Aman Khetrapal vs Union Bank Of India

R. D. Khare, Chairperson

The present appeal has been filed by the appellants U/s 18 of the SARFAESI Act against an interim order dt. 21/01/2023 passed by the DRT, Allahabad in SA No. 600/2021, whereby the interim application filed by the appellants has been is rejected.

The brief facts of the present case are that the appellants are claiming themselves to be tenants in the property in question. The original tenant is stated to be Shri. R.N. Khetrapal, who had died in the year 1996. It appears that the property in question was purchased by M/s Greenland (A & M) Corporation vide registered sales deed dated 12/09/2002, which became freehold vided registered deed dt. 23/03/2017. The said firm is a partnership firm. The partners of the said firm are the sons and legal heirs of Late. R.N. Khetrapal viz: Arun Khetrapal, Ranjan Khetrapal, Anil Khetrapal and Sunil Khetrapal.

It is averred that the respondent no. 3-firm was granted some financial assistance by the respondent bank and the property in question was mortgaged by the borrower firm through its directors including Sunil Khetrapal, who is father of the appellants no. 1 and 3 and husband of appellant no. 2. The borrowers did not repay the loan amount, therefore, the account was classified as NPA and the recovery proceedings were initiated by the respondent bank by taking recourse to sections 13(2) and 13(4) of the said Act and at the last, the bank issued sale notice for auctioning the property in question, which was challenged by the appellants by filing the present S.A No. 600/2021 before the Tribunal below and another S.A has been filed by one of the directors Shri Sunil Khetrapal and both the S.As are still pending consideration before the Tribunal below.

It transpires that during the pendency of both the SAs, the respondent bank obtained an order dt. 15/09/2022, which was subsequently corrected on 20/09/2022, from the District Magistrate, Allahabad U/s 14 of the said Act and the same was challenged by the appellants before the Tribunal below by filing amendment application, which was allowed. Pursuant to the said order, the ACM(II), Prayagraj had issued a notice for taking physical possession of the property in question on 07/12/2022, against which the appellants moved an interim application before the Tribunal below for restraining the Bank from taking physical possession of the property in question on the said date. The said application was rejected by the Tribunal below vide order dated 03/12/2022, against which an Appeal Dy. No. 1077/2022 was filed before this Appellate Tribunal and the same was disposed off vide order dated 12/01/2023.

It is also averred that in pursuance of the order dated 15/20.9.2022 passed by the District Magistrate, Prayagraj, the ACM (II), Prayagraj has issued another notice dated 03/01/2023 for taking physical possession of the property in question, which was challenged by the appellants by filing Misc. Stay Application in the pending S.A., which has been rejected vide impugned order dated 210/01/2023. Being aggrieved by the said order the present appeal has been filed.

The only contention which is pressed by the appellant is, as to whether the reasons, on the ground of which the Tribunal below has passed the order impugned, are legally valid or not, as the Tribunal below has held that if any tenancy is claimed for more than one year, a registered instrument/lease deed/tenancy agreement is required in order to authenticate the same, whereas as per the U.P. Rent Control and Eviction Act, 1947 and 1972, no registered document for the same was required. It is further contended that the only transaction under the Transfer of Property Act requires registration which is not the case of the appellants. The case of the appellant will be governed by the Rent Control Act, 1972.

Learned counsel for the appellant has also contended that the mortgage, which was created, was not created for the advance made in favour of M/s Greenland (A and M) Corporation Motors, as it was created for the loan of M/s Greenland Motors, which is authenticated by the Memorandum of Entries. The copy of the same is appended as Annexure No. 5 to the reply filed by the respondent bank. The learned counsel has further drawn the attention of this court to Annexure No. 7 of the Memo of Appeal (at page no. 104) and has stated that the Bank vide letter dated 05/04/2021 has intimated that the loan accounts of M/s Greenland Motors have been classified as NPA on 31.03.2021 and not that of M/s Greenland (A and M) Corporation, for which entire proceedings have been drawn by the Bank.

Learned counsel for the appellants has also canvassed that the provision for registration of tenancy for more than one year is applicable to the tenancy right created under the provisions of Transfer of the Property Act, but the same is not applicable in respect of tenancy started under the U.P. Rent Control Act, 1972. As such the tenancy right is inheritable and the same can be determined at the present stage.

In the last, the learned counsel for the appellants has prayed that the present appeal may be allowed and the respondent bank may be restrained from taking physical possession of the property in question till final disposal of the S.A No. 600/2021 pending before the Tribunal below.

Learned counsel for the respondent-bank submitted that there is no tenancy whatsoever as canvassed by the learned counsel for the appellants. The attention of this court has been drawn to Annexure No. 3 of the Memo of Appeal, which is a registered sale deed executed on 12/09/2002 in favour of the respondent no 3-firm and has referred to internal page No. 61 to 62 of the Memo of Appeal, wherein it has been stated that after death of R.N Khetrapal in the year 1996, his widow and four sons became sole heirs and successors.

The learned counsel for the respondent-bank has further drawn attention of this court to page no. 64 and 65 of the Memo of Appeal and has argued that the property in question was purchased by M/s Greenland (A and M) Corporation in its name, which is a partnership firm, for residential purpose. It is thus argued that after death of R.N Khetrapal, the firm M/s Greenland (A and M) Corporation became tenant. The learned counsel has further drawn attention to page no. 72 of the Memo of Appeal and has contended that once the sale deed was executed, the tenancy right of the second party i.e. vendees nos. 1 to 5 has merged in the right of ownership conferred on them by the sale deed executed by the erstwhile owner of the property in question. It is thus argued that R.N Khetrapal was initially tenant of the property in question, but after his death, the same was transferred to M/s Greenland (A and M) Corporation by the sale deed dated 12/09/2002, whereafter the tenancy was merged with the rights accrued and the said property was mortgaged by the borrower-firm with the respondent bank, which is an equitable mortgage.

It is further contended on behalf of respondent-bank that the document appended as Annexure No. 5 at page no. 22 of the reply of the bank is Memorandum of Entries and is not a document tendering the title deed. Perusal of the said document would demonstrate that it pertains to a new ad-hoc working capital limit of Rs. 3.50 crore under union trade plus scheme.

The learned counsel for the respondent bank has next drawn attention of this Court to Page No. 24 of its reply, which is affidavit of the firm M/s Greenland (A & M) Corporation and has referred to Para 2 of the said affidavit, which says “I/We The company am/are/is the sole and absolute owner/s of the pieces or parcels of land or ground together with the building/s herditaments and premises standing thereon in the Registration, Sub-District of Sadar and more particularly described in the First Schedule hereunder written hereinafter referred to as “the said property” and no other person has any share, right title, or interest of any kind or nature whatsoever in the said property”.

The learned counsel has further drawn attention of this Court to Page 25 of its reply, which is another affidavit given by the firm M/s Greenland (A & M) Corporation, in which it is stated that the facility was given to M/s Greenland Motors and as referred to Para. 12 of the said affidavit, wherein it is stated on oath by the firm that “the property mortgaged is not given on rent as on date and that it will not be given on the rent in future without the permission of the bank”. A similar document is at Page No. 27 onwards of the reply of the bank. The next argument is that subsequently the mortgage deed was executed and the document with regard to freehold was deposited with the respondent bank, copy of which has been appended at Page No. 32 of the reply of the respondent bank.

The learned counsel for the respondent-Bank has next argued that since M/s Greenland (A & M) Corporation filed an interim application in pending proceedings of S.A No. 303/21 U/s 17 of the SARFAESI Act, which was dismissed by the Tribunal below vide order dated 28/03/2022, photocopy of which has been produced before this Court, which has been taken on record. He further stated that the present S.A filed by the appellant U/s 17 of the SARFAESI Act was also listed on 28/03/2023, but they got the matter adjourned. In the last, the learned counsel has prayed that the present appeal may be dismissed with heavy cost because the appellants are only trying to stall the proceedings of the bank.

Having heard the learned counsels for the parties and considering the materials available on record, it is undisputed that the appellants no. 1 and 3 are the sons and appellant no. 2 is the wife of Shri Sunil Khetrapal, who is one of the directors of the borrower-firm and mortgagers of the property in question. The present appeal has been filed against the interim order and the S.A. filed by the appellants is still pending for adjudication on merits. Therefore, it would not be appropriate to touch/consider the merits of the case at this stage. Prima-facie, the appellants have failed to make out the case for granting interim relief. In view of this, the Tribunal below has rightly rejected the prayer of the appellants for restraining the Bank from taking physical possession of the property in question. As such the impugned order is not required to be interfered by this Tribunal. Hence, the present appeal is liable to be dismissed. Accordingly, the same is dismissed with no order as to costs.

A copy of this judgment be forwarded to the parties as well as to the DRT concerned and also be uploaded on the e-DRT portal.