Payal Batra vs Sanjay Sethi And Ors

P.K. Bhasin, J

The appellant and her husband Shri Sanjay Sethi, respondent No. 1 herein, jointly purchased one residential flat No. G-601, 6th Floor, Central Park, Sector 42, Gurgaon (hereinafter to be referred as 'the property in dispute') in the year 2006 and have been in occupation of the same. The appellant's; case is that without her knowledge and consent her husband obtained a loan of almost a crore of rupees from respondent No. 2 herein sometime in the year 2008 and also created an equitable mortgage of the property in dispute in its favour by depositing the conveyance deed with it as security for the re-payment of the said huge loan money. Not only that the appellant was also shown in the loan documents as a co-borrower and co-mortgagor of the property in dispute by her husband by forging her signatures in various documents in collusion with the officials of the respondent No. 2.

The appellant claims that she came to know about this fraud committed by her husband and officials of respondent No. 2 when demand was raised upon her for the outstanding dues sometime in the year 2009. Then upon enquiries she came to know about the said fraud committed by her husband and then a criminal complaint was lodged by her against her husband with the police and other authorities also. Her husband suddenly disappeared from home in April 2010 leaving her and their two young daughters to face the lender which started threatening to dispossess her and her daughters from the property in dispute by invoking the provisions of Section 14 of SARFAESI Act by filing an application before the District Magistrate concerned. She then filed a Securitisation Application (S.A.) under Section 17(1) of SARFAESI Act before the Debts Recovery Tribunal (DRT)-III, Delhi to protect her residential house. That S.A. was registered as S.A. No. 282/2012. This was also claimed by her that when she had complained to ICICI Bank regarding the collusion between her husband and Bank officials the said Bank had informed her that upon internal investigation it had been found that some kind of fraud had been played in the loan transaction and so matter would be reported to Reserve Bank of India.

Respondent No. 2 only had resisted the S.A. inter alia on the grounds that appellant and her husband had taken loan from it but when the time came for repayment the appellant introduced the story of matrimonial discord with her husband and had started accusing her husband and officials respondent No. 2 of forging her signatures on loan documents in collusion with each other.

The appellant had placed on record one handwriting expert's report to the effect that the signatures on various loan documents purporting to be of the appellant herein were not similar to her admitted signatures. The learned Presiding Officer of the DRT did not place much reliance on that report since it was of a privately engaged expert by the appellant. However, he himself had also compared the admitted signatures of the appellant on the joint conveyance deed in respect of the property in dispute with disputed signatures on loan documents purporting to be her signatures and then had come to the conclusion signatures were different and so concluded that the appellant was not a co-borrower and co-mortgagor with her husband in respect of the loan in question.

The relevant parts of the impugned order dated 28.2.2014 of DRT are reproduced below:

"2. The brief facts of the case are that the applicant is claiming to be the estranged wife of Shri Sanjay Sethi, respondent No. 1 having responsibility of two young children both girls and claiming to be the co-owner of the property in question and being jointly registered in her and her husband name. It is further submitted that respondent No. 1 in collusion with the employees of ICICI Home Finance, Janakpuri, the respondent No. 2 has sanctioned the two loans in the month of July 2010 for a sum of Rs. 62 lacs and Rs. 37 lacs respectively.

It is further submitted that the appellant had also been made party co-applicant alongwith respondent No. 1 and his company i.e. M/s. Kay Dee & Company (Agents) Pvt. Ltd. It is also submitted that her signature has been forged on these loan documents which can be seen with a naked eyes. She has also filed her passport, pan card and other documents for verifying her signature. She has also submitted that as the loan is approved by creation charge over the property in question without following the due process of verifying the property and respondent No. 1 has been absconding since 2010 and she has already lodged a complaint with the local police station regarding the disappearance of her husband on 4.8.2010.

The applicant herein has also filed a private detective agency report in which it is submitted that the signature on the loan documents are different than the admitted signature of the applicant.

The respondent Bank has filed its reply submitting therein that the present SA is misconceived and on merits it is liable to be dismissed.

It is submitted that the applicant is co-owner of the property in question and she has approached the Bank for grant of loan facility and she has executed the relevant loan documents and original title documents duly deposited with the Bank for creation of equitable mortgaged. It is further submitted that the applicant herein is in some family disputes with her husband.

It is further submitted that after six months of time the borrowers were not regular in making payment and ultimately the account has been declared as NPA.

............The applicant herein is the wife of the borrower Shri Sanjay Sethi, who is the proprietor of M/s. Kay Dee & Company (Agents) Pvt. Ltd. and she is claiming that she has no knowledge about the loan taken by her husband and that the several cases are pending against her husband. The applicant herein is also claiming that she is having estranged relation with her husband and he is absconding and she has lodged a police complaint also.

In order to find out whether the applicant has stood as a co-borrower or not, a bare perusal of the documents shows that the signature obtained by the respondent Bank on the loan documents and the sale deed deposited for creation of mortgage are different.............The Private detective agency report also compared the signature and is of the view that the signature on the documents obtained by the respondent Bank are different than her original admitted signature though the private detective agency report is not having much evidentiary value in the eyes of law because it is done by the applicant by her own.

I am of this view that the applicant herein is not the co-borrower and respondent Bank has not produced any document contrary to the claim of the applicant. Thus, I hold that the applicant has no liability and she has not mortgage her share of property in question. Thus SARFAESI proceeding qua her share is hereby quashed but at the same time the respondent Bank is entitled to take SARFAESI measures in regards to the remaining portion owned by her husband i.e. respondent No. 1, who has taken loan and mortgagor of the respondent Bank."

Since the learned Presiding Officer had while holding that the appellant was neither a co-borrower nor co-mortgagor permitted the respondent No. 2 to go ahead with sale of the property in dispute but to the extent of the half share of her husband and not to touch her half share the appellant had felt aggrieved even with that much liberty granted to respondent No. 2 she filed the present appeal. It was her stand in this appeal that the DRT having come to the conclusion that the appellant's husband and officials of respondent No. 2 had colluded to forge her signatures on the loan documents the entire loan transaction stood vitiated and since the transaction of loan was inseparable respondent No. 2 could not be given the liberty to sell only half share in the property in dispute and to introduce a stranger buyer of half share of her husband. Same submissions were advanced by the learned Counsel for the appellant at the time of oral hearing as well as in her written submissions. Many judgments of the Hon'ble Supreme Court were also cited in support of the argument that fraud vitiates all transactions and since in the present case the loan transaction between the appellant's husband and respondent No. 2 was void because of her signatures having been forged on loan documents the respondent No. 2 could not recover anything from the property in dispute by selling it treating the same as its secured interest.

Learned Counsel for the respondent No. 2 had on the other hand argued that the loan transaction was not vitiated for any reason as no fraud in sanction of loan in the joint names of the appellant was committed by anyone nor the appellant had made any attempt to establish alleged fraud by leading any evidence. The decision of the DRT that signatures of the loan documents were not tallying with her signatures of the conveyance deed kept with respondent No. 2 as security did not amount to any finding of fraud. It is not unusual for someone to sign differently on different documents. So, the learned DRT ought not to have restricted the right of respondent No. 2 to recover its dues only from half share of her husband. It was also submitted that the allegations of forgery, collusion etc. were in any event a cock and bull story pressed into service by the husband-wife duo to deprive the respondent No. 2 of crores of public money and if there was any grain of truth in those allegations the appellant herself would not have been paying Rs. 1,12,000/- every month to respondent No. 2 in the loan account in question which fact admitted by herself in her own S.A. demolished her entire case of her being not the co-borrower but unfortunately the learned Presiding Officer of DRT did not even notice that admission of the appellant (security applicant before DRT) and that resulted into a wrong decision being taken to the effect that respondent No. 2 could recover only from half share of appellant's husband in the property in dispute.

After giving my thoughtful consideration to the submissions made from both sides I have come to the conclusion that this appeal deserves to be dismissed.

The appellant had herself admitted that loan was taken from the respondent No. 2 by respondent No. 1, her husband, as was being claimed by respondent No. 2. She had also not disputed that her husband was a co-owner of the property in dispute which was mortgaged by him to secure the loan taken by him from respondent No. 2. She had however, claimed that she had never joined her husband as a co-borrower in obtaining the loan from respondent No. 2 and also in the creation of equitable mortgage in respect of the property in dispute and further that her husband in collusion with Bank officials had forged her signatures on loan documents.

The learned DRT, however, did not come to the conclusion while disposing of the S.A. of the appellant that appellant's husband had committed any forgery or any Bank official had forged the signatures of the appellant on the loan documents. All that was done by the learned Presiding Officer of DRT was to compare the signatures on the loan documents purporting to be that of the appellant herein with her signatures on the conveyance deed in respect of the property in dispute and then to observe that signatures on the two set of documents were not similar. That observation cannot be said to be the decision of the Presiding Officer that either the appellant's husband or any Bank official in collusion with each other had forged the signatures of the appellant. Therefore, there is no merit in the submission of the appellant that the loan transaction was void and so the DRT could not have directed that the respondent No. 2 could sell her husband's half share in the property in dispute and it should have been held that the property in dispute could not be sold at all since it never became the secured asset of the respondent No. 2.

It is also significant to notice that the appellant herself did not even enter the witness box to claim that her signatures had been forged by her husband in collusion with Bank officials. In fact, she herself had admitted in her S.A. itself that she had been paying monthly instalments of Rs. 1,12,000/- to respondent No. 2 in the loan account the borrower firm of which her husband was the proprietor. Respondent No. 2 had also claimed in its reply to the S.A. that monthly instalments were paid in the loan account regularly for many months after disbursement of the loan amount and then payments were stopped. There is no doubt that the appellant had also pleaded in her S.A. that she had paid loan instalments for some months as her husband was in financial problems and he was forcing her to make the payments in his loan account but to substantiate this claim of hers also she did not file any affidavit as her evidence. In fact, the stand of the appellant in this regard has been inconsistent inasmuch as in the S.A. she had pleaded that her husband forced and threatened her to make payments to respondent No. 2 which she did but while in her complaint to the police which she claims to have lodged upon coming to know that in fact she had also been shown as co-borrower in loan transaction in question she had claimed that her husband had requested her to repay the money to respondent as he was in financial problems and to help her husband she been making payments to respondent No. 2. The learned DRT did not notice these important and contradictory averments in her S.A. and the police complaint and if it had been noticed perhaps the learned Presiding Officer would not have even bothered to enter into the exercise of comparison of signatures which he did only to come to the conclusion that two sets of signatures were not similar about which fact there was even otherwise no controversy that those signatures were clearly different but the DRT had not returned any finding that the signatures purporting to be that of the appellant on loan documents were forged by anyone.

Since the learned Presiding Officer of DRT had not returned any finding that the appellant's husband had forged her signatures on loan documents there was no occasion to direct that the secured creditor will deal with only half share of appellant's husband. However, since the respondent No. 2 had chosen not to challenge that decision of the DRT I am not going into the correctness of that decision of the DRT and the decision to protect the interest of the appellant to the extent of half share in the property in dispute is maintained. Here I may also notice that it had also been the case of the respondent No. 2 at one stage in the present appeal proceedings that it would forego its fight for her half share which the DRT had protected. This offer was given on behalf of the respondent No. 2 in its counter affidavit of Shri Ashutosh Gupta filed in this appeal but the appellant had not accepted that offer. During the pendency of this appeal it was also put to her if she was willing to purchase share of her husband but she was not willing to buy his share as the valuation claimed by respondent No. 2 of the property in dispute was not acceptable to her.

I am not noticing various judgments on the consequence of 'fraud' cited by the learned Counsel for the appellant as here there is no conclusion of the Tribunal below that any ' fraud' was committed by anyone in the loan transaction in question. On the contrary, there are circumstances clearly negativing presence of any kind of 'fraud' in the loan transaction. Counsel for the appellant had also cited one judgment that one co-owner cannot affect another co-owner's rights in a joint property but I need not refer to that judgment also since DRT itself has already protected her interest in the property in dispute.

This appeal is consequently liable to be dismissed.

The respondent No. 2 had also moved an application for permission to adduce additional evidence to show that the appellant was along aware of the loan transaction in question. However, that application is also liable to be dismissed for the reason that this Tribunal has observed that there is no finding against respondent No. 2 that there was any forgery.

This appeal is accordingly dismissed. However, considering all the facts and circumstances including the fact that the appellant had been staying in the house in dispute with her two daughters for many years as a result of the interim protection granted to her by the DRT, she is granted three weeks time to vacate the property in dispute so that the same is sold as vacant property so that it fetches proper price and the appellant gets her half share in the sale proceeds as per the decision of the DRT. In case the appellant does not vacate the property in dispute within the period of three weeks being given to her the respondent No. 2 will be at liberty to take possession in accordance with law and to proceed further to auction the same to recover huge amount of public money due to it and pay to the appellant half of the sale proceeds.