Janki Vashdeo Bhojwani vs Indusind Bank LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2004 Supreme(SC) 168

2004(2) Supreme 74
SUPREME COURT OF INDIA
(From Bombay High Court)
S.N. Variava & H.K. Sema, JJ.
Mrs. Janki Vashdeo Bhojwani and Anr. -Appellants
versus
The Indusind Bank Ltd. and Ors. -Respondents
Civil Appeal No. 6709 of 2003
Decided on 10-2-2004
Counsel for the Parties :
For the Appellants : T.R. Andhyarujina, Sr. Advocate, P.H. Parekh, E.R. Kumar, Sandeep Parekh, Lalit Chauhan, Ashish Chugh, Advocates, for M/s. P.H. Parekh & Co., Advocates.
For the Respondents : K. Radhakrishnan, Sr. Advocate, Pranab Kumar Mullick, Simran Mehta, Anil K. Pandey and S.K. Agnihotri, Advocates.

Headnote:Transfer of Property Act, 1882-Section 44-Income Tax Act, 1961-Rule 68, IInd Schedule-Auction of residential premises-Challenged-Respondent Bank had given loan facilities to the extent of Rs. 25 crores to 6th and 7th respondents, concerns run by respondents 2 to 5-Respondents 2 to 5 were also guarantors of loan facilities-Some of the properties belonging to these parties had been mortgaged to the Bank-Suits for recovery filed by Bank against respondents 2 to 7-Debt Recovery Tribunal passed an order of injunction-One of the properties of which respondents and the firm were restrained from alienating was a residential property-Decree passed in favour of the Bank-Recovery Certificate issued by the Tribunal-In pursuance of that Recovery Certificate all the mortgaged properties including residential property attached-Appellants, wives of respondents 2 and 5 filed objections against the attachment of residential property on ground that they were co-owners in the property and that they were not debtors of respondent Bank-Matter remitted to Debt Recovery Tribunal to record a finding whether or not the appellants were co-owners of the property and if so, to what extent.
Held : As it is admitted that the Appellants were neither debtors nor guarantors and that the property at 38, Koregaon Park, Pune was not mortgaged in favour of the 1st Respondent-Bank, the authorities below and the High Court were wrong in not first deciding whether or not the Appellants have any share in the property at 38, Koregaon Park, Pune. If the Appellants have a share then their share could not have been attached and sold in execution of the decree against the other parties. Further if this was a residential premises, as claimed, then the provision of Section 44 of the Transfer of Property Act would apply. The 1st Respondent-Bank could not have taken possession without first applying for partition. In our view, it is essential, before any further orders, can be passed to first decide whether or not the Appellants have a share in this property. We therefore remit the matter back to the Debt Recovery Tribunal to record a finding whether or not on the date the decrees were passed, the Appellants were co-owners of the property at 38, Koregaon Park, Pune and if so, to what extent. In so deciding the Debt Recovery Tribunal will undoubtedly ascertain whether the Appellants had any independent source of income and whether they had contributed for purchase of this property from their own independent income. The Debt Recovery Tribunal will also decide whether this property was the residence of the Appellants at the time possession was taken. The Debt Recovery Tribunal shall permit the parties to lead evidence, both oral and documentary. It must be clarified that the burden of proving that the Appellants have a share in the property will be on the Appellants. The Debt Recovery Tribunal shall then forward its decision to this Court within a period of six months from today. (Paras 23 and 24)

JUDGMENT

Variava, J.-This Appeal is against the judgment of the Debt Recovery Appellate Tribunal dated 23rd April, 2003.

2. Briefly stated the facts are as follows:

The 1st Appellant is the wife of the 5th Respondent. The 2nd Appellant is the wife of 2nd Respondent. The 1st Respondent Bank had given loan facilities to the 6th and 7th Respondents which are concerns run by Respondents 2 to 5. The loans were to the extent of approximately Rs. 22 crores in one case and Rs. 3.75 crores in the other. Respondents 2 to 5 were also guarantors of the loan facilities. Some of the properties belonging to these parties had been mortgaged to the Bank.

3. It is claimed that by an Indenture of Sale dated 5th September, 1991, the Appellants and Respondents 2 to 5 had purchased Plot No. 38, Koregaon Park, Pune - 411 00. It is claimed that on 12th December, 1991, an Agreement of Co-ownership was executed whereunder a HUF (of these parties) was also made a co-owner in respect of the said plot of land. It is claimed that after purchase of the plot of land, a building was got constructed on the plot of land and that Appellants and Respondents 2 to 5 resided in that building.

4. On 3rd October, 2000 the 1st Respondent-Bank filed, against the 7th Respondent and the 2nd Respondent, OA No. 159-P/2001 before the Debt Recovery Tribunal for recovery of a sum of approximately Rs. 3.86 crores. On 25th October, the 1st Respondent-Bank filed, against the Respondents 2 to 6 and one M/s. Progressive Land Development Corporation, OA No. 160-P/2001 for recovery of a sum of approximately Rs. 27.5 crores. It must be mentioned that M/s. Progressive Land Development Corporation is a partnership firm of which the Appellants are, along with others, partners.

5. On 11th December, 2000, the Debt Recovery Tribunal passed an order of injunction in an application made in OA No. 160-P/2001. One of the properties of which the Respondents and the aforesaid partnership firm were restrained from alienating was the 38, Koregaon Park property.

6. On 13th September, 2001, in OA No. 159-P/2001, a decree was passed in favour of the 1st Respondent Bank by the Debt Recovery Tribunal, Pune. In the decree the property at 38, Koregaon Park, Pune was shown as one of the mortgaged properties.

7. On the same day a Recovery Certificate was also issued by the Debt Recovery Tribunal. In pursuance of that Recovery Certificate all the mortgaged properties were attached on 8th November, 2001. The property at 38, Koregaon Park, Pune was one of the properties which was attached. Pursuant to the attachments, a public notice was published in the Times of India of 25th January, 2002 intimating that properties of the 2nd Respondent had been attached. The Appellants claim that they came to know of this attachment only because of this advertisement. This averment is impossible to believe. It is clear that they were aware of the proceedings against their husbands and family concerned.

8. The Appellants filed objections before the Recovery Officer against the attachment of the residential property. On 16th April, 2002, the Recovery Officer rejected the objections of the Appellants on the ground that he could not go beyond the decree.

9. On 17th April, 2002 that Debt Recovery Tribunal also passed a decree and issued a Recovery Certificate in OA No. 160-P/2001.

10. On 30th April, 2002, the Appellants filed Appeal No.2 of 2002 before the Presiding Officer, Debt Recovery Tribunal challenging the attachment and proposed sale of property at 38, Koregaon Park, Pune on the ground that they were co-owners in the property and that they were not debtors of the 1st Respondent-Bank. They also claimed that they had never stood as guarantors and that this property was not mortgaged to the 1st Respondent-Bank.

11. On 7th May, 2002 a public notice was published intimating auction sale of the 38, Koregaon Park, Pune property. The public notice proceeded on the footing that this property belonged to the 2nd Respondent only.

12. On 22nd M

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