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Judgment
Ashok Menon, Chairperson
The Appellant who is the Applicant in Securitization Application (S.A.) No. 154/2023 on the files of the Debts Recovery Tribunal, Nagpur (D.R.T.) is aggrieved by the dismissal of Interim Application (I.A.) No. 861/2023 vide order dated 06.11.2023 which declined to protect his possession over the secured asset which is being proceeded against for recovery of the debt due from Respondents Nos. 2 to 5 under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short).
The Appellant claims to be the exclusive owner of the property which is being proceeded against. It is contended that he purchased the property from Mr Anil Kalluprasad Shukla through the registered sale deed executed on 10.01.2019 and has owned the said property ever since. The predecessor-in-interest Mr Shukla, had in turn, purchased the said property from one Ishwarchand Gore vide a registered sale deed executed on 14.10.1980.
Consequent to the demise of Mr Gore in the year 2000, his four children had partitioned the properties left by him. Without disclosing the fact that their predecessor-in-interest Mr Gore had already parted possession and title of the subject property in the year 1980, a portion of the property which was allotted to one of the sharers was assigned by him to the 5th Respondent in the year 2006 through a registered sale deed. Respondents Nos. 2 to 5 borrowed money from Varthana Thirumeni Finance Pvt. Ltd. in the year 2018, and the subject property purchased by the 5th Respondent from one of the legal heirs of Mr Gore was mortgaged to the said Financial Institution. The financial institution thereafter assigned the debt to the present Respondent M/s. Phoenix ARC Pvt. Ltd. which initiated measures under the SARFAESI Act to recover the debt due from the Respondents Nos. 2 to 5.
The Appellant has already filed a Civil Suit before the Civil Court as Suit No.73/2021 which is pending consideration. The prayer in that suit is to set aside the purported sale deed executed regarding a portion of the property in favour of the 5th Respondent.
The Appellant is a bona fide purchaser from his predecessor who had valid title and was in possession of the property since 1980. The sale deed purportedly executed in 2006 in favour of Respondent No.5 was neither known to Mr Shukla nor the Appellant. On coming to know about the sale deed in favour of Respondent No.5 and the consequent mortgage of the property in 2018, he instituted a Civil Suit challenging the sale and the mortgage.
The Appellant apprehends that he may be dispossessed of the property consequent to the order obtained u/s 14 of the SARFAESI Act from the District Magistrate, and therefore, filed the S.A. as an aggrieved person, u/s 17 (1) of the SARFAESI Act. I.A. No. 861/2023. He sought Interlocutory protection pending the consideration of the S.A. The Ld. Presiding Officer dismissed the S.A. stating that the sale to the mortgager Respondent No.5 was on 05.09.2006 and the mortgaged was created on 27.07.2018 and therefore, the purchase of the property by the Appellant in the year 2019 will not have any validity as far as the creation of the mortgage is concerned.
Though the Respondent bank was served, none appeared. Respondents Nos. 2 to 5 have appeared through counsel, but have objections. The Ld. Counsel appearing for those Respondents seeks time to file his Vakaltnama and reply to the Appeal.
The Ld. Presiding Officer was however, oblivious of the fact that the property allegedly purchased by the 5th Defendant in the year 2006, was already sold in the year 1980 to Mr Shukla the predecessor of the Appellant who has continuity of the title since 1980. Hence, it cannot be said that the mortgage was created before the purchase of the property by the Appellant. Mr Sukla’s right devolved upon the Appellant and he is entitled to whatever right his predecessor of interest had over the property. The sale was affected by the deceased original owner of the property in the year 1980 when he had the exclusive right to the property. Consequent to his demise in the year 2000, his children had partitioned the property which was already sold and therefore, the partition of the property and the consequent sale of the property by one of the sharers to the 5th Respondent has no legal sanctity. The impugned order appears to be erroneous. The Appellant has made out a strong prima facie case and therefore, is entitled to stay of the Sarfaesi measures.
Await the appearance of the first Respondent and the reply of the Respondents Nos. 2 to 5. List on 19.01.2024.