Sudha Joshi vs HDFC Bank Ltd

Brijesh Sethi, Chairperson

The facts leading to the present appeal are that the appellant had filed S.A. No. 26 of 2020 before DRT-II, Chandigarh on 28.01.2020, challenging therein the arbitrary, unfair and illegal actions initiated by respondent bank under the Securitization & Reconstruction of Financial Assets & Enforcement of Security Act, 2002 hereinafter referred to as ―SARFAESI Act 2002.

It is submitted that Sh. Lalit Kumar Joshi, late husband of the appellant, who was sole proprietor of M/s Ess Jay Enterprises, Chandigarh died on 17.08.2017 leaving behind his wife, the appellant, two daughters namely Shalini Sharma and Smriti Joshi and a son Sanjeev Joshi. The legal representatives of late Sh. Lalit Kumar Joshi executed a Partnership Deed dated 03.09.2007 as a temporary arrangement to facilitate Sanjeev Joshi, respondent to operate the business of the firm, only for the remaining period of the financial year. This Deed of partnership was dissolved vide Dissolution Deed dated 31.03.2008, whereby the principal borrower respondent no. 3 took over the entire business of M/s Ess Jay Enterprises as its Sole Proprietor along with all the assets, liabilities, rights and privileges. The remaining three partners including the appellant were left with no interest or concern with M/s Ess Jay Enterprises and its business.

It is further submitted that respondent no. 3 without the knowledge, consent or authority of the applicant had taken several loans/supplementary loans from the respondent HDFC Bank for his business Ess Jay Enterprises in which the appellant had no interest whatsoever. Respondent No. 3 Sanjeev Joshi had forged signatures of appellant himself or with the help of someone else on loan documents, guarantee documents as well as the documents for mortgaging the only residential house of the applicant in order to secure Over Draft facility OD Account no. 276089700000049 and Drop Line Over Draft Account No. 50200005898377 from the respondent HDFC Bank. These signatures of the appellant were forged by respondent no. 3 with the active connivance of bank officials without the knowledge of the appellant.

It is next submitted that the respondent no. 3 borrower defaulted in the repayment of the loan taken by him for his business and the loan accounts were declared NPA. The officials of respondent bank, who were aware of the fact that the appellant is neither a borrower nor a guarantor nor had mortgaged her residential house No. 5663. MHC, Manimajra, started giving threatening calls to the applicant to pressurize to deposit the amount which respondent no. 3 had borrowed from the bank and had defaulted to repay the same. Despite the fact that the appellant informed the said officials of the respondent bank that she is neither a borrower nor a guarantor nor had executed any loan/guarantee documents with regard to the credit facilities given to the business of respondent no. 3 and had not mortgaged her only residential house to give security for the loans advanced to the borrower, they continued demanding the amount and therefore, the appellant was left with no alternative except to file a written complaint to the Sr. Superintendent of Police, Chandigarh on 02.02.2016 against the principal borrower i.e. Sanjeev Joshi as also against the officials of the bank, who connived with her son, respondent no. 3.

As no action was taken by the Chandigarh police on the written complaint dated 02.02.2016 another representation was made on 16.02.2016, followed by a third representation dated 17.04.2016 to the S.S.P., Chandigarh for taking against the principal borrower respondent no. 3 and officials of respondent no. 1 & 2 . Before registering the formal FIR, S.I. Avtar Singh of Chandigarh Police made a detailed enquiry, obtained original Memorandum recording past transactions of creation of mortgage by delivery of title deeds dated 19. 12.2015 from HDFC Bank Ltd., having questioned signatures of complainant Sudha Joshi. In fact the enquiry officer obtained all the loan documents from the respondent bank, submitted the same to CFSL, Chandigarh and after the receipt of the report from CFSL, a formal FIR No. 237 dated 04.11.2016 under Sections 420, 467, 468, 471 IPC at Police Station, Manimajra was registered against respondent no. 3 who was arrested on 22. 08.2017.

It is further submitted that the authorized officer of the respondent bank issued a Demand Notice dated 01.07.2016 to M/s Ess Jay Enterprises, through its proprietor Sanjeev Joshi as borrower, to Sanjeev Joshi Son of Lalit Kumar Joshi as Co-borrower and guarantor and to the appellant as guarantor mortgagor, directing them to pay a total amount of Rs. 1,36,77,036/- in respect of Overdraft account and Drop Line Overdraft facilities utilized by the borrower respondent no. 3 for his business. The demand notice was issued by the authorized officer of the bank altogether ignoring the undisputed fact that the appellant had made written complaints to Sr. Superintendent of Police, UT, Chandigarh and the enquiry officer had taken all the loan documents from the respondent bank, referred the same to CFSL, UT, Chandigarh, in order to verify as to whether the loan documents were signed by the appellant or her signatures were forged.

It is next submitted that the appellant submitted her detailed objections/representations dated 29.08.2016 to the Demand Notice dated 01.07.2016. The said objections/representations were submitted both to the authorized officer as well as to the HDFC Bank, Branch, Sector 8, Chandigarh. The factum of filing written complaints before the police by the applicant has been detailed in the objections besides submitting that she had not signed any loan document and had not mortgaged her residential house no. 5663, MHC, Manimajra, with the bank by depositing its title deeds.

It is further submitted that the authorized officer of the respondent bank conveyed its reply dated 09.09.2016 to the appellant, rejecting her objections being not acceptable to the bank. The perusal of the said reply fully establishes total non-application of mind to the objections, which have been rejected without holding meaningful enquiry into it.

It is further submitted that the authorized officer of the respondent bank issued the possession notice dated 20. 09.2016 for taking the possession of the only residential house of the appellant on the ground that it was mortgaged with the bank as security to the loan facilities given Sanjeev Joshi, respondent no. 3, the principal borrower.

Thereafter respondent bank moved an application before the learned District Magistrate, Chandigarh under Section 14 of the SARFAESI Act for seeking police help, which was allowed without application of mind vide order dated 10.08.2017. The said order was passed by the learned District Magistrate without effecting service on the appellant, despite the fact that she was arrayed as respondent no. 3 and help was sought to take possession of the residential house owned by her. In view of the fact that the orders for taking possession of the residential house owned by the applicant was sought by the respondent bank, it was incumbent upon the learned District Magistrate to effect service on the applicant before passing the order. The respondent bank made the application for police help together withholding the material facts regarding the CFSL report and the filing of challan against the borrower Sanjeev Joshi, respondent no. 3.

It is further submitted that the Central Forensic Science Laboratory, Chandigarh submitted its partial report dated 04.10.2016 along with the result of the examination of the documents. The perusal of the report shows that the person who wrote the signatures stamped and marked ‗A1 to A12‘ did not write the enclosed signatures stamped and marked ‗Q1, Q2, Q4 to Q14 and Q16 to Q27‘. The signatures stamped and marked A1 to A12 are the admitted signatures of the appellant. Thus, as per the CFSL report dated 04.10.2016, she has not signed memorandum recording past transactions of creation of mortgage dated 19.12.2015 and has not signed the declaration-cum-indemnity dated 19.12.2015. The signatures on the declaration dated 15.12.2015 are not that of the appellant. The sanction letter dated 15.12.2015 is also not signed by the applicant. It is further submitted that as per CSFL report, questions marked as Q3, Q28 to Q32, Q54, Q55, Q55A, Q56 to Q90 and Q104 and Q121 are also not signed by the appellant. Thus, the supplementary agreement for Drop Line Overdraft dated 15.12.2015 does not bear her signatures and is a forged document. The declaration for submission of cheques dated 15.12.2015 is also not signed by the applicant, according to the CFSL report and the same is forged.

It is submitted that according to the bank officials whose statements were recorded by the investigating officer, the loan documents were taken by Sanjeev Joshi, respondent No. 3 and were submitted after getting the signatures alleged to have been signed by the appellant, meaning thereby undisputedly, the alleged signatures on the loan documents were not given by the appellant in the presence of any of the bank employee. The investigating officer has further noticed that Sudha Joshi, applicant travelled from Chandigarh to Mumbai on 18.12.2015 in Jet Airways and even the location of her mobile was in Mumbai. Therefore, it is proved on record that she had not signed any loan documents including the agreement in question on 19.12.2015 at Chandigarh.

It is further submitted that after completing the investigation, the Chandigarh Police filed Challan on 16. 10.2017 along with the CFSL report dated 04.10.2016.

It is next submitted that as the CFSL report with regard to all the loan documents was not submitted with the report dated 04.10.2016, the investigating officer after receiving the complete CFSL report submitted the supplementary challan on 09.07.2018.

It is further submitted that from the perusal of the CFSL report dated 03.05.2018. It is fully established that the applicant has not signed any loan document either as a borrower or as co-borrower or as guarantor and has not signed any document to mortgage her only residential house with the respondent bank as security for the loans availed by Sanjeev Joshi, respondent no. 3. From the perusal of the concluding paragraph of the supplementary challan, it is established on record that the appellant has not signed any loan document, either as a borrower or co-borrower or as guarantor and has not executed any document to mortgage her only residential house no. 5663, MHC, Manimajra. In the concluding paragraph of supplementary challan dated 09.07.2018 it is mentioned that ‗In view of the above said CFSL report, it has been proved that most of the loan documents in question is having the forged signatures of Mrs. Joshi and the beneficiary is only accused Sanjeev Joshi‘.

It is next submitted that the borrower respondent no. 3 was arrested on 22.08.2017 and is facing trial in the case FIR No. 237 dated 04.11.2016 under Sections 420/467/468 and 471 of the Indian Penal Code.

It is further submitted that during investigation, the Investigating Officer recorded the statements of Raman Verma son of Sh. Madan Lal Verma, Sr. Manager, HDFC Bank, Loan Department Plot No. 28, Industrial Area, Phase-I, Chandigarh Who has recorded in his statement that Sh. Sanjeev Joshi came to the bank and signed the agreement in his presence and in the presence of another employee Mrs. Suraj and requested that his mother was 68 years old and was not feeling well and thus was not able to come to the bank for putting her signatures. He requested that he would get the signatures of his mother on the documents from the house. Relying upon him, being old customer of the bank, his request was acceded and was allowed him to get the signatures of this mother on the loan documents from home. After some time, Sanjeev Joshi came back after getting the signatures alleged to have seen signed by his mother Sudha Joshi and submitted the agreement/documents to the bank.

It is proved from the statement of the bank employee that the appellant did not put here signatures on the loan documents in the presence of any bank employee and in view of the fact as per the statement of the bank employee made under Section 161 of the Code of Criminal Procedure, Sanjeev Joshi, respondent no. 3 got her signatures on the documents from the house, no bank employee were that of the appellant or were forged. In view of the fact that it has come in clear terms in both the CFSL reports that the appellant had not signed the loan documents, therefore, the appellant is neither a borrower, nor co-borrower nor guarantor nor mortgagor and therefore the provisions of the SARFAESI Act and that of contained in SARFAESI Rules, 2002 could not have been invoked for proceedings against the appellant or her residential house. As it is proved on record that the appellant has not signed the loan documents and has not availed the loan facilities, she is not covered under the provisions of Recovery of Debts and Bankruptcy Act, 1993 as the provisions of Section 2(g) are not applicable.

It is further submitted that the appellant filed S.A. No. 734 of 2017, which was dismissed as withdrawn by the Debt Recovery Tribunal-III, Chandigarh vide order dated 20.02.2018.

It is further submitted that Civil Suit No. 1000 of 2016 filed by the applicant on 31.05.2016 was dismissed by the learned Civil Judge (Jr. Division), Chandigarh for want of Jurisdiction vide order dated 18.07.2018.

It is further submitted that being aggrieved and dissatisfied from the action of respondent bank, the appellant filed Civil Writ Petition No. 19141 of 2018 in the Hon‘ble Punjab & Haryana High Court. The learned Motion Bench while issuing Notice of Motion was pleased to grant status quo vide order dated 03.08.2018. The said civil writ petition has been dismissed as withdrawn by the learned Motion Bench vide order dated 15.01.2020, wherein the statement of the learned counsel for the bank to the effect that question of limitation absolves the writ petitioner since the petitioner had been diligently perusing the remedy before this court under Section 14 of the Limitation was also recorded.

It is next submitted that the SA filed by the appellant was not taken up for final hearing despite the orders of the Hon‘ble High Court due to pandemic and was adjourned to 15.02.2021. In the meanwhile, the respondent bank served a letter dated 11.11.2020 seeking police assistance for taking the physical possession of the only residential house of the appellant and therefore, she was constrained to file IA No. 246 of 2020 for preponing the hearing of the SA. It is further submitted that along with the application for preponement, the appellant made another IA for an interim direction restraining respondent bank from taking the physical possession the only residential house on 03.12.2020. The Ld. DRT allowed the application for preponement vide its order dated 19.11.2020 and fixed the main SA for final arguments on 24.11.2020. The learned DRT-II allowed the IA and preponed the hearing of the SA.

It is further submitted that the appellant came to know that respondent no. 3 has attached two documents i.e. partnership Deed dated 03.09.2007 as well as dissolution of partnership dated 31.03.2008 in CrI. Misc. 7345 of 2020 under Section 482 of the Cr. P.C for grant of anticipatory bail in case FIR No. 10 dated 29.01.2020 under Section 420/467/468/471 IPC registered at Police Station, North, Sector 3, Chandigarh. An application dated 21.11.2020 was filed by the appellant before the learned DRT-II, Chandigarh for permission to place the said two documents on record of the SA.

It is further submitted that the respondent bank submitted its reply in the SA, the perusal of which fully establishes that there is no denial of the specific averments made in para 18 of the SA filed by the appellant to the effect that Sh. Raman Verma, Sr. Manager, HDFC Bank, Loan Department, Industrial Area, Phase-I, Chandigarh has made a statement that Sanjeev Joshi came to the bank and signed the agreement in the presence and in the presence of another employee Mrs. Suraj and requested that his mother was 68 years old and was not feeling well and therefore, was not able to come to the bank for putting her signatures on the documents. Relying upon him, being old customer, his request was acceded and documents were handed over to him for getting the signatures of the appellant. According to this statement, respondent no. 3 came back after sometime along with the all loan documents with the signatures alleged to have been that of the appellant. He further stated that later on he came to know that respondent no. 3 got the signatures of his mother i.e. the appellant forged on the loan documents.

It is further submitted that the appellant submitted its detailed replication dated 06.03.2020 on 16.03.2020 vide Diary No. 3481 before the Ld. DRT-II, Chandigarh.

It is further submitted that the Ld. DRT-II, Chandigarh dismissed the S.A. No. 26 of 2020 vide its order dated 27.11.2020 in a wholly illegal and arbitrary manner, without even noticing the case law cited in support of the settled principles of law, governing the question involved in SA by passing a cryptic order in a summary manner without returning finding on the main controversy involved between the parties.

It is further submitted that the Demand Notice dated 1. 07.2016 issued under Section 13(2), an amount of Rs.13677036.00 was claimed by the bank on account of the alleged outstanding amounts in respect of Overdraft Account No.2708970000049 and Drop-line Account No. 50200005898377 as on 06.06.2016. The documents like Memorandum Recording Past Transactions of Creation of Mortgage dated 19.12.2015, Declaration-cum-Indemnity of the same date and Declaration dated 15.12.2015 were relied upon and the demand notice was on the basis of said documents. Undisputedly, as per the CSFL report dated 04.10.2016 and 03.05.2018, the said documents did not bear the signatures of the appellant. Therefore, the bank had no jurisdiction whatsoever to invoke the provisions of SARFAESI Act to initiate actions against the appellant under Chapter-III of the said Act. For the facility of reference, the relevant portion of the CSFL reports are reproduced as under:

CENTRAL FORENSIC SCIENCE LABORATORY, SECTOR 36, CHANDIGARH. 04.10.2016:

Result of examinations: The documents of this case have been carefully and thoroughly examined. 1. The  person  who wrote the enclosed signatures, stamped and  marked  Al  to  Al2  did  not  write  the enclosed signatures stamped and marked Q1, Q2,  Q4 to Q14 and Q16 to Q27".

CENTRAL FORENSIC SCIENCE LABORATORY, SECTOR 36, CHANDIGARH.

xx xx xx xx x

The person who wrote the enclosed signatures, stamped and marked Al to A14, A14A and A15 to A39 did not write the enclosed signatures stamped and marked Q3, Q28 to Q32, Q54, Q55, Q55A, Q56 to Q90, 0104 and 0121. 3 to 5 xx xx xx xx xx xx"

Since according to the referred CSFL reports, the documents of loan and mortgage  on the basis of  which Demand Notice was issued by respondent bank were  not  signed  by the  appellant,  it  was incumbent upon the Id. DRT-II, Chandigarh to have returned definite finding after examining these reports but in the instant case the said CSFL reports  which is a Central Government Agency, have been brushed  aside  with  a  cryptic  observation that they are only opinion of an expert.

It is next submitted that the appellant never executed the documents titled as Memorandum of Creation of Mortgage in respect of the subject property for restructuring the loan facility. The respondent bank in its reply attached a document Annexure R/1 which is in two parts, the first part consist of Term Loan Agreement, Supplementary letter of Hypothecation, both dated 17. 01.2014. The said documents as per the CSFL reports do not bear the signatures of the appellant. The perusal of para 2 of the CSFL report, the questioned signatures stamped and marked as 55A and 56 to 90 are not signed by the appellant Sudha Joshi as per the CSFL report dated 03.05.2018. The Supplementary letter of continuing guarantee which is part of Annexure R/1 of the reply of the respondent bank, has already been attached by the appellant with her SA at page 192 and according to the CSFL report dated 03.05.2018, her alleged signatures stamped and marked as Q79 are forged by respondent No.3.

It is further submitted that the learned DRT-II, Chandigarh committed an error in altogether ignoring that the Memorandum Recoding Past Transaction of Creation of Mortgage by delivery of Title Deeds dated 19.12.2015, Declaration-cum-Indemnity Bond executed on 19.12.2015 and sanction letter dated 15.12.2015 do not bear the signatures of the appellant and, therefore, the demand notice was issued by the respondent bank on the basis of above documents is not valid. The learned DRT-II failed to appreciate that it is these three documents which are material for the disposal of the SA and from the perusal of the said documents, it is fully established that the Demand Notice had been issued on the basis of these documents.

It is further submitted that the police report filed along with the Challan dated 12.10.2017 in FIR No.237 dated 04.11.2016, the documents referred to above on the basis of which proceedings under Chapter III of the Act were initiated by the respondent bank by issuing Demand Notice were forged. For the facility of reference, the relevant portion of the Police Report is reproduced below: " The concerned bank officials who had processed the loan applications in question have also joined investigation and they disclosed that in the month of December, 2015, Sanjeev Joshi approached the bank and requested to increase the DOD Limit. Sanjeev Joshi alone came to the bank and signed the required documents i.e. Loan Agreement and requested to the bank officials that his mother is old aged and could not come to the bank. He requested to the bank officials that he will get the signatures of his mother done from her. They relied upon Sanjeev Joshi being old customer of the bank. The bank official acceded to his request and allowed him the signatures of his mother done from home. After getting the signatures of his mother, accused Sanjeev Joshi submitted the agreement in question to the bank. So it has been proved from the statements of the bank officials that Mrs. Sudha Joshi did not sign the agreement in question and hence, it is proved that either accused Sanjeev Joshi signed the signatures of his mother himself or through his other associate.

It is further submitted that in view of the facts proved on record that the signatures of the appellant on loan documents and that of the document of Creation of Mortgage were forged as per CSFL reports and the statement of Sh. Raman Verma, Sr. Manager, Loan Department of respondent bank, the DRT-II was expected to examine in detail the existence of genuine valid documents for holding the actions of respondent bank against the appellant under Chapter-III of the Act as valid, but in the instant case, he has disposed of the SA of the appellant in summary manner by cryptic observations that the CSFL reports are opinion of an Expert and the statement of official of the bank was under Section 161 Cr.P.C. While dismissing the SA of the appellant in summary manner, the Id. DRT-II, Chandigarh has completely ignored the fact that the specific averments made by the appellant In SA have not been controverted by the respondent bank. In view of these proved facts, It cannot be held by any stretch of imagination that the residential house In question was a security interest created by the appellant in favour of the respondent bank and therefore, the provisions of Chapter-III of the Act could not have been invoked.

It is further submitted that Sh. Raman Verma, the Sr. Manager, Loan Department of the respondent bank is the person who sanctioned the Credit facility and the same person is now admitting the fact that the signatures of the appellant on the relevant documents were forged. In the absence of the denial of the statement of the Sr. Manager by respondent bank, there is no material on record to hold that the security interest was created by the appellant in favour of respondent bank.

It is further submitted that in order to reach the right conclusion to decide as to whether the house in question was a secured interest in favour of respondent bank or not, the learned DRT-II, has ample jurisdiction to have summoned or directed the respondent bank to produce him before him. In fact no steps whatsoever have been taken by the respondent bank to aver that the statement of Sh. Raman Verma its Sr. Manager Loan Department was not relevant for the disposal of the SA. The perusal of the reply of the bank in para 18, it is established that it is an evasive reply, because the averments made in pars 18 of the SA have been denied for want of knowledge, the Ld. DRT-II ignored this aspect of the matter and has disposed of the SA in summary manner, causing huge loss and injury. In fact, the failure of the Id. Presiding Officer of DRT-II, Chandigarh to examine this aspect of the matter has denied the protection of Section 17 of the Act to the appellant and therefore, the order impugned herein deserves to be set aside on this ground alone.

It is next submitted that while dismissing the SA filed by the appellant, the learned DRT-II, has altogether ignored the settled law that the surety, like any other contracting party, cannot be held bound to do something for which he has not contracted.

It is further submitted that while dismissing the SA of the appellant, the learned DRT-II, Chandigarh has failed to examine the documents of loan on the basis of which Demand Notice was issued and proceedings under the SARFAESI Act were initiated against the appellant by the respondent bank. The appellant had already submitted the details regarding those documents by way of replication to the written statement of the respondent bank. For the facility of reference, the same is reproduced as under:-

A. Final memorandum recording past transactions of creation of mortgage by delivery of title deeds for the entire top up and enhanced existing credit facilities to the tune of Rs.1,28,50,000/- (one crore twenty eight lacs fifty thousand only) dated 19/12/2015 :

• As per the CFSL report dated 04/10/2016 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged ,null & void .

B. Declaration Cum Indemnity documents for creation of security by equitable mortgage by deposit of title deeds as security therefore for the facility Rs.1,28,50,000/- (one crore twenty eight lacs fifty thousand only) dated 19/12/2015;

• As per the CFSL report dated 04/10/2016 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged ,null & void .

C. Declaration Form dated 15/12/2015 ;

• As per the CFSL report dated 04/10/2016 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void .

D. Sanction Letter dated 15/12/2015 ;

• As per the CFSL report dated 04/10/2016 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void.

E. Supplementary Agreement for drop line overdraft facility for the said credit facility dated 15/12/2015;

• The said Document - Supplementary Agreement for drop line overdraft facility dated 15/12/2015 is annexed in Annexure A5 from page 108 to 114 by the Applicant in present SA and the alleged signatures of the applicant on the said document is marked as questions i.e Q-28 to Q29 by CFSL for the authenticity & examination. As per the CFSL report dated 03/05/2018 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged , null & void.

F.  declaration  for  submission  of  cheques dated 15/12/2015 and customer request form for debit authority and disbursement details & document for foreign currency exposure dated 15/12/2015.

It is further submitted that the learned DRT-II, Chandigarh also altogether ignored that the above said documents i.e. declaration for submission of cheques & customer request form for debit authority and disbursement and document for foreign currency exposure dated 15/12/2015 is annexed in Annexure A5 and the alleged signatures of the applicant on the said document is marked as questions i.e Q-30 to Q32 by CFSL for the authenticity & examination. As per the CFSL report dated 03/05/2018 it was cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void and not binding on the appellant.

It is further submitted that the learned DRT-II, Chandigarh has omitted to consider that Security interest is defined under clause(zf) of section 2 of the SARFAESI Act, which reads as under:

"security interest" means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31;

It is submitted that in the present case the forged document has been executed by respondent No. 3 in the active connivance with the bank officials who admitted the fact before the investigating officer and made the statement under 161 of the Cr.P.C. in view of the same there is no valid mortgage by the applicant under section 58 clause (f) on the Transfer of Property Act which deals with the mortgage by deposit of title deeds. As such there is no valid mortgage and if there is no valid mortgage by the applicant than the respondent bank could not have been enforced such a defective security interest under the provisions of the SARFAESI Act.

The following reliefs have been sought by the appellant in the present appeal:-

A) Appeal may kindly be allowed, the impugned order dated 27.11.2020 in SA No.26 of 2020 be set aside;

(B) The Demand Notice dated 01.07.2016, the possession notice dated 20.09.2016 under Section 13(4) read with Section 13 (12) of the SARFAESI Act and the Notice dated 11.11.2020 whereby respondent bank has sought police assistance to take the physical possession of the only residential house of the appellant, be set aside;

(C) The order dated 10.08.2017 passed by the District Magistrate, UT, Chandigarh whereby the application of respondent bank for police help was allowed, be set aside;

(D) The proceedings under Section 29 of the SARFAESI Act, 2002 and rules framed thereunder be ordered to be initiated against the erring bank officials and be ordered to be punished and imprisoned in accordance with law.

(E) Pass any other such or further orders in favour of the applicant as this Hon'ble Tribunal may deem fit and proper.

WRITTEN SUBMISSIONS ON BEHALF OF THE APPELLANT.

In the written submissions, it is submitted by the appellant that the present case is a classic example and ex-facie demonstrates, as to how an Angel (Respondent Bank) has joined hands with the Devil (Respondent No.3) in as much as that the Respondent Bank in collusion with Respondent No.3, admittedly the actual beneficiary of the loan/credit facilities by committing numerous violations of the RBI Guidelines, Bank Rules & Procedures, Banking Regulation Act sanctioned, enhanced and disbursed the credit facilities in a most fraudulent manner to the Respondent No.3, who forged the signatures of his mother-the Appellant, by falsely projecting her as guarantor by mortgaging her only residential property without her knowledge and at her back with the aid of the Bank Officials. The Respondent Bank has been proceeding against the innocent senior citizen like the Appellant-a widow aged 76 yrs, by misusing its unfettered powers under SARFAESI Act, 2002 violating the Security Interest (Enforcement) Rules, 2002, against the clear guidelines laid down by the Hon'ble Apex Court in the case of Mardia Chemicals Ltd. V/s Union of India 2004) 4 SCC 311 and has obtained collusive orders by withholding the material information and the illegal acts of the Respondent Bank in collusion with the Respondent No. 3, amounts to playing fraud and it is a settled law that "Fraud-vitiates all judicial acts as held by the Hon'ble Apex Court, in the case of, 'S.P.O Naidu: 1994(1) RRR 253, the ratio decidendi whereof is attracted in the present case.

It  is  submitted  that  the  Demand  Notice  dated 01.07.2016 is totally illegal, unclassified and unwarranted in the eyes of law and doesn't stand at the altar of the judicial touchstone as the same is based upon the aforementioned loan documents executed between the period of 15.12.2015 to 19.12.2015, as they carry forged signatures of the Appellant as have not only been duly proved by the first CFSL report dated 04.10.2016 (admissible per-se in the eyes of law) but also duly proved during investigation carried out by the police as is evident from the first charge sheet dated 12.10.2017, hence, the entire subsequent proceedings on the basis of the aforesaid Demand Notice dated 01.07.2016 and the orders obtained by the Respondent Bank in collusion with Respondent No.3 by playing sharp practices are illegal and not sustainable in the eyes of law.

It is submitted that the second set of loan documents received as per the second seizure memo are as under:-

• Second CFSL report dated 03.05.2018 at Pg.593-594 duly prove the forgery of the signatures of the Appellant.

• Especially the signature Q-28 to Q-32 at Pg.173-185, as the said loan documents pertain to December, 2015 (purportedly not supplied earlier by the Respondent Bank).

• Similarly, the signatures Q-54 & Q-55 on sanction letter dated 05.06.2014 (purportedly second enhancement of loan) Pg.730

• MOR dated 17 . 01 . 2014 having signatures Q -55A to Q -69, Pg.747-756 too are forged, as per the aforesaid second CFSL Report.

• Declaration-cum-indemnity dated 17.01.2014 Q-72 to Q-78 Pg.757-764 are forged as per the Second CFSL Report.

• Supplementary letter dated 17.01.2014 Q-79 to Q-89 Pg.772- 777

• Declaration dated 06.11.2012, which loan document pertains to the very first sanctioned loan is also forged signature as per Q90 in view of the CFSL Report.

• Application form Pg.884-887 carrying forged signatures Q-104 in view of the CFSL Report.

It is next submitted that  the Demand Notice dated 1. 07.2016 issued under Section 13(2), an amount of Rs.13677036/- was claimed by the bank on account of the alleged outstanding amounts in respect of Overdraft Account No.2708970000049 and Drop - line Account No. 50200005898377 as on 6. 06.2016. The documents like Memorandum Recording Past Transactions of Creation of Mortgage dated 19.12.2015, Declaration-cum-Indemnity of the same date and Declaration dated 15. 12.2015 were relied upon and the demand notice was on the basis of said documents.

Undisputedly, as per the CSFL report dated 4. 10.2016 and 03.05.2018, the said documents did not bear the signatures of the appellant. Therefore, the bank had no jurisdiction whatsoever to invoke the provisions of SARFAESI Act to initiate actions against the appellant under Chapter-III of the said Act. For the facility of reference, the relevant portions of the CSFL reports are reproduced as under:

" CENTRAL FORENSIC SCIENCE

LABORATORY, SECTOR 36,

CHANDIGARH.

04.10.2016

Result of Examinations:

The documents of this case have been carefully and thoroughly examined.

1 . The person who wrote the enclosed signatures, stamped and marked Al to Al2 did not write the enclosed signatures stamped and marked Ql, Q2, Q4 to Q14 and Q16 to Q27".

" CENTRAL FORENSIC SCIENCE

LABORATORY,SECTOR 36,

CHANDIGARH.

03.05.2018.

xx xx xx xx x

The person who wrote the enclosed signatures, stamped and marked Al to A14, A14A and A15 to A39 did not write the enclosed signatures stamped and marked Q3, Q28 to Q32, Q54, Q55, Q55A, Q56 to Q90, Q104 and Q121.

3 to 5 xx xx xx xx xx xx"

It is submitted that since according to the above referred CSFL reports, the documents of loan and mortgage on the basis of which Demand Notice was issued by respondent bank were not signed by the appellant, it was incumbent upon the Id. DRT-II, Chandigarh to have returned definite finding after examining these reports but in the instant case the said CSFL reports which is a Central Government Agency, have been brushed aside with a cryptic observation that they are only opinion of an expert.

It is next submitted that the appellant never executed the documents titled as Memorandum of Creation of Mortgage in respect of the subject property for restructuring the loan facility. The Term Loan Agreement, Supplementary letter of Hypothecation, both dated 17.01.2014. The said documents as per the CSFL reports do not bear the signatures of the appellant. The perusal of para 2 of the CSFL report, the questioned signatures stamped and marked as 55A and 56 to 90 are not signed by the appellant Sudha Joshi as per the CSFL report dated 03.05.2018. The Supplementary letter of continuing guarantee which is part of Annexure R/1 of the reply of the respondent bank , has already been attached by the appellant with her Appeal at page 772-777 i.e Q-79 to Q89 and according to the CSFL report dated 03.05.2018, her alleged signatures stamped and marked as are forged by respondent No.3.

It is further submitted that admittedly every time for sanction of a loan or even enhancement of the said same loan, a fresh procedure i.e. again the signatures on the loan documents are taken, as per the Banking rules and RBI Guidelines, therefore, the loan documents and the succeeding/superseding loan documents (executed during December, 2015) being the act of fraud and forgery, on the basis of which the demand notice is issued is illegal and unwarranted in the eyes of law as the same are duly proved on the statement of the loaning officer i.e. Raman Verma, Sr. Manager, CFSL Repots dated 04.10.2016 and 03.05.2018 and both the investigations Reports in the FIR No.237/2016.

It is further submitted that documents which were concealed by the Respondent Bank as well as the Respondent No.3 from the police during investigation, especially the documents at pg.1281 & 1282, as well as any other documents related to the loan, the police was deprived from getting CFSL Report of the same and Respondents cannot be allowed to rely upon as they cannot take benefits of their own wrongs/misdeeds carrying forged signatures of the Appellant.

It is next submitted that Sh. Raman Verma, the Sr. Manager, Loan Department of the respondent bank is the person who sanctioned the Credit facility and the same person is now admitting the fact that the signatures of the appellant on the relevant documents were forged. In the absence of the denial of the statement of the Sr. Manager by respondent bank, there is no material on record to hold that the security interest was created by the appellant in favour of respondent bank.

It is further submitted that the respondent No.3 siphoned the FD of Rs.5.lakh of the Appellant by forging her signatures and got it transferred to his account with the aid and connivance of the same HDFC -Respondent Bank for which the Appellant filed another complaint against both the Respondent No.3 and the Respondent Bank with the Chandigarh police, who after receiving the CFSL Report has registered another/second FIR No.10/2020 and the trial of the same has commenced in the District Courts, Chandigarh, as would be evident from the Chargesheet/Challan i.e Annexure A-20 in 1.A No. 340/2022 at pg 14-23 and as the officials of the Respondent Bank again escaped, this proves that to what extent the Respondent Bank is in collusion with respondent No.3 for the reasons best known.

It is further submitted that the said documents as stated in the preceding para are not executed by the Appellant Sudha Joshi and further duly admitted in the statement recorded by the bank officials Raman Verma that the same was not executed in their presence and they have come to know that the forged signature has been committed by respondent No. 3 for availing the said credit facilities. It is further crystal clear from the documents placed on record along with the CFSL reports that the relevant loan documents were not executed by the Appellant Sudha Joshi in view of the same the Appellant cannot be held bound to something for which the appellant has not contracted. Hence the Appellant cannot be held liable to pay or discharge the liabilities on the said forged executed documents and is entitled to invoke section 133 of the Indian Contract Act which cannot be rebutted by the bank.

It is further submitted that the learned DRT-II, Chandigarh has omitted to consider that Security interest is defined under clause(zf) of section 2 of the SARFAESI Act, which reads as under:

"security interest" means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31;

It is further submitted that in the present case the forged document has been executed by respondent No. 3 in the active connivance with the bank officials who admitted the fact before the investigating officer and made the statement under 161 of the Cr.P.C. in view of the same there is no valid mortgage by the Appellant under section 58 clause (f) on the Transfer of Property Act which deals with the mortgage by deposit of title deeds. As such there is no valid mortgage and if there is no valid mortgage by the Appellant than the respondent bank could not have been enforced such a defective security interest under the provisions of the SARFAESI Act.

It is next submitted the learned DRT-II, Chandigarh has failed to appreciate the law settled by the Division Bench In AIR 1935 Privy Council 21 titled "Seth Pratap singh Moholalbhai and another vs. Keshawlal Harilal Setalwad and another has held as under:-

" The principle is that the surety , like any  other  contracting party ,  cannot be  held bound to do something for which  he has not contacted .  If the regional parties have expressly agreed to vary the terms of the original contract no further question arises. The optional contract has gone, and unless the surety has assented to the new terms there is nothing to which he can be bound, for the final obligation of the principal debtor will be something different from the  obligation which the surety guaranteed . Presumably he is discharged forthwith on the contract being altered without his consent for the parties have made it impossible for the guaranteed performance to take place."

In AIR 1938 Madras 585 titled "Messrs. Nuserwanji Cursedji Bhesania and Co. vs. Mahamayi Ammal and others", the Division Bench has held that it is a fundamental principle of the law of suretyship that a surety cannot be bound to something for which he has not contracted. Any variation in the original contract cannot bind the surety unless he has assented to the variation. The Division Bench has held as under:

“it is a fundamental principle of the law of suretyship that a surety cannot be bound to something for which he has not contacted."

It is submitted that these principles were reiterated in AIR 1961 Punjab 281 titled " Union Bank of India versus Pearl hosiery Mills and others by the division bench. A division bench has held that when there is a variation in terms of original contract between debtor and creditor without consent of surety, surety bond executed in favour of the creditor stands discharged. The Division Bench held as under in para no. 34:-

We have also heard the criticism of the learned counsel for the appellant regarding the findings given by the trial Court against defendant No. 3. I am of the view that the finding of the trial Court on Issue No. 4 Is correct, namely, that the surety bond executed by defendant No. 2 In favour of defendant No. 3 stands discharged, because of the variations having been made In the terms of the original contract, dated the 3rd July, 1954, without the consent of the surety (defendant No. 2).

It  was  held  in  Pratapsingh  Mohalalbhai  v. Keshavlal Harilal, AIR 1935 Privy Council 21:

"The  surety,  like  any  other  contracting party, cannot be held bound to something for which he has not contracted.  If the original  parties  have  expressly  agreed to vary the terms of the original contract no  further  question  arises.  The original contract has gone, and unless the surety has assented to the new terms there is nothing to which he can be bound, for the final obligation of the principal debtor will be something different from the obligation which the surety guaranteed. Presumably he is discharged forthwith on the contract being altered without his consent, for the parties have made it impossible for the guaranteed performance to take place."

It is further submitted that t hese principles were reiterated in Special Civil Application No. 4822 of 2010 - Pranjivan Purushottarn Zaveri & anr. v. Dena Bank & ors by Gujarat DB . A division bench has held that - If there is no valid security interest created in favour of the bank, then there is no mortgage, and if there is no valid mortgage, then the petitioners, who are the purchasers of the property, can definitely say that the bank could not have enforced such a defective security interest.

It is next submitted that t hese principles were reiterated in CWP 20773 -2019 (0& M) - Punjab National Bank & Ors. vs. M/s Chintpurni School Educational Society & ors by Hon'ble Panjab &Haryana high court ( DB) . A division bench has held as under:

"Since the variations were  made  in  the terms of original contract/ documents, respondents no.15 & 16 cannot  be  made  liable  beyond  terms  of their engagement as per settled law" .

It is further submitted that the case of the Appellant also attracts the law laid down the Hon'ble Apex Court in the case titled as, "Central Bureau of Investigation Vs. Jagjit Singh: 2013(4) RCR (Cri) 607",especially in view of the fact that the signatures of the Appellant have been proved to be forged and the Respondent No.3, who admittedly is the real beneficiary of the loan has not denied his signatures on any of the loan documents and rather have has admitted his all signatures on the entire loan documents. It is also pertinent to mention herein the respondent bank failed to produce the relevant documents sought before this Appellate tribunal, which also clearly reflects their malafide intention & their misdeeds.

Reply on behalf of Respondent Bank (HDFC Bank Ltd.)

Ld. counsel for the respondent has submitted that the impugned order is a well reasoned order suffering from no infirmity, therefore the present Appeal is liable to be dismissed with exemplary costs.

It is submitted that the appellant is a well-educated lady and was running business of Tuff Polybags as its Proprietor and was also actively involved in the business of her husband who was running the same as a proprietor in the name and style of Ess Jay Enterprises.

It is further submitted that Appellant along with her husband took business loan from Bank of India in the name of their respective aforesaid proprietorship firms and to secure the said loan created mortgage with respect to her property being House No. 5663, Category Ind, DU, Phase -3, Modern housing Complex, Manimajra, Chandigarh. Bank of India duty marked its lien in the records of Chandigarh Housing Board.

It is further submitted that Appellant‘s husband Mr. Lalit Joshi died on 17.08.2007. Thereafter, in the year 2012, the Appellant along with her son Mr. Sanjeev Joshi (Respondent No. 3) approached Respondent Bank (HDFC Bank) for transfer of the loan from Bank of India to HDFC Bank. It is submitted that HDFC Bank agreed to grant financial assistance of Rs.57 lakhs to the aforesaid firms (Rs. 32 Lakhs in Ess Jay Enterprises and Rs.25 Lakhs in Tuft Poly Bags) subject to same being secured by way of mortgage of aforesaid property and hypothecation of the stocks and debt of the firms. The Appellant and her son agreed to the same and accordingly upon release / disbursal of the loan amount by Respondent Bank to BOI, so as to close loan accounts with Bank of India standing in the name of the aforesaid has, BOI transferred the aforesaid security with respect to immoveable property to the Respondent Bank and therefore issued letter dated 15.11.2012 to the Chandigarh Housing Board for removing lien in favour of the Bank of India. It is pertinent to submit that the Bank of India then transferred the original title documents to the Respondent Bank and further at the behest of the Appellant and Respondent Bank, Chandigarh Housing Board marked the lien in favour of the Respondent Bank.

It is further submitted that at the time of transfer of the aforesaid loan facilities from BOI to HDFC, the Appellant and her son Mr. Sanjeev Joshi signed the loan documents.

It is further submitted that thereafter the additional loan facilities detailed hereunder were granted to the Appellant and her son (Respondent No. 3) and accordingly loan documents were executed by the Appellant and her son. It is further pertinent to submit that the aforesaid security was extended to the said additional financial facilities and documents with respect to same were  executed  by  Appellant  and  her  son  Respondent No.3.

DETAILS OF THE FINANCIAL FACILITIES GRANTED BY THE RESPONDENT BANK TO APPELLANT AND RESPONDENT NO. 3.

Ess Jay Enterprises (Proprietorship     of Mr. Sanjeev Joshi) (Mrs.  Sudha  Joshi was Guarantor)

Tuff Poly Bags (Proprietorship    of Mrs. Sudha Joshi) (Mr.  Sanjeev  Joshi

was Guarantor)

November, 2012

Rs.        32,00,000/- (01.11.2012)

Rs.       25,00,000/- (07.11.2012

21.Jan.2014

Rs.        12,00,000/-

(increased)

27.Jan.2014

Rs.       13,00,000/-

(reduced)

9.Jun.2014

Rs.        62,00,000/- (DOD)

16.Sep.2014

Closed

10.Nov.2014

CC  Limit  enhanced from                   Rs. 45,00,000/-   to

Rs. 60,00,000/-

19.Dec.2015

DOD   limit   of   Rs. 62,00,000/-    which came  down  to  Rs. 55,79,000/-       was increased    to    Rs. 68,50,000/- (thereby sanctioning   top-up

of Rs. 12,70,000/-)

TOTAL

Rs. 1,28,50,000/-

NIL

It is submitted that as per the version of the Respondent No. 3 (son of the Appellant), the Appellant is convent educated, very progressive and independent person. She does all her shopping online and travels alone or with children by air within India and abroad. She belongs to family of IAS/IPS and is thus very well versed with the affairs of the world and is not an ill-informed or dependent person as has been presented by her before this Tribunal and in various other litigations filed by her. The cleverness of the Appellant is evident from the fact that she approached the Presiding Officer of DRT, Chandigarh for favourable order, as a result of which the said presiding officer had to rescue himself from the case and this fact is recorded in the order dated 24.07.2017. Therefore, the version of the Appellant that she signed blank documents without understanding the consequences and relevance of the same is incredible and unbelievable. However, in any case, it is well settled proposition of law that a liability cannot be evaded on the plea that blank documents were signed, as the person signing the same is responsible for it. Copy of order dated 24. 07.2017.

It is further submitted that the contention of the Appellant that she had not mortgaged the subject property in favour of the Respondent Bank is false, which is evident from the fact that there is no denial on part of the Appellant with respect to grant of loan by the BOI as mentioned above and at that time mortgage was created by Bank of India. Further, at the time of transfer of the said loan account to the Respondent Bank, the said mortgage was then mortgaged by BOI to HDFC (Respondent Bank) as the title documents were given by Bank of India to Respondent Bank and accordingly a lien was marked in favour of the Respondent Bank by Chandigarh Housing Board.

It is further submitted that the Appellant has repeatedly being making false statements with respect to creation of aforesaid mortgage of the subject property in favour of the Respondent Bank at various forums, which are reproduced herein in below:-

i. In Suit CS/1000/2016 and SA/32/2016 (SA/105/2017 —SA/734/2017), the Appellant stated that subject property had been mortgaged with BOI when husband of Appellant was alive (pare 15 of Suit at page 1387 of Appeal Paperbook and pare 14 of SA/32/2016 at page 1403 of Appeal Paperbook) and in Civil Writ being CWP/1941/2018, it is stated that the subject property had been mortgaged with BOI when husband of Appellant was alive and after death of husband, loan was transferred to HDFC (pare 3 (I) at page 1132 of Appeal paperbook)

ii. In  contradiction  to  above,  during  the hearing in SA/26/2020, the Appellant stated that title  documents were  in  bank  locker, jointly operated by Appellant and Sanjeev Joshi, son, and he without consent of Appellant  deposited  with  HDFC,  which  is recorded in the impugned order dated 27.11.2020.

iii. In CWP/13800/2022, the Appellant in pars 3.3 has stated as under:-

"It is respectfully submitted that though the Petitioner was reluctant, as the said house was gifted to her by her late husband but believing her son-Respondent No. 6 and not to discourage him, the petitioner handed over the papers of the subject property, but with a condition that Respondent No. 6 would return the property papers within 2-3 years and as such, the Respondent No. 6 obtained the loan from the Bank of India, purportedly in the year 2008, against both firms by mortgaging , the aforesaid property of the petitioner."

iv. In paragraph 5.3 of the present Appeal, she has stated that Respondent No. 3 without her knowledge and consent took the loan and forged her signatures on the loan documents, guarantee documents as well as the documents for mortgaging the only residential house of the Appellant. Further, that the signatures on these documents were forged by Respondent No. 3 with the active connivance of Bank officials without the knowledge of the Appellant. It is pertinent to submit that the Appellant in support of said contention is relying upon the CFSL reports dated 04.10.2016 and 03.05.2018.

It is further submitted that it is a well settled proposition of law that the CFSL report is not a conclusive evidence and therefore cannot be solely relied upon as only evidence to a fact and are to be corroborated with other evidence. Moreover, when Respondent No. 3 (her son) has stated in Application (para 7) under Section 156 (3) CrPC before JM1C Chandigarh that Appellant is in the habit of signing in two different ways. In fact, Appellant has made same two different signatures before DRT including the ones now denied by her in the loan documents.

It is further submitted that perusal of the said CFSL reports itself shows that the same cannot be taken as conclusive evidence with respect to signatures of the Appellant on the loan and mortgage documents, as is evident from the contents of the CFSL Report itself. The relevant extract from the same is reproduced herein for ready reference:-

"5. It has not been possible to express any opinion regarding the authorship of the enclosed questioned signatures stamped and marked Q1 to Q32, Q54, Q55, QSSA, Q56  to  Q90,  Q104,  Q121,  Q136,  Q143, Q172 to Q183, Q185, Q187 to Q222, Q222A, Q223 to Q236, Q240 and Q311 in comparison with the standard  signatures stamped and marked Si to S6, S7 to S12 and A40 to A63; Q15 in comparison with the standard signatures stamped and marked Al to A14, A14A and A15 to A39 for the manifest reason that that all the writings characteristics as occurring in the questioned writing and signatures are not similarly and collectively accounted for from the standard writing and signatures. Another attempt can be made to examine the above said questioned writings and signatures of the specimen writing and signatures as well as admitted writings and signatures written of Mrs. Sudha Joshi and Sanjeev Joshi during normal course of routine on some existing documents containing similar letters and their combinations as occurring in the questioned writings and signatures are supplied for further examination."

It is further submitted that apparently the contention of the Appellant that she did not mortgage the aforesaid property with the Respondent bank is prima facie false and incorrect and has been made to mislead this Hon'ble Tribunal. This is also evident from the fact that as per the CFSL report dated 03.05.2018 the "Memorandum recording past transactions of creation of mortgage by delivery of title deeds dated 04.11.2014" bears the signature of the Appellant at Q105 to Q122. The relevant extract of the said Report is reproduced herewith for ready reference:-

"3. The enclosed signatures stamped and marked Q33 to Q38, Q38A, Q39 to Q53, Q91 to Q103, Q105 to Q120, QI22 to Q128, Al to A14A and A15 to A39 have been written by one and the same person."

It is further submitted that since as per the CFSL Report dated 03.05.2018, many documents including "Memorandum recording past transactions of creation of mortgage by delivery of title deeds dated 04.11.2014" bears the signatures of the Appellant, therefore admittedly said documents have been signed by the Appellant. It is submitted that perusal of the aforesaid documents clearly shows that a mortgage has been created by the Appellant has been created to secure the entire financial facility of Rs.112 Lacs.

It is submitted that admittedly the original title documents with respect to subject property are not with the Appellant, since the year 2008 and no explanation has been given by the Appellant as to why no effort was ever made by her to recover the said title documents. Further, no explanation has been given as to why she did not make a complaint prior to 2016 that she is being forced to sign on blank papers or printed loan documents by her son (Respondent No. 3). It is only after she realized that he son is not in the financial position to return the loan and the Bank will enforce the security, then she made the complaint to the police. Further, it is not her case that she is not beneficiary to the financial facility granted by BOI in her proprietorship concern and thereafter the said loan was paid by the Respondent Bank at the time when it was transferred to it. Also, it was from the financial facility granted by the Respondent Bank that the loan account of Tuff Polybags was closed. It is also pertinent to mention that an amount of Rs.9,17,700/- was transferred from Ess jay Enterprises account on 29. 10.2014 in Tuff Poly Bags for the purpose of closing the account facility in which Mrs. Sudha Joshi (Appellant) was the primary borrower. It is submitted that it is admitted fact that the said loan where the Appellant was Principal Borrower was never returned by the Appellant to the Respondent Bank. It is further submitted that since the Appellant throughout was aware about the financial facilities taken by the Respondent No. 3 and that she is the Guarantor to the said accounts and therefore her subject property is mortgaged with the Bank, the Respondent No. 3 despite closure of her loan account as a principal borrower never sought release of the said mortgage.

It is submitted that in view of above facts and circumstances, it is apparent that the Appellant is signatory of the loan, guarantee and mortgage documents executed in favour of the Respondent Bank. Therefore, the Bank has rightly enforced the subject security by taking the action under the provisions of SARFAESI Act.

It is further submitted that the Appellant is not a credible person whose statement can be relied upon and considered by this Hon'ble Tribunal, since apparently she has been making incorrect and contradictory statements with respect to the facts before different Tribunal and Courts. It is pertinent to mention that at every stage the Appellant has been inconsistent in her statements and looking at the conduct of the Appellant, none of the Court has believed the different versions of the Appellant in different pleadings and have not granted any relief as prayed by her. Few of the contradictory statements made by the Appellant are detailed as under:-

a. About signatures on Loan and Mortgage Documents

i. The Appellant in the criminal complaint dated 02.02.2016 stated that she out of blind faith in son Sanjeev Joshi used to sign each  and  every  blank  as  well  as  typed documents including cheques and blank documents presented to her by the son till January, 2016 without worrying about anything and in full faith in her son.

ii. However, in the SA/26/2020 and present Appeal, the Appellant has refuted having signed any loan documents.

iii. In the Writ (CWP/13800/2022) filed by the Appellant, she has further stated that though she has signed various documents out of blind faith when presented by her son, however she has not signed any document that of HDFC Bank.

b. The Appellant in the present Appeal is refuting have availed any loan facility from HDFC Bank, whereas it has been recorded in the order dated 18.07.2018 passed in the Civil Suit No. 1000/2016 "The Plaintiff admitted  that initially the  loan  Rs.62  lacs was obtained by the Plaintiff and Defendant No. 1 but she has stated that loan of Rs.62 lacs was wrongly increased to Rs.1.28 lacs in  connivance  with  officials  of  Defendant No. 2 by forging her signatures."

c. It is also pertinent to mention that during the proceedings in SA/329/2016, the Appellant had admitted loan facility and therefore sought time to arrange for deposit of initial amount The said admission is reflecting in the order dated 19.01.2017. The relevant portion is reproduced hereunder for ready reference:-

"On the other hand side, the counsel for the applicant who also seeks time for arrangement qua deposit or initial amount which gas been admitted."

d. Firstly, in pleadings other than the present Appeal and SA, the Appellant had disputed only the loan documents of 2015 and not raised averments against the prior loan  documents,  whereas  in  the  present appeal  the  Appellant  has  refuted  having signed any loan documents of HDFC Bank.

e. That the Appellant has made inconsistent statements even with respect to Tuff Polypacks/ Polybags. In the Suit CS/1000/2016 and SA/32/2016 (SA/105/ 2017-SA/734/2017), the Appellant has mentioned that before the death of husband of the Appellant, Sanjeev Joshi left for China in the year 2005 (at page 1400 of Appeal paperbook) and after return took over the business of Ess Jay Enterprises and also opened M/s Tuff Polybags (pars 6 of Suit - at page 1385 of Appeal paperbook), whereas in the chargesheet, it is mentioned that the Appellant further stated that Sanjeev Joshi being the only son used to manage the family business of making paper tubes in the name & style of Ess Jay Enterprises and does not mention anything about Tuff Poly Bags.

It is submitted that the Appellant has maintained her stand in the SA and Appeal that she has not signed any loan documents and therefore is not the co-borrower or guarantor under the financial facilities granted by the HDFC Bank to her son. However, in para 16 of Petition under Section 482 of CrPC, the Appellant has admitted being guarantor for old loan of HDFC:

It is further submitted that the respondent no. 2 ought to have recovered their dues from respondent no. I who is the principal borrower. The petitioner no. 2 is at best the guarantor for respondent no. 3 and that too for an old loan. Further, inconsistent statements about the proprietorship M/s Tuff Poly Bags are as follows :-

In para 3.1 of CWP/---/2022

"It, is submitted that in order to help his son-Respondent No. 6 / establish his career, Sh. Lalit Joshi opened a firm namely M/s Tuff Poly Packs, in the same abovementioned rented industrial plot making him the proprietor of the same but Respondent No. 6 incurred heavy losses and then left for China in 2005."

In  para  5  of  Reply  dated  29.08.2016  to Notice under Section 13(2) "That  after  coming  from  China,  Principal Borrower Sanjeev Joshi (son) as takes over the complete control of business of the firm M/s Ess Jay  Enterprises". Not only  this Principal Borrower Sanjeev Joshi (son) opened one new firm named as "Tuff Polypacks" being its proprietorship firm in the  same  premises,  where  "M/s  Ess  Jay Enterprises" was working."

It is submitted that the Appellant has made numerous false stories to frame her son and bank official to escape her liability, and she has even made incorrect statement about her son leaving her house or he being thrown out of the house. In pars 6 of Petition under Section 482 of Cr PC, it is mentioned that:-

"That after the acts of forgery and cheating  committed by Respondent No. 3 against the petitioner no. I, she immediately threw her son  out  of  the  house  at  great  pains,  he being the only son."

However, at most of the place including para 14 of the Suit (CS/1000/2016) (at page 1387 of the Appeal paperbook), she has stated as follows:-

"That the Plaintiff then first time warned the Defendant No. 1 that he should behave like a gentleman and should accept the crimes/sins he has committed. Instead of accepting the guilt, the defendant no. 1 left the house/Suit property on 04.01.2016.........''

It is submitted that in Criminal Misc 27710/2018 (Petition under Section 482 of Cr PC), the Appellant has not disputed signature on prior loan facilities but claimed that she has not signed only the documents for enhancing the loan.

It is further submitted that the present Appeal is liable to be dismissed as no of cause of action has arisen against the Respondent No. 1. It is submitted that from issuance of Demand Notice under Section 13 (2) of the SARFAESI Act till date all the proceedings conducted by the Respondent Bank under the SARFAESI Act are valid and legal. The Appellate has failed to bring out any irregularity committed by the Respondent Bank under the Act. The proceedings have been wrongly challenged by the Appellate only claiming dispute between the borrowers (Appellate and Respondent No. 3) being mother and son. The Appellate has neither raised any legal ground nor shown any irregularity in the proceedings conducted by the Respondent Bank. Hence, the present appeal is liable to be dismissed with exemplary costs.

It is further submitted that the Respondent Bank has only acted in terms of the financial agreement and in consonance with SARFAESI Act. It is submitted that the Appellate is indulging in luxury litigation as against Respondent Bank. Hence, present Appeal is liable to be dismissed against Respondent Bank with exemplary cots. Present appeal is not maintainable and is liable to be dismissed as no cause of action arose on favour of Appellate and against Respondent Bank and the present appeal is nothing but an abuse of the process of law as such the same is liable to be dismissed, with exemplary cost.

The details of the various litigations between the parties are as under:-

Nature of Proceedings

Civil         Proceedings         (CS 1000/2016)

Caste Title

Sudha  Joshi  vs  Sanjeev  Joshi & Ors.

Date of Filing

31.May.2016

Date of Decision

18.Jul.2018

Decision Crux

In   the   said   matter   we   had moved an application under O7 R   11   of   the   CPC   1908   for seeking  the  rejection  of  plaint, the said application filed by the bank and the Hon’ble court had accepted  the   application   filed by  the  bank  and  rejected  the plaint.    It    is    worthwhile    to mention  here  that  the  Hon’ble court     while     disposing     the petition   has   observed   in   the order that “The plaintiff admitted that  initially  the  loan  of  Rs.  62 Lacs    was    obtained    by    the plaintiff and defendant no. 1 but she has stated that the loan of Rs.      62.50      was      wrongly increased  to  Rs.  128  Lacs  in connivance  with  the  officials  of the    Respondent    no.    2    by forgiving the signatures.”

Nature                of

Proceedings

SA    32    of    2016    late    on transferred  to  DRT-II  vide  SA No.   105   of   2017   which   was later  on  transferred  to  DRT-III vide SA No. 734 of 2017

Case Title

Sudha  Joshi  Vs  HDFC  Bank Ltd.

Date of Filing

28.Nov.2016

Date of Decision

2.Feb.2018

Decision Crux

The        Said        Securitization Application had been withdrawn by   the   petitioner   on   02-Feb- 2018

Nature                of

Proceedings

Criminal Misc-27710 of 2018

Case Title

Sudha  Joshi  Vs  The  State/UT Chandigarh

Date of Filing

12.Jun.2018

Date of Decision

4.Jul.2018

Decision Crux

Petitioner  have  Relied  upon  a copy of communication to SHO Manimajra  to  contend  that  the Police   are   interfering.   It   was issued  only  to  comply  with  the order  passed  by  the  DM,  the petitioner   has   a   remedy   to

challenge     the     said     order somewhere else.

Nature  of Proceedings

Civil Writ Petition (CWP 1941 of 2018)

Case Title

Mrs.  Sudha  Joshi  Vs  The  DM UT Chandigarh & Ors.

Date of Filing

23.Jul.2018

Date of Decision

15.Jan.2020

Decision of Crux

The said writ petition had been disposed   of   on   15-Jan-2020 with a liberty to the petitioner to approach the Hon’ble DRT.

Nature  of Proceedings

High Court

Case Title

Sudha  Joshi  Vs  HDFC  Bank (CWP-21479 of 2020)

Date of Filling

15.Dec.2020

Date of Decision

15.Dec.2020

Decision Crux

The     present     petition     the borrower is petitioner is alleging that neither she is borrower nor co-borrower,        hence         be exempted    from    deposit    of Statutory    Deposit.    The    said petition  had  been  disposed  of and held that the order passed by   Ld.   DRAT   calls   for   no interference.

Nature    of Proceedings

DRT (SA 206 of 2020)

Case Title

Sudha  Joshi  Vs  HDFC  Bank (CWP-21479 of 2020)

Date of Filing

29.Jan.2020

Date of Decision

27.Nov.2020

Decision Crux

Therefore,  I  am  of  this  opinion that       the       property       was mortgaged by Mr. Sudha Joshi by BOI for taking loan and that loan  was  transferred  to  HDFC along  with  this  mortgage  and original    title    deed    of    this property is with HDFC and son of applicant took loan by putting this  property  as  a security  with HDFC.         Therefore,         the SARFAESI       action       being initiated    by    HDFC    bank    is absolutely as per law and there is no prima facie case made out in favour of applicant to restrain the  respondent  bank  for  taking physical    possession    of    the property  for  the  recovery  of  its dues  which  are  more  than  2.5 crores.     Therefore,     as     per above-mentioned reasons there is  no  ground  to  allow  this  SA and   accordingly   this   SA   is

dismissed.

Nature  of Proceedings

High Court

Case Title

Sudha  Joshi  Vs  HDFC  Bank (CWP-21479 of 2020)

Date of Filing

9.Dec.2020

Date of Decision

15.Dec.2020

Decision of Crux

The     present     petition     the borrower is petitioner is alleging that neither she is borrower nor co-borrower,        hence         be exempted    from    deposit    of Statutory    Deposit.    The    said petition  had  been  disposed  of and held that the order passed by   Ld.   DRAT   calls   for   no

interference.

Nature  of proceedings

High Court

Case Title

Sudha  Joshi  Vs  HDFC  Bank (CWP 13800 of 2022)

Date of Filing

28.Jun.2022

Date of Decision

12.Jul.2022

Decision Crux

The  Hon’ble  High  Court  while disposing  the  said  Writ  petition has directed the Hon’ble DRAT

to decide the matter  within two months.

It is further submitted that it is incorrect on part of the Appellant to claim that for the dues demanded by the Respondent Bank in the Demand Notice dated 1. 07.2016 issued under Section 13 (2) of the Act, the Respondent Bank is relying only on Memorandum recording past transactions of creation of mortgage dated 19. 12.2015   or   declaration   dated   19.12.2015   or 15. 12.2015 as alleged. It is reiterated that Respondent Bank relies upon entire loan documents beginning from November, 2012 till date. The Appellant has not disputed financial facility documents including mortgage documents executed by her in 2012 and she has also admitted having executed documents till 2014. The Appellant is only disputing having executed loan documents in 2015. Hence, as detailed in the preceding paragraphs, the Appellant cannot claim exoneration from

her liability under the subject financial facility, wherein subject property is mortgaged in favour of the Respondent bank and the Appellant at every stage is causing hindrance in recovery of the dues to which the Respondent bank is entitled to. It is further denied that the reports of the CSFL have been brushed aside with a cryptic observation that they are only opinion of an export as alleged. It is settled principle of law that CFSL report carries no meaning in the eyes of law unless it is tested during the course of trial. The contents of the preceding paragraphs are reiterated to be true and correct, same are not repeated herein for the sake of brevity.

It is submitted that it has already been established in the preceding paragraphs that the subject property is mortgaged with the Respondent Bank since 2011, and therefore claim of the Appellant that she has not mortgaged it with the Respondent Bank is incorrect and liable to be dismissed. It is vehemently denied that Bank has admitted any forgery as alleged. It is vehemently denied that disposal of the SA has caused huge loss or injury to the Appellant, when correct fact is that Appellant in connivance with his son is playing fraud upon the Respondent Bank so as to avoid their liability under the financial facility availed.

In view of the aforesaid facts and circumstances, the following prayers have been made: -

a. Dismiss the Appeal filed by the Appellant against the Respondent Bank, as same being completely baseless, incorrect and unwarranted;

b. Grant costs and legal expenses in favour of the Respondent Bank and against the Appellate for causing inconvenience and maligning the name of the Respondent Bank by making false allegations without any basis in the present Appeal;

c. Pass any such other and further order(s)/direction(s) in favour of the Respondent Bank and against the Appellate as it m. deem fit and proper in the interest of justice and equity.

WRITTEN SUBMISISONS ON BEHALF OF HDFC BANK (RESPONDENT NO. 1 BANK):

In the written submissions respondent no.1 has submitted that the Appellant has committed a fraud/ perjury upon the Ld. DRT, Chandigarh while filing SA no.26 of 2020, wherein the Appellant has set up the case on the ground that the appellant had never signed any document for the transfer /shifting of the loan from Bank of India to HDFC Bank Ltd; nor had she signed any guarantee or mortgage documents in favor of the respondent bank (para no.5 of SA 26/2020) and maintained that there is no privity of contract between the appellant and the respondent bank. The said averments are/were in complete contradiction of the documents submitted before the Ld. DRT, which has, while dismissing the SA categorically held that "I am of the opinion that the property was mortgaged by Mrs. Sudha Joshi to BOI for taking loan and that the loan was transferred to HDFC Bank along with this mortgage and original title deed of this property is with HDFC". (Hon'ble Tribunal may see BOI Letter dated 15.11.2012 regarding closure of loans availed by the Appellant and her son, Letter issued the Appellant to Accounts Officer, Chandigarh Housing Board for lien/charge marking in favor of HDFC Bank and Letter issued by HDFC Bank dated 14.12.2012 addressed to Accounts Officer.

It is further submitted that the Appellant while arguing his Appeal has not refuted the fact that the subject property was earlier mortgaged with Bank of India to secure the loan facility availed by the Appellant and her husband. Further, that in the year November, 2012 Appellant and her Son Mr. Sanjeev Joshi, transferred the loan from Bank of India to HDFC Bank and consequently the loan with Bank of India was closed with the loan granted by the HDFC Bank and accordingly the mortgage with respect to the subject property was then transferred by Bank of India to HDFC Bank, by handing over of the original title deed/documents to the HDFC Bank. In fact, this finding of the Hon'ble DRT Chandigarh is in the impugned order.

It is further submitted that HDFC Bank is in possession of the original title deeds with respect to the subject property.

It is next submitted that the creation of the mortgage by deposit of title deeds in favor of Bank of India and then in favour of the HDFC Bank has been duly recorded by the Chandigarh Housing Board. It is pertinent to point out that the Appellant has been making repeatedly false statement with. respect to creation of mortgage, which is evident from the fact that during the hearing in SA/26/2020, the Appellant stated that title documents were in bank locker, jointly operated by Appellant and Sanjeev Joshi, son, and he without consent of Appellant deposited with HDFC, which is recorded in the impugned order dated 27.11.2020. Whereas, the truth is that she herself gave it to the Bank of India with the intention of creating mortgage by deposit of title deeds, at the time of availing financial facility for her proprietorship firm and as well as for Ess Jay Enterprises, from Bank of India. It is pertinent to mention herein that this observation in this regard by the Hon'ble DRT Chandigarh in the impugned order has not been assailed by the Appellant in this Appeal and even during the oral arguments before this Hon'ble Tribunal. As such, the order of the Ld. DRT can only be assailed on the basis of averments made in SA and arguments made by the appellant before Ld DRT, on the basis of which well-reasoned impugned order was passed.

It is submitted that the HDFC Bank in November, 2012 at the time of granting the financial facility to the Appellant and her Son Mr. Sanjeev Joshi examined the financial documents as submitted by the Appellant being proprietor of Tuff Polybags and also by Mr. Sanjeev Joshi as proprietor of M/s. Ess J. Enterprises. That thereafter on various occasions the financial limits were enhanced and the details of the financial facilities granted to the Appellant and her Son are reproduced herein below for ready reference:-

DETAILS OF THE FINANCIAL FACILITIES GRANTED BY THE RESPONDENT BANK TO APPELLANT AND RESPONDENT NO.3.

Ess      Jay      Enterprises (Proprietorship     of     Mr. Sanjeev      Joshi)      (Mrs. Sudha         Joshi         was Guarantor)

Tuff Poly Bags (Proprietorship         of Mrs. Sudha Joshi) (Mr. Sanjeev

Joshi was Guarantor)

November, 2012

Rs.32,00,000/-

{01.11.2012)

Rs.25,00,000/- (07.11.2012)

21.Jan.2014

Rs.12,00,000/-

(increased)

27.Jan.2014

Rs.13,00,000/-  (reduced  by the   payment   by   Ess   Jay Enterprises        from        the enhanced      loan      amount granted   to   Ess   Jay,   thus clearly         Appellant         is beneficiary          of          the enchantment   given   to   Ess Jay)

9.Jun.2014

Rs.62,00,000/- (DOD)

16.Sep.2014

Closed

10.Nov.2014

CC  Limit  enhanced  from Rs.        45,00,000/-        to Rs.60,00,000/-

19.Dec.2015

DOD limit of Rs. 62,00,000/- which came down    to Rs. 55,79,000/-, was increased to Rs.

68,50,000/- (thereby sanctioning top-up of Rs.12,70,000/-)

TOTAL

Rs.l,28,50,000/-

NIL

It is submitted that the fact of execution of the loan documents and recording of mortgage documents from November, 2012 to 10.11.2014 are not in dispute and in fact the CFSL report dated 03.05.2018 has confirmed that these documents bears signatures of Mrs. Sudha Joshi. In the said CFSL report the specimen signatures of Mrs. Sudha Joshi, the Appellant herein are A1-A14A, A15 to A39. In the result it is stated that-

"3. The enclosed signatures stamped and marked Q33 to Q38, Q38A, Q39 to Q53, Q91 to Q103, QJOS to Ql20, QJ22 to Q128, A1 to AJ4A and AIS to A39 have been written by one and the same person."

It is further submitted that the Appeal paper book, is the 'Memorandum of Entry and Declaration', executed by the Appellant, recording the past transactions of creation of mortgage for deposit of title deeds. The signatures of Mrs. Sudha Joshi at the said document is at Q105 to Q128, which as mentioned above are of Mrs. Sudha Joshi as per the CFSL report dated 03.5.2018.

It is further submitted that the attention of this Tribunal is drawn to the document which reflects the financial facility of the past of the proposed one. The entry on the said page/document clearly shows that existing financial facility of 45 lakhs is increased to Rs. 15 Lakhs totaling to Rs. 60 Lakhs for Mis. Ess J Enterprise. Further, under the column of Borrower 2, it is shown that there is existing loan of Rs.62 lakhs. Thus as on 04.11.2014, the financial facility granted to Mis. Ess J Enterprises and Mr. Sanjeev Joshi was Rs.122 lakhs and Mrs. Sudha Joshi stood as a guarantor by admittedly signing the loan documents.

It is next submitted that the notice of this Tribunal which bears signatures of the Appellant, description of the mortgage property and the details of the original title documents in possession of HDFC Bank is mentioned.

It is submitted that there is no document on record to show that prior to January 2016, any objection was ever raised by the Appellant alleging that she is not aware of the loan facility granted or ever sought release of guarantee and return of the original title documents.

It is submitted that the only arguments made by the counsel for the Appellant is with respect to the forgery of Appellant signatures on the loan document dated 19. 12.2015. The basis of said contention is that the Statement of the Bank Manager who stated that Mr. Sanjeev Joshi on 19.12.2015 took the loan documents from the bank and got them signed from Mrs. Sudha Joshi and the said documents were not signed in his presence. It is submitted that since the customers (Mr. Sanjeev Joshi and Mrs. Sudha Joshi) were existing clients, therefore bank officials trusting Mr. Sanjeev Joshi that his mother Mrs. Sudha Joshi cannot come to the Bank due to her old age, handed over the said documents to Mr. Sanjeev Joshi. Further, in any case the factum with respect to the allegations of forgery on loan documents dated 19.12.2015, is subject matter of trail before the competent court and, thus cannot be decided under present Appeal, as this would then prejudice the criminal case. Same observation was also recorded in the impugned order by Ld. DRT. In any case, SA was filed by the appellant before DRT only on the ground that no loan was ever taken, and the title deed of the property alleged to be mortgaged was lying in bank locker and same was stolen by her son (respondent no.3) for availing loan from HDFC Bank and same assumes significance for deciding this Appeal.

It is submitted that after having agreed to act as the Guarantor in the year 2012, for the financial facilities availed by her son from the Respondent Bank, Appellant cannot evade her liability merely on the ground that loan documents dated 19.12.2015 are not signed by her. It is pertinent to submit that as per the 'Memorandum and Declaration dated 04.11.2014', which admittedly bears signatures of the Appellant as per the CFSL report dated 3. 05.2018, she is liable to pay for all the outstanding that were existing as on November, 2014 ( Rs.122 Lakhs) and even thereafter and also it is a well settled proposition of law that the party who had taken the benefit of a transaction cannot escape the liability under said transaction on account of invalidity of the document without returning the benefit availed under said transaction. Therefore, since the Appellant failed to pay the outstanding amount demanded vide demand notice under section 13 (2) of the Act, therefore enforcement proceedings initiated by the Respondent Bank against the subject property are valid and within the purview of the SARFAESI Act.

It is submitted that that the Respondent Bank has only acted in terms of the financial agreement and in consonance with SARFAESI Act. It is submitted that the Appellant is indulging in luxury litigation as against Respondent Bank. Hence, present Appeal is liable to be dismissed against Respondent Bank with exemplary cots. That present Appeal is not maintainable and is liable to be dismissed as no cause of action arose on favour of Appellant and against Respondent Bank and hence, the present appeal is nothing but an abuse of the process of law and as such the same is liable to be dismissed, with exemplary costs.

Brief Synopsis on behalf of Respondent No. 3

Ld. Counsel for the respondent no.3 has submitted that the Moot question in the present Appeal for the consideration & adjudication of this Appellate Tribunal is as whether the Ld. Debt Recovery Tribunal, Chandigarh vide Final Order dated 27.10.2020 has rightly dismissed the SA No. 26 of 2020 titled Sudha Joshi vs HDFC Bank and another, while answering the following question, framed on the basis of pleadings of the parties and on the basis of documents, as follows;

“ It has to be seen whether the property in question was mortgaged by with HDFC Bank or not, whether loan was taken by the son of the applicant by depositing the title deed of this property as a security?

It  is  further submitted that  that  the Hon‘ble  High Court of Punjab and Haryana vide its order 12.07.2022 in CWP No. 13800 of 2022 filed by the Appellant, while directing to decide the present Appeal within 2 months by Hon‘ble Tribunal, has also reiterated the same question as under:

“In  facts  and  circumstances  of  the  case, since the Appeal bearing MA No. 118 of 2020  is  said  to  be  pending  before  Debt Recovery Appellate Tribunal, New Delhi (DRAT) where in the question whether mortgage in question was actually created by the Petitioner or not, is under consideration, the DRAT, is directed to decide the said MA No. 118 of 2020 within a period of two months in accordance with law after hearing both the parties.”

For a fair and just adjudication of the aforesaid question regarding the creation and validity of the Mortgage of the property, the brief factual position is submitted which runs as under:

S.No

Date

Event

Page

1

2005       to

18.8.2007

Respondent No. 3 – Sanjeev Joshi is the only son of  Appellant  –  Mrs.  Sudha  Joshi.  Shalini  Sharma and  Samriti  Joshi  are  two  sisters  of  Respondent No. 3. Respondent No. 3 had been  in China where he    had    been    working    since    2005    for    an International Company.

Late Sh. Lalit Joshi - Father of Respondent No. 3 expired  on  17.08.2007.  Late  Sh.  Lalit  Joshi  had been   running   a   proprietorship   business   in   the name  of  Ess  Jay  Enterprises,  at  Plot  No.  323, Industrial  Area,  Phase  –  II,  Chandigarh,  carrying out   business   of   paper   packaging   and   allied activities.

Another  Proprietor  ship  Firm  Tuff  Poly  Bags  was also   being   run   by   and   in   her   own   name   by Appellant-Sudha Joshi.

Various loans had been taken in the name of these

two proprietorship firms from Bank of India against the   mortgage   of   Residential   House   No.   5663, Modern Housing Complex, Manimajra, Chandigarh owned by Petitioner-Sudha Joshi. The said house had  been  purchased  in  the  name  of  Sudha  Joshi on 19.6.2003.

On   the   death   of   the   father   on   17.08.2007, Respondent No. 3 came to India

There   were   huge   liabilities   against   the   firm including the loan of banks which had been taken against the mortgage of the residential house and the residential house had been already mortgaged during  the  life  time  of  husband  of  Appellant  and father of Respondent No. 3

2

3.Sep.2007

Firstly,  the  Respondent  No.  3  was  induced  to become    a    partner    in    the    business    and    A partnership  firm  was  constituted  vide  Partnership Deed dated 3rd Sep. 2007 between mother of  the Mrs. Sudha Joshi ( Appellant here-in), Respondent N0. 3   and his two sisters namely Shalini Sharma and  Samriti  Joshi  ,  all  having  25  %  share  in  the business, commencing from 18.08.2007.

3

31.Mar.2008

The   Partnership   Firm-Ess   Jay  Enterprises   was dissolved  but  still  the  business  was  managed  by Appellant  along  with  sister  and  brother  in  law  of Respondent No. 3.

Loans of taken over by HDFC Bank from Bank of India along with mortgage of the residential house and execution of loan documents from 2012 to 2015

4

1.11.2012

to 15.11.2012

HDFC    Bank    sanction    Credit    Limits    to    two Proprietorship firms as under :

1272-

1279

Ess Jay Enterprises

Proprietor – Sanjeev Joshi-R-3

Tuff Poly Bags

Proprietor – Sudha Joshi- Petitioner

Date

Loan Amount

Date

Loan Amou nt

A

1.Nov.2012

32.00`

7.Nov.2012

25.00

5

Both Loans- Loan by Ess Jay Enterprises and Loan to Tuff Poly Bags, both were Secured by Mortgage of a Residential House  No.  5663,  Modern  Housing  Complex,  Manimajra, Chandigarh owned by Appellant -Sudha Joshi.

The mortgage  was transferred from Bank of India where the Residential  House  was  already  mortgaged  for  loans  taken by both the proprietorship firms.

6

5.11.2012

To 15.11.2012

HDFC    Bank    obtained    the    following documents for creation of Mortgage:

a)  Original     Title     Deeds     of     the Property

b) No Objection Certificate issued by

Bank of India in favour of The

Estate Officer stating that

Accounts of both the Firms-Ess

Jay Enterprises & Tuff Poly bags

has been closed on 12.11.2012

and the bank‘s charge should be

lifted from the residential property

c) Letter from Appellant to Estate

Office for shifting of Lien in favour

of HDFC Bank

d) Letter dated 4.12.2012 by HDFC

Bank to Chandigarh Housing

Board to mark its lien

e) Deed of Indemnity dated

6.11.2012 - 2790

f) Valuation Report

g) Legal Opinion confirming that the

House is in the name of Sudha

Joshi vide Sale deed dated

19.6.2003 but is mortgaged with

Bank of India.

1280

1281 1282 1283-1284 1290-1292 1286-1289

7

APPELLANT  SUDHA  JOSHI  HERSELF

executed/signed  all  the  loan  documents in  the  year  2012  including  the  sanction letter,  Letter  of  Continuing  Security  and Demand  Promisory  Note  etc.  at  Page Numbers  279,  301,  302,  304,  305  306.

311, 312, 343, 353 and 875 of the Paper Book and her signatures have been duly confirmed by FSL Report dated 3.5.2018 at  Page  593  in  Question  Signatures  No. 91 to 103

THUS,   A   VALID   MORTGAGE   WAS CREATED  IN  FAVOR  OF  HDFC  BANK IN THE YEAR 2012 BY THE TRANSFER OF  ALREADY  EXISTING  MORTGAGE IN FAVOUR OF BANK OF INDIA

8

14.01.2014

to 5.6.2014

Bank further enhanced  the Limits to Ess Jay Enterprises and reduced the limits in Tuff    Poly    Bags    but    the    Mortgaged property remained the same.

Ess Jay Enterprises Proprietor  –  Sanjeev  Joshi- R-3

Tuff     Poly Bags Proprietor

–      Sudha Joshi- Petitioner

Date

Loan Amount

Date

Loan

Amount

1.Nov.2012

32.00

7.Nov.2012

25.00

14.Jan.2014

13.00

Increased. Total       Limit Rs. 45 lacs

27.Jan.2014

-13.00

Page 218

Page 222-

278

5.Jun.2014

62.00-        DOD

Facility sanctioned

Page 212

Appellant  Sudha  Joshi  herself  signed  and  executed  all  the  Loan  documents including the Memorandum of  Mortgage for grant of  additional facilities of  Drop Line Facility of Rs. 62 lacs and also of Increased CC Limit of Rs. 45 lacs.

Her  signatures are duly confirmed on all the  loan documents at PAGE 189 TO

212  in  FSL  REPORT  dated  3.5.2018  from  Questions  33  to  Question  No.  53 appearing on Loan Documents/Demand Promissory Note and Guarantee deeds etc. at Page Number 189, 193, 195, 197, 199, 201, 203, 204, 205, 206 and 211.

On  10.11.2014,  the  CC  Limit  of  Rs.  45  lacs  to  ESS  Jay  Enterprises  was increased from Rs. 45 lacs to Rs. 60 lacs. And Total Limits were thus enhanced to Rs. 122 lacs ( CC Limit Rs. 60 lacs + DOD Facility of Rs. 62 lacs)

10.Nov.2014

15.00

10.Nov.2014

-

12.

00

Total Limits

122.00

NIL

Appellant  Sudha  Joshi  herself  signed  and  executed  all  the  Loan  documents including  the  Memorandum  of  Mortgage  for  grant  of  additional  facilities  of  Drop Line Facility of Rs. 62 lacs and also of Increased CC Limit of Rs. 60 lacs.

Her  signatures  are  duly  confirmed  on  all  the  loan  documents  including  the Memorandum of Deposit of Title Deeds dated 4.11.2014   in FSL REPORT dated 3.5.2018  from  Questions    to  Question  No.  105  to  120    appearing  on  Loan Documents/Demand Promissory Note and Guarantee deeds etc. at Page Number 408, 409, 417, 418, 419 etc.

Her Question signatures No. 105, 106, 107, 108, 109 on Memorandum of Deposit of Title Deeds dated 4.11.2014  at Page 408-409 and Her Question Signatures No. 110 on Schedule confirming the Existing Title Deeds in favour of Bank at Page 410 duly  confirm  that  Appellant  Sudha  Joshi  has  duly  created  the  Mortgage  on 4.11.2014 in respect of Loan facilities  of Rs. 122 Lacs.

Thus, it is evident and confirmed even from the FSL Report dated 3.5.2018 that Appellant  Sudha  Joshi  has  signed  all  the  Loan  Documents  of  HDFC  Bank including the creation of Mortgage 1.11.2012 to 4.11.2014 and her allegation that she never created any Mortgage in favour of HDFC Bank is totally false.

On  19.12.2015,  HDFC  Bank  again  revised  the  Drop  Line  Facility  of  Rs.  62  lacs which was sanctioned on 10.11.2014. On 10.11.2014, this facility, which had come down to Rs. 55.79 lacs was increased to Rs. 68.50 lacs by sanctioning Top-Up of Rs. 12.70 lacs. However, the total limits of Rs. 122 lacs sanction on  10.11.2014 were increased only to Rs. 128.50 lacs, meaning thereby that only an increase of Rs. 6.50 lacs.

B

19.Dec.2015

6.50

Total

128.50

NIL

Loan Documents executed for enhanced limits on 19.12.2015 were also signed by Appellant-Sudha Joshi who also executed Guarantee Deed and MOE for creation/Continuance of Mortgage. However, later on, she refused to acknowledge her signatures on the loan documents dated 19.12.2015.

It is a matter of record and it is evident even from the various documents/affidavits signed by Sudha Joshi that she is in a habit of putting different signatures at different times on different papers deliberately and intentionally.

The difference in her signatures is evident from the following documents signed by her in these very proceedings at the Page Numbers: - 46, 48, 56, 58, 959, 960, 961, 967, 968, 969, 976, 1392, 1393, 1396, 1414, 1486, 1487, 1489.

These different signatures by Sudha Joshi on different Court papers at different Times clearly show a marked difference in her own signatures. Even in the Loan Documents of 2012 and 2014, which are got signed by the Bank in a Bound Booklet Form signed in one go, are also not matching on few places which confirms that her own signatures differ at different times.

Thus, her allegation that she did not sign the Loan Documents dated 19.12.2015 is totally false. Further, FSL Report dated 4.10.2016 has compared her todays‘ signatures with 2015 signatures and this report is only an opinion and cannot be said as a conclusive evidence till a Final Judicial Finding aspect on this issue. It is

also to be seen that the first CFSL report dated 4.10.2016 has only have 12 admitted signatures. Whereas The second CFSL report dated 3.5.2018 have 40 admitted signatures. When the admitted signatures start increasing, the signatures start matching. Thus, her signatures in Loan Documents of 2015 have been matched with those 40 admitted signatures, then those signature shall also match with admitted signatures of Sudha Joshi.

In any case, her initial allegation of forgery of her signatures was only in respect of Loan Documents dated 19.12.2015 and not the earlier loan documents, which also is patently false.

But now in last 6 years from 2016 to 2022, she has improved upon her allegations every time to now allege that she never took any loan and never created any Mortgage which is totally false and is contrary to her own admitted documents.

Her another allegation on the basis of a Travel Ticket and an alleged Travel Certificate that on 19.12.2015, she was in Mumbai and hence her signatures are forged is also totally baseless AS ALL THE FOLLOWING LOAN DOCUMENTS ARE SIGNED ON 15.12.2015 itself as is evident from a bare perusal of the following documents:

Sanction                                                        Letter                                            dated                      15.12.2015 ---

Page – 169 - 172

Declaration                                                                                                          dated                   15.12.2015

Page – 168

Supplemental Agreement for Drop Line Facility                                          dated                    15.12.2015

Page 173 – 179

(Date of Execution of Agreement for increase in Loan from Rs. 55.79 to Rs. 68.50

lacs is mentioned at Page 178 at the Top in Right Column.

Disbursement Letter Page 183

Letter for Capital & Provisioning Requirement

Page 184-185

Thus the alibi created by Sudha Joshi regarding not having signed the documents on the ground of her not being in Chandigarh on 19.12.2015 and not having signed any loan documents is totally false.

There appears to be an inadvertent date by bank as 19.12.2015 only on the Memorandum recording past transactions of creation of Mortgage which seems to have been put for some internal reasons of the bank but this cannot allow the Appellant Sudha Joshi to deny all other loan documents.

Even Further, a difference in date on the Memorandum Document, cannot wipe out the earlier legally valid and subsisting Mortgage continuing since 2012 since once a Mortgage is always a Mortgage.

On the basis of above stated factual position, it is evident that the property in question has been duly mortgaged in favour of the bank by Sudha Joshi herself and there exists a legally valid and subsisting mortgage in favour of HDFC Bank.

Proceedings initiated by Sudha Joshi on the instance of her daughter and son in law in possession of the property

9

4.Jan.2016

Respondent No. 3 – Sanjeev Joshi was shunted out of  the  residential  house  by  Sudha  Joshi  and  his sister  and  brother  in  law  due  to  marriage  with  a Chinese Girl when he finally came to India in Dec. 2015

10

2.Feb.2016

Sudha  Joshi  filed  a  Complaint  against  her  son- Sanjeev   Joshi   on   the   allegations   of   fraud   and forging the loan documents executed on 19.12.2015 whereby  the  Limits  had  been  enhanced.  Admitted had been signed Blank documents till last month.

1373-

1381

Proceedings by Sudha Joshi  in Civil Court

12

10.May.2016

Appellant   -   Sudha   Joshi   filed   a   Civil   Suit   for declaration      that      Loan      Agreement      dated 15.12.2015/19.12.2015  (Supplementary)  in  regard to  additional  Loan  facilities  of  Rs.  68.50  lacs  and Rs. 12.70 lacs are products of fraud and is null and void and not binding upon the rights to possess the residential  property  AND  that  the  Sudha  Joshi  is not   liable   under   the   Old   Guarantees   dated 17.11.2012/ Residential house has not remained a mortgaged  property  and  for  Mandatory  Injunction to recover the outstanding dues from Respondent No. 3-son and not from her or from her mortgaged property.

1382-

1393

13

22.Feb.2017

Bank  filed  an  Application  under  Order  7  Rule  11 CPC for rejection of Plaint.

14

11.Oct.2017

Civil Court grants an Ex-parte Status quo order

15

14.May.2018

Civil Court vacated the Status Quo Order

16

18.Jul.2018

Civil   Suit   is   dismissed   by   the   Civil   Court   by observing that Appellant Sudha Joshi has already approached    DRT    and    SA    has    also    been withdrawn.   Civil   Court   recorded   a   finding   that Petitioner has admitted taking of loan of Rs. 62 lacs which has been allegedly increased to Rs. 1.28 Crores. – Page 1337

1337-

1341

Proceedings By HDFC Bank under SARFAESI Act &  Proceedings by Sudha Joshi In filing of  first SA before DRT by Sudha Joshi

17

31.May.2016

HDFC Bank declares the Account as NPA

18

1.Jul.2016

HDFC Bank issued a Notice under Section 13(2) demanding Rs.  1,36,77,036/-  due on 6.6.2016  at the  address  of  Ess  Jay  Enterprises    since  the Factory was duly working and existing at the same very address AND also at residential address.

99-102

19

29.Aug.2016

Reply  to  Notice  under  Section  13(2)  is  sent  by Sudha Joshi

Allegation  in  Para  18-  Page  106  –    Over  Draft Limit of Rs. 62 lacs increased to Rs. 128.50 lacs by    way    of    Supplemental    Agreement    dated 15.12.2015/19.12.2015      and      in      the      said supplemental   agreement,   all   the   signatures   of Guarantor/objector were found to be forged.

Thus,  No  allegation  at  all  with  respect  to  Loans Taken, Loan Documents executed and Creation of Mortgage from 2012 to 2014.

103-117

20

9.Sep.2016

HDFC Bank rejected the Objections under Section 13(3-A) of SARFAESI Act.

118-127

21

20.Sep.2016

HDFC Bank issued Notice under Section 13(4) of SARFAESI Act,

128

22

4.Nov.2016

FIR   No.   237   dated   4.11.2016      is   registered against  Respondent  No.  6  u/s  420,467,468,471 IPC

1373-

1381

23

28.Nov.2016

During the pendency of  Civil Suit, SUDHA Joshi filed   a   SA   No.  329  of   2016  for   quashing   of Possession Notice dated 20.9.2016

Page  1403-Para  14  –  Property  was  mortgaged with Bank of India

Page 1404 – Para 17 - Over Draft Limit of Rs. 62 lacs  increased  to  Rs.  128.50  lacs    by  way  of Supplemental                Agreement                dated 15.12.2015/19.12.2015      and      in      the      said supplemental  agreement,  all her signatures  were found to be forged

Page 1404- Para 19 – Documents on Agreement dated 15.12.2015/19.12.2015.

Prayer :- Page 1417 – To quash the Possession Notice dated 20.09.2016

1394-

1415

24

11.Jan.2017

HDFC Bank filed Application under Section 14 of SARFASI Act before District Magistrate

25

19.Jan.2017

Sudha Joshi sought time from DRT to deposit the admitted amount.

1458

26

24.Jul.2017

PO-DRT rescues himself from the case and writes a  letter  to  DRAT,  New  Delhi  for  transferring  the case  to  some  other  DRT  with  the  observations that   Respondent   No.   5   has   approached   him during the Lunch Hours outside the court.

1463

27

10.Aug.2017

District    Magistrate    passed    the    order    Under Section 14 directing to take physical possession of Residential House.

129-130

28

22.8.2017

to 26.10.2017

Respondent  No.  3  –  son  was  got  arrested  and remained in custody for more than 2 months.

29

20.Feb.2018

SA  is  withdrawn  without  any  liberty  and  without any explanation.

30

8.Jun.2018

District   Magistrate   directed   Tehsildar   to   take Physical possession on 12.6.2018

Proceedings before High Court

31

4.Jul.2018

Hon‘ble  High  Court  dismissed  Petition  CRM-M- 27110-2018 filed by Sudha Joshi  to set aside the order passed by DM and to restrain the bank from taking physical possession.

1227-

128

32

23.Jul.2018

Sudha Joshi filed Civil  Writ Petition No. 19141 of 2018 with prayers:

a)  To   Quash   the   order   dated   10.8.2017 passed by District Magistrate.

b)  To  direct  the  respondents  to  not  to  take physical possession

1121-

1149

33

3.Aug.2018

Notice of Motion is issued and Status Quo Order passed.

34

14.Jan.2019

In the Writ Petition, Sudha Joshi admits herself to be guarantor

However,  IN  THE  REJOINDER  AT  PAGE  1428

AND 1429, She made a False Averment  That As The  House  Was  Transferred  In  Her  Name  Only On 19.06.2013, There Was No Occasion To Have Mortgage The Same Either With Bank Of India Or With HDFC Bank On 7.11.2012.

Bank was directed to produce Original Title Deeds on the basis of which loan was sanctioned for the perusal of Hon‘ble High Court.

1426-

1443

35

15.Jan.2020

Writ  Petition  No.  19141  of  2018  is  dismissed  as withdrawn with liberty  to approach DRT

1444

Proceedings before DRT, DRAT and High Court

36

28.Jan.2020

SA No.  26 of 2020 is filed by Sudha Joshi Allegations –

Para 5 – Page – 73 – Did not sign any documents for  transfer/shifting  of  loan  account  from  Bank  of India  to  HDFC  Bank  nor  signed  any  subsequent loan   documents.   Never   signed   any   guarantee deed,   mortgage   documents   or   any   other   loan documents.

Para  13-Page  79  –  As  per  CFSL  Report  dated 4.10.2016,   she   has   not   signed   Memorandum recording past transactions of creation of mortgage dated 19.12.2015 and not signed other documents dated   15.12.2015.   Sudha   Joshi   travelled   from Chandigarh  to  Mumbai  on  18.12.2015.  She  had not  signed  any  loan  documents  on  19.12.2015  at Chandigarh

Para  16  –  Page  81-  From  CFSL  Report  dated 3.5.2018, it is established that she has not signed any loan document either as a borrower or as co- borrower or as guarantor.

Ground (ii) – Page 86 – There is no document on record  to  establish  that  the  applicant  has  signed any  document  to  mortgage  her  only  residential house     no.     5663,     MHC,     Mamimajra,     UT Chandigarh.

Prayer- Page-93

To   set   aside   demand   notice   dated   1.7.2016, Possession   Notice   dated   20.9.2016   and   order dated   10.8.2017  passed   by  District   Magistrate, Chandigarh.

66-98

37

27.Nov.2020

DRT,    after    examining    all    the    Title    Deeds, documents   executed   by   Sudha   Joshi   and   her letters     to     Estate     Office     and     transfer     of loan/Mortgage  documents,  dismissed  the  SA  by recording  a  categorical  finding  of  fact  that  Sudha Joshi herself has created a Mortgage.

Ld.  DRT  has  categorically  rejected  the  contention that the Title Deeds were stolen by the son of the Applicant-Sudha Joshi. Such an obnoxious ground had  been  taken  contrary  to  the  documents  which clearly    prove    that    the    title    deeds    were    in

possession of Bank of India from where the same

49-52

were transferred to HDFC Bank.

Ld.  DRT-III  Chandigarh,  after examining all the    documents    executed    by    Appellant Sudha   Joshi   and   after   examining   CFSL Report has come to a correct finding of fact that the property was mortgaged in Bank of India  and  that  the  Loan  was  transferred  to HDFC along with this Mortgage and that the Original  title  deed  of  this  property  is  with HDFC.

Ld. DRT has categorically held that there is no case made out in favour the applicant to restrain  the  respondent  bank  from  taking physical   possession   of   the   property   for recovery  of  its  dues  which  are  more  than Rs. 2.50 Crores.

There  is  no  ground  to  allow  the  SA  and accordingly the SA is dismissed.

PROCEEDINGS BEFORE DRAT, NEW DELHI

38

3.Dec.2020

This Appellate Tribunal directed to deposit 25 % of the amount for entertainment of Appeal.

39

15.Dec.2020

High  Court  dismissed  the  CWP  No.  21479  of  2020 filed  by  Sudha  Joshi  to  challenge  the  order  dated 3.12.2020 passed by DRAT, New Delhi. Order dated 15.12.2020  passed  by  High  Court  already  placed  on record.

40

10.Nov.2021

HDFC  Bank  filed  CWP-22453-2021  for  directions  to DM   to   implement   order   dated   10.8.2017   to   take physical possession of the property and to quash the order  dated  28.12.2020  passed  by  SSP,  Chandigarh directing that No Application for Police Assistance be entertained  until  decision of  Criminal Trial  in FIR  No. 237 dated 4.11.2016

41

24.Mar.2022

Physical  possession  of  the  House  is  taken  by  the Bank

42

25.Mar.2022

Writ  Petition  of  Bank  is  disposed  of  by  Hon‘ble  High Court   as   having   become   infructuous   in   view   of Physical possession taken over.

43

26.May.2022

HDFC Bank  issued an  Auction  Notice for sale  of  the House on 29.06.2022 at a Reserve Price of Rs. 2.26 Crore for an alleged recovery of Rs. 1.37 Crores. Sale has not materialised.

44

12.07.2022

25.08.2022

Hon‘ble High Court has disposed off the Writ Petition No. 13800 of 2022 filed by Appellant Sudha Joshi vide order  dated  12.07.2022  to  decide  the  appeal  in  2

month  further  extended  vide  order  dated  25.08.2022 to decide the appeal by 12.10.2022

It is next submitted that the finding of Fact recorded by Ld. DRT-III, Chandigarh after examining all the documents executed by Appellant Sudha Joshi and after examining CFSL Report that the property was mortgaged in Bank of India and that the Loan was transferred to HDFC along with this Mortgage and that the Original title deed of this property is with HDFC., is a completely correct finding of Fact and is not liable to be interfered in the facts and circumstances of the case.

It is submitted that the property in question has been duly mortgaged in favour of the bank by Sudha Joshi herself and there exists a legally valid and subsisting mortgage in favour of HDFC bank. Rebuttal of Allegation of Shifting of Business in 2015 and Grant of Loan at Non-Existent Business Premises are as under:-

a) The allegation by Sudha Joshi that the factory had been shifted from Chandigarh to Lalru on 10.11.2015 and the Loan was granted by the Bank to a Non-existing Unit at Chandigarh address is totally false.

b) The alleged Letter addressed to The ETO Chandigarh on the Letter head of Ess Jay Enterprises, which is marked as Annexure P-2 in CWP-1380-2022 and placed on Page 66 and 67 of the said petition, is an Un-dated and Un-signed paper which seems to have been forged and fabricated by Sudha Joshi as she had been always in possession of blank letter heads and thus this forged paper cannot be even looked at for any purpose.

c) Ess Jay Enterprises has been duly carrying out its operations from the said premises till March 2016 and had been submitting the Sale Tax Returns and depositing the Sales Tax which is a statutory Evidence of Existence of the Factory at the addressed premises. All the Sale Tax Returns and Sales Tax Receipts were also duly submitted to HDFC Bank also. Thus, the allegations that the factory was not existing in 2015 is totally false and baseless. Copies of SALES TAX RETURNS & RECEIPTS ARE ATTACHED.

It is further submitted that Appellant has made false allegations and had been making different allegations and has been changing her stance which are duly pointed by Respondent bank in its reply which is adopted by the Respondent No. 3 which is also apparent from a bare reading of all the following different proceedings from 2016 to 2022 detailed as under:-

Complaint dated 02.02.2016 to Police

Civil Suit dated 10.5.2016

Reply dated 29.08.2016 to Notice dated 1.7.2016 under Section 13(2) of SARFAESI Act. 2002.

SA No. 329 of 2016

Criminal Petition in High Court - CRM-M-27110-2018 – Date of Dismissal - 4.7.2018 – Challenge to DM Order dated 10.8.2017

Writ Petition in High Court - CWP-19141-2018 – Date of Dismissal – 15.01.2020 - Challenge to DM Order dated 10.8.2017

SA No. 26 of 2020 – Date of Dismissal – 27.11.2020 – Challenge to DM Order dated

10.8.2017

Appeal No. 118 of 2020- Date of Order for pre-deposit-3.12.2020 – Challenge to DRT Order dated 27.11.2020 and interim relief to stay the DM Order dated 10.8.2017

Applications filed by Appellant Writ Petition - CWP-21479-2020 – Date of Dismissal – 15.12.2020 – Challenge to Challenge to DRT Order dated 27.11.2020 and interim relief to stay the DM Order dated 10.8.2017

CWP-22453-2021 filed by HDFC Bank. Writ Petition - CWP-13800 of 2022 filed to challenge the Auction Notice. Disposed off vide order dated 12.07.2022.

Respondent No. 3 has also relied upon the following Judgments in support of its submissions:

AIR 1965 ( Supreme Court) 430- K.J. Nathan vs S.V Marathi Rao and other

2012 (46) RCR (Civil) 932 – DRAT Allahabad- UCO Bank vs State Bank of India

2020 (1) RCR ( Criminal). 699 – Padum Kumar vs State of Uttar Pardesh- Supreme Court

2014 (2) AD ( Delhi) 154 – MMTC Ltd vs Raj Rani Gulati – Delhi High Court

It is further submitted that none of the submissions and none of the documents which were not the part of record before the ld. DRT Chandigarh while deciding the SA, may not be taken into consideration or relied upon which are now being sought to be relied upon by the appellant. It is also submitted that none of directions sought by the appellant in the various applications filed by the appellant during the pendency of the present appeal deserve any consideration and are liable to be dismissed at the threshold.

FINDINGS:-

I have considered the rival submissions and gone through  the  record.The  impugned  order  dated 27. 11.2020, passed by Ld. DRT-II, Chandigarh runs as follows:-

“The counsel for applicant has filed one IA for placing on record certain documents which has not been objected by counsel for bank. Therefore, the IA is allowed and the documents annexed with this IA are taken on record.

Heard arguments in this SA.

The counsel for applicant has argued that this SA has been filed by applicant Mrs. Sudha Joshi and the main argument of counsel for applicant is that applicant never took any loan from the HDFC Bank and all documents regarding this loan have been forged by the son of the applicant/respondent No.3 with the connivance of the HDFC Bank Officer. The counsel for applicant has stated that the title deed of the property alleged to be mortgaged was lying in bank locker which is operated jointly by applicant and her son and her son managed to get the title deed and he deposited title deed with the HDFC Bank and took loan by forging signature of his mother who is applicant in this case.

The counsel for applicant has stated that applicant lodged an FIR against her son and during criminal investigation, bank officer has also given statement under Section 161 Cr.P.C. that the son of applicant had told that his mother is not well and he took all the documents at his home for getting her signatures which clearly proves that applicant had never gone to HDFC Bank for making any signatures for taking this alleged loan. The counsel for applicant has further argued that CFSL report at page No.381 & 382 also makes it clear that the signatures differ from the original signatures of Mrs. Sudha Joshi. The counsel for applicant has stated that applicant never took any loan from HDFC Bank, her son forged her signatures on all loan documents and deposited the title deed without the knowledge of applicant for taking this loan and prayed to allow this SA.

The counsel for respondents jointly argued that in this case Mrs. Sudha Joshi (applicant) has taken loan from BOI initially which is admitted by applicant also. The counsel for bank and counsel for respondent No.3 argued that this loan was transferred by BOI to HDFC bank vide letter at page No.184 and this property was already mortgaged by Mrs. Sudha Joshi with BOI which is evident from document placed on record by respondent No.3 with its reply at page No.182 to 188. The counsels for respondents further argued that BOI transferred this loan along with this mortgage of property in question to HDFC bank and HDFC bank wrote a letter to Estate Officer for making an entry in the record as lien which is evident from page NO.181 to 184 of reply of respondent No.3 and Mrs. Sudha Joshi also signed on all these documents for transfer of loan and transfer of mortgage of this property from BOI to HDFC bank.

The counsels for respondents further argued that all relevant documents regarding these loans from HDFC bank were signed by Mrs. Sudha Joshi and they have denied that the signatures of Mrs. Sudha Joshi can be forged by any person. The counsels for respondents further argued that Criminal Court investigation has already been done and matter is pending before Criminal Court. The counsels for respondents further argued that FIR was lodged only for one document dated 19.12.2015 and all previous documents have never been challenged by applicant in FIR and prayed to dismiss this SA.

Heard all the learned counsels and perused file.

It has to be seen whether the property in question was mortgaged with HDFC bank or not, and whether loan was taken by the son of applicant by depositing the title deed of this property as a security?

As far as mortgage is concerned admittedly applicant had taken loan from BOI by mortgaging this property. From the documentary evidence placed on record at page No.182 to 188 by respondent NO.3 with its reply it is clear that the loan which was taken by applicant Mrs. Sudha Joshi from BOI was transferred by BOI to HDFC bank and Mrs. Sudha Joshi had mortgaged the property in question with BOI and that mortgage was also transferred to HDFC which is evident from relevant document at page No.182 to 188 filed by respondent NO.3 with its reply. The counsel for applicant has stated that the son of applicant managed to take the original title deed of the property from the bank locker without the consent of applicant and forged her signatures. The Counsel for applicant has failed to reply that in which bank locker this title deed was lying. The Counsel for applicant has stated that locker was being operated by applicant and her son jointly but has not given any such proof of this fact.

As far as mortgage is concerned admittedly applicant had mortgaged this property with bank BOI at the time of taking loan and since this loan was transferred by BOI to HDFC and lien was created with the State Office without HDFC and all these documents are signed by Mrs. Sudha Joshi which was never challenged by applicant at the time of lodging an FIR and in FIR, only signatures have been denied on document dated 09.12.2015 and that criminal investigation has to be adjudicated by competent court of criminal jurisdiction and matter is subjudice. Therefore, at this stage it cannot be said that the signatures of Mrs. Sudha Joshi are forged. Admittedly the original title deed of property is with HDFC and son of applicant took a loan from this bank after depositing this title deed and there is no prima facie evidence of this fact on the file that son of applicant stole the title deed from any bank locker without the consent of applicant and further all previous relevant loan documents, applicant Mrs. Sudha Joshi had signed and in the absence of any proof, it cannot be said that these signatures are forged. As far as CFSL at page No.381-382 is concerned and that is only an expert opinion and that matter has to be adjudicated by criminal court of jurisdiction. Therefore, merely on the basis of statement of bank officer under Section 161 Cr.P.C. and CFSL report it cannot be said that these signatures of Mrs. Sudha Joshi are forged.

Therefore, I am of this opinion that the property was mortgaged by Mrs. Sudha Joshi by BOI for taking loan and that loan was transferred to HDFC along with this mortgage and original title deed of this property is with HDFC and the son of applicant took loan by putting this property as a security with HDFC. Therefore, the SARFAESI action being initiated by HDFC bank is absolutely as per law and there is no prima facie case made out in favour of applicant to restrain the respondent bank for taking physical possession of the property for the recovery of its dues which are more than 2.5 crores.

Therefore, as per above-mentioned reasons there is no ground to allow this SA and accordingly this SA is dismissed.

File be consigned to record room.

Copy of this order be given to parties as per rule.”

I have perused the impugned order passed by the Ld. PO, DRT-II, Chandigarh and am of the opinion that the same cannot be sustained in the eyes of law for the reasons that will be given in details hereinafter.

Perusal of the impugned order dated 27.11.2020 reveals that the Ld. PO has disbelieved the documents which are forged as per the CFSL Reports dated 4. 10.2016 and 03.05.2018 on the ground that the concerned criminal court will decide about its admissibility. Ld. PO has further observed that the property was mortgaged by Mrs. Sudha Joshi to Bank of India for taking loan and thereafter that loan was transferred to HDFC Bank along with the mortgage and original title deed of the property is with HDFC Bank and the son of appellant had taken the loan by putting the property in question as a security with HDFC. Therefore, the SARFAESI action initiated by HDFC bank is as per law and there is no prima facie case made out in favour of appellant to restrain the respondent bank for taking physical possession of the property for the recovery of its dues which are more than 2.5 crores and therefore, there are no grounds to allow the SA and the same was accordingly dismissed.

This Tribunal is not reiterating the facts since these have already been stated by the parties in detail in their pleadings and are mentioned in earlier part of the judgment.

Let this Tribunal first peruse the CFSL reports dated 4. 10.2016 and 03.05.2018.

Perusal of the first CFSL report dt. 04.10.2016 reveals that following documents do not bear the signature of the appellant:-

A. Final memorandum recording past transactions of creation of mortgage by delivery of title deeds for the entire top up and enhanced existing credit facilities to the tune of Rs.1,28,50,000/- (one crore twenty eight lacs fifty thousand only) dated 19/12/2015 :

• As per the CFSL report dated 04/10/2016, it is clear that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void .

B. Declaration Cum Indemnity documents for creation of security by equitable mortgage by deposit of title deeds as security therefore for the facility Rs.1,28,50,000/- (one crore twenty eight lacs fifty thousand only) dated 19/12/2015;

• As per the CFSL report dated 04/10/2016, it is clear that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged ,null & void .

C. Declaration Form dated 15/12/2015 ;

• As per the CFSL report dated 04/10/2016, it is clear that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void .

D. Sanction Letter dated 15/12/2015;

• As per the CFSL report dated 04/10/2016, it is clear that the alleged signatures are not signed by the Applicant (Sudha Joshi) as recipient as such the said document is forged, null & void

E.  Supplementary  Agreement  for  drop line overdraft facility for the said credit facility dated 15/12/2015 ;

• The said Document - Supplementary Agreement for drop line overdraft facility dated 15/12/2015 is annexed in Annexure A5 from page 108 to 114 by the Applicant in present SA and the alleged signatures of the applicant on the said document is marked as questions i.e Q-28 to Q29 by CFSL for the authenticity & examination. As per the CFSL report dated 03/05/2018, it is cleared that the alleged signatures are not signed by the Applicant (Sudha Joshi) as such the said document is forged, null & void.

F. declaration for submission of cheques dated 15/12/2015 and customer request form for debit authority and disbursement details & document for foreign currency exposure dated 15/12/2015.

• As per CFSL report dt. 03.05.2018, signatures of the appellant at Q-30, 31 and 32 on the above documents are forged.

Perusal  of  the  subsequent  CFSL  report  dated 3. 05.2018 reveals that following documents also do not bear the signatures of the appellant.

• Signatures Q-54 & Q-55 on sanction letter dated 05.06.2014 (purportedly second enhancement of loan) are forged.

• MOR dated 17. 01.2014 having signatures Q - 55A to Q -69 too are forged.

• Signatures on Declaration-cum-indemnity dated 17.01.2014 from Q-72 to Q-78 are forged.

• Signature at supplementary letter dated 17.01.2014 from Q-79 to Q-89 are forged.

• Signature on Net worth statement/ Declaration dated 06.11.2012 i.e. the loan document which pertains to first sanctioned loan is also forged as per Q90.

• Application form carries forged signatures at Q-104.

Thus, the above CFSL reports reveal that most of the documents are not signed by the appellant and are forged one.

The question to be considered is whether the above CFSL reports are to be totally disbelieved and can be brushed aside on the ground that it is an expert opinion only. Ld. PO DRT has not considered the forged documents in view of the fact that CFSL report is an expert opinion only and criminal court will decide the fact whether documents are forged or not? However, it is to be kept in mind that it was not a criminal trial which was being conducted before Ld. PO but was an application being decided u/s. 17 of the SARFAESI Act.

So far as disposal of application under Section 17 of the SARFAESI Act is concerned, it is a settled law that the Tribunal while considering the facts and analyzing the evidence appearing on record shall not be bound by the procedure prescribed under CPC or strict rules of evidence. However, the Tribunal is supposed to follow the principles of natural justice and fair play while deciding the dispute pending before it but it is nowhere provided that the appellant has to prove each and every fact before the Tribunal beyond reasonable doubt as in a criminal trial.

Thus, the Tribunal is not fettered by the technicalities and can decide the application in accordance with principles of natural justice and fair play and it was also so held by Hon‘ble Delhi High Court in M/S Satnam Agri Products Ltd. & Ors. Vs. Union of India & Ors. 2014 SCC OnLine Del 6965.

It is with the above approach and background, let this Tribunal now analyze the material appearing on record.

Perusal of record reveals that besides the CFSL report, there is statement of one Mr. Raman Verma, Sr. Manager, Loan Department recorded u/s. 161 Cr.P.C by the investigating officer and it runs as follows:-

CASE FIR NO. 237 DATED 4.11.16 U/S 420, 467, 468, 471 IPC PS-MM, CHANDI-GARH

Statement of Mr. Raman Verma S/o Sh. Madan Lal Verma r/o 120, Milk Colony Dhanas, UT, Chandigarh. Now Sr. Manager, Loan Department, Plot No. 28, Ind. Area, Phase-I, Chandigarh, Mobile No. 9357244405 u/s 161 Cr.P.C.

Stated that I am residing at the above said address and is being served in HDFC Bank as Sr. Manager, Loan Department, Plot No. 28, Ind. Area, Phase-I, Chandigarh. Today I come present in your office and have produced the following record:-

Original Drop line Over Draft limit agreement and sanction letter 05.06.2014 signed by Sh. Gaurav Mishra, Credit Manager, Deptt. Of LAP vide loan account

no. 81020387, limit account No. 50200005898377 for Rs. 62 lacs in the name of Sanjeev Joshi r/o 5663, MHC, Manilmajra UT, Chg.

Original loan agreement and sanction letter 01.11.2012 signed by Sh. Ravi Shukla Sr. Manager, Deptt. Of EEG in the name of Ess Jay Enterprises through Sanjeev Joshi as Prop. for Rs. 32 lacs loan account No. 80476447, limit No. 27608970000049.

Original loan agreement and sanction letter 05.11.2015 signed by Sh. Ravi Shukla, Sr. Manager, Deptt. Of EEG in the name of M/s Ess Jay Enterprises through Sanjeev Joshi as Prop. for Rs. 60 lacs, loan account No. 81678172.

Original loan agreement and sanction letter 14.01.2014 signed by Sh. Ravi Shukla, Sr. Manager, Deptt. Of EEG in the name of Ess Jay Enterprises through Sanjeev Joshi as Prop. of Rs. 45 lacs loan account No. 80829874.

The above said documents as produced by me have been taken to police possession by you and seizure memo in this regard has been prepared accordingly and the same has been signed by myself as attesting witness. The original record has been produced before you and the photo copy of the same has been retained by me and the same would be proved in the court as and when required. He further stated that I am working as Sr. Manager in HDFC Bank at the above said site since 2008. I have dealt with the Sanjeev Joshi Proprietor of Ess Jay Enterprises and Sudha Joshi being proprietor of Tuff Polybags, co borrower as the mortgage property i.e. 5663, MHC, mani majra is in the name of Sudha Joshi. That both the said persons had availed loan facility from HDFC Bank Ltd. Initially Rs. 32 lacs by M/s Ess Jay Enterprises and Rs. 25 lacs by Tuff poly bags on 07.11.12 and then enhancement of Rs. 12 lacs was given to M/s Ess Jay Enterprises on 21.01.2014 by reducing the exposure to M/s Tuff Polybags and then again enhancement Rs. 15 lacs was given to M/s Ess Enterprises on 10.11.2014 by closing the entire exposure of M/s Tuff Polybags and DOD limit of Rs. 62 lacs in the year of 09.06.2014 and again enhancement was availed in existing DOD account up to Rs. 68 lacs on 19.12.15 against 5663 MHC. Mani Majra UT, Chandigarh. Sanjeev Joshi and Sudha Joshi were imperia customers of the bank, the limits were increased as and when requested by them. That in Dec. 2015 Sanjeev Joshi again requested to increase the DOD limit and the limit was increased to Rs. 68 lacs. They were asked to sign the supplementary agreement and were called in the bank to sign the supplementary agreement, thereafter on 09.12.2015 Sanjeev Joshi came to the bank and signed the agreement in my presence and in the presence of other employee Mrs. Suraj and requested that his mother is 68 years old and was not feeling well and not able to come to the bank. He requested that he will get the signatures of his mother done from her. Relying upon him being old customer of the bank his request was acceded and allowed him to get the signatures of his mother done from her home. After some time Sanjeev Joshi came back after getting the signatures of his mother sudha joshi and he submitted the said agreement to the bank. Till 2015 they paid the outstanding amount regularly. Later on he come to know that there was family dispute between them and it has also come to know that Sanjeev Joshi had forged the signatures of his mother on the supplementary agreement and did not disclose the same to her mother. But Mrs. Sudha Joshi leveling the baseless allegation upon the bank. Sanjeev Joshi is the sole proprietor of M/s Ess Jay Enterprises and the beneficiary of the case credit, DOD limit and the limit was used by him for his personal benefit. As on today i.e. 23.09.2017 there is total outstanding of Rs. 16067083.18/-against them. There is no personal gain to the bank or any other employees of the bank. Sanjiv Joshi had no intention to pay the outstanding limit and the loan account became NPA. In spite of several notices they did not bother to pay the outstanding amount. The bank has initiated SARFAESI proceeding against the said persons and order u/s 14 were obtained for taking the physical possession of the property, since the account turned NPA, the bank is to take physical possession on 06.10.17 that the original relevant record has been produced before you and the same has been taken to police possession by preparing the seizure memo which is signed by me as attesting witness. The original record as produced today would be proved in the court of law as and when required.

ROAC.

Sl. Sohan Lal.

EOW, Chandigarh.

Dated:- 23.09.2017

From the above statement, it is clear that respondent no.3 i.e. son of the appellant had taken the loan documents from the bank in December, 2015 for getting the same signed from his mother i.e. the appellant. However, as per CFSL reports, it is clear that these documents were not got signed from the appellant.

It is again reiterated, even at the cost of repetition, that the Ld. PO, DRT ought not to have forgotten the fact that it was not a criminal trial which was being conducted where each and every fact is to be proved beyond reasonable doubt. This, in fact, was an application under Section 17 of SARFASEI Act where the Tribunal was supposed to follow the principles of natural justice and ensure fair play and even if it is assumed for the sake of argument that trial before Ld. PO in SARFAESI should be as per CPC and principles of Civil law will apply while deciding an application u/s. 17 of the Act, then too, this fact cannot be ignored that even civil cases are decided on the basis of principle of preponderance of probabilities and not on the basis of principles of criminal law where prosecution has to prove its case beyond reasonable doubt. Thus, even when the above principle of Civil Law is applied (though it cannot be applied in proceeding before DRT as it supposed to decide the application by following principles of natural justice and fair play), the CFSL reports, Statement of Mr. Raman Verma, Sr. Manager-Loan Department u/s. 161 Cr.P.C. and chargesheet points out towards the fact that it is not the appellant who has signed the documents on the basis of which the demand notice dated 01.07.2016 u/s. 13(2) of the Act was issued and later on possession of appellant‘s house was taken by the Bank.

Let this Tribunal now quote the chargesheet vide which the respondent no.3 i.e. son of the appellant has been charged with offences u/s. 420/467/468/471 IPC. The chargesheet runs as follows:-,

CASE FIR NO.237 DATED 4.11.16 U/S 420, 467, 468, 471 IPC PS-MM, CHANDIGARH

Brief Facts:-

Sir,

The Present case has been registered on the basis complaint of Smt. Sudha Joshi W/o Late Sh. Lalit Joshi R/o 5663 MHC, Manimajra, Chandigarh. The Complainant stated in her complaint ―that she has three children i.e. two daughters one son Sanjeev Joshi, the husband of the applicant passed away in 2007 leaving behind his entire properties. The son of the applicant namely Sanjeev Joshi did not take care of the business and household expenses. He was treated more than 15 times by the De-addiction Centre for alcohol abuse. She further stated that Sanjeev Joshi being the only son used to manage the family business of making paper tubes in the name & style of Ess Jay Enterprises situated at Ind. Area, Phase-II, Chandigarh. The applicant out of blind faith in her son Sanjeev Joshi used to sign each and every blank as well as typed document presented to her. She had further stated that in the month of January 2016, she got a call from the HDFC Bank regarding repaying of loan Installments taken by her as co-borrower. The complainant was further told that if she would not repay the loan amount she would dispossessed from her residential house i.e. 5363, MHC, Manimajra, Chandigarh and even the accused Sanjeev Joshi use to reside with his wife until recently when he left the house all of the sudden. On verification, the complainant had come to know that her son Sanjeev Joshi, since the very inception of death of his father has meticulously planned to loot, cheat, misappropriate and dupe the family funds as well as the properties by forging documents and mis-utilizing the documents which were in his possession as he was having control on the management of the firm. The complainant further stated that the accused Sanjeev Joshi had transferred money from her account to his account by forging her signatures and mis-utilizing her signed paper and blank Cheques. Sanjeev Joshi had also obtained loan from HDFC bank for his firm by mortgaging residential house i.e. 5663,MHC, Manimajra and never informed her and taken the signature of complainant on blank papers. The complainant had never given her consent to mortgage the said property. It is further stated that Sanjeev Joshi had taken a total loan of Rs.1,29,16,512/- against the house No.5663, Manjmajra, Chandigarh, liquidated FDRs of Rs.14 lacs fraudulently and also got en-cashed and transferred Postal Deposits to the tune of Rs.22,27,500/- lying in the joint account with her daughters. It is further alleged that Sanjeev Joshi had also sold the residential house situated in Panchkula which was in the name of her daughter. Sanjeev Joshi purchased some land in Lalru with the said amount in his personal name and mis-utilized the funds. Sanjeev Joshi also transferred all the share of Sh. Lalit Kumar Joshi in the name of the complainant and further transferred the same in the name of him. Sanjeev Joshi further purchased shop in Rudra Pur and some land in Larlu by misappropriating the family funds. That on coming to know all the facts the complainant approached the bank and requested for documents signed by her. The complainant had come to know that Sanjeev Joshi, while taking the loan had mentioned himself sole proprietor of M/s Ess Jay Enterprises and also shown the complainant as co-borrower.

That when the complainant confronted him with all these misdeeds, he started threatening. The complainant had also learnt that Sanjeev Joshi had also shifted all the machinery of the firm to a new location where he had pumped all the money which had mis-utilized from the accounts of the complainant and other family members. The complainant has further alleged that her son has fraudulently enhanced loan amount of Rs. 60,00,000/- to Rs.1,29,16,512/-without her consent against the residential house owned by her by forging her signatures on the loan enhancement agreement in the year of December 2015.

That accused/ applicant Sanjeev Joshi filed regular bail application, which was entrusted to this Hon‘ble Court and upon notice, the respondent being investigating officer had filed reply on 13/09/2017. After consideration the regular bail application was dismissed on 14/09/2017 by this Hon‘ble Court.

That prior to registration of the case the inquiry was conducted by Sl Avtar Singh on the complaint No.PW201602440, dated 16.02.16. During inquiry Sl Avtar Singh had obtained original memorandum recoding passed transactions of creation of mortgaged by delivery of titled deeds dated 19.12.15 from HDFC, Ltd. having questioned signature of complainant Smt. Sudha Joshi. Sl Avtar Singh had also obtained original agreement to sell dated 27.04.2000 executed between Ramesh Kumar Sood S/o Sh. Kharati Ram R/o H.No.509373, Cat III, Modern Complex, Manimajra, UT, Chandigarh and Mrs. Sudha Joshi W/o Sh.Lalit Kumar Joshi for the purchase of house No.5663, MHC, Manimajra and power of attorney executed by Mrs. Sudha Joshi in favor of HDFC corporation Ltd. having admitted signatures of Sudha Joshi. That Sl Avtar Singh had sent the questioned and admitted signatures for the purpose of comparison to CFSL Sec.36, Chandigarh and the report of the same was received vide report no. CFSL/(C) – 1039/2016/DOC /CX-151/2016/2417, dated 04.10.16. The questioned signatures of Mrs. Sudha Joshi on memorandum recording passed transitions of creation of mortgaged by delivery of titled deeds dated 19.12.15 marked as Q-1, Q-2, Q-4 to Q-27 and the admitted signatures of Mrs. Sudha Joshi marked as A-1 to A-12 on agreement to sell and power of attorney. The report of the same is as under “1. the person who wrote the enclosed signatures stamped and market A1 to A12 did not write the enclosed signature stamped and marked as Q-1, Q-2, Q-4 to Q-14 and Q-16 to Q-27. (2). It has not been possible to express any opinion regarding the authorship of the enclosed questioned writings stamped and marked as Q15 in comparison with the admitted signatures stamped and marked A1 to A12. For the manifest reason that the questioned writings are in capital letter except the letters ‗u‘ & ‗i‘ whereas the supplied admitted signatures have only two capital letter ‗S‘ & ‗J‘. Another attempt can be made to examine the above said questioned writings if the specimen writings as well as admitted writings written by Mrs. Sudha Joshi during normal course of routine on some exiting documents containing similar letters and their combinations as occurring in the questioned writings marked Q15. Such writings may be available on certain instruments/ documents and routine personal correspondence are supplied for further examinations‖.

That on receiving the above said report which is conclusive as except one signature marked as Q15, which in fact is not the signature of Sudha Joshi but the name written in capital letter. Questioned signatures stamped and marked as Q-1, Q-2, Q-4 to Q14 and Q16 to Q-27 are found forged and beneficiary is only Sanjeev Joshi. So, with the prior approval of competent authority the instant case was registered against Sanjeev Joshi. Initially the investigation was conducted by Sl Avtar Singh. On 16.02.17, after the death of Sl Avatar Sing the investigation was entrusted to Sl Satnam Singh. On 10.06.17 the investigation was entrusted to Sl Sohan Lal. During the course of investigation the complainant got joined investigation and the facts were discussed with her. That on 22.08.2017 accused Sanjeev Joshi was arrested in this case and was produced in the court on 23.08.17 through ASI Major Singh. The specimen signatures of accused as Sanjeev Joshi and as Sudha Joshi were taken in the Court and the accused sent to judicial custody. On 05.09.17 complainant again contacted at her residence 5663, MHC, Mani majra to join her in investigation.

Mrs. Sudha Joshi had produced a copy of certificate dated 14.03.17 issued by JET Airways (India) ltd. by showing the proof of travelling by Mrs. Sudha Joshi from Chandigarh to Mumbai on 18.12.15 through ticket No.589 2121080779, flight no.9W472. She had also produced the copy of bill of her mobile phone no.931603553 to prove that on the date 18.12.15 she was not in Chandigarh but she was in Mumbai and hence the loan enhancement documents are forged which was shown to be signed by Sudha Joshi on 19.12.15 and the same was notarized on 19.12.15. The concerned bank officials who had processed the loan applications in question have also joined investigation and they disclosed that in the month of Dec.2015 Sanjeev Joshi approached the bank and requested to increase the DOD limit. Sanjeev Joshi alone came to the bank and signed the required documents i.e. loan agreement and requested to the bank officials that his mother is old age and could not come to the bank. He requested to the bank officials that he will get the signatures of his mother done from her. They relied upon Sanjeev Joshi being an imperia customer of the bank, the bank officials acceded to his request and allowed him to get the signatures of her mother done from home. After getting the signatures of his mother, accused Sanjeev Joshi Submitted the agreement in question to the bank. So it has been proved from the statements of bank officials that Mrs. Sudha Joshi did not sign the agreement in question in their presence and hence proved that either accused Sanjeev Joshi signed the signatures of his mother himself or through his another associate. This fact also proved from the air ticket of Mrs. Sudha Joshi that she had traveled Chandigarh to Mumbai on 18.12.15 in the flight of JET Airways and there is no question to sign the agreement in question on 19.12.15 at Chandigarh and hence proved the offence of forgery, as the only beneficiary of the said loan amount was Sanjeev Joshi himself. That the bank officials has also produced details of loan amount enhanced time to time and had not return the same and on 23.09.17 the outstanding amount of the HDFC Ltd. was Rs.1,60,67,083.18 and the amount is pertaining to HDFC Bank Ltd. and is a public money. The ownership of 5663 MHC, Chandigarh got approved from the O/o Secretary Housing Board, Chandigarh vide requisition letter No.D-788 dated 11.10.17 and the report was received vide letter No.HB-AO-IV/2017/8319 dated 11.10.17 which reveals that that said house was initially allotted one Ramesh Kumar sood vide allotment No.3632 dated 31.07.95 and further transferred to Mrs. Sudha Joshi w/o Lalit Kumar Joshi Vide transferred letter no.67 dated 11.09.2003 on the basis of sale deed no.1319 dated 19.06.2003. It is free hold property and deed of Conveyance has been issued vide registration no.835 dated 22.05.2003. So, as per record of the Housing Board, Chandigarh Mrs. Sudha Joshi is owner of the said house since 11.09.2003. As per report of Chandigarh Housing Board there is lien marked by two banks. i.e. Bank of India and HDFC bank Ltd. Moreover the residential house of the complainant was mortgaged in lieu of the said loan whereas the beneficiary is only accused Sanjeev Joshi. So the accused knowingly did not return the loan amount as he knows that if he will not return the loan amount then the residential house of her mother will be taken over by the bank and he will not bear any loss and loss is to be borne by the complainant. Hence the intention of accused Sanjeev Joshi was malafide from the very beginning and hence the offence of cheating has been proved.

That prior to registration of the case the only loan enhancement agreement dated 19.12.15 was taken and got compared from the CFSL. Now the remaining loan agreements are being taken to Police Possession and are being sent to CFSL for comparison. The report will be obtained in the due course of time. The accused is in judicial custody since 23.08.17 and the stipulated period is being expired shortly. During the course of investigation the statements of witnesses have been recorded and the relevant records have also been procured from the concerned quarters.

That the investigation conducted so far, record on file, statements of witnesses there is sufficient evidence on record to charge sheet the accused Sanjeev Joshi S/o Late Sh. Lalit Kumar Joshi r/o M/s Ess Jay Enterprises, Village Sarsini, PS Lalru, Distt. Mohali, Pb. Now 1366 sector 40-B, Chandigarh to charge sheet him u/s 420,467, 468,471 IPC. Hence, in the light of above facts the charge sheet is being submitted before the Hon’ble Court u/s 420, 467, 468, 471 IPC. In accordance with section 173.2 Cr.P.C. against the above said accused Sanjeev Joshi S/o Late Sh. Lalit Kumar Joshi r/o M/s Ess Jay Enterprises, Village Sarsini, PS Lalru, Distt Mohali, Pb. Now 1366 sector 40-B, Chandigarh for judicial Verdict. The remaining investigation is being conducted, the questioned documents are being procured from the concerned quarters and will be sent to GEQD. After completion of remaining investigation and report of CFSL the supplementary charge sheet against the above said accused will be filled U/s 173.8 Cr.P.C. The witnesses as per list of witness may be summoned during the course of trail.

SHO/ PS-Mani Majra

UT, Chandigarh

Dated :12.10.17.

Perusal of the charge-sheet clearly reveals the involvement of respondent no.3 and the fact that he has obtained the documents from the bank and forged the signature of his mother i.e. Appellant on the loan documents.The  charge-sheet  further  reveals  that documents in question have been executed at Chandigarh 19.12.2015 whereas appellant was not in Chandigarh on the said date as she had already left for Bombay on 18.12.2015 as per certificate issued by Jet Airways. It is also clear from the charge-sheet that appellant‘s mobile (number i.e. 9316003553) shows that she was in Bombay on the above date. Thus, it is clear that documents upon which the Respondent Bank‘s demand notice dated 01.07.2016 is based are forged and the appellant was in Bombay when these were signed and notarized.

Thus, The CFSL reports and statement of Mr. Raman Verma, Sr. Manager, Loan Department, establishes the fact that appellant has not signed the documents on the basis of which the Bank has initiated action against her under SARFASEI Act.

The next question which arises for consideration is whether the Bank officials should have allowed respondent no.3 to take the documents from the Bank on the pretext of getting the same signed from his mother. The answer again lies in negative. Even if it is believed for the sake of argument that in case of Senior Citizen, the Bank may be granting some relaxation and facility to the extent that documents can be got signed at home, however, in such circumstances, an official of the Bank is required to go to the house of senior citizen and get the same signed in his/her presence and instead of that if documents are given to a third person (even if he is a relative), it cannot be presumed that the same are signed by the senior citizen/ account holder. Strangely this rule of common sense and prudence was given a good-bye and documents were given to the son of the appellant who unfortunately forged the same.

The next question which arises for consideration is that in the above circumstances when the signatures of the appellant have been forged, who is at fault? The appellant, who is a senior citizen, or the Bank‘s officials? The answer obvious will be that Bank should be held responsible for negligence of its employees who had handed over the documents to the son of the appellant instead of getting it signed from the appellant in presence of its employees.

It is now to be seen whether in such circumstances where the Bank is at fault, the measure taken by the Bank to take possession of the house of a 76 years old widow, on the presumption that she has signed the documents can be said to be valid. The answer lies in negative as the Bank could not have taken action on the basis of presumption that these documents were signed by the appellant in the absence of any cogent evidence on record.

Now the next question which arises for consideration is whether the demand notice dated 1. 07.2016, issued under Section 13(2) of the SARFAESI Act for an amount of Rs. 1,36,77,336/- which was in respect of Overdraft Account No.2708970000049 and Drop-line Account No. 50200005898377 as on 6. 06.2016 is in accordance with law and could have been relied upon by the Bank for the purpose of dispossessing the appellant u/s. 13(4) of the SARFAESI Act.

Perusal of demand notice dated 01.07.2016 reveals that the loan documents like facilities of overdraft account and Drop Line overdraft account in which defaults have been committed are the basis of issuance of the demand notice u/s. 13(2) of the SARFAESI Act. As discussed above, the documents vide which loan facilities were increased and even other documents like Memorandum of Recording Past Transactions of Creation of Mortgage dated 19.12.2015, Declaration-cum-Indemnity of the same date and Declaration dated 15.12.2015 are forged and do not bear the signatures of the appellant. In these circumstances, it can safely be held that the bank has wrongly invoked the provisions of SARFAESI Act to initiate action against the appellant under Chapter-III of the said Act.

In view of the above, the action of the Bank in taking possession of appellant‘s premises in pursuance of the defective, invalid and illegal demand notice cannot be said to be in consonance with law.

Ld. Counsel for the respondents, on the other hand, have, however, argued that appellant is a well educated lady and was running the business under the name and style of Tuff Polybags as its Proprietor and was also actively involved in the business of her husband who was running the same as a proprietor in the name and style of Ess Jay Enterprises.

It is further submitted that the Appellant along with her husband took business loan from Bank of India in the name of their respective aforesaid proprietorship firms and to secure the said loan created mortgage with respect to her property being House No. 5663, Category Ind, DU, Phase -3, Modern Housing Complex, Manimajrs, Chandigarh. Bank of India duty marked its lien in the records of Chandigarh Housing Board.

It is further submitted that Appellant‘s husband Mr. Lalit Joshi died on 17.08.2007. Thereafter, in the year 2012, the Appellant along with her son Mr. Sanjeev Joshi (Respondent No. 3) approached Respondent Bank (HDFC Bank) for transfer of the loan from Bank of India to HDFC Bank. It is submitted that HDFC Bank agreed to grant financial assistance of Rs.57 lakhs to the aforesaid firms (Rs. 32 Lakhs in Ess Jay Enterprises and Rs.25 Lakhs in Tuft Poly Bags) subject to same being secured by way of mortgage of aforesaid property and hypothecation of the stocks and debt of the firms. The Appellant and her son agreed to the same and accordingly upon release / disbursal of the loan amount by Respondent Bank to Bank of India (‗BOI‘ in short), so as to close loan accounts with Bank of India standing in the name of the aforesaid firms, BOI transferred the aforesaid security with respect to immoveable property to the Respondent Bank and, thereafter, issued letter dated 15.11.2012 to the Chandigarh Housing Board for removing lien in favour of the Bank of India. It is pertinent to submit that the Bank of India then transferred the original title documents to the Respondent Bank and further at the behest of the Appellant and Respondent Bank, Chandigarh Housing Board marked the lien in favour of the Respondent Bank.

It is further submitted that at the time of transfer of the aforesaid loan facilities from BOI to HDFC, the Appellant and her son Mr. Sanjeev Joshi signed the loan documents.

It is submitted that thereafter the additional loan facilities were granted to the Appellant and her son (Respondent No. 3) and accordingly loan documents were executed by the Appellant and her son. It is further submitted that the aforesaid security was extended to the said additional financial facilities and documents with respect to same were executed by Appellant and her son Respondent No. 3.

It is further submitted that the contention of the Appellant that she had not mortgaged the subject property in favour of the Respondent Bank is false. As per CFSL report dated 03.05.2018, the appellant Sudha Joshi had signed all the loan documents of HDFC Bank including the creation of mortgage on 01.11.2012 to 4. 11.2014 and, therefore, her allegations that she never created any mortgage in favour of HDFC bank is totally false.

It is further submitted that on 19.12.2015, HDFC Bank again revised the Drop Line overdraft Facility of Rs. 62 lacs  which  was  sanctioned  on  10.11.2014.  On 10. 11.2014, this  facility,  which  had come  down  to Rs. 55. 79 lacs was increased to Rs. 68.50 lacs by sanctioning Top-Up of Rs. 12.70 lacs. However, the total limits of Rs. 122 lacs sanction on 10.11.2014 were increased only to Rs. 128.50 lacs, meaning thereby that only an increase of Rs. 6.50 lacs.

Ld. Counsel for the respondents has further submitted that appellant has made false statement with respect to the creation of the forged documents/ mortgage before various courts/forums.

It is further submitted by Ld. Counsel for the respondents that it is in the CFSL report that appellant Sudha Joshi had herself signed and executed all the loan documents including the memorandum of mortgage for grant of additional facility of drop line overdraft facility of Rs. 62,00,000/- and also of Increased CC Limit of Rs. 45 lacs. Her signatures are duly confirmed on all the loan documents in CFSL report dated 3.5.2018 from Question 33 to Question No. 53 appearing on Loan Documents/Demand Promissory Note (dt. 05.06.2014) and Guarantee deeds (dt. 05.06.2014).

It is further submitted that on 10.11.2014, the CC Limit of Rs. 45 lacs to ESS Jay Enterprises was increased from Rs. 45 lacs to Rs. 60 lacs and Total Limits were thus enhanced to Rs. 122 lacs ( CC Limit Rs. 60 lacs + DOD Facility of Rs. 62 lacs)

10.Nov.2014

15.00

10.Nov.2014

-12.00

Total Limits

122.00

NIL

It is further submitted that appellant Sudha Joshi herself signed and executed all the Loan documents including the Memorandum of Mortgage for grant of additional facilities of Drop Line overdraft Facility of Rs. 62 lacs and also of Increased CC Limit of Rs. 60 lacs. Her signatures are duly confirmed on all the loan documents including the Memorandum of Deposit of Title Deeds dated 4.11.2014 in CFSL report dated 3.5.2018 from Questions No. 105 to 120 appearing on Loan Documents/Demand Promissory Note (dt. 04.11.2014) and Guarantee deeds dt. (04.11.2014) etc. Her Question signatures No. 105, 106, 107, 108, 109 on Memorandum of Deposit of Title Deeds dated 4.11.2014 and her Question Signatures No. 110 on Schedule confirming the Existing Title Deeds in favour of Bank duly confirm that Appellant Sudha Joshi has duly created the Mortgage on 4. 11.2014 in respect of Loan facilities of Rs. 122 Lacs. Thus, it is evident and confirmed even from the CFSL Report dated 3.5.2018 that Appellant Sudha Joshi has signed all the Loan Documents of HDFC Bank including the creation of Mortgage from 1.11.2012 to 4.11.2014 and her allegation that she never created any Mortgage in favour of HDFC Bank is totally false.

It is further submitted that Loan Documents executed for enhanced limits on 19.12.2015 were also signed by Appellant-Sudha Joshi who also executed Guarantee Deed and MOE for creation/Continuance of Mortgage. However, later on, she refused to acknowledge her signatures on the loan documents dated 19.12.2015.

Ld. Counsel for the Respondents have, thus, submitted that there is no infirmity or illegality in the order of Ld. DRT and, therefore, the present appeal may be dismissed, in the interest of justice.

I have considered the above submissions of Ld. Counsel for the respondents. Perusal of the record reveals that as per the CFSL report dated 03.05.2018, the loan documents including the Memorandum of Deposit of Title Deeds dated 4.11.2014 are not forged documents and, thus, this fact stands established that property was duly mortgaged. However, the documents submitted at the time of subsequent loan facilities granted in the year 2015 are forged and, therefore, the demand notice dated 1. 07.2016 issued u/s. 13 (2) of the Act which has been issued on the basis of the loan facility of the year 2015 is not in consonance with the law as it is based upon forged documents and the appellant is, therefore, not liable to pay for the loan facilities granted on 19.12.2015. However, this Tribunal is not passing any order regarding the liability of the appellant to pay the dues of the Bank till November, 2015 since for that, the Bank has to first determine the exact liability, if any, and thereafter issue a fresh demand notice and take further action in accordance with law and it goes without saying that in that eventuality, the appellant can challenge the said notice by moving an appropriate application u/s. 17 of the Act before the Ld. DRT.

I have also considered the submissions of Ld. Counsel for the respondent no. 1 that appellant has given different versions before different forums regarding her stand regarding the loan documents. In the opinion of this Tribunal, such variations in the version of the appellant before different forums do not change the very basic foundation of the disputed loan facilities which do not bear the signatures of the appellant. As discussed in earlier part of judgment, it has to be kept in mind that this is not a criminal trial where some contradictions and variations in the version of the appellant given before different forums will demolish her case since it is clear from CFSL reports that her signatures are forged on documents granting enhanced loan facility on 19.12.2015.

Ld. Counsels for the respondents have next contended that original title deeds of the house in question are with the Bank and loan facilities were earlier availed by the appellant and, therefore, the appellant is liable to pay the dues of the Bank.

I have considered the above contention of Ld. Counsel for the respondents and am afraid that the same does not help them for the reason that it stands established that property was duly mortgaged with the respondent Bank. However, demand notice issued u/s. 13(2) of SARFAESI Act dated 01.07.2016 is based upon the default alleged to have been committed by appellant in later loan facilities granted in December 2015 on which her signature are found to be forged in the opinion of this Tribunal, since the very foundation i.e. documents on the basis of which demand notice was issued are forged, all the subsequent actions taken by the bank are not in consonance with law and, therefore, cannot be sustained.

This Tribunal has also gone through the judgments relied upon by the Ld. Counsel for the respondent no. 3 which are as follows:-

K.J.Nathan vs. S.V.Marathi Rao & Ors., 1965 AIR(SC) 430;

UCO Bank vs. State Bank of India, 2012 (117) R.D.189;

Padam Kumar vs. State of Uttar Pradesh, 2020(1) RCR (Criminal) 699; and

MMTC Ltd. vs. Raj Rani Gulati, 2014 (2) AD(Delhi) 154.

There is no quarrel with the proposition of law laid down in the above judgments but the authorities cited by Ld. Counsel for the respondent no. 3 are distinguishable on the basis of facts and circumstances stated therein. Moreover, this has to be kept in mind that this is not a criminal trial but adjudication of an Application under the SARFAESI Act where strict procedure of CPC or rules of evidence do not apply. Since the forgery of the documents has been established by CFSL reports and statement of Mr. Raman Verma, Sr. Manager of the Bank as well from chargesheet filed by investigating Officer u/s. 420/467/468/471 IPC against respondent no.3, the authorities cited by Ld. Counsel for the respondent do not help him.

Ld. counsel for the respondents have next argued that appellant is in the habit of signing in two different ways and, therefore, CFSL report cannot be relied upon.

I have considered the above contention of Ld. counsel for the respondents. In fact, respondent no. 3 i.e. son of the appellant has stated that appellant is in the habit of signing in two different ways. However, as discussed in the earlier part of the judgment, the CFSL reports are unambiguous and stand corroborated by the statement of Mr. Raman Verma Sr. Manager, HDFC Bank, Loan Department. Since it stands established that the documents on the basis of which the demand notice dated 01.07.2016 was issued are forged, the contention of Ld. Counsel for the respondents that appellant was in the habit of signing in two different ways and, therefore, the CFSL reports should not be relied upon, cannot be accepted.

In view of the above discussion, this Tribunal is of the opinion that order passed by the Ld. PO is not in accordance with law and the same is, therefore, set-aside in the interest of justice and consequently, action taken by the bank i.e. taking over of the possession of the house of the appellant bearing no.5663, Category Ind. DU, Phase-3, Modern Housing Complex, Manimajra, Chandigarh is also set aside. It is, therefore, directed that the possession of the premises in question be reverted back to the appellant (who is a widow aged about 76 years and a victim of fraud and is living at the mercy of her daughter) within ten days.

However, as discussed in Para no. 146 of this judgment, the CFSL report dated 03.05.2018 clearly reveals that loan documents including the Memorandum of Deposit of Title-deeds dated 02.11.2014 are not forged document and, thus, this fact stands established that property was duly mortgaged by the appellant. However, the documents supplied at the time of subsequent loan facilities granted in Dec. 2015 are forged. This Tribunal is, therefore, not passing any order regarding the liability of the appellant to pay the dues of the Bank till November, 2015 since for that, the Bank has to first determine the exact liability, if any, and thereafter issue a fresh demand notice and take further action in accordance with law.

So far as liability of respondent no.3 to pay the dues of the Bank as proprietor of M/s Ess Jay Enterprises (Respondent no. 1) is concerned, the Bank may recover its dues from him in accordance with law.

It is ordered accordingly.

The appeal stands disposed. All pending IAs also stand disposed off. File be consigned to Record Room.