Sur Buildcon (P) Ltd. vs Punjab National Bank And Ors.

The issue in these two appeals arises out of the liability fixed pursuant to the order passed in O. A. 166/2008 filed by the Bank and decided by the Tribunal below on 19.3.2012.

The Bank had filed this O.A. for recovery of a sum of Rs. 20,91,92,307/- with interest and cost. The Tribunal below, after hearing the parties impleaded in the O. A., allowed the same and held the Bank entitled to recover sum of Rs. 20,91,92,307 with interest @12% p.a., from 28.11.2008 onwards until realisation with cost from defendants jointly and/or severally. Smt. Sumitra Gupta (defendant No. 3 in O.A.) and Mr. Anuj Gupta (defendant No. 4 in the O.A.) were held liable to the limited extent of the properties inherited by them from the deceased Mr. Anil Gupta. The Bank was also held entitled to recover the amount by proceeding against immovable properties bearing No. 5/17, Shanti Niketan, New Delhi and Farm House bearing No. 20, Avenue Maulsari, Rajokri, New Delhi (hereinafter referred to as the 'Farm House') on which restraint order was earlier passed on 21,7.2010.

Ms. Sumitra Gupta has filed appeal (No. 317/2014) against this order seeking setting aside the impugned order and for remanding the O.A. for consideration before the Tribunal below.

In Appeal No. 305/2013 filed by M/s. Sur Buildcon (P) Ltd., the appellant has made a limited prayer for setting aside that part of the order passed in the O.A. whereby the Bank has been held entitled to recover the dues from immovable property including the Farm House No. 20, Avenue Maulsari, Rajokri, New Delhi. The appellant has therefore prayed for amending the recovery certificate (R.C.) by deleting the reference to the said property on the ground that this property has been wrongly held liable for recovery of dues.

The appellant M/s. Sur Buildcon (P) Ltd. being a subsequent purchaser of the Farm House was not a party in the O.A. The appellant learnt about the proceedings when the sale proclamation was pasted on the property and, therefore, the appellant M/s. Sur Buildcon (P) Ltd. filed an MA 101/2012 before the Tribunal below for withdrawing/correcting the R.C. and the final order passed in the O.A. by deleting reference to the Farm House property. This prayer, however, was declined by the Tribunal on 7.6.2013. Accordingly, the appellant would seek setting aside this order dated 7.6.2013 passed in M.A. No. 101/2012 as well on the grounds as have been urged in the appeal.

The facts, noticed in brief, in this case are M/s. Hoteline Teletube and Components Ltd. had entered into a loan agreement with the respondent Bank Late Mr. Mukesh Agarwal and his brother Mr. Anil Gupta were two Directors of the company. Mr. Mukesh Agarwal had purchased property bearing 5/17, Shanti Niketan, New Delhi on 25.5.1986. On 15.9.1989 he executed personal guarantee in favour of the Bank to secure the loan obtained by the company. On 18.8.1990, Mr. Mukesh Agarwal executed a Will of this property in favour of his brother late Mr. Anil Gupta. Mr. Mukesh Agarwal died on 2.10.1990. On 12.2.1992, Mr. Anil Gupta became the absolute owner of the property when the Will of Mr. Mukesh Agarwal was probated in his favour. On 26.4.1999 Mr. Anil Gupta executed personal guarantee in favour of the Bank for the purpose of securing credit facilities advanced to respondent No. 3.

Unfortunately, Mr. Anil Gupta was diagnosed with cancer on 23.11.2005. There was fault in repayment of the loan. The loan account of M/s. Hoteline Teletube and Components Ltd. was declared NPA on 31.3,2006. Mr. Anil Gupta executed a Gift Deed of 5/17, Shanti Niketan, New Delhi on 11.7.2006 in favour of his wife, namely, Ms. Sumitra Gupta (appellant in Appeal No. 317/2014). On 3.8.2006, this property was mutated in the name of the said appellant. On 13.11.2006, Bank issued demand notice to the company followed by another demand notice to .Mr. Anil Gupta on 6.1.2007.

The appellant Ms. Sumitra Gupta claims that no demand notice has been served on her till date. On 10.1.2007, Mr. Anil Gupta sent response to the demand notice. The Bank thereafter took action under Section 13(4) of the SARFAESI Act by taking possession of the plant machinery of the company at Gwalior. In the meantime, Mr. Anil Gupta expired on 14.2.2008. The Bank thereafter sent legal notice to the appellant she being legal heir of late Mr. Anil Gupta, to which the appellant replied on 11.10.2008. The Bank had thereafter filed O.A. on 27.11.2008 which has been allowed and recovery is ordered to be effected from the sale of the property gifted to the appellant by her husband. She has accordingly filed the present appeal.

Appeal No. 305/2013 is filed by Sur Buildcon (P) Ltd. which is the subsequent purchaser of the Farm House and this property is also subjected to recover}' as ordered by the Tribunal. The appellant being subsequent purchaser thus would impugn that part of the direction issued by the Tribunal where the Bank has been held entitled to recover the amount in the O.A. from Farm House property.

The facts on record would show that the Farm House property also was in the name of Mr. Mukesh Agarwal who had executed a Will in favour of his brother on 18.8.1990. This Will was probated on 12.2.1992. Mr. Anil Gupta had gifted this property in favour of Ms. Taru Priya Gupta on 10.5.2006 after obtaining prior permission to transfer the same from the concerned Additional District Magistrate (LA)'s office vide NOC dated 1.5.2006. Mutation was entered in the name of Ms. Taru Priya Gupta on 8.6.2006. Though the account was declared NPA on 31.3.2006, as already noticed above, but the Bank had recalled the loan granted to respondent No. 2 M/s. Hoteline Teletube and Components Ltd. on 13.11.2006. Mr. Anil Gupta was a guarantor but it is averred that property, Farm House, was never mortgaged nor was secured in favour of the Bank for the loan granted to respondent No. 2. The borrower company had moved before BIFR with the plea that its net-worth had completely eroded due to accumulated losses. This reference made by M/s. Hoteline Teletube and Components Ltd., before BIFR came to be dismissed on 12.5.2008, whereafter the company approached AAIFR. During this period Punjab National Bank invoked the guarantees in the loan account on 6.1.2007. Notice under SARFAESI Act came to be issued on 13.2.2007 and symbolic possession was taken. This action by the Bank was during the lifetime of the guarantor Mr. Anill Gupta who, as noticed, died on 14.2.2008.

While the proceedings initiated by Bank were in progress, Ms. Taru Priya Gupta entered into an agreement for sale of this property with Mr. Vijay Gupta on 10.10.2008. Said Mr. Vijay Gupta approached PNB Housing Finance Ltd., which is a subsidiary of Punjab National Bank for a housing loan. The panel of Advocate of PNB Housing Finance Ltd. gave a title verification report stating that Ms.Taru Priya Gupta was having a clean and marketable title qua this property. On 6.11.2008, NOC was obtained from concerned Tehsildar for transfer of the property in favour of Mr. Vijay Gupta. Concededly, Ms. Taru Priya Gupta had not been impleaded as party in the O.A. filed by the Bank on 27.11.2008. Even no mention was made that this property was owned by Ms. Taru Priya Gupta or that she was in possession of the same. In regard to this property, the only aspect mentioned in the O.A was that the aforesaid property was in the hands of LRs of Mr. Anil Gupta and the existing security in favour of the Bank were insufficient to satisfy the claim. In fact, the Farm House property was not with the LRs., but was standing in the name of Ms. Taru Priya Gupta.

In the above-noted background, the first injunction order came to be passed by the Tribunal below on 18.12.2007 restraining the LRs of Mr. Anil Gupta from dealing and transferring the property in question. This injunction order was never served on anybody, not even on the LRs of the borrower. No restraint order was passed against Ms.Taru Priya Gupta. Even no attachment order was passed against this property, i.e., Farm House. Ms. Taru Priya Gupta had executed a registered sale deed in favour of Mr. Vijay Gupta on 28.1.2009. The appellant would urge that Mr. Vijay Gupta purchased this property by obtaining a housing loan from M/s. PNB Housing Finance Ltd. and registered a mortgage of this property in favour of PNB Housing Finance Ltd.

Reference before AAIFR was dismissed on 19.5.2010. The Bank had again approached the Tribunal for obtaining fresh injunction. Yet another fresh application was filed pleading that the earlier injunction order was not served as the matter was pending before AAIFR. The Tribunal below passed another injunction order on 21.7.2010. The LRs of Mr. Anil Gupta received notice in the O.A. on 3.8.2010 and the notice of this injunction order was received by them on 11.8.2010. The respondents appeared before the Tribunal and filed their written statement. As per the appellant, the O.A. remained uncontested before the Tribunal and the impugned order came to be passed.

It is now the turn of the appellant M/s. Sur Buildcon (P) Ltd. to enter into the scene. On 29.3.2011, the appellant entered into an agreement for purchase of this property with Mr. Vijay Gupta. Mr. Vijay Gupta obtained NOG for selling this property to the appellant. On 18.3.2011 the mortgage of PNB Housing Finance Ltd. was redeemed and all the original documents were got released from PNB Housing Finance Ltd. On 7.4.2011, Mr. Vijay Gupta executed sale deed in favour of the appellant. The appellant would thus claim that they are bona fide purchaser of this property after passing a consideration of Rs. 39 crore. As per the appellant, it did so after due diligence and thus is bona fide purchaser. The name of the appellant was duly mutated in the revenue record. It is alleged that ignoring this position, the Tribunal below passed the impugned order on 19.3.2012 without appreciating that owner of this property was not made party to the proceedings before the Tribunal and true and correct facts did not come to the notice of the Tribunal, The Tribunal has passed this order simply on the basis of injunction passed on 21.7.2010. The appellant therefore would plead that it has been condemned unheard,

The appellant, in fact, came to know about the order when sale proclamation notice was pasted on the property on 31.7.2012. The appellant immediately moved objections before the R.O, and these objections are statedly still pending. Besides, the appellant filed an application under Section 19(25) read with Section 22( 1) of the RDDBFI Act for correction of the R.C. and withdrawal of this property from the R.C. and the final order. On 16.8.2012, the Tribunal below passed an interim order staying the proceedings before the R.O. This application filed by the appellant has now been dismissed on 7.6.2013. The appellant therefore has challenged this order dated 7.6.2013 as well as order dated 19.3.2012 in the present appeal.

On the basis of facts as pleaded and noticed above, both the appellants in these appeals have come up claiming somewhat different reliefs. Appellant Ms. Sumitra Gupta would pray for setting aside the impugned order passed in the O.A. and. would pray for remand of the case for fresh consideration by the Tribunal below. On the other hand, M/s. Sur Buildcon (P) Ltd. would only seek setting aside of that part of the impugned order where the Bank is held entitled to recover the amount from the sale of Farm House by seeking correction in the order in O.A. and R.C.

Respondent Punjab National Bank would oppose the reliefs claimed in both the appeals tooth and nail and would pray for dismissal of the both the appeals with exemplary cost being based on false averments.

The stand of the Bank is that the appeal filed by Ms. Sumitra Gupta is mala fide, bogus and abuse of process of law. The Bank would point out that Mr. Anil Gupta who was the husband of the appellant had availed IL FLC facility and failed to meet assurances and their obligations. He neglected to pay and meet their liabilities. The account therefore was classified as NPA on 31.3.2006. At that stage, outstanding amount was Rs. 31,30,06,612/-, The Bank had no alternative but to recall the entire outstanding together with interest and was also constrained to initiate proceedings under the SARFAESI Act. When the borrower failed to pay the dues of the Bank, legal notice was sent calling upon the borrower to pay a sum of Rs. 18,39,32,750.49. The Bank had thereafter filed O.A. for recovery of the amount which has now been allowed.

The Bank has averred in the O.A. that the security available was not sufficient to liquidate the claim and therefore the Bank sought an order in regard to the property being 5/7, Shanti Niketan, New Delhi and the Farm House. The Bank had claimed in the O.A. that the said property belonged to Mr. Anil Gupta and the appellant Ms. Sumitra Gupta being his wife had inherited the said property after the death of her husband. The Bank had thus sought a restraint order in respect of these two properties. On 18.12.2008, the Tribunal below passed an order restraining the respondents from selling, alienating transferring, encumbering or otherwise disposing of or dealing with or creating any third-party rights in any manner in regard to these immovable properties, i.e., 5/17, Shanti Niketan, New Delhi and the Farm House. Subsequently, another LA. was filed and the order of attachment was again obtained on 21.7.2010 as noted above. It is stated that the defendants including the appellant Ms. Sumitra Gupta appeared before the Tribunal but failed to file written statement. Even an application was moved for removing the attachment of the property, namely, 5/17 Shanti Niketan, New Delhi on 12.9.2011. As per the Bank, the said appellant never pleaded that this is her sole residential house. Rather, the stand of the Bank is that late Mr. Anil Gupta had gifted Farm House to Ms. Taru Priya Gupta, his daughter-in-law, where the appellant and others are residing. It is also pleaded that there was restraint order in regard to the Farm House as well which was in the knowledge of the appellant. The appellant never disclosed this fact and thus the appellant Ms. Sumitra Gupta is accused of having played fraud upon the Tribunal below.

The Bank would also contest the right of Ms.Taru Priya Gupta to sell the Farm House for a consideration of Rs. 32 crore. As per the Bank, this sale was executed on 28.1.2009 much after the restraint order was passed on 18.12.2008. The Bank came to learn about this sale only when an application was filed by M/s. Sur Buildcon (P) Ltd., the appellant of Appeal No. 305/2013. It is urged that appellant Ms. Sumitra Gupta thus obtained an ex parte order in her favour by playing fraud. As per the Bank, Gift Deed was executed by late Mr. Anil Gupta in favour of his daughter-in-law 10.5.2006 which was much after the account was classified as NPA on 31,3,2006. The Bank accordingly would urge that these two properties were transferred with mala fide intention by Mr. Anil Gupta to defeat the dues of public sector Bank and that, too, after the account was classified as NPA. The Bank has accordingly contested the claim of the appellant subsequent purchaser and would plead that the claim set up in the M.A. has rightly been declined by the Tribunal below. The Bank would also justify the order passed by the Tribunal and has prayed for dismissing this appeal.

When these appeals came up for hearing, there was a bit of confrontation as to which appeal should be heard first. The Counsel for the appellant Ms. Sumitra Gupta had pressed that first the Appeal No. 305/2013 filed by M/s. Sur Buildcon (P) Ltd. be heard before he is called upon to make submissions. Though it hardly was an issue, yet it was resolved when ultimately the Counsel appearing in appeal filed by M/s. Sur Buildcon (P) Ltd. took initiative in addressing this Tribunal first.

The plea by the Counsel is that the appellant in Appeal No. 305/2013 is a bona fide purchaser and had purchased the property form a person who had earlier purchased the same property from Ms. Taru Priya Gupta. The Counsel would submit that the appellant had purchased this property for a sum of Rs. 39 crore whereas Mr. Vijay Gupta had purchased the same from Ms. Taru Priya Gupta for a sum of Rs. 32 crore. The Counsel would highlight that Ms.Taru Priya Gupta was the registered owner of the said property and this fact was misrepresented in the O.A. filed by the Bank where it was mentioned that the property belonged to the widow and son of late Mr. Anil Gupta being LR of the deceased Mr. Anil Gupta.

Another very significant fact that would emerge from the record is that Ms.Taru Priya Gupta was not a party to the O.A. and no injunction order was ever issued injuncting her to sell or transfer this property. Even the injunction order which was passed 18.12.2008 was not against her and was not served upon Ms. Taru Priya Gupta and it was only against respondents 3 and 4. Mr. Akhil Sibal, the Counsel fort he appellant, would highlight that no attachment order qua the property was ever passed despite a prayer having been made in this regard. By the time injunction order came to be passed on 21.7.2010, the property had already been sold by Ms. Taru Priaya Gupta to Mr. Vijay Gupta for valuable consideration and he is not related to the borrower in any manner.

Yet another aspect highlighted by the Counsel is that for purchasing this property Mr. Vijay Gupta had obtained a housing loan from PNB Housing Finance Ltd., which is a subsidiary of respondent Punjab National Bank. PNB Housing Finance Ltd. had mortgage over the said property when it was purchased by the appellant for a sum of Rs. 39 crore. The sale deed in favour of the appellant was registered after discharging the debt of PNB Housing Finance Ltd. and after getting the property released from the mortgage. The Counsel accordingly would contend that before purchasing the property, the appellant had satisfied itself after carrying out due inquiry and found that there was no injunction or restraint order operating against the property in question. The property was accordingly purchased after obtaining NOC from the Tehsildar. The Counsel would thus state that the appellant is a bona fide purchaser without notice of the pending litigation and as such it deserves to be protected.

As per the Counsel, the impugned order qua this property was passed only due to misrepresentation made by the Bank while pleading that this property belonged to respondents 3 and 4 as LRs of Mr. Anil Gupta. The plea therefore by the Counsel is that the Tribunal had no jurisdiction to direct recovery of the debt against this property which was neither a mortgaged nor a charged property with the Bank. The property did not belong to the guarantor at the time of passing the order. The property was under the registered ownership of a third party.

Appellant would claim that it was never impleaded as party in the O.A. though it was in possession of the property and the impugned order passed in the O.A. directly affected the rights of the appellant. Faced with this situation, the appellant approached the Tribunal by moving an application under Section 19(25) read with Section 22(1) and Section 26(2) of the RDDBFI Act to bring the correct position to the notice of the Tribunal. The appellant accordingly had pleaded for deletion of the said property from the recovery order. As per the Counsel, this was the only appropriate course available to the appellant and it had made right approach before the Tribunal. The Counsel would accordingly submit that the Tribunal was not justified in rejecting this prayer on the basis of the facts and law pleaded before it.

The Counsel for the appellant in the appeal filed Ms. Sumitra Gupta would support and adopt the argument advanced by the Counsel appearing for the appellant in Appeal No. 305/2013. As per the Counsel, the case of appellant Ms. Sumitra Gupta is similar to that of the appellant in Appeal No. 305/2013 as both the appellants have derived their title from the borrower/guarantor and all the pleas raised in Appeal No. 305/2013 are applicable in this appeal as well. Perhaps, the Counsel while so stating is ignoring the fact that the appellant in Appeal No. 305/ 2013 is subsequent purchaser of the property which was sold by Ms. Taru Priya Gupta which may have come to her as gift from the same person from whom Ms. Sumitra Gupta got her property. Still, the Counsel would plead that no distinction can be made in both the cases and these deserved similar treatment and outcome. The Counsel would also support the submission advanced by Mr. Sibal in regard to this plea.

Mr. Sibal, however, would submit that the case of the appellant in Appeal No. 305/2013 is entirely different as appellant Ms. Sumitra Gupta is the LR of the borrower and was impleaded as party. She, as such, cannot plead ignorance about the proceedings and she continues to hold the gifted property whereas the property in the hands of appellant in Appeal No. 305/2013 who is stranger to the O.A. proceedings and he is bona fide purchaser.

Besides other pleas, the Counsel for the Bank would submit that the transfer in favour of appellant Ms. Sumitra Gupta and Ms. Taru Priya Gupta was done to defeat the rights of the Bank to effect recovery and thus were fraudulent transactions. This plea of course has met with stiff resistance from Mr. Sibal who would oppose the same on various legal grounds. The Counsel would contend that the Bank is required to allege that the transfer was fraudulent one and was with the intent to defeat and delay the creditors before the Bank could seek protection of Section 53 of the Transfer of Property Act. As per the Counsel, the fraud is neither pleaded nor proved. He would also submit that sale in favour of the appellant is not in violation of any injunction order and in this regard fault, if any, would be of the Bank for which the appellant cannot be made to suffer. Continuing further, the Counsel states that even if it is assumed that this transaction in favour of Ms. Taru Priya Gupta was a fraudulent one to defeat the recovery of the Bank, the appellant would still be protected by the same very Section 53 of the Transfer of Property Act, which is pleaded by the Bank to allege fraud. First plea in this regard is that the Bank would be required to institute appropriate legal proceedings to seek cancellation of registered sale deed in favour of the appellant, as Section 53 of the Transfer of Property Act makes the impugned transfer voidable at the instance of creditor and not void ab initio. The Counsel has referred to the contents of Section 53 of the said Transfer of Property Act to emphasise that the section itself talks of instituting suit by a creditor to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors. On this basis, the plea so made is that the Bank in such proceeding has to plead and prove that the transaction which it seeks to avoid was made with intend to defeat or delay the creditors of the transferor.

To substantiate his submission, the Counsel would seek support from the judgment in the cases of Bank of Maharashtra v. Bagwe Udyog Ltd., 2007 (4) Bom.CR 9, Sharfuniya Begum Sahiba v. (Sayyad) Pacha Sahib & Ors., AIR 1928 Mad 793 and Mina Kumari Bibi v. Bijoy Singh Dudhuria, (1917) 19 Bom.L.R. 424.

The Counsel would further submit that the Bank would also be required to establish that the appellant is not a transferee in good faith for consideration as Section 53 of the Transfer of Property Act provides that even if transfer is made with intent to defeat or delay the creditors of the transferor and is voided by one of the creditors that shall not impair the rights of a transferee in good faith for consideration. It is accordingly urged that the bona fide purchaser for consideration even would be entirely protected even under Section 53 of the Transfer of Property Act. Reliance in this regard is placed on the case of Ishan Chunder Das Sirkar v. Bisoo Sirdar & Ors., (1896-97) 1CWN 665 . As per the Counsel none of the conditions is present in this case to term the transfer in favour of the appellant to be a fraudulent one.

The Counsel would even highlight and point out that the Bank had never pleaded or claimed before the Tribunal below that sale in favour of the appellant was fraudulent one. In this regard, the Counsel would make reference to the response filed by the Bank to the application filed by the appellant before the Tribunal below for deleting this property from the recovery certificate. The Bank in its reply failed to plead or allege fraud, says the Counsel. The only plea raised was that the transfer was purportedly done in violation of the injunction order. The appellant therefore would submit that he is fully protected on all counts in this case.

The facts as pleaded would clearly show that when the appellant in Appeal No. 305/2013 purchased this property, there was no order injuncting the sale. The dates of various transactions like gift deeds have been noticed above. Gift Deed of House No. 5/17, Shanti Niketan, New Delhi in favour of appellant, Ms. Sumitra Gupta, was made on 11.7.2006. This was subsequently mutated in her name on 3.8.2006. The loan account by then had already been declared NPA on 31.3.2006. The demand notice was issued to the company on 13.11.2006. Mr. Anil Gupta was served with the demand notice on 6.1,2007. He had filed his response on 10.1.2007. The SARFAESI proceedings were then initiated and possession under Section 13(4) of that Act was taken on 13.2.2007. A year thereafter Mr. Anil Gupta had expired on 14.2.2008. The O.A. was filed on 27.11,2008. The earlier restraint order though passed on 18.12.2008 was never served perhaps due to pendency of proceeding before BIFR and thereafter before AAIFR. A significant fact highlighted is that there was no restraint order passed against Ms. Taru Priya Gupta and this restraint order dated 18,12.2008 was only against LRs of late Mr. Anil Gupta. Ms. Taru Priya Gupta had never been impleaded as party respondent whereas appellant Ms. Sumitra Gupta was a party being the LR of late Mr, Anil Gupta.

Much before the date of injunction order dated 18.12.2008, Mr. Taru Priya Gupta had entered into an agreement to sell the Farm House with Mr. Vijay Gupta on 10.10.2008. The sale ultimately was executed on 28.1.2009, but till then no restraint order had been served on any one even if any in existence. There is no dispute in this regard as the Bank itself has disclosed so in its application while seeking fresh injunction order, which was passed on 21.7.2010. The plea by the Bank in this application was that the earlier injunction order dated 18.12.2008 could not be served as the matter was pending before AAIFR. The clear position, therefore, that would emerge from the record is that there was no restraint order either in operation or served upon the parties when Ms. Taru Priya Gupta executed the sale deed on 28.1.2009. In fact, Ms. Taru Priya Gupta was not even party in the O.A. filed by the Bank and thus she cannot even be attributed with any knowledge of the pending proceedings as well.

The Bank, of course, would plead that Ms. Taru Priya Gupta was not a stranger to the family and in fact is daughter-in-law of late Mr. Anil Gupta. Rather, the Bank would allege that this Gift Deed was only with the purpose to defeat the recovery of the Bank and thus the gift was a fraudulent transfer. Though now the Bank is so pleading, but the Bank apparently faulted in not so pleading before the Tribunal below. That thus cannot even be taken as the case pleaded by the Bank,

The appellant would be justified in pleading that even taking the case of the Bank at highest pedestal, still, the appellant, who is a bonafide purchaser, would be protected. Once it is noticed and found that the sale in favour of Mr. Vijay Gupta was executed while no restraint order was in operation qua this property, then the only way the Bank could have succeeded was by showing the transfer in favour of Ms. Taru Priya Gupta was a sham and fraudulent transaction. In this regard, the plea by the appellant is that the Bank did not plead so and thus this ground cannot now be urged by the Bank.

In the case of Ishan Chunder Das (supra) relied upon by the appellant, the Court has considered the validity of purchase with reference to Section 53 of the Transfer of Property Act. The Court has observed that reading of this section would mean that where a transfer of immovable property is made with intent to defeat or delay any creditor of the transferor, it is voidable at his option, but where a transferee for value takes the property in good faith, that is, without being a part}' to any design on the part of the transferor to defeat or delay his creditors his rights shall not be impaired by anything contained in this section. The Court has gone on to hold that consideration of this section taken as a whole would lead to a view that the object of last paragraph of this Section 53 is to protect an innocent transferee for value, notwithstanding that the transferor may be actuated by a desire to defeat or delay his creditors.

The Court has also considered the question where a transferee for a value has knowledge of an impending execution against the transferor and if such knowledge itself is sufficient to vitiate the transfer and make it a transfer not in good faith, notwithstanding that the transferee may not be aware of any intention on the part of the transferor to defeat or delay his creditors, and notwithstanding that he may honestly believe that the sale is resorted to for the purpose of paying the creditors. In this regard, the Court has held that mere knowledge of impending execution against a transferor is not sufficient to make the transferee other than in good faith, when he does not share the intention of the transferor to defeat or delay his creditors. Thus, even in cases where the transferee had the knowledge of the impending execution, he still was considered protected.

In the case of Bank of Maharashtra (supra) the Court has considered the issue of transfer having been made to defeat or delay the creditors. It is observed that there can be no difficulty in accepting the argument of the plaintiffs that if plaintiffs were to allege and prove that the transfer of immovable property in question has been made by the transferor in favour of transferee with an intent to defeat or delay the creditors of transferor, then the said transfer would be voidable at the option of the creditor. The Court has observed that what is significant in Section 53 of the Transfer of Property Act is that such right of the creditor is not an absolute right as the same is subject to right of the transferee of such immovable property in good faith and for consideration. In other words, if transferee alleges and prove that it had purchased the property in good faith for consideration, then the question of creditor succeeding in getting declaration in terms of Section 53 of the Transfer of Property Act will not arise.

In Sharfuniya Begum Sahiba's case (supra), plaintiff, a Mohammedan married woman had instituted a suit for declaration that certain transfer of property in her favour by her husband was for consideration and therefore she was the owner of the property. She had accordingly pleaded that the property was not liable to be attached at the instance of the creditor. Her claim in the execution proceedings was disallowed. The finding distinctly given by the Courts below was that it was a transfer in fraud of creditors. In appeal, the Court has observed that no question of adequacy of consideration would and can arise because there is no plea on the part of the defendants that the document, while it was in part good and proper and for consideration, was for the other part merely nominal, there being a resulting trust in favour of defendant in respect of such portion. Court held that it is not the plea nor is the finding. In this case, though the Court has expressed it should not be understood to say that in no case of transaction amounting to undue preference there can be made out a case in fraud of creditors but one thing is generally different from other. To make out that transaction is really in fraud of creditors, it must be distinctly alleged and proved. The relevant observations are as under:

"3. We do not wish to be understood to say that in no case where the transaction amounts merely to undue preference there can be made out a case also of the transaction being in fraud of creditors. But, generally speaking, the one thing is different from the other and if it is sought to make out that a transaction is really in fraud of creditors in such circumstances, it must be distinctly alleged and proved. The burden of proving it, is on the creditors who allege it part from Clause (2), Section 53, T.P. Act. because otherwise the Court finding the transaction to be supported by consideration and proved by a registered deed will be bound to give effect to it and support it."

Thus, it can be said that when the creditor wish to challenge the transfer on the ground of fraud, taking recourse to Section 53 of the Transfer of Property Act, then it may be required to distinctly allege and also to prove the same. The burden of proving so would be on the creditor as otherwise the Court finding the transaction to be supported by consideration and proved by registered deed will be bound to give effect to it.

In Mina Kumari Bibi's case (supra), the Court has held that however suspicious a transaction may be, there must be evidence on which the fraudulent intention must be made out. The Counsel would thus contend that Court decision must not rest on suspicion but on legal grounds established by legal testimony.

In Vannarakkal Kallalathil Sreedharan v. Chandramaath Bala Krishan & Anr., (1990) 3 SCC 291, the Court has held that sale deed after attachment of the property on the basis of agreement to sell entered into prior to the attachment order would create an obligation attached to the sale deed. The Court did not accept the contrary view expressed in the case of Mohinder Singh & Anr. v. Nanak Singh & Anr., AIR 1971 Pb. & Har.381.

In addition, the Counsel has referred to the case of Bank of Maharashtra (supra) to show the effect of not serving an injunction order. The case under consideration before the Court was whether transfer of immovable property in contravention of a prohibitory or injunction order of a Court is illegal or void. The Court has observed that at best the case of plaintiff can be of a transfer having been effected in favour of one defendant by another in anticipation of some proceedings to be taken out by the plaintiff against the transferor defendant or likelihood of an injunction being passed, This was not a case where immovable property was transferred despite the order of injunction. The Court has observed that the case of plaintiff was not that the order of injunction was ever served on the defendants whereas the plaintiff was pleading that the order of injunction was communicated to City Survey Office. City Survey Officer or any other Government Official or Authority was not made party defendant. No injunction order was passed against any such official. The deed of assignment in this case was presented for registration much prior to the order of injunction. It is accordingly noticed that this was not case of transaction in favour of the third party after injunction order as such.

Hon'ble Supreme Court in the case A. Venkatasubbiah Naidu v. S. Chellappan & Ors., VI (2000) SLT 767=AIR 2000 SC 3032, has restated the well-established legal position to the fact that service of an ex parte injunction order on the opposite party in terms of the Order 30 Rule 3 of Code of Civil Procedure, 1908 is imperative. If a party in whose favour such an ex parte order has been passed, fails to comply with his obligation to serve the opposite party in the manner as well as in specified time, runs the risk of non-compliance, It is observed that in the case of Keshrimal Jivji Shah & Anr. v. Bank of Maharashtra & Ors., IV (2004) BC 6 (DB). =2004 (3) Bom.L.R. 969, the question considered was if the transfer of immovable property in contravention of prohibitory or injunction order of Court is illegal or void.

The pleas raised by Mr. Sibal that appellant M/s. Sur Buildcon (P) Ltd. is a bona fide purchaser for consideration and his rights cannot be impaired seems to be well supported on the strength of ratio of law emerging from the judgments cited by the Counsel. The sweep of Section 53 of the Transfer of Property Act seems to be no more res Integra. The legal position is that for a creditor to succeed, it is imperative for them to allege and prove the transfer of immovable property in question was made with intent to defeat or delay the creditors. The Privy Council in the case of Mina Kumar Bibi's case (supra) has observed that if the transaction was to be really subsequent to the attachment, then there would be a justification for finding of a fraud and mere setting up of collusion and fictitious nature of transaction is only a case of Benami which is distinct from fraudulent transaction. The debtor for an that is contained in Section 53 of the Act may pay his debt in any order he pleases and prefer any creditor he chooses and whatever may be suspected and however slander the confidence that the person may inspire, there is no evidence on which any fraudulent intention can be imputed that will fall within the sweep of Section 53 of the Act. This would even emerge from the case of Sharfuniya Begum Sahiba (supra). The Court in this case has observed that the case of fraud of creditor must be distinctly alleged and proved. The legal position therefore is that howsoever the suspicious transaction may be, there must be evidence on which the fraudulent intention must be made out.

Reference here may also be called for to the case Mulraj v. Murti Raghonathji Mahara], AIR 1967 SC 1386. This was a case where respondent had filed a suit against appellant for eviction of a shop which the appellant had taken on monthly rent from the respondent. Munsif dismissed the suit against which respondent filed appeal. The order of Munsif was upheld by taking a view that permission granted after the stay order had been passed was a nullity. The respondent filed an appeal before High Court, which considered only one question whether the permission granted by the Magistrate was a nullity or not. Noticing that stay order was passed in September 1961 by the District Magistrate and the Magistrate who was dealing with the matter of permission had no knowledge of it when he granted permission in October 1961. The question before the High Court, therefore, was if the permission in these circumstances could be said to be a nullity. The High Court viewed that the stay order could not and did not take away the jurisdiction of the Magistrate from the moment it was passed and that as the Magistrate had no knowledge of information about the stay order when he granted permission, the permission was with jurisdiction and the suit would therefore be maintainable. Against this order, the appellant moved the Supreme Court by way of Special Leave to Appeal, which was granted as there was conflict of opinion between the various High Courts on this question. The Hon'ble Supreme Court has noticed the difference of opinion among the High Courts on the question of effect of stay order, particularly with reference to execution proceedings. Some of the High Courts have held that in such a case the stay order takes effect from the moment it was passed and the fact that the executing Court had no knowledge of it makes no difference and all proceedings taken in execution after the stay order is without jurisdiction. On the other hand, some other High Courts have taken a different view to hold that the executing Court does not lose its jurisdiction from the moment the stay order is passed and that the order being in the nature of prohibitory order, the Court carrying on execution does not lose its jurisdiction to do so till the order comes to its knowledge and that proceedings taken in between are not a nullity. The Supreme Court has approved the view expressed by the Division Bench of Calcutta High Court in Bessesswari Chowdhurany v. Horro Sunder Mozmadar & Ors., (1896) 1 C.W.N. 226, which is the earliest view by holding that an order staying the execution of a decree against which an appeal is pending is in the nature of prohibitory order, and as such only would take effect when communicated. This has been held as correct view though in some subsequent judgment even the Division Bench of Calcutta High Court had taken a different view. It is held that the stay order is in the nature of prohibitory order and is addressed to the Court that is carrying out execution, it is not an order of the same nature as an order allowing an appeal quashing in execution proceeding. That kind of order takes effect immediately when it is passed and thus takes away the very jurisdiction of the Court executing the decree. Mere order of stay of execution does not take away the jurisdiction of the executing Court. While drawing distinction between the stay order and injunction order, it is observed that the stay order is more or less in the same position as the order of injunction with one difference. An order of injunction is generally issued to a party and it is forbidden from doing certain acts. It is well-settled that in such case the party must have knowledge of the injunction order before it could be penalised for disobeying it. Further it is equally well-settled that the injunction order is hot addressed to the Court and if the Court proceeds in contravention to Court order the proceedings are not a nullity. In the case of a stay order, as it is addressed to the Court and prohibits it from proceeding further, as soon the Court has knowledge it is bound to obey it and it does not, it act illegally, and all proceedings taken after the knowledge of the order would be a nullity.

A reference to the case Saroop Singh v. Narsingh & Ors., AIR 1929 Allahabad 846. may also be apt here. The Court has held that an attachment operates as a valid prohibition against alienation of the attached property only from the date on which the necessary proclamation is made and copy of the order affixed as contemplated in Order 21 Rule 54, CPC and that where no evidence of prohibitory order under Order 21 Rule 54(i) and it proclamation is given, then the alienation by the judgement debtor cannot be impeached. In this case, the Court has also held that in execution proceeding of a money decree no right to immovable property is directly and specifically in question and the provisions of Section 52 of the Transfer of Property will, therefore, not apply. Calcutta High Court has also expressed the similar view in the case of Mahadeo Saran v. Thakur Prasad Singh, (1910) 14 C.W.N. 677 where it is held that where a property not mortgaged is attached in execution of a money decree the doctrine of lis pendens does not apply to the 'sale of the property. Even the Delhi High Court in the case of Manoj Kr. Shah v. Anand Kr. & Anr., 2007 (97) DRJ 189, has observed that Section 52 of the Transfer of Property Act would not apply to immovable property in a case where it was not subject matter of suit which was for recovery of money. The execution Court had &held that the judgment debtor is deemed to have knowledge that the decree holder wanted to execute the decree by way of attachment and sell the property and the doctrine of lis pendens by virtue of Section 52 of the Transfer of Property Act was applicable. The Hon'ble High Court, instead, expressed the view that Section 52 of the Act applies where a right to an immovable property is directly and specifically in question. It is further observed that Section 53 of the Act is applicable where transfer of immovable property is made with an intent to defeat or delay the creditors. This section, as per the Court, requires that immovable property should be transferred by a judgment debtor to defraud the creditors and the transaction should not be bona fide. The Court has further observed that this provision is not applicable where a transferor purchases the property in good faith and for consideration. To declare a transaction to be hit by Section 53 of the Act, the Court has to reach a definite and conclusive finding that Section 53 is applicable. For this, parties must be given an adequate and fair opportunity to lead and proved their case. This view would also find support from the judgement of Canara Bank v. Gurmukh Singh & Ors., (1995) 51 DRJ 491.

The Counsel for the appellant therefore would stress that the injunction order passed in this case by the Tribunal could have taken effect only once it was served upon the Ms. Taru Priya Gupta. In this case neither any injunction order was passed against Ms. Taru Priya Gupta nor was it served on her. Therefore, the transfer of the property by way of sale to Mr. Vijay Gupta cannot be held bad on this count. This was the only ground pleaded to challenge the sale in favour of Mr. Vijay Gupta and consequential sale in favour of the appellant. As has been noted above, the Bank had pressed this very ground only to challenge the sale executed in favour of the appellant though at the stage of appeal the allegation of sale being fraudulent on the ground that it was done to defeat or delay the creditors has been so raised. Detailed discussion in this regard on the basis of fact pleaded and the law has been made above. The position that would emerge is that the creditor has to plead the same distinctively and prove the allegation of the fraud as well. The ratio of law relied upon in the judgments noticed above would clearly show that neither this was the case pleaded nor any material was placed on record to prove so. This plea primarily is being raised by the Bank on the ground of a suspicion that late Mr. Anil Gupta had executed this Gift Deed once the account was declared NPA to defeat and delay the claim of the creditors. The Bank failed to even plead this aspect before the Tribunal below. The pleas raised by the Bank have been noticed from the response filed to the application filed by the appellant under Section 19(25) of the RDDBFI Act, as referred to above. The only ground raised in this reply is that the transfer was done in violation of the injunction order. That plea may not be enough to sail the Bank through the difficult position it has placed itself in. The ground even now raised before me alleging fraud would only remain in the region of suspicion. As has been held by the Court that generally speaking transaction of undue preference is one thing which is different from the transaction being in fraud of creditors. It is held that if the transaction is really in fraud of creditors in such circumstances, it must be distinctly alleged and proved and the burden of proving it is on the creditor.

One may still have ignored all these, if the property still had been in the hands of Ms. Taru Priya Gupta. The appellant is a third-party who is claiming itself to be a bona fide purchaser. It is not even the one who had purchased this property from Ms. Taru Priya Gupta. As the fact would show, Ms. Taru Priya Gupta had sold this property to Mr. Vijay Gupta for a consideration of Rs. 32 crore who, in turn, sold the same to the appellant for Rs. 39 crore. Even if it is accepted that late Mr. Anil Gupta had transferred this property by way of gift to his daughter-in-law Ms. Taru Priya Gupta with intent to defeat or delay the creditors, then this transaction would be only voidable at the option of the creditor. The Bank took no action to get this transfer declared void on the ground that it was done with intent to defeat and delay the creditors. The result would be that the third-party rights have come to be created in respect of this property. Section 53 itself seems to protect such transferees when it provides that;

"Nothing contained in this sub-section shall impair the rights of any transferee in good faith and for consideration."

It is this protection which the appellant would plead in their favour to contend that the Tribunal below failed to notice this important aspect by simply rejecting the application filed by the appellant in the fact situation in this case. The plea further is that the creditor Bank was required to seek declaration by instituting a suit and this plea is raised by making reference to the following part of Section 53.

"A suit instituted by a creditor which term include a decree-holder whether he has or has not applied for execution of his decree to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted behalf of, or for the benefit of, all the creditors."

It is to be noticed that the Bank had not instituted any such suit. Having failed to perform its part, the Bank really cannot now seek a legal remedy as it is found wanting in taking proper action. The Bank is even found to be in slumber as the appellant purchased the property by redeeming the mortgage from PNB Housing Finance which is subsidiary of Punjab National Bank. Still, it is claimed that the property was with LRs.

Reference here may be called for to the law laid down in the case of State Bank of India v. Raj Kumar Bhandari & Ors., Civil Revision 6573 of 2005 (O&M). decided on 30.1.2008. The Court in this case has held that the Tribunal constituted under the RDDBFI Act has not been conferred with power for deciding the issue of title of the property between the parties or to set aside any sale deed executed in favour of some person.

In fact, the Bank got a chance and warning to take action in accordance with law when it was served with the notice on an application filed by the appellant under Section 19(25) of the RDDBFI Act. Even at that stage the Bank neither took proper action to institute proceeding to prove and allege fraud, nor it availed of the opportunity to taking up this plea in the reply filed to this application. The Tribunal below has considered this application and rejected the same on 7.6.2013 which is also made part of challenge in the present appeal.

The perusal of this order would show that in response to the plea raised by the appellant to seek correction of the recovery certificate and for necessary correction in the order passed in the O.A., the stand of the Bank only was that there was restraint order passed which was again reiterated on 21.7.2010. The plea of the Bank was that there was no error or mistake in the order the clarification of which can be sought. It is alleged that the transaction entered into in respect of the property was in violation of the order dated 18.12.2008. The Bank therefore pleaded that the application be dismissed. After noticing the entire transaction leading to the transfer of property in favour of the appellant, the Tribunal below has noticed the submission of the Bank which was that the appellant being a third party to the O.A. had no right, to call for cancellation/ modification/clarification of the judgment in which he is not a party. As per the Bank, even if the appellant had any such right, it should have either preferred an appeal or review. Simultaneously, it is also submitted that the review was available only if there was some mistake or error apparent on the face of the record.

The Tribunal below seems to have accepted the submission made by the Bank that the appeal would be an appropriate remedy. The Tribunal has made reference to section 20 of the RDDBFI Act where the word used is 'any person' to notice that word used in the provision providing for review is 'a party'. Thereafter, the Tribunal has considered if the order passed by it contained any error apparent on the face of the record. While doing so, the Tribunal has observed that the Gift Deed by Mr. Anil Gupta in favour of his daughter-in-law Ms. Taru Priya Gupta could be a sham transaction (Emphasis added). As per the Counsel for the appellant, this cannot be taken as a definite finding that this was a sham transaction. The Tribunal seems to have stated so in moments of some over- enthusiasm as otherwise it does not seem to be the plea raised by the Bank. The Counsel thus is justified in finding fault with the action of the Tribunal in relying upon or making reference to Section 53 of the Transfer of Property Act which makes the transfers which are made with intent to defeat or delay the creditors of transferor to be voidable at the option of the creditors. Strangely, the Tribunal has gone on to simply observe that the Bank refused to recognises the transaction on the basis of it being sham transaction. The Tribunal then has taken note of the injunction order which was against the LRs and had gone on to observe that the Bank did not recognise the Gift Deed. The Tribunal, therefore, has held that the property was with the LRs of Mr. Anil Gupta and Ms. Taru Priya Gupta could not have validity alienated the property in view of restraint order passed on 18.12.2008.

I have not been able to discern as to how one can reach such finding. There is no material on record to show that Farm House was with LR of Mr. Anil Gupta. The finding that Ms. Taru Priya Gupta could not have validly alienated the property in view of the restraint order cannot be sustained as the restraint order dated 18,12.2008 was not against Ms. Taru Priya Gupta and she was not even served with any such restraint order. I have already discussed the legal position that stay orders or restraint orders would operate only once they are served. Thus I am unable to subscribe to the view and the approach adopted by the Tribunal below. Action of Ms. Taru Priya Gupta could be faulted on the basis of restraint order. Her rights could not be de-recognised on the basis that the Bank had not recognised the Gift Deed. If the Bank was to dispute her right, it was required to make a proper challenge. What was required to be seen was the legal position in regard to the title. In any event, there was no contest so far as the title of Ms. T aru Priya Gupta was concerned. The finding by the Tribunal below that the property belonged to the LRs of Mr. Anil Gupta also seems to be against the evidence and material on record. Even if this proposition is accepted for the sake of argument, still, restraint order passed on 18.12.2008 would not come into play as the same was concededly never served even upon the LRs. As held by the Hon'ble Supreme Court in the case of Venkatasubbiah (supra) the injunction order is required to be served on the party against whom it was passed and on failing to do so, the party would run the risk of non-compliance. When the subsequent order of injunction was obtained in the year 2010, the property had already been sold. Importantly, these cannot be held to be a sham transaction as valid consideration which is to the tune of Rs. 32 crores and 39 crores have been pleaded and are shown to have changed hands. A validly executed sale deed cannot be nullified only on the ground that the Bank did not recognise the Gift Deed. The law has to take its course. In order to succeed, the Bank is to prove this transaction by-Ms. Taru Priya Gupta to be a fraudulent one on the ground that it was executed to defeat or delay the creditors. That has not been done and it is not even pleaded.

The Counsel for the appellant would be justified in submitting that the only proper course open before the appellant was to file application under Section 19(25) of the RDDBFI Act along with other relevant provision. This was never an application seeking review or modification of the order, but it was filed with the request to withdraw the recovery certificate in respect of a property which was neither mortgaged nor a property under any charge. Section 26 of the RDDBFI Act was also pressed into service in this application. This section talks of validity of a certificate and amendment thereof. This section provides that the Presiding Officer shall have power to withdraw the certificate or correct any clerical or arithmetical mistake. As per the appellant, this was only course available before the appellant. This is stated to be the most appropriate course of action as the R.O. would not have any power to carry out any correction in the recovery certificate.

In support of his stand that this was the only right and appropriate course, the Counsel has relied on the judgment in the case of Dr. Anil Nandkishor Tibrewala & Anr. v. Jammu and Kashmir Bank Ltd. & Ors., I (2007) BC 6. This was a case where miscellaneous application was filed by the petitioner before the Court for rectification/modification/correction of the order. The matter was posted for order and no order was passed on the same as the Presiding Officer ceased to hold the office. The question arose whether petitioner claiming title or interest in the property could move the Tribunal by invoking its jurisdiction under Section 19(25) of the RDDBFI Act. The Hon'ble Bombay High Court on this issue has held that Section 19(25) gives power to the Tribunal to give orders or direction to prevent the abuse of its process or to secure the ends of justice. As held in this case, where a financial institution obtained an order or certificate pursuant to a mortgage created by judgment-debtor based on a fraudulent document, and if such party comes before the Court and points out that the mortgaged created is sham and/or bogus, the Tribunal can assume jurisdiction under Section 19(25) and can do so in exercise of powers conferred under Section 22 of the Act. It is further observed that the R.O. could not go beyond the certificate and so the party like the petitioner before the Court could move the Tribunal by invoking jurisdiction under Section 19(25) of the Act.

The plea accordingly was that the only remedy available for the appellant was under Section 19(25) of the RDDBFI Act in the absence of any specific provision. The plea also was that the provisions of Sections 20 and 30 of the RDDBFI Act would be no effective remedy nor Rule 5A of the Debts Recovery (Procedure) Rules, 1993. Even it was pleaded before the Court in the case of Dr. Anil Nandkishor (supra) that the provisions of Section 29 of the RDDBFI Act which makes the provisions of Second and Third Schedules of the Income Tax Act applicable on the fact of the case would not be available. The Court in this case has thus considered the remedy available to a party who is not a party in the proceeding before the Debts Recovery Tribunal but his property has been declared by the Tribunal validly mortgaged in favour of the Bank/FI. Noticing that Section 34 of the RDDBFI Act makes this provision of the Act effective and Section 18 of the Act which bars the Court or other authority to exercise jurisdiction, the Court has taken note of the right of appeal and other provisions governing the procedure to be adopted by the Debts Recovery Tribunals. It is noticed that Section 22 states that the Tribunal shall not be bound by the procedure laid down by the Civil Procedure Code and is to be guided by the principles of natural justice.

The Court has gone on to examine if the remedy available under Section 20 would be effective or elusive. It is noticed that in an appeal preferred, the appellate Tribunal would be bound to consider the record as it stands. The parties may have a remedy of producing additional evidence but the case before the Tribunal below is such where the party had no opportunity to plead its case. It is accordingly observed that in the absence of pleading, evidence would be futile and so remedy under Section 20 would not be effective remedy at law.

After making elaborate reference to all such provisions like Sections 29,30 and 26 of the RDDBFI Act, the Court has considered the provisions of Section 19(25) of the RDDBFI Act to hold that this provision would indicate that there is a power in the Tribunal to give orders or directions to prevent abuse of its process or to secure the ends of justice. The Tribunal can lay down its own procedure and it is not bound by the procedural provisions of the CPC. As per the Court, the expressions "prevent abuse of its process" and "or to secure the ends of justice" would be wide enough to cover a case where a financial institution has obtained an order or the certificate pursuant to a mortgage created by .the judgment-debtor based on a fraudulent document. If such a party comes before the Court and points out to the Court that the mortgage created is a sham and/or bogus, the Tribunal to prevent abuse of its process, can assume jurisdiction under Section 19(25) of the RDDBFI Act to decide that issue and for that purpose exercise powers conferred under Section 22 of the Act. Aggrieved person being allowed to participate in the proceedings, it will be open to the Tribunal to review the order and to pass such other order to secure the ends of justice.

The plea accordingly is that the appellant had invoked this remedy which has been brushed aside by the Tribunal below adopting a misconceived approach. It is relevant to notice that the Tribunal below has not rejected this application on the ground that it is not maintainable as such. The Tribunal below has not only entertained this application, but had dealt with the same and has decided the issues raised therein on merits. The maintainability of such an application being not in issue, it would not fall for consideration now. So far as decision of this application on merit is concerned, it may need to be observed that such an application could not be treated as a review application limited in scope as per the provisions of Rule 5A of the Rules. As already noted above, the findings on the plea raised in this application by the Tribunal below apparently are not sustainable and therefore would call for interference.

In view of the facts as coming on record, and the ratio emerging from the judgements relied upon, the plea that the sale was in violation of injunction order cannot be accepted as Ms. Taru Priya Gupta was not a party in the O.A. and the injunction order was not against her. Even the injunction order had not been served on her. Besides, the Bank has not been able to cross the legal hurdle to dent the plea that the appellant is the bona fide purchaser and would be protected even if their plea in regard to the sale being fraudulent transfer is to be considered. In my view, once the Bank had not raised any such plea before the Tribunal below, it cannot be permitted to so urge in the appeal. Permitting the Bank to do so would amount to taking the appellant by surprise. Going further, even if this plea is taken up for consideration ignoring the fact that it was not so pleaded before the Tribunal below, the appellant M/s. Sur Buildcon (P) Ltd. may seems to be protected as it is not the case of the Bank that it was not transferee in good faith and for consideration and so its right cannot be impaired even in terms of the legal provision contained in Section 53 of the Transfer of Property Act. Taking the case from any angle, the appellant M/s. Sur Buildcon (P) Ltd. has made good its submissions and the Bank had not been able to either prove this transfer to be one which was to defeat and delay the creditors or that the rights of the appellant who are bona fide purchaser in good faith are to be impaired in any manner.

However, the case of the appellant Ms. Sumitra Gupta is entirely different. She was a party to the O.A. and was fully aware of the proceedings that were in progress. The transfer in her favour by way of Gift Deed executed on 11.7.2006. The account by then had already been declared NPA. She being LR of late Mr. Anil Gupta was fully in picture and aware of the proceeding unlike Ms. Taru Priya Gupta. She continues to be the owner of the property may be either by way of gift or by inheritance. She cannot wish away the restraint order passed in the O.A. in her presence and to her knowledge. Ms. Taru Priya Gupta being not a party could not thus be bound by any injunction order which was not ever served on her. Even otherwise, what primarily has gone to save the property Farm House is the third party interest of the bona fide subsequent purchaser which is protected by law. Even if the submission by Counsel for Ms. Sumtra Gupta is considered that the transfer made by Mr. Anil Gupta in her favour was with intent to delay and defeat the creditors would be voidable at the option of the creditor and for which no move had been made by the Bank still the appellant Ms. Sumitra Gupta may not succeed in saving the recovery against her property. The restraint order passed in regard to this property is not challenged ever. She was party in the O.A. and had all the opportunity to defend her rights. Appellant in Appeal No. 305/2013 was not a party in the O.A. There is yet another difference and it is that appellant Ms. Sumitra Gupta is the LR of Mr. Anil Gupta. Her liability would be as LR as well. Thus, property has come to her from the borrower/guarantor and still lying in her hand.

The plea by the appellant that she had filed an application on 9.12.2009 stating that she was not a director or guarantor and so had challenged the interim attachment/injunction in respect of the property No. 5/17, Shanti Niketan, New Delhi which, as per the appellant, has not been decided would show that she was well aware of the injunction order. Her plea that the appellant being neither a borrower nor guarantor and had no comment to offer to the transaction to justify her stand for not filing reply would be an added burden on her to come clean. As per the appellant, this property is not inherited from her husband and was her own property which issue was never heard by the Tribunal in the application so filed may have to be considered in the light of the background that her right to file the written statement had been taken away. The appellant may have appeared in the proceeding but was required to take such stand she being party to the O.A. and her right to file written statement having been taken away may stand against her to take up defences available to her.

This whole claim made by the appellant Ms. Sumitra Gupta is that the property in question is her own property having been gifted to her and in this regard, the date of declaring the account as NPA has no meaning. It is pleaded that no action has been taken for getting the gift set aside. It is urged that the plea that the issue of gift or self-acquired was not taken before the Tribunal below and so cannot be taken at the appellate stage is also contested. The Counsel would plead that the appellate Court cannot shut its eyes on the ground of non-filing of written statement as evidence of gift of this property is available on record and plea by the Bank that cannot be now raised is not worth-consideration. Once the appellant got a chance to raise all available pleas and failed to raise relevant pleas, she cannot now use such words that the appellate Court cannot shut its eyes. The appellate Court certainly can expect such an appellant at least to remain awake during the proceedings where more than sufficient opportunities were afforded to the appellant to raise all such pleas as are being raised. If any application has not been considered, the appellant ought to have approached the concerned forum where such application was filed.

The appellant cannot remain oblivious to the proceedings where she was a party and where the Bank had every right to claim charge over this property, the other security being inadequate. It was for the appellant to plead so before the Tribunal below where it chose to lose its right and even did not file written statement. The appellant has not even challenged the order whereby her right to file written statement was closed. The appellant, therefore, in my view, would lose her right to raise all such pleas at this stage.

In the result, appeal No. 305/2013 filed M/s. Sur Buildcon (P) Ltd. is allowed and the following part of the impugned order contained para 12(iv) reading "and Farm House bearing No. 20 Avenue Maulsari, Rajokri, New Delhi" is ordered to be deleted. It is accordingly held that the said property noted above would not be liable for the dues of the respondent Bank and the Recovery Certificate Bearing No. 58/2012 shall be amended accordingly. The order dated 7.6.2013 passed in MA101/ 2012 is also set aside. The appeal filed by Ms. Sumitra Gupta, however, is dismissed. There shall be no order as to cost.