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2017 Supreme(Bom) 305
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R. M. BORDE, A. S. GADKARI, JJ.
Mr. Mukesh Kothari - Petitioner
Vs.
State Bank of India – Respondent
Writ Petition No. 9804 of 2014
Decided on : 10-03-2017.
Advocate Appeared:
For the Petitioner: Mr. Aashish Kamat a/w Mr. Nikhil Rajani i/by. V. Deshpande & Co.
For the Respondent: Mr. Raj Patel i/by. Mr. Prakash Panjabi
Important Point: If Courts are not to honour and implement their own orders and encourage party litigants, be they public authorities, to invent methods of their own to short circuit and give a go by to the obligations and liabilities incurred by them under orders of Courts, the rule of law will become casualty in the process.
Headnote:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4)-Recovery proceedings.-Since illegal transaction between parties will not affect entitlement of Bank hence Bank can initiate recovery proceedings under Section 13(4) of Act.
There is a valid mortgage in favour of respondent No. 1-Bank created by respondent No. 2 and that such transaction is not at all been questioned by respondent No. 2-creator of the mortgage and as such respondent No. 1-Bank has entitlement to proceed under Section 13(4) of the SARFAESI Act. As has been observed above, the transaction entered into by the petitioner with respondent No. 2 being illegal one, cannot be recognised and petitioner does not have any right to question the measures taken by respondent No. 1 Bank under the SARFAESI Act. It would be open for petitioner to proceed against respondent No. 2 for redressal of his grievance.
Transfer of Property Act, 1882 - Section 58(f)-Creation of mortgage.-Non-production of original gazette before Court, cannot prohibit creation of equitable mortgage at any particular place.
Transfer of Property Act, 1882 - Section 58(f)-Valid mortgage.-Mortgage deed by deposit of title-deed amounts to creation of valid mortgage in favour of Bank.
R. M. BORDE, J.
Heard.
2. Rule. With the consent of the parties, Petition is taken up for final disposal at the admission stage.
3. The Petitioner is objecting to the decision rendered by the Debts Recovery Appellate Tribunal at Mumbai in Appeal No. 117 of 2009 decided on 16th June 2014 confirming the decision rendered by the Debts Recovery Tribunal – III at Mumbai in S. A. No. 35 of 2007 decided on 16th April 2009. The Petitioner herein is purchaser of Flat No. 101, First Floor, Rajendra Kripa Cooperative Housing Society Ltd; Manish Darshan, Bidkanti Nagar, near Jain Temple, J. B. Nagar, Andheri (East), Mumbai – 59. The flat was purchased by Petitioner from Respondent No. 2 through a Sale-deed dated 18th November 2006 for a sale consideration of Rs. 22.00 Lacs. According to Petitioner, the Sale Agreement was duly registered on 18th November 2006. The property has been purchased by Petitioner by obtaining housing loan from Respondent No. 3 – Allahabad Bank, in whose favour Petitioner is stated to have created Equitable mortgage in respect of the said flat. The Petitioner claims that Respondent No. 1 – State Bank of India has taken steps under Section 13(4) of the SARFAESI Act and issued a possession notice on 12th April 2007 on the Petitioner. The Petitioner claims that he is neither a Borrower nor a Guarantor in respect of the loan availed by Respondent No. 2 from Respondent No. 1 – Bank.
4. There are two contentions raised by the Petitioner for resisting the proposed action under Section 13(4) of the SARFAESI Act at the instance of Respondent No.1 – (i) The Equitable mortgage created by Respondent No. 2 in favour of Respondent No. 1 – Bank is not a legal, valid and that the Respondent No. 1 – Bank has no right to proceed against the property in possession of Petitioner under the SARFAESI Act. The Petitioner prays for declaration of the possession notice dated 12th April 2007 as null and void; and (ii) it also contends that the Petitioner is bonafide purchaser for value, without notice of the Equitable Mortgage allegedly created in favour of the Respondent No. 1 – Bank. The Petitioner also contends that he did not have any knowledge in respect of initiation of proceedings under RDDB & FI Act by Respondent No. 1 and issuance of interim order of injunction by the Debts Recovery Tribunal at Bangalore. It is further contended that even otherwise the transaction of sale between Petitioner and Respondent No. 2 remains unaffected and that Respondent No. 1 – Bank does not have any entitlement to proceed against the Petitioner.
5. It is contended on behalf of Respondent No. 1 – Bank that the property in dispute has been mortgaged with Respondent No. 1 – Bank. The Respondent No. 2 has created the Equitable mortgage by deposit of original Title Deeds and the mortgage is prior in time and subsisting. The Petitioner does not have any right to create a mortgage in favour of Respondent No. 3 – Allahabad Bank in respect of the property in dispute and the mortgage created in favour of Respondent No. 1 – Bank being prior in time, shall have precedence over the mortgage allegedly created in favour of Respondent No. 3 – Allahabad Bank by Petitioner. It is also contended that the transaction of sale effected during operation of the order of injunction is illegal and as such sale does not have any binding effect on the Respondent No. 1 – Bank and further that the prior claim of Respondent No. 1 – Bank on the basis of the mortgage created by Respondent No. 2 – original owner of the property remains unaffected. The Petitioner does not have any right or entitlement to question the Equitable mortgage created by Respondent No. 2 in favour of Respondent No. 1 – Bank and more specifically when Respondent No.2 has not raised any question and has accepted the factum of creation of mortgage by his conduct of not raising any question in that behalf.
6. The Respondent No. 1 – Bank presented Original Application No. 47 of 2001 before the Debts Recovery Tribu
