AI Structured Summary
Not yet generated for this judgment
Judgment
JUSTICE R. D. KHARE, CHAIRPERSON
The present appeal has been filed under section 18 of the Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") against the judgment and order dated 31.10.2019, whereby the Securitization Application No. 40/2019 filed by the appellants has been dismissed.
Brief facts of the matter are that the respondent no. 2 is a private limited company, which was granted certain credit facilities through its directors respondents no. 3 & 4. In order to secure the same, the respondents no. 3 & 4 stood as guarantors. It has been alleged that the appellants no. 1 & 2 stood as guarantors to the financial assistance granted by the respondent no. 1 to the respondent no. 2 and executed various loan documents in favour of the respondent no. 1-FI and appellant no. 2 created equitable mortgage over her property in question by depositing original title deeds dated 25.07.2018 with the respondent no.1-FI on 24.07.2017. Since the borrowers did not maintain the financial discipline, therefore, the account was classified as NPA and a demand notice u/s 13(2) of the SARFAESI Act was issued on 25.02.2019 by the respondent no. 1 to the respondents no. 2 to 4 including the appellants. The appellants submitted representation dated 15.04.2019 under Section 13(3-A) of the SARFAESI Act, which was replied by the respondent-FI vide letter dated 23.04.2019. Since the borrowers did not pay any heed to the said demand, therefore, the possession notice u/s 13(4) of the SARFAESI Act was issued and symbolic possession of the property in question was taken by the respondent no. 1-FI. Thereafter, the respondent no. 1 issued sale notice under Rule 8(6) of the Rules, 2002 on 03.05.2019 scheduling the auction of the property in question on 10.06.2019 and calling upon the borrowers including the appellants to repay the loan availed by the respondent no. 2 within 30 days, otherwise the property will be sold.
The appellants challenged the entire proceedings of the respondent no. 1-FI by filing the S.A. No. 40 of 2019 including the auction sale dated 10.06.2019 and its subsequent proceedings on the ground that the appellants have never executed any loan documents or personal guarantee or created any mortgage over the property in question. The Tribunal below vide order impugned has dismissed the said S.A. holding that there is no infirmity in the action of the respondent no. 1-FI initiated under the SARFAESI Act and also held that the appellants no. 1 & 2 not only stood as guarantor but also additionally secured the loan by mortgaging immovable property in question. Being aggrieved by the said order, the present appeal has been filed by the appellants.
Learned counsel for the appellants submitted that the appellants are neither borrowers nor guarantors or mortgagors to the loan advanced by the respondent no. 1-FI to the respondent no. 2-borrower and their property has fraudulently been mortgaged by the borrowers with the FI. It was further contended that the appellants have specifically and categorically stated before the Tribunal below that they have never offered any additional security or an irrevocable and unconditional personal guarantee to the respondent no. 1 as alleged by the FI, but the same has not been considered. It was also contended that the Tribunal below has not considered the report of the Forensic Science Laboratory, Dehradun and if the same had been taken into consideration, definitely the appellants would have been exonerated from their liability as allegedly imposed by the FI.
Learned counsel for the appellants has referred to page no. 52 of the I.A. No. 624/2023 filed by the appellants for bringing on record the same as additional documents. The said document is a report dated 18.08.2020 issued by the Forensic Science Laboratory, Uttarakhand, Dehradun and has further referred to page no. 53 thereof, last para of which shows that no loan documents of the FI were signed by the appellants, as such a fraud has been committed by the FI to secure the loan in question. It was further contended that the report of the Forensic Science Laboratory is contrary to the contention of the Bank that appellants have signed and executed loan documents as guarantors to the loan advanced in favour of the respondents no. 2 to 4-borrowers.
Learned counsel further submitted that the credit facility was sanctioned by the respondent no. 1-FI in favour of the respondent no. 2 on 24.04.2017, whereas the property in question was purchased by the appellant no. 2 on 04.05.2017 i.e. 10 days after the sanction of the said loan. It was thus contended that the said facility was sanctioned by the respondent no. 1-FI irrespective of the guarantee/collateral security of appellant no. 2. It was further contended that the various correspondences were made by the appellants with the respondents no. 2 to 4 after receipt of letter dated 30.03.2018 from the respondent no. 1-FI and with the respondent no. 1, but in spite of assurances given by the respondents-borrowers, the correspondence was not stopped from the side of the FI with the appellants.
Learned counsel further submitted that the appellants vide letter dated 15.03.2019 again called upon the respondent no. 1 to provide the documents pertaining to the alleged guarantees created by the appellants, but the respondent-FI did not provide the documents pertaining to the guarantees of the appellants till date. It was, therefore, contended that the authenticity and the bonafides of the same are challenged. It was thus contended that since the respondent no. 1 did not provide the documents as requested by the appellant vide letters dated 14.02.2019, 20.02.2019 and 15.03.2019, therefore, it is presumed that all the said documents are forged and vitiated by fraud by the respondents. It was further contended that since no satisfactory reply or explanation was being received from the respondents, therefore, the appellants were forced to file a police complaint dated 13.04.2019 before the SSP, Dehradun bringing the true facts on record and requesting therein to take the possessions of the documents from the respondent no. 1 and get the same examined by a forensic expert. It was also contended that the Tribunal below has erred in rejecting the S.A. on the ground that the original title deeds of the relevant property were kept with the respondents no. 3 & 4 for the last two years only for the purpose of mutation. It was also contended that the Tribunal below has further erred in rejecting the admissibility of and writing expert's opinion on the ground that the signatures were compared with xerox copy of the material documents and concluded that the signatures are of the same person when seen with naked eyes. It was thus contended that the Tribunal below has also not considered the fact that the appellant no. 1 was a non-executive director of respondent no. 2 and the appellant no. 2 has never held any post or office in the respondent no. 2-company, thus the order impugned passed by the Tribunal below is not sustainable. It was, therefore, prayed that the order impugned may be set aside and the appeal may be allowed.
Learned counsel for the respondent no. 1-F.I. submitted that the respondent no. 2 was sanctioned financial assistance vide sanction letter dated 24.04.2017, to which the appellant no. 1 and respondents no. 3 & 4 stood as guarantors in their personal capacity and appellant no. 2 had also given her unconditional personal guarantee and created equitable mortgager over her property by depositing original title deeds to the said facility. It was further contended that the Tribunal below after going through all records has held that the signatures appended on the sanction letter, deed of guarantee dated 25.04.2012, addendum sanction letter dated 12.04.2018, copy of the declaration dated 25.07.2018 as well as copy of memorandum of recording of creation of mortgage dated 25.07.2018 and the signatures appended on the S.A. filed by the appellants are same and similar. It was also contended that the appellant no. 2 had also deposited the original deed in respect of the property in question with the respondent-FI, which is lying with it. It was thus contended that the contention of the appellants that they have not signed any of the loan documents in favour of the FI and the appellant no. 2 had not created any mortgage over her property in question is not tenable, as the report of handwriting expert cannot be taken into consideration since it is based on zerox copy of the signatures. It was, therefore, prayed that the appeal filed by the appellants may be dismissed with heavy costs.
It appears that despite service of notice, no one had appeared on behalf of the respondents no. 2 to 4, therefore, the matter was heard ex-parte against them.
Having heard the learned counsels for the parties and considering the material available on record, undisputedly, the demand notice and possession notice as well as sale notice were issued and served upon the appellants as admitted by them.
The main controversy involved in the present case is, as to whether the appellants had executed any loan documents and the appellant no. 2 created any mortgage in favour of the respondent no. 1-FI in respect of the credit facilities granted to the respondent no. 2-borrower or not?
It is to be seen that the credit facilities were granted by the respondent-FI in favour of the respondent no. 2-borrower vide sanction letter dated 24.04.2017, whereas the property in question was purchased by the appellant no. 2, which is stated to have been mortgaged, on 04.05.2017. Thus the appellant no. 2 had purchased the same after sanction of the said loan. The general practice for granting the loan is that after receipt of loan application from the borrower, the bank firstly get the property checked from the Tehsil in order to know that the property, which is being proposed to be mortgaged, is free from encumbrances or not and secondly, get the same valued from its approved valuer to know its real value, but in the present case, when the loan was sanctioned, there was no property in the name of the appellant no. 2. However, the said contention of the appellant has not been controverted by the respondent-FI.
The finding of the Tribunal below with regard to the report of handwriting experts that the report of the handwriting experts placed on record by the applicants is not admissible as the handwriting expert has given its report on the basis of xerox copy of signatures, is not tenable because the image of the matter is not changed after doing its photocopy. However, if the Tribunal below had any doubt on the report produced by the appellants, the Tribunal below ought to have taken the signatures of the appellants in open court on plain paper and sealed the same along with the original documents of the loan, which are claimed by the respondent-FI to have been signed by the appellants, and sent the same to the handwriting expert of the Forensic Science Laboratory, directing it to submit its report and on the basis of the same, the said controversy should have been decided, but the Tribunal below did not do so and it itself has compared the signatures of the appellants from the documents available before the Tribunal below, which cannot be said to be an authentic decision because the Tribunal or court has no expertise for the same.
From the perusal of record, it appears that since inception of the proceedings of the Bank under the SARFAESI Act, the appellants are contending that they are neither borrower nor guarantor or mortgagor to the loan in question and have never signed any loan documents by depositing the title deed of the property in question with the Bank. In this regard, the appellants have lodged a FIR and also submitted a Forensic Science Laboratory Report, in which the signatures of the appellant no. 2 has been held not to be matching with the signatures appended on the loan documents, which appears to be correct because the opinion of any unskilled person cannot be held to be over and above the opinion of the expert of the said field. Thus the Tribunal below has erred in not considering the report of the handwriting expert of the Forensic Science Laboratory with regard to the signatures of the appellants, as the said report was obtained by the Additional Chief Judicial Magistrate-III, Dehradun in Criminal Case No. 11/21020 u/s 403,420,465,467,468,471,474,120B IPC. As such the order impugned is not sustainable in the eye of law, thus the same is liable to be quashed against the appellants.
In view of the discussions as recorded above, the order impugned passed by the Tribunal below against the appellants is set aside. Consequently, the process adopted by the respondent-FI under the SARFAESI Act against the appellants by issuing demand notice, possession notice and sale notice and its subsequent actions are set aside. The respondent-FI is directed to return the sale deed in respect of the property in question to the appellant no. 2 and also restore the possession of the property in question, if taken earlier. The appeal filed by the appellants is accordingly is disposed off. Pending IAs, if any, also stand disposed off. No order as to costs.
A copy of this judgment be forwarded to the parties as well as the DRT concerned and be also uploaded on the e-drt portal.