Anita Sharma vs Jain Cooperative Bank Ltd.

P.K. Bhasin, Chairperson

The appellant claiming herself to be the owner of first and second floors of property no. 72/2, Krishan Kunj Extension, Khasra no. 54/2, Gali No. 4 Laxmi Nagar, Delhi-110092(hereinafter to be referred as 'the property in question') having purchased the same from one Ms. Babita on 26.10.2015, filed a Securitisation Application(S.A) under Section 17(1) of the SARFESI Act when the respondent bank wanted to auction first, second and floors of property no. 72/2 it claiming it to be its secured asset having been mortgaged in its favour by one Ashu Jain, a member of respondent bank, to secure the repayment of Rs. 17.50 lakhs which had been given to him and had not been repaid.

The S.A. filed by the appellant has been dismissed by DRT. The facts of the case have been noted by the DRT in its order dated 4. 11.2019. To avoid repetition of facts the impugned order of DRT can be re-produced here. It reads as under:-

"1. The present Securitization Application has been filed on behalf of the applicant to restrain the respondent bank from taking actions under Section 13(2), 13(4) & 14 of Securitization Act in respect of the property in question i.e. ''1st& 2ndFloor, property no. 72/2, Gali No. 4, Kishan Kunj Extension, Laxmi Nagar, Delhi-110092.''

The brief facts of the case are that the applicant is the registered and lawful owner of the property bearing no. 72/2, Gali no. 4, 1st& 2nd Floor, kishan Kunj Extension, Laxmi Nagar, Delhi-92 by virtue of registered GPA dated 26.10.2015 as the said property was purchased by her from Mrs. Babita, w/o Mr. Ranjeet Kumar. However, the respondent no. 2 managed to secure the business loan of Rs. 17,50,000/- on 28. 05.2017 from the respondent no. 1 by mortgaging the said property illegally and malafidely and this fact has come to the knowledge of the applicant, when the notice dated 20.12.2017 was affixed on the property in question. Thereafter, the applicant approached the counsel, who had served the notice dated 08.01.2018 by the respondent no. 1 stating that the said property has no relevance with the alleged borrower and the description of the property mentioned is absolutely wrong and malafide, but nothing has been done on behalf of the respondent bank. Thereafter, again, the applicant found a notice dated

09.2018 affixed upon the property which was issued by the Ld. Counsel for the respondent stating that the Ld. CMM, Karkardooma Court has directed to take the physical possession of the property in question i.e. 1st & 2nd floor without roof rights, area measuring 40 sq. yards, i.e. 33.44 sq. mtrs out of Rec. No. 54, Killa no. 6, situated in the village Khureji Khas, J Extension, Laxmi Nagar, Illaqa Shahdara, Delhi-92 and as per subsequent order dated 03.08.2013, seeking correction of address was done and the property has been mentioned as 72/2, situated in the area of Village Khureji Khas, Krishan Kunj, LAxmi Nagar, Illaqa Shahdara, Delhi-92. Therefore, the property belonging to the applicant and all the bills have been issued to the applicant with respect to the property i.e. 1st 2nd& 3rd floor without roof rights, area measuring 40 sq. yards, i.e. 33.44 sq. mtrs out of Rec. no. 54, Killa no. 6, situated in the village Khureji Khas, J Extension, Laxmi Nagar, Illaqa Shahdara, Delhi-92 is in the possession of the applicant for the last so many years and the respondent no. 1 has no right, title & interest, accordingly, he could not said to have mortgaged the said property in the favor of the respondent bank. Therefore, the steps taken by the respondent bank under the garb of provisions of the Securitization Act are bad in law and have been taken with malafide intentions and accordingly, prayed for declaring the actions/measures of the respondent bank as illegal, null & void and issue a decree that the notice u/s 13(2), 13(4) & 14 with respect to the property in question are illegal and malafide one.

The detailed reply of the same has been filed on behalf of the respondent bank no.1 i.e. Jain Cooperative Bank Ltd. whereas, the respondent no.2 remained exparte. On behalf of the respondent bank no. 1 it is being submitted that the present SA has been filed on false and frivolous grounds and on the basis of the GPA, no right, title & interests vests in favor of the applicant herein as the property in question was sold by way of registered sale deed to Mr. Ashu Jain, who had created equitable mortgage with the respondent bank for availing the loan facility and the title documents were duly deposited. Further it is submitted that in fact the property located in the area of village Khureji Khas, Illaqa Shahdara, Delhi is also known as Village area of Khureji Khas, Kishan Kunj, Laxmi Nagar, Shahdara, Delhi and the same also stand verified from the Election Commission's Report. Therefore, it could not be said that both the properties are different i.e. upon which, the applicant is claiming its right and the property upon which the respondent bank is relying upon are one & the same. Mr. Ashu Jain had created equitable mortgage with respect to 1st 2nd& 3rd floor without roof rights, area measuring 40 sq. yards, i.e. 33.44 sq. mtrs out of Rec. No. 54, Killa No. 6, situated in the village khureji Khas, J Extension, Laxmi Nagar, Illaqa Shahdara, Delhi-92, though the applicant is claiming its right over the 1st& 2nd floor of the property in question on the basis of the GPA. After passing of the judgment of the Hon'ble Supreme Court in the case of ''M/s Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana & Anr.'', no right, tiltle & interest exists in the favour of the applicant herein. Further, it is also submitted that as Mr. AShu Jain failed to maintain his loan amount as per the agreement entered into between the parties, the account was declared NPA on 30.12.2017 and the demand notice was issued demanding a sum of Rs. 19,01,071/- under Section 13(2) of the SARFAESI Act on 19.01.2018 and thereafter, the applicant moved under Section 14 of the SARFAESI Act, 2002 for appointing the Ld. Receiver to take the physical possession and accordingly, Ld. CMM appointed the Receiver on 07.05.2011. In para wise reply all the allegations were totally denied on behalf of the respondent bank no. 1 and prayed that the applicant has no right, title & interest over the property in question and prayed for dismissal of the present Securitization Application with heavy costs.

In order to prove their case, the applicants filed their evidence by way of affidavit of Mrs. Anita Sharma, who has exhibited the copy of registered general power of attorney as AW-1/1 (Colly), legal notice dated 08.01.2018 as AW-1/2, bill issued by BSES as AW-1/3, copy of sale deed as AW-1/4 (colly). Previous chain of documents reflecting the description of property dated 18.06.2015 as AW-1/5 & 6 (colly), photograph taken from outside the property reflecting the address as AW-1/7, notice already set on the property and a photograph as AW-1/8, notice as AW-1/9(colly), GPA in favour of applicant as AW-1/1A, agreement to sell as AW-1/1B, affidavit as AW-1/1C, possession notice as AW-1/1D, receipt as AW-1/1E and will deed as AW-1/1F.

The respondent no.1 bank has also filed its evidence by way of affidavit of Ajay Kumar Saxena, authorized representative, of the respondent bank who has exhibited the copy of mortgage deed dated 27. 03.2017 as RW1A (colly), copy of sale deed as RW1B (Colly), copy of title chain as RW1C, copy of valuation report as RW2A, legal search report as RW2B. Electricity Bills as RW 2B, calculation sheet as RW3, demand notice as RW4, order of notice by the Ld. CMM dated 17. 10.2018 as RWSA, order of the Ld. CMM as RW5B, receiver notice as RW6, and copy of the Election Commission Report as RW7.

The Ld. Counsel for the applicant vehemently argued that Anita Sharma had purchased the first and second floor of 72/2, Gali No. 4, Kishan Kunj Extension-I, Laxmi Nagar, Delhi-110092 from Smt. Babita vide agreement to sale whereas Babita has purchased the said property from Nilima Rai by virtue of GPA, agreement to sale and will dated 18. 06.2015, whereas Asha Jain is claiming to be owner of the property by virtue of the sale deed dated 07.12.2015 and bank is claiming by virtue of mortgaged deed dated 27.03.2017 but the property has already been sold to the applicant herein, Anita Sharma by virtue of registered will, therefore, no title, interest & right exists in favour of AShu Jain. Further, it is also argued that bills show that Ashu Jain was residing in LAxmi Nagar, J-Extension and the property has been sold situated in J-72, Krishan Kunj Extension, LAxmi Nagar. Therefore, both the properties are different. Accordingly, prayed that the bank be restrained not to take actual possession with respect to the property in question and the notice under Section 13(2), 13(4) & Section 14 are totally illegal and null & void. It is also argued that in the same list Mark C the address of Laxmi Nagar, Krishan Kunj as well as Laxmi Nagar are different shown in page no. 18 at serial no. 1 & 2 and page no. 20 at serial no. 12 & 13. Accordingly, prayed for acceptance of the SA.

Ld. Counsel for the respondent FI vehemently contended that Mr. Ashu Jain R/o 72/2, out of Rect. No. 54, Killa No. 6, situated in the area of village Khureji Khas, abadi of J-Extension, Laxmi Nagar, Illaqa Shahdara, Delhi-110092 had obtained the loan facility for a sum of Rs. 17. 50 lacs from the respondent bank and executed mortgaged deed on the same date. Mr. Ashu Jain has also deposited sale deed dated 7. 12.2015 qua second & third floor of the property in question for availing the said facility. The said sale deed 07.12.2015 was executed by Mr. Ashu Jain & Nilimi Rai. However, after obtaining the loan facility account become irregular and account was declared NPA on 30. 12.2017. Thereafter, notice under Section 13(2) of the SARFAESI Act, 2002 was issued on 19.01.2018. It is further contended on behalf of applicant that she is owner of the property i.e., first & second floor, which was equitably mortgaged with the respondent bank. In the said sale deed, the details of the property are clearly mentioned. Though, the applicant herein stated to have been claimed that the property bearing no. 72/2, J-Extension, Laxmi Nagar, Delhi-110092 & property no. 72/2, Gali no. 4, Kishan Kunj, Extension-I, Laxmi Nagar, Delhi-110092 are situated on different location and also relied upon Will, GPA & Agreement of sell, both the properties are different and addresses of the properties are differently mentioned, but the voter card issued by Delhi Municipal Corporation i.e., Mark ''C'' wherein the J-Extension and Kishan Kunj are the same area and J-Extension is the part of Kishan Kunj. Therefore, the plea taken by the applicant that the property i.e., J-Extension as well as Kishan Kunj could not be different properties and the first & second floors were equitable mortgaged with the bank, therefore, no right, title & interest lies in favour of Anita Sharma by virtue of GPA, as the sale deed has already been executed by Nilima Rai in favour of Babita on 18.06.2015, when the sale deed has already been executed qua the property in question on 07.12.2015. Therefore, the GPA has no relevancy. It is also argued that though, applicant herein has relied upon GPA executed between Nilima Rai & Babita, wherein the property detail has been mentioned as same i.e, Village Khureji, Krishan Kunj, Illaqa Shahdara, Delhi and the Tillochan Singh, who has executed GPA, Agreement of sell to Pritpal Kaur area 100 sq. yards of the same property and the description of the property in Eastern side shows that the Gali no. 10 therefore, the claim of the applicant, that the properties i.e., first & second floor of the property in question are different is out of place. Accordingly, prayed for dismissal of the SA with costs.

Heard and the record has been thoroughly perused. Mrs. Anita Sharma, the present applicant herein has been claiming her right, title & interest over the 1st& 2nd floor property bearing no. 72/2, Gali no. 4, Kishan Kunj Extension, Laxmi Nagar, Delhi-92, which was purchased by her on the basis of GPA dated 26.10.2015, executed by Mrs. Babita had purchased the same from Mrs. Neelima Rai, vide GPA dated 18.06.2015. However after passing the judgment of the Hon'ble Supreme Court in the case of ''M/s Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana & Anr.'', no right, title & interest stand created on the basis of mere execution of the GPA, unless the same is got validated by executing the registered sale deed. Therefore at the most, on the basis of the said GPA, it could be said that Mrs. Anita Sharma, is claiming her right, title & interest on behalf of Mrs. Neelima Roy. In the present matter, Mrs. Neelima Roy, had executed the sale deed on 07.12.2012 in the favour of Mr. Ashu Jain, who had created equitable mortgage for availing the loan facility for Rs. 17,50,000/- from the respondent bank no.1 on 27.03.2017 and duly deposited the sale deed dated 07.12.2015 executed between him and Mrs. Neelima Roy. Further, on the same date, the mortgage deed was also executed by Mr. Ashu Jain i.e., on 27.03.2017 in the favour of bank. Hence, after the execution of the sale deed by Mrs. Neelima Rai in the favour of Mr. Ashu Jain on 07.12.2015, the GPA automatically stands withdrawn. Mere execution of unregistered agreement to sell also does not create any right, title & interest in the favour of Anita Sharma. Accordingly, no right title & interest stand vested in the favour of Mrs. Anita Sharma on the basis of those documents, as the same never got converted into sale deed.

In the present matter, though, it is being contended on behalf of the applicant herein that the property bearing no. 72/2, Khureji Khas, Laxmi Nagar, Illaqa Shahdara, Delhi was different from the property, upon which, the bank is claiming its right i.e., 72/2, Killa 6, situated in Khureji Khas, J-Extension, Shahdara, Delhi-92. In order to substantiate her claim on behalfof the applicant, it is being relied upon the above said GPA, where, it is so mentioned and stated that the address of the property as claimed by the bank has been mentioned and stated that the address of the property as claimed by the bank has been mentioned so stated above in the registered sale deed dated 07.12.2015. Further, on behalf of the applicant, the electricity bills i.e., Ex. X & Y and MARK F & G i.e., of Mrs. Anita Sharma, Mr. Dheeraj Kalra and Mr. Ashu Jain have been placed on record. Though in the electricity bill of Mr. Ashu Jain dated 04.02.2017 i.e., MARK F & G, the address so mentioned is as 72/2, 1st Floor, Gali No. 4, Kishan Kunj Extension, Part-1, Laxmi Nagar, near Jain Sweets, Delhi and the same address has been mentioned on the property which has been purchased by Mrs. Anita Sharma by way of general power of attorney i.e., 72/2, 1st Floor, Gali no. 4, Kishan Kunj Extension, Part-1,Laxmi Nagar, near Jain Sweets, Delhi-02. Whereas, the address in the sale deed has been mentioned as 72/2, out of rect. No. 54, Kila No. 2, Gali no. 4, Khureji Khas, Kishan Kunj, Shahdara, Delhi. The bill which has been relied upon by the respondent bank no. 1 is totally different and in the electricity bill of Mr. Dheeraj Kalra i.e., Ex. Y, the address has been mentioned as 72 G/F, J-Extension, Laxmi Nagar, Delhi-92. However, in the present matter, on behalf of the respondent bank, the voter list/polling station list issued by the Election Commission has been placed on record, (the judicial notice of same can be taken) wherein, the address i.e., Khureji Khas, Extension Part-1, Laxmi Nagar and J-extension, Laxmi Nagar are mentioned which are one and the same place. The same are also situated near Ramesh Park & Vishkarma Park.

Further, on behalf of the applicant, it could not be proved on record that Smt. Nillima Rai is possessing two different properties on two different localities. Burden to prove the said fact was upon the applicant, which she failed to discourage. In order to prove the fact that the properties, upon which, the respondent bank is claiming its right, title & interest on the basis of creation of equitable mortgage by Mr. Ashu Jain was different, certainly, the record should have been called upon by the applicant herein from the municipal corporation, which was the best evidence to establish the fact that the property situated at J-extension , Laxmi Nagar, as well as Khureji Khas, Laxmi Nagar are totally different located areas in Illaqa Shahdara, Delhi. Thus, the adverse influence stands drawn against the applicant. Apart that, on behalf of the respondent bank, it is proved on record that Kishan Kunj Extension was one & the same place and situated in Khureji Khas and the property I.e., 72/2, Kishan Kunj, Delhi-92 is the same regarding which the sale deed has been executed by Mrs. Neelima Rai in the favour of Mr. Ashu Jain and upon which, the applicant is claiming her right. Hence it is proved on record that the 1st& 2nd Floor of the property in question, upon which, the respondent bank is claiming right is the same property, upon which, Mrs. Anita Sharma is also claiming right. Though, the one GPA was executed by Mrs. Neelima Rai in the favour of Mrs. BAbita and thereafter, Mrs. Babita has executed the GPA in favour of Mrs, Anita Sharma, but the sale deed was executed by Mrs. Neelima Rai in favour of Mr. Ashu Jain on 07.12.2015. However, GPA merely creates a power to sell, transfer and to do certain acts with respect to the property and the power of attorney holders acts on behalf of the executant, therefore, after the execution of the registered sale deed, the GPA used to stand withdrawn/cancelled and no right, title & interest can be claimed by the GPA holders. Though, in the present matter, the sale deed was executed on 07.12.2015 between Mrs. Neelima Rai and Mr. Ashu Jain, but after execution of the sale deed, no right stands vest in the favour of Mrs. Anita Sharma on the basis of GPA, on behalf of the bank, it is proved on record that the default was committed by Mr. Ashu Jain in repaying the loan amount of Rs. 17,50,000/- even after receiving the demand notice. Therefore, the bank was left with no option than to take action under Section 13(2), 13(4) & 14 of SARFAESI Act, qua the entire property i.e., 1st&2nd Floor of the property in question and apparently, there Is no illegality/irregularity in the action measures of the respondent bank in respect of the property in question i.e, 72/2, J-Extension, Krishan Kunj, Khureji Khas, Shahdara, Delhi and the applicant has no right, title & interest in the said property i.e., 72/2, J-Extension, Krishan Kunj, Khureji Khas, Shahdara, Delhi and the applicant has no right, title & interest in the said property i.e, 1st& 2nd Floor, Khureji Khas, Krishan Kunj, Shahdara, Delhi.

Accordingly, finding no merit in the present Securitization Application, the same stands dismissed with no order as to costs. File be consigned to record."

From a reading of this order of the DRT it is clear that appellant purchased the property in question from one Babita on the basis of GPA and Babita purchased the same from one Nillima Rai on the basis of GPA etc. So, it is common case of the parties that Nillima Rai was the owner. Now, same Nillima Rai sold the property vide a registered sale deed to Ashu Jain, who is the borrower of the respondent bank who had secured loan from the respondent bank by mortgaging by executing a mortgage deed in respect of the bigger property of which the property in question is part i.e. first and second floors. Thus, secured interest stood created in favour of the bank the moment a mortgage deed was executed by Ashu Jain. Sale deed 8.12.2015 was executed in favour of Ashu Jain and thus title stood vested in him and just because Nillima Rai had executed GPA in favour of Babita before sale in favour of Ashu Jain that would not make sale by registered sale deed in favour of AshuJain illegal. It will be for appellant to settle the score with Babita or Nillima Rai as she may be advised. In the facts of this case right of bank as a secured creditor cannot be defeated just like that.

Lot was argued by the learned counsel for the appellant orally as well as in his written submissions, and in fact that was the main argument, that the property mortgaged was different than the property in question of which the appellant claims to be the owner. This argument is baseless because Ashu Kumar purchased the entire first, second and third floors of property no.72/2 from Nillema Rai and the appellant claims that same Nillema Rai sold the property in question(first and second floors) by way of GPA sale to Babita who in turn sold the same to the appellant. Thus, there can be no dispute about the identity of the mortgaged property. The appellant introduced this controversy just to side track the real issue viz. whether the respondent bank was a secured creditor and that it has proved by producing a mortgage deed executed by Ashu Jain in its favour. Thus, the appellant has failed to make out any case for quashing SARFAESI measures taken by the bank and the appeal must fail.

I do not find any merit in this appeal and the same is rejected.