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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.J. KATHAWALLA, VINAY JOSHI JJ.
IDBI Trusteeship Services Limited - Appellant
Versus
District Collector, Pune - Respondent
Writ Petition No. 3417 of 2019
Decided on : 25-06-2021
Maharashtra Land Revenue Code, 1966 - Sections 149 and 169 - Real Estate (Regulation and Development) Act, 2016 - Section 40 and 40 (1) - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act - Section 2(1) (zd) and 26-E - Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine Payable, Forms of Complaints and Appeal etc.) Rules, 2017 - Rule 3 - Transfer of Property Act, 1882 - Sections 3 and 56 - Recovery of interest or penalty or compensation and enforcement of order, etc - EPriority to secured creditors - Postponement of sale - Auction sale of immovable property - Challenged - Pleased to declare that entire exercise of conducting auction of Subject Property is fraudulent and non-est and quash and set aside same; Impugned Order and after considering legality and validity thereof and to issue of writ of certiorari or any other writ, order or direction in nature thereof quashing and setting aside the sale and Impugned Order - Petitioner is a Trusteeship Company in whose favour said Property has been mortgaged. Respondent Nos. 1 and 2 are revenue authorities who have conducted auction sale of said Property. Respondent Nos. 3 and 3A are Auction Purchasers of said Property. Respondent No. 4 is the Original Owner of the said Property and has created mortgage in respect thereof in favour of the Petitioner. Respondent Nos. 5, 6 and 8 are Promoters of Respondent No. 4. Respondent No. 7 is a Partnership Firm forming part of same group as Respondent Nos. 4 to 6 and 8. Respondent No. 9 is the Maharashtra Real Estate Authority - Whether exercise of such right of marshalling by Respondent Nos. 3 and 3A would cause any prejudice to the Petitioner i.e. the prior Mortgagee
Finding of the court: It is required to be noted that when a transfer of immovable property is effected by way of a registered instrument, a subsequent purchaser is said to have implied notice of the same. Section 3 of Act, 1882 takes into its ambit not only the actual notice but also implied notice by way of a registered instrument, provided that instrument is required by law to be registered. Admittedly Public Notice for auction sale of the said Property was published in local newspaper on. Auction sale was fixed just two days later. On date of auction, Petitioner had admittedly remained present through its Advocate and submitted its objections vide its Advocate’s Letter. Same clearly mentions that Petitioner claims to have a prior registered mortgage over the said Property. This has also been admitted by Respondent No. 2 in the Affidavit in Reply to above Petition - Mere non-entering encumbrances in the revenue records as contended on behalf of Respondent Nos. 1 and 2 and 3 and 3A cannot be an excuse. Moreover, the second proviso to Section 149 of MLRC exempts the obligation of reporting the acquisition of rights by a registered instrument to the revenue authorities.
Result: Petition allowed.
JUDGMENT :
S.J. KATHAWALLA & VINAY JOSHI, JJ.
1. Rule. Rule made returnable forthwith. Heard finally by consent of parties.
2. By this Writ Petition filed under Article 226 of the Constitution of India, the Petitioner has challenged the auction sale of immovable property being a parcel of land bearing Survey No. 95 Hissa No. 3, situated at Chovisawadi, Taluka Haveli, District Pune, admeasuring 0 Hectares 49.66 Ares (“the said Property”), of which the Petitioner is a Mortgagee, by Respondent No. 1 (District Collector, Pune) and Respondent No. 2 (Additional Tehsildar, Pimpri Chinchwad, Pune), in favour of Respondent Nos. 3 and 3A, in order to recover amounts payable by Respondent No. 4 to the Respondent Nos. 10 to 15, under Orders passed by Respondent No. 9 (Maharashtra Real Estate Authority) under the provisions of the Real Estate (Regulation and Development) Act, 2016.
3. The Petitioner is a Trusteeship Company in whose favour the said Property has been mortgaged. Respondent Nos. 1 and 2 are the revenue authorities who have conducted the auction sale of the said Property. Respondent Nos. 3 and 3A are the Auction Purchasers of the said Property. Respondent No. 4 is the Original Owner of the said Property and has created the mortgage in respect thereof in favour of the Petitioner. Respondent Nos. 5, 6 and 8 are the Promoters of Respondent No. 4. Respondent No. 7 is a Partnership Firm forming part of the same group as Respondent Nos. 4 to 6 and 8. Respondent No.9 is the Maharashtra Real Estate Authority. Respondent Nos. 10 to 15 are Flat Purchasers who had filed RERA Complaints against Respondent No. 4 before Respondent No. 9. Respondent No. 9 had passed Orders directing Respondent No. 4 to refund the monies paid to it by Respondent Nos. 10 to 15 along with interest. It was for recovery of these amounts that Respondent Nos. 1 and 2 conducted the auction sale of the said Property.
4.1. The case of the Petitioner in the present Petition, is as follows:
4.2. The Petitioner is a leading Indian Trusteeship Company providing services as a debenture trustee, security trustee, share pledge trustee, securitisation trustee etc.
4.3. By and under a Debenture Trust Deed dated 16th February 2016, executed by and between Respondent Nos. 4 to 8 and the Petitioner (“Debenture Trust Deed”), Respondent No. 4 agreed to issue secured, redeemable optionally convertible debentures for an aggregate sum of Rupees One Hundred and Twenty Crores to the subscribers thereof, in order to raise funds for developing certain immovable properties. The Petitioner is the Debenture Trustee under the Debenture Trust Deed. The Debenture Trust Deed has been registered with the Sub-Registrar of Assurances at Haveli-16 under Registration No. Havl-16/1511/211/2015. Various immovable properties, including the said Property, were mortgaged in favour of the Petitioner to secure the obligations of Respondent No. 4 under the Debenture Trust Deed.
4.4. Respondent No. 4 purchased further immovable property under a Sale Deed dated 8th June 2015. The same was mortgaged in favour of the Petitioner under a Supplementary Deed of Mortgage dated 12th February 2016, to secure the performance of the obligations of Respondent No. 4 under the Debenture Trust Deed.
4.5. Based on the aforesaid documents, the Petitioner became the first charge holder in respect of the properties mentioned therein, including the said Property. Respondent No. 4 failed to redeem the debentures on their due dates, which constituted an event of default under the Debenture Trust Deed. In view of the same, the Petitioner became entitled to enforce its mortgage in respect of the various properties mortgaged to it, including the said Property.
4.6. One of the properties mortgaged to the Petitioner is land situated at Dudulgaon, Taluka Haveli, District Pune. Respondent No. 4 was developing a real estate project on this property, which was registered with Respondent No. 9 under the name of “Padmanabh Phase - 1”. Respondent Nos. 1
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