Appeal No. 291 of 2007. Case: Pranjivan Purushottam Zaveri (Dr.) and Anr. Vs Dena Bank and Anr.. Mumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Case NumberAppeal No. 291 of 2007
Party NamePranjivan Purushottam Zaveri (Dr.) and Anr. Vs Dena Bank and Anr.
JudgesAllah Raham, J. (Chairperson)
IssueBanking
Citation1 (2011) BC 143
Judgement DateApril 15, 2010
CourtMumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)

Judgment:

Allah Raham, J. (Chairperson)

  1. This Appeal impugns the order dated 31st July, 2007 passed by the then Presiding Officer, DRT-1, Ahmedabad, whereby Appellants' application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SRFAESI Act) for setting aside measures taken by the Respondent No. 1 Bank under Section 13(4) of the SRFAESI Act was dismissed.

  2. Appellant No. 1 is the husband of Appellant No. 2. The Respondent No. 1 Bank is the mortgagee while the Respondent No. 2 is the mortgagor of Residential House No. 13/A, Niketa Sattadhar Society, Sola Road, Ghatlodiya, Ahmedabad (hereinafter referred to as the disputed property). Since the Appellants wanted to purchase the aforesaid residential property they obtained Title Clearance Certificate from Advocate Mr. Vijay Patel, another Certificate was issued by Advocate Mr. Narendra Soni. In the search, the Respondent No. 2 was found to be owner of the disputed property. No encumbrance of Respondent No. 1 or any other Bank was noticed in the disputed property. The Appellants entered into an Agreement of Sale with the Respondent No. 2. Registered Sale Deed dated 22nd November, 2006 was executed by the Respondent No. 2 in favour of the Appellants. Thus, the Appellants became owner of the disputed property. The Appellants noticed that the Respondent No. 1 and some other financial institutions were asserting their claims over the disputed property being mortgagee. It was also found that the original Title Deeds of the disputed property were in the custody of one Social Co-operative Bank, Ahmedabad. The Appellants filed Special Civil Suit No. 330 of 2006 in the Court of Civil Judge (Sr. Division), Ahmedabad (Rural). The Respondent No. 1 had filed Miscellaneous Application No. 187 of 2006 before the Chief Metropolitan Magistrate Ahmedabad, under Section 14 of the SRFAESI Act, wherein the learned CMM was pleased to pass an order dated 22nd March, 2007 directing the Police to provide protection to Respondent No. 1 in taking possession of the disputed property from the Appellants or other occupants. In pursuance to the order passed by the learned CMM, the Respondent No. 1 Bank has taken actual possession of the disputed property on 25th March, 2007. Appellants claim to be bona fide purchasers for value without notice of any right, title or interest in the disputed property of the Respondent No. 1 or any other person. The Appellants, therefore, approached the DRT under Section 17 of the SRFAESI Act challenging the measures taken under Section 13(4) of the SRFAESI Act, being illegal and void. They also prayed for restoration of their possession over the disputed property.

  3. Respondent Bank contested the application on the grounds, inter alia, that Respondent No. 2 and her husband Prahaladbhai are the Directors of Robust Cement Private Limited (hereinafter referred to as the said company). Respondent No. 1 had granted financial assistance of Rs. 49.50 lacs (approximately) to the said company for which Respondent No. 2 and her husband Prahaladbhai Ambalal along with their son Ashok Prahaladbhai Patel stood guarantor in their personal and individual capacity. Moreover on 11th September, 1996 the Respondent No. 2 also deposited original Title Deeds and documents of title of her immovable property consisting of Bungalow No. A-13 known as 'Niketa' (disputed property) and created equitable mortgage by way of First Charge over the said bungalow in favour of the Respondent No. 1 with an intent to secure due repayment of entire outstanding. The Respondent Bank had also drawn Memorandum of Entry dated 11th September, 1996, inter alia recording deposit of Title Deeds and documents of title made by the Respondent No. 2 and the said company with Dena Bank on 11th September, 1996. The Respondent Bank has also drawn Memorandum of Entry by Extension dated 18th September, 2000. Moreover, the Respondent No. 2 has also signed an Affidavit dated 6th September, 1996 in this regard, inter alia, declaring on oath that she is the sole and absolute owner and occupier of the Bungalow No. A-13 and her title is clear, marketable and free from all encumbrances and she undertakes not to transfer, convey or part with the possession of the said property during continuance of the above mortgage. In this connection, Shyam Sattadhar Co-operative Housing Society Limited has also issued Certificate dated 16th August, 1996, Letter dated 20th August, 1996 to the Respondent Bank and Certificate dated 11th November, 2000 in order to recover its dues against the Respondent No. 2 and others. Respondent No. 1 Bank filed Original Application No. 3 78 of 2001 in DRT, Ahmedabad under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for Short the RDDBFI Act). The Respondent No. 1 Bank has obtained an order whereby Respondent No. 2 and others are restrained from selling the properties including the disputed property. Respondent No. 1 Bank also issued Notice under Section 13(2) of the SRFAESI Act on 7th August, 2006 to Respondent No. 2. Since the Notice was not responded by making payment, Respondent No. 1 Bank took...

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