Allowed

Pallavi Arun Gokhale v. Edelweiss Asset Reconstruction Co. Ltd.

DRT2 Jun 2026SA/727/2025

Case brief

AI extract

What is this about?

In this securitization application, a bona fide purchaser challenged possession taken by an asset reconstruction company under the SARFAESI Act, arguing that no valid security interest existed because the property lessor denied issuing the required No Objection Certificate for the mortgage. The Tribunal found the lessor's records did not show an NOC, deemed the mortgage invalid, and directed the r

What did the court decide?

The Securitization Application is allowed. All proceedings under SARFAESI Act are set aside as illegal. The respondent is directed to restore possession of the suit property to the applicant immediate

Pallavi Arun Gokhale versus Edelweiss Asset Reconstruction… — Company and Corporate | DRT (2026)

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Presented on: 12/08/2025 Registered on: 24/11/2025 Decided on: 02/06/2026 Duration: Y M D 00 – 09- 20

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IN THE DEBTS RECOVERY TRIBUNAL, AT AURANGABAD Securitization Application No. 727 of 2025

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1 Mrs. Pallavi Arun Gokhale, Age 45 years, occupation - Doctor, R/o Flat No. 2, C-2,

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Tapadia Park, N-4 CIDCO, Tal. Chh. Sambhajinagar, Dist. Chhatrapati Sambhajinagar.

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… Applicant

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VERSUS

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Edelweiss Asset Reconstruction Co. Ltd., Through its Authorized Officer, Retail Central office, 1^st Floor, Edelweiss house, Off CTS Road, Kalina Mumbai 400 098.

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Bharat Narayan Ikkar, Age. 45 years, occupation- Business, R/o. Vivekanand Nagar, CIDCO, Chhatrapati Sambhajinagr 431 003.

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Smita Bharat Ikkar, Age- 37 years, Occu. Housewife R/o. Vivekanand Nagar, CIDCO, Chhatrapati Sambhajinagr 431 003.

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The Administrator, City & Industrial Development Corporation of Maharashtra Ltd. Udyog Bhavan, Chhatrapati Sambhajinagar 431 003 Respondents

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[AAM] (SA No.727/2025) Page 1 of 21

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APPEARANCE :

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For the Applicant	Mr. Kulkarni Vivek B, Adv.
For Respondent No. 1	Mr. Agrawal Bobby R, Adv.
For Respondent No. 2&3	None.
For Respondent No. 4	Shri. S.S.Randive Adv.

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CORAM: DR. J.R. CHAUHAN, PRESIDING OFFICER

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JUDGMENT

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(Pronounced on : 02.06.2026)

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The applicant namely Pallavi Arun Gokhale has filed

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the Securitization Application (SA) under Section-17 of The Securitization and Reconstruction of Financial Assets and Enforcement of Securitization Interest Act, 2002 (hereinafter referred as SARFAESI Act) for the following reliefs.

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I. That the Ld. Tribunal may be pleased to set aside the possession notice dated 01.07.2025 issued by the respondent No.1 F.I. / Bank which was pasted on the said property.

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II. That the Ld. Tribunal may be pleased to set aside the notices issued by the Respondents F.I. / Bank in respect of said property under SARFAESI Act and declared that steps taken by Respondent no.1 under SARFAESI Act are being bad in law and non est;

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III. That the Ld. Tribunal may be pleased to direct the

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[AAM] (SA No.727/2025) Page 2 of 21

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respondent No. 1 not to proceed further against the said property of the applicant for the recovery of dues of the respondent no.2 in future.

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IV. Any other just and equitable orders, in favour of the Applicant, in the interest of justice, may also kindly be passed, to meet ends of justice.

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V. This Hon’ble Tribunal may kindly be pleased to hold that, the act of respondent Bank for taking possession of the secured asset on 23.03.2026 without any written notice is illegal and against provisions of law.

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VI. Direct the Respondent No.1 to pay costs including the compensatory costs to the extent of Rs.1 lakh may kindly be awarded to the applicants.

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The brief facts as set up in amended SA are that the applicant is neither a borrower nor a mortgagor but she is a bona-fide purchaser of Shop No.UGL-08, Admeasuring 18.09 Sq. Mtrs., constructed on R + C Plot No. 14 &15, “Punarma Arcade” N-4, / NS 3, Chhatrapati Sambhajinagar) vide registered deed of Assignment bearing document No.AGG-5-2225 dated 17.03.2020 from the respondent no.2.

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[AAM] (SA No.727/2025) Page 3 of 21

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The respondent no.1 is Financial Institution/Reconstruction Company and doing the business of acquiring Nonperforming Assets (NPA) from the banks and Financial Institutions and resolving them through appropriate resolution as per SARFAESI Act. As per possession notice, M/s HDB Financial Services Ltd. (original lender) has assigned the loan of the respondent no.2&3 to the respondent no.1 and respondent no.1 has initiated SARFAESI action through its authorized officer against the said property i.e. owned by respondent no.1. The respondent no.2&3 are coborrowers and respondent no.2 has mortgaged the said property to them. The respondent no.4 i.e. City and Industrial Development Corporation of Maharashtra (CIDCO) is a body corporate incorporated under the Companies Act, 1956, having its Registered Office at „Nirmal‟, II nd floor, Nriman Point, Mumbai and having branch at Chhatrapati Sambhajinagar, is owner of the property and said property has been transferred through lease

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[AAM] (SA No.727/2025) Page 4 of 21

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deed. The applicant has purchased the shop in dispute vide Registered Deed of assignment from respondent no.2 and respondent no.4 has issued transfer order in the name of

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present applicant on 04.11.2024.

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It is further stated that, the applicant surprised to see the possession notice dated 01.07.2025 which was pasted by respondent no.1 on her clinic i.e. said property, which shows that the respondent no. 2&3 are co-borrowers. The applicant inquired from respondent no.2 regarding availing the loan then it transpired that aforesaid property is not mortgaged. However, the respondent no.1 is stating that they have Security Interest. The respondent no.4 (CIDCO) has transferred the aforesaid shop in the name of applicant. The respondent no.4 had never issued any NOC for creation of mortgage in favour of any Financial Institution except the transfer order dated 04.11.2024 issued in favour of the applicant. The respondent no.4 is original owner of the property and they have not issued any NOC for creation of

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[AAM] (SA No.727/2025) Page 5 of 21

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mortgage in favour of Financial Institution. The applicant has paid consideration of Rs. 25,00,000/- to the vendor (respondent no.2) and taking into consideration, the respondent no. 4 CIDCO has transferred the said property in the name of present applicant. The applicant is bona-fide purchaser for valuable consideration. The respondent no. 1 has proceeded further under the SARFAESI Act and action of the respondent no.1 is liable to be set aside on the ground that the applicant is bona-fide purchaser and her name has been mutated in the CIDCO office. The respondent no.4 (CIDCO) has not issued permission for mortgage/NOC to M/s HDB Financial Services, hence alleged mortgage deed as well as the alleged assignment agreement dated 30.12.2022 is not binding on the present applicant. The respondent no.4 has not granted any permission to create mortgage in favour of original lender pertaining to the suit property. If the borrower has not paid loan, respondent no.1 cannot initiate action against property, which was purchased

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[AAM] (SA No.727/2025) Page 6 of 21

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by following due process of law. The respondent no.4 (CIDCO) has submitted a letter to the applicant dated 20.01.2026 whereby the respondent no.4 has informed that they have not issued any NOC dated 29.07.2016 in favour of HDB Financial Services Ltd. and no valid and legal mortgage deed was executed and no valid security interest was created in favour of the original lender as well as in favour of respondent no.1 and the actions of the respondent no.1 are illegal and against the provision of law and prayed for allowing the Securitization Application.

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The respondent no.1 filed Written Statement and contested the securitization application on the grounds that the applicant purchased the said property vide deed dated 17.03.2020 and that is subject to the prior registered mortgage deed dated 24.08.2016. The original lender created its security in 2016 and the original lender acted upon the NOC and property registered entry dated. 29.07.2016 and subsequent document submitted by CIDCO to the contrary,

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[AAM] (SA No.727/2025) Page 7 of 21

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is after-thought and has been procured by the applicant to defeat the loan recovery of respondent No.1. The physical possession was taken by the respondent no. 1 on 23.03.2023 in compliance of a lawful order passed by ACJM on 11.11.2025 under Section 14 of SARFAESI Act. The letter dated 25.03.2026 is a procured document and cannot invalidate a security interest created and procured in 2016 based on contemporaneous documents issued by CIDCO. The respondent no.1 has denied all other allegations of the SA and took preliminary objections regarding jurisdiction, maintainability, Locus standi, collusion, priority of charge, applicant is not bona-fide purchaser and the applicant has suppressed the material facts and coming before this tribunal with unclean hands and prayed for dismissal of the SA of the applicant.

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The respondent no.4 (CIDCO) filed Say/WS alleging therein that the subject property is developed land situated at Plot Nos.14 &15. It was originally allotted to Shri. Sushil

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[AAM] (SA No.727/2025) Page 8 of 21

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Kamalnayan Bharuka and others by the CIDCO pursuant to an agreement lease, and subsequently transferred via transfer order in favour of M/s. Chaudhari Builders and Developers and thereafter registered lease deed (bearing Day Book No. 3229 and 3240) was executed on 31^st December, 2004 in favour of Vasanti Shivdas Chaudhari and others. The subject property known as Shop No. UGL-08, was transferred vide transfer order No. 1256 dated 04.10.2024 in favour of Shri. Hrishikesh Bhalchandra Desale from M/s. Chaudhari Builders and Developers, via Sumati Vinal Chaudhari. Subsequently, the same property was transferred in favour of Bharat Narayanrao Ikkar from Shri Hrishikesh Bhalchandra Desale. Thereafter, on 04.11.2024, the property was transferred vide Transfer Order No. 47 in favour of Dr. Pallavi Arun Gokhale from Shri. Bharat Narayanrao Ikkar (Respondent No.2)

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It is further submitted by respondent no.4 that upon review of the available record, it is found that CIDCO has

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[AAM] (SA No.727/2025) Page 9 of 21

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not issued a “No Objection Certificate” (NOC) dated 29.07.2016, authorizing the mortgage of said property to M/s. HDB Financial Services Ltd. According to CIDCO records, the property has not been mortgaged to M/s. HDB Financial Services Ltd. Furthermore, lease hold to the property remains in the name of Pallavi Arun Gokhale as per CIDCO records. The CIDCO has not issued NOC permission to mortgage the property to M/s. HDB Financial Services Ltd. or any other Financial Institution. The respondent no.4 is owner of the property and applicant is lessee of the respondent no.4 as per rules and regulations of CIDCO. It is mandatory to obtain No Objection Certificate before mortgaging the property, therefore, the said mortgage in favour of the FI (respondent No.1) is not binding on CIDCO.

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I have heard the learned counsel for the parties and gone through the material on record as well as Written Note

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of Arguments submitted by both the sides and my findings

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[AAM] (SA No.727/2025) Page 10 of 21

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along-with reasons are as under:

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As per Respondent No.4 (CIDCO), said property is developed land situated at Plot No.14&15. It was originally allotted to Shri. Sushil Kamalnayan Bharuka and others by

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the CIDCO and thereafter transferred in favour of M/s Chaudhari Builders & Developers and the registered lease deed was executed on 31.12.2004 in favour of Vasanti Shivdas Chaudhari and others. The subject property is known as Shop No. UGL-08 was transferred in favour of Hrishikesh Bhalchandra Desale from M/s. Chaudhari Builders and Developers, vide Transfer Order No. 1256 dated 04.10.2024. Thereafter the same property was transferred in favour of Shri. Bharat Narayanrao Ikkar (respondent no.2/borrower). Thereafter on 04.11.2024 the property was transferred in favour of the present applicant namely Dr. Pallavi Arun Gokhale vide Transfer Order No. 47 from Shri. Bharat Narayanrao Ikkar (respondent no.2/borrower). The applicant has produced copy of deed of

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[AAM] (SA No.727/2025) Page 11 of 21

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assignment and transfer order dated 04.11.2024 as “Annexure - A-1” (Colly) page 17 to 37 of SA in list of documents Exh. – 4.

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It has been submitted on behalf of the respondent no.1 that, originally the loan was advanced to respondent no. 2&3 by HDB Financial Services Ltd. and thereafter this Financial Institution assigned the loan account in favour of the present respondent no.1 by way of assignment deed. It is also submitted on behalf of the respondent no.1 that the mortgage of the suit property was created with the prior permission of lessor (CIDCO respondent no.4) and No Objection Certificate was issued by respondent no.4 and entry to this effect was made in property registered on 29.07.2016 and copy of this certificate has been produced on record by the respondent No.1 alongwith reply.

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On the other side, it was submitted on behalf of the applicant that the NOC dated 29.07.2016 was never issued by respondent no.4 as the respondent no.4 has confirmed this

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[AAM] (SA No.727/2025) Page 12 of 21

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fact vide letter dated 25.03.2026 issued by CIDCO in response of letter dated 20.01.2026 sent by the applicant (Annexure A-4 colly). The Learned Counsel for the respondent no.1 argued that this Tribunal lacks jurisdiction to adjudicate upon the title dispute and that can be adjudicated by the competent Civil Court. The respondent no.1 has primacy of the prior charge of the suit property and applicant has purchased the suit property at his own risk, whereas mortgage was created in the year 2016.

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The above argument of learned counsel for respondent no.1 has no weight reason being that in the given facts and circumstances of this case, it is within the powers of the DRT to adjudicate the issue of legality and validity of a mortgage and the legality and validity of security interest created in favour of the original lender as held in judgment in Pranjivan Purushottam Zaveri and another vs. Dena Bank and others AIR 2011 Gujarat 388 (DB).

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Now it has to be appreciated by evidence on record led

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[AAM] (SA No.727/2025) Page 13 of 21

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by the parties where the mortgage deed dated 24.08.2016 was validly executed in favour of original lender (HDB Financial Services Ltd.) or a valid security interest was created in favour of this Financial Institution. The respondent no. 2 &3 have raised the loan from original lender HDB Financial Services Ltd. and alleged to have mortgaged the suit property in favour of the Financial Institution. Admittedly the respondent no. 4 CIDCO is the owner of this suit property and for mortgage, the permission of respondent no.4 was mandatorily required. The respondent no.1 claimed that the respondent no.4 issued No Objection Certificate in favour of HDB Financial services Ltd. as per NOC dated 29.07.2016. The respondent no.4 CIDCO has filed Written Statement in this case and they have denied issuing this No Objection Certificate. It is specifically stated in Written Statement that upon review of the available record, it was found that CIDCO has not issued No Objection Certificate dated 29.07.2016 authorizing the

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[AAM] (SA No.727/2025) Page 14 of 21

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mortgage of said property to HDB Financial Services Ltd. As per record, lease hold right to the property remains in the name of Dr. Pallavi Arun Gokhale. The respondent no.4 is owner of the property and applicant is lessee of respondent no.4 as per rules and regulations of CIDCO. Therefore, the respondent no.4 has totally denied the No Objection Certificate dated 29.07.2016 on which the entire case of the respondent no.1 is based.

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It is admitted case of the respondent no.1 that no Tripartite agreement was executed between the respondent no.2&3, HDB Financial Services Ltd. and CIDCO (respondent no.4). The applicant has produced on record certain documents vide Document Filing Diary No. 4649/2026. The attested copy of outward register dated 29.07.2016 showing outer dispatch letter number starts from 458 to 465 and other outward register reflects letter No. 369 to 373 whereas the letter number has been given on NOC

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dated 29.07.2016 is as No.

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[AAM] (SA No.727/2025) Page 15 of 21

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CIDCO/ADM/AMO/AUR/2016/2730 and hence, this number does not tally in the outward register and none of the letter Number is pertaining to the present property. The charge of the HDB Financial Services has not been recorded in the register of the CIDCO as column in the register of shop no. 08 is left blank in relevant register. Respondent no.1 has not produced any document to prove that NOC dated 29.07.2016 was validly issued by respondent no.4. It was necessary for the original lender, on receipt of this NOC dated 29.07.2016, to refer the same to respondent no.4 for verification as to whether this certificate has been issued for mortgaging the property in favour of HDB Financial Services Ltd. at the instance of Bharat Narayanrao Ikkar (respondent no.2) or not. The original lender was negligent to verify the legality of the NOC dated 29.07.2016 upon which the mortgage of the suit property is based.

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When it is established on record that the purported mortgage created by respondent no.2 in favour of HDB

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[AAM] (SA No.727/2025) Page 16 of 21

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Financial Services Ltd. was without valid NOC from the

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CIDCO (the lessor of the plot) whose NOC was necessary for the transfer/mortgage. Therefore, a valid execution of mortgage of the suit property in favour of respondent no.1 as well as creation of valid security interest in favour of respondent no.1 by the respondent no.2 is not proved. Therefore, the alleged mortgage created in favour of HDB Financial Services Ltd. (original lender) by respondent no.2 is invalid as the letter/NOC dated 29.07.2016 has not been issued by administrator of the CIDCO giving permission to respondent no.2 to mortgage the suit property in favour of the original lender.

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The applicant purchased the suit property from respondent no. 2/borrower and paid consideration of Rs. 25 lacs to the vendor (respondent no.2). The respondent 4 has issued transfer order dated 04.11.2024 (Annexure A-1 colly in list of documents Exh-4) in favour of the applicant and now the applicant is recorded as transferee/lessee of the suit

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[AAM] (SA No.727/2025) Page 17 of 21

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property and has become bona-fide purchaser for valuable consideration. The respondent no.4 has also admitted this fact that as per record, now applicant is in possession of the

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suit property. Therefore, the respondent no.1 has wrongly proceeded further against the suit property under the SARFAESI Act.

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It may be noted that during SARFAESI proceedings, the respondent no.1 has taken possession of the suit property on 23.03.2026. The respondent no.4 issued a letter dated 25.03.2026 informing that “No Objection Certificate” dated 29.07.2016 was never issued as per their record and as per record, the present applicant is having lease hold rights in the suit property.

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The respondent no.1 during the course of argument as well as in written Submissions stated that this Tribunal has declined the interim relief to the applicant vide order dated 05.01.2026 with the findings that the borrowers had mortgaged the Secured Assets in favour of finance company.

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[AAM] (SA No.727/2025) Page 18 of 21

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These findings on interim relief application have no relevance at this stage of deciding the Securitisation Application on merits because at the time of deciding interim relief application, only it is to be appreciated from the available material on record whether there is a prima facie case in favour of the applicant or not, for the purpose of interim relief only. When order dated 05.01.2026 was passed, there was prima facie no evidence that NOC has not issued by CIDCO on 29.07.2016. On the request of the applicant, the respondent no.4 issued letter dated 25.03.2026 that as per record, No NOC was issued in favour of HDB Financial Services for mortgaging of the suit property at the instance of respondent no.2 and at the time of deciding the interim relief application, letter dated 25.03.2026 was not in existence. Hence, NOC dated 29.07.2016 is declared as false and fabricated by CIDCO itself. The alleged mortgage created in favour of original lender is invalid. Therefore, the securitization application filed by the applicant is

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[AAM] (SA No.727/2025) Page 19 of 21

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maintainable and she has locus standi to file the present securitization application and the respondent no.1 has failed to prove any collusion between the applicant and the borrowers.

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As the respondent no.1 has taken the possession of the suit property on 23.03.2026 under the provision of SARFAESI Act and thereafter, the present applicant filed IA Diary No.882/2026 for restoration of the possession. As it is established in this case that there was no valid execution of mortgage deed of the suit property in favour of the respondent no.1 or its assignor namely HDB Financial Services Ltd. and No valid security interest has been created in favour of respondent no.1 and hence, the respondent no.1

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is liable to restore the possession of the suit property to the applicant.

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O R D E R

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A. The Securitization Application No. 727/2025 is hereby allowed with no orders as to costs.

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B. All the proceedings conducted by respondent

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[AAM] (SA No.727/2025) Page 20 of 21

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No.1 under SARFAESI Act against the suit property are illegal, null and void and are hereby set aside.

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C. The respondent no.1 is directed to restore the possession of the suit property to the applicant immediately on receipt of the copy of this judgment.

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D. All the Interlocutory Applications, if pending stand disposed of in terms of the present judgment.

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E. Copy of the order be uploaded on the website.

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F. File be consigned to the Record Room.

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Pronounced in open court. Place: Aurangabad Date: 02/06/2026

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(Dr. J.R. Chauhan) Presiding Officer, Debts Recovery Tribunal, Aurangabad

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[AAM] (SA No.727/2025) Page 21 of 21

Pallavi Arun Gokhale v. Edelweiss Asset Reconstruction Co. Ltd.

Case brief

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Pallavi Arun Gokhale v. Edelweiss Asset Reconstruction Co. Ltd.

Case brief

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