (2026)

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Appeal No.01/2023

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27.03.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 27^th day of March, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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APPEAL No.01 of 2023

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MA No.522 of 2022

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DRC No.34 of 2020 in OA No.690 of 2014

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Mrs. M. Revathy W/o D. Mohanraj No.9, Gangai Street, Kalashetra Colony Besant Nagar, Chennai – 600 090

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…..Appellant /Petitioner /Third Party

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Vs-

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STATE BANK OF INDIA Stressed Assets Management Branch Rep. by its Asst. General Manager Red Cross Buildings, II Floor No.32, Montieth Road, Egmore Chennai – 600 008

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….1^st Respondent / Certificate Holder

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M/s Leather Leader Company Private Limited Having its Registered Office at No.114/2, Anna Salai Extension Nagalkeni, Chrompet

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Chennai – 600 020

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A.E.S. Ravi Flat No.4 A, Century Habitat No.9/4, 4^th Main Road Gandhi Nagar, Adyar Chennai – 600 020

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Josephraj Flat No.23, House No.14 24^th Cross Street, Sankar Nagar Chennai – 600 075

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Appeal No.01/2023

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27.03.2026

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D. Mohanraj No.H3/3, Door No.9, Gangai Street Kalashetra Colony, Besant Nagar Chennai – 600 090

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V. Shankar No.L23, Raj Bhavan Colony Velachery, Chennai – 600 041

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……Respondents 2 to 6 / Certificate

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Counsels on record / appeared:

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Counsel for Appellant : M/s G. Desingu & L. Thiyagaiya Counsel for 1^st respondent : Sh. R. Sugumaran Respondents 2 to 6 were set ex-parte on 23.03.2026

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:- FINAL ORDER -:

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The present Appeal has been filed praying to set aside the order passed by the Recovery Officer in the M.A. No.522 of 2022 in DRC No.34 of 2020 in OA No.690 of 2014 dated 03.12.2022 and to direct the quash the order dated 28.04.2022.

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The Orders passed by the Ld. Recovery Officer dated 28.04.2022 is impugned in the present Appeal and the amount outstanding due in the subject loan account is Rs.19,45,03,266.52p (Rupees Nineteen Crores Forty Five Lakhs Three Thousand Two Hundred and Sixty Six only) along with interest.

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Appeal No.01/2023

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3. Facts of the case:

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3.1 The appellant herein is the Third party to the above said Debt Recovery Certificate/ Original application. It is submitted that the Appellant is a wife of Mr.D.Mohanraj who is the 5^th Respondent/5^th Certificate Debtor /5^th Defendant in the OA.

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3.2 It is submitted that the appellant was shocked and surprised that after she came to know about the restraint order passed by the Recovery Officer of this Tribunal dated on 28.04.2022 in the above DRC as against her schedule property morefully detailed in the schedule to the Appeal. Certainly the Appellant was unaware of the loan obtained by the 2^nd to 6^th respondent including his husband 5^th respondent and in default 1^st respondent was filed the original application which was allowed by this Hon’ble Tribunal as against the 2^nd to 6^th Respondent on 01.01.2020 and also Debt Recovery Certificate No.34 of 2022 dated 31.01.2020 was issued.

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3.3 It is submitted that there is no creation of mortgage over the said property by the 5^th respondent in favour of 1^st respondent in the above said original application and it is not a suit property. The Appellant came to understand that the said property was purchased by the 5^th respondent and mortgage the same to the Yes bank, during the year of the 2014. Later on during the pendency of the mortgage with Yes bank, 5^th respondent executed the settlement deed in favor of the appellant out of love and affection and the same has been registered on file of Sub Registrar, Pammal vide Document No.4573 of 2015 dated 11.06.2015.As per the advice of the

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officials of Yes Bank the 5^th respondent was cancelled the settlement deed on 28.09.2016 on file of the Sub Registrar Pammal vide Document 6510 of 2016.

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3.4 It is further submitted that during the year of 2016, the 5^th respondent had cancelled the absolute settlement deed executed in favor of Appellant in the year of 2015, which he had no power to cancel it and hence it is invalid as per the eye of law. So based on the above said property, the Appellant’s husband obtained private loan from third party and settled the loan account. After release the documents from Yes bank, the said property was again settled by the 5^th respondent in favour of the appellant out of love and affection and the same has been registered on the file of the Sub Registrar, Pammal vide document No.6901 of 2019, with view to rectify the earlier blunder done by him for cancellation of settlement deed.

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3.5 In the above circumstances, the absolute settlement has been made in the year of 2015 itself, which doesn’t fall under Fraudulent transfer under section 53 of the Transfer of Property act,1882. Further the appellant have to make the payment of mortgage loan to the third party, who gave the money to settle the loan to Yes Bank, which is still pending and the said property is unapproved one. So, they said property could not alienate without getting the approval from the appropriate authority. It is submitted that the said property stands in the name of Appellant and having the physical possession of the property till date without any hindrance. Further

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the above said settlement deed executed by the 5^th respondent in favour of the Appellant and handed over the physical possession of the said property prior to issuing the notice by learned Recovery officer of this Tribunal under Rule 3 of Schedule of Income Tax Act.

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3.6 In the view of the above circumstance, the order of restrain of the Recovery officer as against the appellant and her property is not maintainable and not valid in the eye of law. Further the above issues are triable nature and can be adjudicated by the Civil Court. So, the property of the appellant could not restrained or attached or sold by the Recovery officer.

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3.7 It is further submitted that the appellant was unaware of the loan bought by 5^th respondent and also regarding the Original Application which was allowed by this Tribunal and also issuance of the above DRC dated 31.01.202. In the above circumstance, to shock and surprise the recovery officer of this of this Tribunal issued the order of restraint to the property which belongs to the appellant herein.

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3.8 The Appellant submits that the Appellant family having well known and reputation in the esteem society. To safe the guard the property she has been filed the claim application as M.A.No,.522/2022 in DRC No.34/2020 in OA No.690 of 2014, in which the 1^st respondent has filed their counter. The recovery officer of this Tribunal was please to dismiss the claim application filed by the Appellant dated 03.12.2022 without considering facts and legal aspects. Hence the present Appeal is preferred

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aggrieved by the order of the Ld. Recovery Officer amongst the following grounds:

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(i) The Ld. Recovery Officer has failed to consider the statement of appellant that there is no creation of mortgage over the said property by the 5^th respondent in favour of the 1^st respondent in the above said Original Application and it is not a suit property which doesn’t fall under Lis Pendens under Section 52 of Transfer of Property Act, 1882.

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(ii) The Ld. RO has failed to consider the stand of appellant that the said property was purchased by the 5^th respondent in the year of 2011 and mortgaged the same to the Yes bank which is earlier to the Original Application filed by the 1^st respondent.

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(iii) The Ld. RO has failed to consider that during the pendency of the mortgage with Yes bank, 5^th respondent executed the Settlement Deed in favor of the applicant out of love and affection and the same has been registered on file of Sub registrar, Pammal vide document No.4573 of 2015 dated 11.06.2015. The 5^th respondent cancelled the Settlement Deed on 28.09.2016 on the file of the Sub registrar Pammal Vide document 6510 of 2016 which is valid in the eye of law.

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(iv) The Ld. RO had failed to consider that absolute settlement has been made in the year of 2015 itself, which doesn’t fall under Fraudulent Transfer under section 53 of the transfer Of Property Act,1882.

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(v) The Learned recovery officer has failed to consider that the above said settlement deed executed by the 5^th respondent in favor of the applicant and handed over the physical possession of the said property prior to issuing the notice buy the Hon’ble Recovery officer under Rule 2 of II schedule of Income Tax Act.

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(vi) The Ld. RO officer has misconceived the issue that the 5^th respondent never disclosed the asset in this case, but the issue of disclosure of asset not raised in this case, which was raised by the 1^st respondent in another case, but another case was settled between the 5^th respondent and the 1^st respondent. So there is no question arisen for disclosure of assets in this case and the same cannot be deciding the factor for dismissing the claim application. So the learned recovery officer was giving in the order, not valid in the eye of law.

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(vii) The order of restraint of the learned recovery officer as against the appellant and her property is not maintainable and not valid in the eye of law.

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(viii) The Ld. RO has failed to consider the above issues are triable nature and can be adjudicated by Hon’ble civil court. So, the property of the appellant could not be restrained or attached or sold by the learned recovery officer.

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3.9 During the course of arguments, the Appellant in support of her contentions has relied upon the following judgments:

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(i) Judgement of Hon’ble High Court of Bombay in the case of Nitin Nagarkar – Vs. – Income-Tax Officer and others reported in 2022 SCC Online Bom 1540;

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(ii) Judgement of Hon’ble High Court of Madras in the case of The Tax Recovery Officer II, Sadar Nagpur – Vs. – Gangadhar Vishwanath Rande reported in 1998 (II) CTC 677

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4. Counter of 1^st respondent bank:

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4.1 The 1^st respondent bank has filed objections to the appeal inter-alia contending that the claimant is the wife of the 5^th Respondent herein, who is one of the personal guarantors to the credit facilities availed by the 2^nd Respondent company. During the pendency of the OA, the parties to the OA arrived at a compromise in and by which, the Certificate Debtors agreed to pay a sum of Rs.10.40 Crores within a time frame fixed in the compromise. However, the certificate Debtors after the payment of initial sum of Rs.4.00 crores did not complete the transaction in full, rendering

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the failure of compromise. In view of failure of compromise, the OA was proceeded further and final order came to be passed by the Tribunal on 01.01.2020 and in pursuance of which the present DRC came to be issued.

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4.2 It is submitted that the aforementioned D. Mohanraj had also guaranteed the due repayment of the credit facilities in respect of yet

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another entity i.e., Rang Rasayaan Associates P. Ltd, which was liable to pay a sum of Rs.9,17,38,839.71p to the 1^st Respondent herein. The 1^st Respondent herein filed OA No.69 of 2015 before the Debts Recovery Tribunal-I, Chennai and after contest, final order came to be passed on 31.08.2017 directing the defendants therein to pay a sum of Rs.7,32,27,737/- together with future interest @ 11% p.a(simple) from the date of application till realization in full from the defendants jointly and severally, in case of default, to sell the mortgage properties and if sale proceeds are not sufficient the defendant therein are personally liable.

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4.3 It is stated that pursuant to the same, DRC No.332 of 2018 was issued on 30.01.2019 and Demand Notice came to be issued on 11.01.2019. Even though the said account was subsequently settled between the parties under a Onetime settlement scheme, in view of the issuance of the above Demand Notice, as per Rule 16 of the Second Schedule of the Income Tax Act, 1961, the defaulter, in this case D.Mohanraj or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to them except with the permission of the Recovery Officer nor shall any civil court issue any process against such property in execution of a decree for the payment of money and where an attachment has been made under this schedule, private transfer of delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, divided or

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other money contrary to such attachment, shall be void as against all claims enforceable under the attachment.

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4.4 It is submitted that when the alleged Settlement Deed was executed on 22.08.2019 vide Doc.No.6901 of 2019, the operation of Rule 16 was in full force. I submit that an Indian citizen holding single PAN and identity is bound by all money decrees enforceable against him and Rule 16 clearly prohibits the defaulter/certificate debtor from doing the acts mentioned therein. The third party or the concerned defaulter cannot take shelter under the present DRC and demand notice. Territorial Jurisdiction of DRTs are made only for administrative convenience and cannot be by any stretch of imagination come to aid of the Appellant herein.

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4.5 It is further contended that by virtue of S.31B of the recovery of Debts and Bankruptcy Act, 1993, priority of charge has been exclusively made in favor of the secured creditor, in as much as the section starts with a non obstance clause. As such, the various private transfers mentioned in affidavit filed in support of the above claim petition are illegal are not enforceable in law.

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4.6 It is submitted that so long as property was under mortgage to YES bank, this respondent can only have a subservient charge. Once the said loan is cleared, the charge of this respondent becomes primary in as much as the 5^th respondent in favor of the appellant is non-est in law. This respondent never at point in time claimed the subject property is mortgaged but only stakes in claim having already obtained orders on

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personal guarantee of the 5^th respondent. Since the alleged settlement deed in 2015 had already been cancelled the same cannot be tagged to claim retrospective effect of the settlement deed executed in 2019.

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4.7 It is further submitted that the 5^th respondent herein was also a party to the proceedings in OA. No. 69 o0f 2015 and in response to the application for disclosure of assets filed there in, the 5^th respondent filed a no-asset affidavit, which shows the temerity of the 5^th respondent over Tribunals for granted. Further, filing such a false affidavit knowing the same to be false as the 5^th respondent was the owner of the property as early as in June 2015, amounts to criminal contempt. As there is no disputed question involved in this case, there are no triable issues to be adjudicated by civil court.

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4.8 In view of what is stated above, the transactions mentioned in the affidavit filed in the support of the claim petition are sham and nominal and are not sustainable in law. The 5^th respondent in order to defeat the just and reasonable claim of the certificate holder has indulged in the above fraudulent transfers. It is not out of context to mention that in the proceedings before the DRT-I, the 5^th respondent in response to an application for disclosure of assets has filed an affidavit that he did not own or possess any other immovable property other than those mortgaged to the certificate holder bank. The above statement made by the 5^th respondent makes out a case of perjury and criminal contempt.

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4.9 In view of the foregoing, the order passed by the Ld. RO is just and reasonable. The claim petition itself is an abuse of process of law, filed in active collusion with certificate debtors, devoid of any merits and is liable to be dismissed in limini with costs was rightly dismissed. Consequently, the present appeal against the order dated 13.12.2022 made in M.A No.522 of 2022 is also devoid of any merits and is liable to be dismissed in limini. The appellant has not made out any prima facie case and the balance of convenience is not in her favor. Hence the 1^st respondent bank prayed for dismissal of above appeal with costs.

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4.10 During the course of arguments, the 1^st respondent bank in support of their contentions has relied upon the following judgments:

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(i) Judgement of Hon’ble High Court of Andhra Pradesh in the case of Ayitam Venkata Anjani – Vs. – Ganeshula Uma Parvathi & another decided on 04.09.2015;

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(ii) Judgement of Hon’ble High Court of Kerala at Ernakulam in the case of M/s Verizon Builders & Developers Ltd. – Vs. – Jyothi Susan John & Another reported in 2018 SCC Online Ker 5291

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During the hearing on 04.06.2025, counsel for appellant submitted that AOS filed, however on verification it is found that AOS is not available in the file. Hence appellant’s counsel was directed to furnish copy of the same to the Tribunal. Despite direction, counsel for appellant did not furnish

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the same. Respondents 2 to 6 were called absent and placed ex-parte on 23.03.2026.

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Heard the submissions of both sides and perused the available records of the case.

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6.1 Admittedly, the Appellant is a third party to the proceedings. It is the case of the appellant that she came to know about the restraint order passed by the Recovery Officer dated 28.04.2022 in the above DRC as against her and schedule mentioned property in the Appeal. It is the further case of the appellant that she was unaware of the loan obtained by the respondents 2 to 6 including her husband 5^th respondent. Due to default in repayment, the 1^st respondent bank had filed OA before this Tribunal which came to be allowed vide order dated 01.01.2020 and DRC No.34 of 2022 was issued on 31.01.2020.

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6.2 It is contended by the Appellant that there is no valid mortgage created by the 5^th respondent in favour of 1^st respondent bank in the above said OA and it is not a secured asset. The further contention of the appellant that she is unaware of the purchase of the subject property by her husband, 5^th respondent and the mortgage created by him in faovur of Yes Bank during 2014. It is admitted by the appellant that during the pendency of the mortgage with Yes Bank, 5^th respondent had executed Settlement Deed vide Doc No.4573 of 2015 dated 11.06.2015. Subsequently, the same was cancelled as per the advice of officials of Yes Bank during the year 2016, which he had no power to cancel it and the

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same is invalid. Again the 5^th respondent had obtained private loan from third party and settled the loan account, subsequent to which the 5^th respondent had once again settle the property in favour of appellant, vide Doc No.6901 of 2019 dated 22.08.2019. Under such circumstances, the appellant submits that she is the absolute owner of the subject property and is continuing to be in physical possession and enjoyment of the said property and hence the order of Ld. RO is not maintainable as the same is not valid in the eyes of law.

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6.3 Whereas it is the case of the 1^st respondent that the Appellant is the wife of 5^th respondent herein who is one of the personal guarantors to the credit facilities availed by 2^nd Respondent. During the pendency of OA, parties have arrived at compromise and agreed to pay a sum of Rs.10.40 crores as per the terms of compromise. However, the certificate debtors after payment of initial sum of Rs.4 crores, did not complete the transaction in full, rendering failure of the compromise. Consequently, OA was proceeded further, final order was passed on 01.01.2020 and the present DRC was issued. The 5^th respondent had guaranteed another borrower, to whom the 1^st respondent had extended the credit facilities. For recovery of debt due from the said borrower, the 1^st respondent bank had filed OA No.69 of 2015 before DRT-I, Chennai and the OA came to be allowed vide order dated 31.08.2017 for recovery of Rs.7,32,27,737/- together with 11% p.a. (simple) from the defendants jointly and severally and in default to sell the mortgaged properties and if the sale proceeds are not sufficient,

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to proceed personally against the defendants. Pursuant to the final order, DRC No.332 of 2018 came to be issued on 03.01.2019 and demand notice came to be issued on 11.01.2019. Although the said account was subsequently settled between the parties, in view of issuance of demand notice, as per Rule 16 of the II Schedule to IT Act, 1961, the defaulter, in this case the 5^th respondent herein or his representative shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him without express permission of the RO or the property may otherwise be dealt with before any other forum.

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6.4 The respondent submits that the alleged settlement deed was executed on 22.08.2019 vide Doc No.6901 of 2019 during the operation of Rule 16. Further, by virtue of S.31 B of RDB Act, 1993, priority of charge has been exclusively made in favour of the secured creditor, in as much as the section starts with non obstante clause. As long as the property was under mortgage to YES bank, the respondent can only have a subservient charge. Once the said loan is cleared, the charge of this respondent becomes primary in as much as the 5^th respondent herein is under liability to this respondent in view of the express prohibition under Rule 16 as mentioned above, transfer made by the 5^th respondent in favour of Appellant is non-est in law. The respondent claims stake over the subject property based on the personal guarantee of the 5^th respondent. Since the alleged settlement deed in 2015 had already been cancelled, the same

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cannot be tagged to claim retrospective effect of the settlement deed executed in 2019.

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6.5 In OA No.69 of 2015, 5^th respondent herein was also party to the proceedings in OA No.69 of 2015 and in response to the application for disclosure of assets filed therein, the 5^th respondent filed a no-asset affidavit knowing the same to be false as the 5^th respondent was the owner of the property as early as in June, 2015, amounts to criminal contempt. The order passed by the Recovery Officer is just and reasonable as the claim petition itself is an abuse of process of law.

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6.6 After hearing both sides arguments and on perusal of records, the point that arises for consideration is

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(i) Whether the appellant is entitled for the relief as prayed for?

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(ii) If so, to what extent?

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6.7 This Appeal was filed before this Tribunal on 30.12.2022 along with MA No.85/2023 for condonation of delay of 35 days in re-presenting the Appeal. The MA was taken up on 09.06.2023 and the relevant proceedings is as under :

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“It is the case of appellant that aggrieved by the objection / return dated 01.04.2023 taken by the Registry in SR No.14746/22, asking applicant to remit 50% of the claim amount to consider their appeal under Section 30 against the orders of Recovery Officer, appellant had preferred Writ Petition before Hon'ble High Court, Madras in W.P.

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No.11795/23, which was considered favourably by its order dated 20.04.2023, with a direction to this Tribunal to number the appeal without insisting for the said 50% payment, filed vide Dy. No.1788/22 challenging the order passed by Ld. RO in MA No.522/22 in DRC No.34/2020 in OA NO.690/2013 dated 03.12.2022. However as the order copy was uploaded in website of Hon'ble High Court only on 05.05.2023, appellant could not re-present the appeal within time and hence a delay of 35 days occurred in re-presentation of appeal. Thus submitting, Ld. Counsel for appellant prayed for condoning the delay and prayed for necessary orders.

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In the circumstances stated, MA No.85/23 is allowed condoning delay of 35 days in re-presenting the appeal and Registry is directed to number the appeal, if otherwise found to be in order.”

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Thereafter, the appeal was numbered as Appeal No.01/2023.

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6.8 It is manifest from records that OA No.690/2014 is filed by the 1^st respondent bank against respondents 2 to 6, who are borrowers/ guarantors / mortgagors to the loan availed from 1^st respondent bank. Although the defendants entered appearance, did not choose to file any reply statement. OA was allowed vide order dated 01.01.2020 for recovery of a sum of Rs.19,45,03,266.52p due under various credit facilities, less Rs.5,09,78,243/- realized through sale of A schedule property and Item Nos. 1 and 2 of B schedule property and various amounts paid between 03.01.2015 and 02.04.2016 together with pendent lite and future interest

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@ 14.50% p.a. from the date of filing of application till the date of realization in full from the defendants jointly and severally. It is also further ordered that in case of default in payment by the defendants, the applicant bank is entitled to sell Item No.3 of the Schedule B property alone and adjust the sale proceeds towards the amount due. If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants are personally liable for all such amounts due. The said final order was not challenged in appeal by any of the parties.

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6.9 Based of the above final order, DRC No.34/2020 was issued on 31.01.2020. During the execution of DRC, the Ld. Recovery Officer had issued an order of Restraint in respect of the subject property in Appeal and the same was communicated to The Sub Registrar, SRO, Pammal, Kancheepuram District for making necessary entries in the relevant registers, along with that a Show Cause notice was issued to the Appellant Mrs. M. Revathy, W/o D. Mohanraj, to show cause as to why the above order of restraint be imposed on her and also to show cause as to why the schedule mentioned property be attached and sold in execution of the RC.

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6.10 On receipt of the show cause notice, the Appellant had filed a claim petition in MA No.522 of 2022 before the Ld. Recovery Officer praying to vacate the order of Restraint dated 28.04.2022 taking into account the objection of the petitioner / third party. The 1^st respondent bank filed their counter to the said MA. After hearing both sides, the Ld. Recovery Officer

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vide order dated 03.12.2022 dismissed the MA and the relevant operative portion of the order is extracted below:

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“On perusal of the records, the Respondent No.5, transferred the subject property during the pendency of the OA No.690/2014, having fully aware of the proceedings against him as a guarantor. Further the respondent No.5 never disclosed his personal assets and was set ex-parte at the time of issuing final order dated 01.01.2020. Earlier, joint compromise memo filed by the parties which is recorded on 24.01.2015 but Certificate Debtors failed to make the full compromise amount. Therefore, the reasons will be sufficient to prove that Respondent No.5, engaged in transferring the subject property by way of settlement deed to the petitioner, is to directly deny the rights of the creditors.

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In view of the above, both the MAs were dismissed without costs”

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6.11 Aggrieved by the aforesaid order of Ld. Recovery Officer, the appellant had preferred the present Appeal. The contention of appellant that she is a third party to the above DRC and that she is not aware of the loan obtained by 5^th respondent and also regarding the OA which was allowed by the Tribunal and DRC dated 31.01.2020 issued, is not a valid contention as the Appellant and 5^th respondent are husband and wife, and as per the Appeal cause title both are residing at same address and it is not the case of the Appellant that she is not in good matrimonial terms with

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her husband for her to be ignorant of the above facts. That being the case, the claim of Appellant that she is unaware of the pendency of case does not have legs to stand.

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6.12 The further contention of Appellant that the 5^th respondent had cancelled the absolute Settlement Deed executed in favour of appellant in the year 2015, which he had no power to cancel. It is a matter of record that the subject property was offered as security by the 5^th respondent to the YES Bank and during the pendency of mortgage, the 5^th respondent had executed the Settlement Deed in favour of Appellant, which itself is unlawful. The mortgage contract is a separate financial obligation between the borrower (husband/jointly) and the lender, which remains attached to the property regardless of who holds the title. Therefore, at the insistence of YES bank, the 5^th respondent had cancelled the Settlement Deed. Thereafter, the 5^th respondent had settled the dues of YES Bank and once again settled the property in favour of Appellant during the year 2019. When the property was under mortgage with YES bank, 5^th respondent had no right to settle the property in his wife’s name, when the very settlement deed itself is void, the contention of appellant that the 5^th respondent had no power of cancel the Settlement Deed executed in her favour, has no legs to stand.

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6.13 The contention of Appellant that the Ld. Recovery Officer has failed to consider that the absolute settlement made in the year 2015 itself, which doesn’t fall under Fraudulent Transfer under Section 53 of Transfer of

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Property Act, 1882. In this context, it is a matter of record that the subject OA was filed during the year 2014, final order was passed on 01.01.2020, holding the defendants / respondents 2 to 6, including 5^th respondent herein personally liable, if the sale proceeds are not sufficient to satisfy the dues. DRC came to be issued on 31.01.2020. In order to frustrate the legitimate recovery process of applicant bank and in anticipation of such an order, the 5^th respondent had settled the property in his wife’s favour during 2019 itself. Even otherwise, Under Section 128 of the Transfer of Property Act, the donee (in this case Appellant) becomes personally liable for all existing debts and liabilities associated with the property. This applies to all outstanding debts and legal liabilities of the donor existing at the time the gift is made. Hence the above contention also fails.

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6.14 The facts and circumstances in the Judgements relied on by the appellant is different from the present case on hand, as it is the matter of record that the 5^th respondent, knowing very well about the order of this Tribunal holding him personally liable for the dues in the OA, had willfully settled the loan in his wife’s name during 2019.

¶161

For the forgoing reasons, the Oder of the Ld. Recovery Officer does not need any interference and the said Order dated 03.12.2022 is upheld by directing the Ld. Recovery Officer to proceed further in accordance to law.

¶162

Appeal No.01/2023

¶163

27.03.2026

¶164

¶165

Accordingly, the Appeal No.01/2023 stands dismissed. Interim Order of stay, if any granted stands vacated. Pending IA’s are also disposed of. No order as to cost.

¶166

A copy of this order be communicated to the parties concerned as per extant guidelines and also to the concerned Recovery Officer of this Tribunal.

¶167

Sd/-

¶168

(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

¶169

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 27^th day of March, 2026)

¶170

ANNEXURES

¶171

LIST OF DOCUMENTS PRODUCED BY THE APPELLANT

¶172

Sl. No.	Description of Documents	Documents No.
1.	Sale Deed dated 17.09.2008	A-1
2.	Sale Deed dated 31.10.2011	A-2
3.	Settlement Deed dated 11.06.2015	A-3
4.	Cancellation of Settlement Deed dated 28.09.2016	A-4
5.	Settlement Deed dated 22.08.2019	A-5
6.	Final order in OA No.690 of 2014	A-6
7.	Copy of DRC No.34 of 2020	A-7
8.	Copy of order of Restraint dated 28.04.2022	A-8
9.	Claim Petition with Affidavit	A-9
10.	Counter Affidavit filed by the 1^stRespondent	A-10
11.	Impugned order in MA No.522 of 2022	A-11

¶173

Appeal No.01/2023

¶174

¶175

27.03.2026

¶176

TYPED SET OF DOCUMENTS FILED BY THE 1^st RESPONDENT

¶177

NIL

¶178

Schedule of property:

¶179

All that piece and parcel of land together with Old Village No.129, 88, 23, New Village No.20, Pammal Village, Sri Saraswathi Muthu Pazhaaiyappa Nagar, Now Pallavaram Taluk, Kancheepuram District, South Chennai DRO, Pammal SRO, Old S.No.97,Old Patta No.5504,as per patta S.No.97/12,New Patta No.7978 and 6989 as per patta New S.No.97/12/A2 in it plots No.A measurement 10714 sq.ft in it shed a E.B. and bounded on the

¶180

North by - 24 feet Broad Road, South by - S.Nos.98,99/12 in it compound wall East by - S.No.97/12B part Divathi vacant site West by - S.No.97/13B part of Sundarraj vacant site. And Measuring

¶181

East West on the North side - 109 feet East West on the South side - 111 feet North South on the East side - 89 feet North South on the West side - 108Feet

¶182

In between Plot No.A measurement 10714 sq.ftvacant site A.C.C.Roof Sheet shed and Electricity connection and other accessories.

¶183

Sd/-

¶184

(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Mrs.M.Revathy v. State Bank of India

Case brief

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Mrs.M.Revathy v. State Bank of India

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