Salochna Goyal vs Standard Chartered Bank

S.N.H. Zaidi, J

Heard parties' Counsel on appeal. This appeal has been directed against the order dated 30.8.2012 of DRT-II, Delhi whereby M.A. No. 198/2011 filed for the release of the title deed of the mortgaged property has been dismissed. Mr. Bansal submits that the State Bank of India (SBI) had sanctioned certain credit facilities to respondent No. 2 company qua which respondent No. 5 stood as guarantor and mortgaged his property bearing No. X-6B, Hauz Khas, New Delhi-110016 with the Bank by depositing its title deed. When the borrower company defaulted in repayment of the loan amount, SBI filed O.A. No. 127/2002 against respondent Nos. 2 to 9 for the recovery of its dues. During the pendency of the O.A., SBI had assigned the debt in question to Standard Chartered Bank (SCB), respondent No. 1, vide assignment deed dated 29.3.2006 and it was substituted in place of SBI and in 2009 the borrower company had amicably settled the dispute with SCB, which had acknowledged the receipt of entire OTS amount of Rs. 10.75 crores, vide letter dated 1.8.2009. The LR of deceased respondent No. 5, sold away the mortgaged property by way of two safe deeds to the appellant in 2009 and the settlement amount was paid to SCB. The respondent Bank thereafter issued 'No Dues Certificate' dated 13.8.2009 and also filed an application before the DRT for the withdrawal of the O.A., but the Tribunal below, vide order dated 4.11.2009, stayed the implementation of the OTS on the application of the Canara Bank. The respondent Bank filed Appeal No. 116/2010 against that order, which was allowed by this Tribunal, vide order dated 11.3.2010, and upholding the OTS the respondent Bank was permitted to withdraw the O.A. which was accordingly withdrawn.

Mr. Bansal further submits that as there was some dispute regarding the ownership of the property in question between the LRs of deceased respondent No. 5 and the appellant, the LRs had filed a Civil Suit CS (OS) No. 47/2010 before the Delhi High Court, which was dismissed as withdrawn on 6.9.2010 on the basis of the compromise arrived at between the parties, whereby the title of the appellant was accepted by the L.Rs. He further submits that since all the claim of the respondent Bank was satisfied and after the withdrawal of the O.A. there was no lien or charge of anyone over the property in question, the appellant filed application (M.A. No. 198/2011) for the release of the title deed of the mortgaged property, which was deposited by the SBI with the DRT, in her favour but the learned Tribunal below has dismissed that application by the order impugned holding that if the sale deed is returned to the applicant, there would be no guarantee that it would be produced before the trial Court. Mr. Bansal submits that this appeal has been directed only for a limited purpose of the release of the title deed of the property in favour of its purchaser.

Mr. Cherobin points out that before the assignment of debt to the respondent No. 1, the original title deeds of the mortgaged properties were seized by the OBI in 2002 from State Bank of India, Industrial Finance Branch, Vijaya Building, Sansad Marg, New Delhi as an FIR was lodged with it against the borrower company and its Directors. He further points out that in order to produce evidence in the O.A. before the DRT, SBI had moved the CBI Court for the release of title documents, which was declined by it against which a writ petition was filed by SBI before the Delhi High Court and the Hon'ble Court, vide order dated 25.9.2008, had allowed the release of the title deeds in favour of the petitioner Bank. He points out that the said order has been quoted by the Tribunal below in the order impugned, which reads as under:

"Hence, petition is allowed. The CBI/respondent is directed to place the attested copies of the original documents as appearing at serial Nos. 430 to 441 on the Court record and the Court on receipt of the attested copies of these documents shall return the original documents to the petitioner with the condition that petitioner shall produce the original documents as and when required by the Court during the trial of the case. In case the properties pertaining to any of these documents are auctioned/sold away or transferred in the name of any third person, the Bank shall ensure that the name and correct address of the said person is placed on the Court record so as to facilitate the Court to summon the concerned person with the original documents as and when required. While auctioning the properties, the Bank would also ensure that an undertaking is given by the auction purchaser of the property that he will produce the original documents in the Court as and when required. The petitioner shall also inform the Court as and when any property is auctioned or is sold so as to ensure that the trial of the case is no hampered with or is not prejudiced for want of these documents."

Mr. Cherobin further points out that the title deeds were accordingly filed in the DRT, which are available with it and the trial before the CBI Court is still pending.

Mr. Cherobin opposes the release of original sale deeds of the property in question in favour of the appellant and submits that the DRT, vide an interim order passed in the O.A., had restrained the transfer of the mortgaged property, but after the death of defendant No. 5, his L.R. in violation of the said restraint order, had sold away the mortgaged property by way of two sale deeds to the appellant, as such the said sale deeds are null and void and the appellant has not acquired any lawful title in that property, though the O.A. was withdrawn subsequent to the said transaction.

Having considered the submissions of the parties' Counsel and looking to the facts and circumstances of the case, I am of the view that the question regarding the legality of the execution of sale deeds in favour of the appellant is not relevant for the purposes of the release of original sale deed of the property in question which was executed in favour of the appellants' predecessor-in-interest. The title of the appellant qua that property is no more in dispute after the Civil Suit was allowed to be withdrawn by the Hon'ble High Court. The Hon'ble High Court, while ordering for the release of the title deed in favour of the Bank, had not put any bar on the transfer of the property and had specifically said that in case the properties pertaining to any of the documents are auctioned/sold away or transferred in the name of any third person, the Bank shall ensure that the name and address of the said person is placed on the Court record so as to facilitate the Court to summon the concerned person with the original documents as and when required. In view of this, there appears to be no bar for the release of the original title deeds in favour of the appellant and the Tribunal below has not considered the direction of the Hon'ble High Court in its right perspective. The order impugned is, therefore, liable to be set aside and the appeal is entitled to be allowed. The appeal is allowed and the order impugned is set aside. The Tribunal below is directed to release the title deed of property bearing No. X-6B, Hauz Khas, New Delhi-110016 in favour of the appellant subject to filing of an undertaking on affidavit by the appellant before it as well as before the concerned Court of Special Judge, CBI that the original title deeds pertaining to that property would be produced as and when required by the Court. The respondent Bank is also directed to place the name and correct address of the appellant on the trial Court's record so as to facilitate the Court to summon the appellant with the original documents.