Daughters of a proprietrix challenged coercive loan recovery against property their mother had gifted them after availing an undischarged bank loan. The court agreed with the bank that the gift was intended to defeat creditors and was voidable under Section 53 of the Transfer of Property Act, dismissing the writ petition.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF OCTOBER, 2024
PRESENT
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
THE HON'BLE MR JUSTICE C M JOSHI
WRIT PETITION NO. 22351 OF 2024 (GM-DRT)
BETWEEN:
Digitally signed by SHARADA VANI B
Location: HIGH COURT OF KARNATAKA
ALL ARE R/AT NO.29-B, EAST LING ROAD, MALLESHWARAM, BENGALURU-560 003.
(BY SRI. M S RAJENDRA.,
SRI. VIVEK HOLLA.,ADVOCATES)
AND:
…PETITIONERS
BOTH 2 AND 3 ARE R/AT NO.29, III CROSS, B EAST LINK ROAD, MALLESHWARAM, BENGALURU-560 003.
…RESPONDENTS
(BY SRI.NIDHI PATIL.,ADVOCATE FOR C/R5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO i) ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT ORDER OR DIRECTION, QUASHING THE ORDER DATED 08/02/2019 PASSED BY THE RECOVERY OFFICER-2, DRT-2 (ANNEXURE-F) ORDER DATED 16/03/2022 PASSED BY THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU IN APPEAL NO.2/2010 (ANNEXURE-J) AND THE ORDER DATED 12/07/2024 PASSED BY THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI IN MA NO.33/2023 (ANNEXURE-L) AND ETC.,
THIS WRIT PETITION, COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT and HON'BLE MR JUSTICE C M JOSHI
ORAL ORDER
(PER: HON'BLE MR JUSTICE KRISHNA S DIXIT)
Petitioners being the daughters of the proprietrix of
the 1st respondent proprietory concern are knocking at the doors of writ court for laying a challenge to the coercive loan recovery proceedings instituted by the 5th respondent-Bank. These proceedings are comprised in the order dated 08.02.2019 (Annexure-F) passed by the Recovery Officer-2, DRT-2 followed by the order dated 16.03.2022 (Annexure-J) passed by the DRT-2 Bangalore in Appeal No.2/2010 and Debt Recovery Appellate Tribunal’s order dated 12.07.2024 (Annexure-L) whereby their M.A.No.33/2023 has been negatived.
eventually resulting into change of khata; this property having not been furnished by way of security for the recovery of loan in question, cannot be targeted by the respondent bank. This aspect of the matter having not been properly discussed by the Recovery Officer, by the DRT and lastly by the DRAT, the impugned orders have apparent error on their faces warranting their invalidation. Learned counsel appearing for the caveator bank resists the petition making submission in justification of the impugned orders and on the ground of unconscionable conduct attributable to proprietrix mother, if not to her daughters. He invokes Sec.53 of the Transfer of Property Act, 1882 in support of his contention that any transfer of property intended to delay or defeat the creditor is liable to be voided.
as to the availment of loan by the respondent proprietrix
and the proprietory concern. Admittedly, the said loan having not being discharged, the coercive proceedings have been taken up and the debtors have suffered statutory orders of recovery. That being the position, the proprietrix could not have gifted the subject property to the daughters.
“53. [Fraudulent transfer.-(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.”
The transfer referred to in this section are transfers
binding between the parties, but voidable in the
circumstances stated in the section. A transfer with a deliberate attempt to defeat the rights of the decreeholder, would be hit by the provisions of this section. A
document made to defeat or to delay his creditors is binding on the executants, and those claiming under him. There is absolutely no case made out by the petitioner for escaping the clutches of this provision.
NC: 2024:KHC:41898-DB WP No. 22351 of 2024
furnished, it would be a case of mortgage and the mortgagee would take the property subject to the encumbrance of loan.
In the above circumstances, this petition is liable to be dismissed and accordingly it is, costs having been made easy.
Sd/(KRISHNA S DIXIT) JUDGE
Sd/(C M JOSHI) JUDGE
Snb/ List No.: 1 Sl No.: 8
2 issues framed by the court
Whether a gifted transfer of property by a borrower-proprietrix to her daughters during undischarged loan recovery is voidable under Section 53 TPA.
Whether property not furnished as loan security is immune from coercive recovery proceedings.
2 provisions across 2 enactments
MS. U MANISHA
MS. U. SUSHMITHA
MS U. RAKSHITHA
M/S SUMA OIL AGENCIES REP BY ITS PROPREITRIX, SUMA UMASHANKAR
SMT. SUMA UMASHANKAR
SRI. UMASHANKAR
KRISHNA S DIXIT
C M JOSHI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
