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High Court of Judicature at Calcutta
SYAMAL KANTI CHAKRABARTI
M/s Hotel Sonar Bangla
Versus
The State Bank of India & Others
W. P. No. 25701(W) of 2007 & W. P. No. 7430(W) of 2008
Decided On : 30-07-2010
The court held that the first sale deed, which was registered and acted upon by mortgaging the property to a financial institution by deposit of title deed, is valid. The second sale deed, which was presented for registration but not entered into the volume, is invalid and cannot transfer any right, title, or interest in the property. The second creditor, the State Bank of India, did not acquire any legally enforceable right to dispose of the property by public auction for the realization of their unpaid dues.
Fact of the Case:
Mr. Amitava Basu sold the property on 03.08.2005 by one instrument but by presenting two same instruments before the registering authority tried to befool them and to kill two birds by one stone. Therefore, by accepting such an invalid sale deed by way of mortgage of property by deposit of a sale deed, the State Bank of India has not acquired any legally enforceable right so as to dispose of such property by public auction for the realization of their unpaid dues as per their notification dated 12.11.2007 which is not sustainable in law.
Finding of the Court:
The court held that the first sale deed, which was registered and acted upon by mortgaging the property to a financial institution by deposit of title deed, is valid. The second sale deed, which was presented for registration but not entered into the volume, is invalid and cannot transfer any right, title, or interest in the property. The second creditor, the State Bank of India, did not acquire any legally enforceable right to dispose of the property by public auction for the realization of their unpaid dues.
Issues: Whether the writ petitions are maintainable in law?Where the owner of an immovable property while transferring the same to the vendor on receipt of consideration executes two sale deeds for a single transaction and obtains two registered sale deeds in respect of the same property which sale deed shall be treated as valid and operative and from what point of time?If such person using two such registered sale deeds in respect of the same property obtains a loan from two financial institutions by mortgaging such property by deposit of both the sale deeds, which financial institution will be entitled to sell such property, if needed, for realization of all outstanding dues from the borrower?
Ratio Decidendi: The court held that the first sale deed, which was registered and acted upon by mortgaging the property to a financial institution by deposit of title deed, is valid. The second sale deed, which was presented for registration but not entered into the volume, is invalid and cannot transfer any right, title, or interest in the property. The second creditor, the State Bank of India, did not acquire any legally enforceable right to dispose of the property by public auction for the realization of their unpaid dues.
Final Decision: The court set aside the notice dated 12.11.2007 published in the Statesman. The court also held that the second creditor, i.e., the State Bank of India as well as the Balagaria Central Cooperative Bank Limited may, however, seek alternative remedy for the realization of their dues as per law.
Syamal Kanti Chakrabarti, J.:
1. The writ petitioner M/s. Hotel Sonar Bangla (Digha), a partnership firm claims in W.P. No. 25701(W) of 2007, inter alia, that the respondent no. 3 Amitava Basu was the owner of Hotel Omega at Barrister Colony, Digha. In terms of a letter dated 04.12.2006 the said respondent no. 3 agreed to sell the said hotel at a consideration of Rs. 70,00,000/- on condition that the petitioner firm will liquidate a loan of Rs. 50,00,000/-taken by the respondent no. 3 from the proforma respondent no. 4, Balagaria Central Cooperative Bank Limited, Digha Branch against mortgage of the said hotel and the balance amount of Rs. 20,00,000/- shall be paid to the said respondent no. 3 of which Rs. 10,00,000/- is to be paid in advance and the balance Rs. 10,00,000/- at or before registration of the said property.
2. Thereafter, the petitioner firm negotiated with the respondent no. 4 Balagaria Cooperative Bank Limited, Digha Branch for obtaining a fresh loan of Rs. 50,00,000/- in the name of the petitioner firm and in letter dated 10th December, 2006 has clearly stated that the said loan was sought for to purchase the said hotel on 11.12.2006. The petitioner firm also approached the Chairman of the said cooperative bank to issue a ‘no objection certificate’ from the said bank for disposal of the said hotel in their favour by the respondent no. 3.
3. Thereafter the petitioner firm entered into an agreement for sale with the respondent no. 3 and the agreement for sale dated 12.12.2006 was registered at the office of the Additional District Sub-Registrar, Ramnagar, Purba Medinipur.
4. In the mean time the proforma respondent no. 4 sanctioned the loan of Rs. 50,00,000/- in their communication dated 15.01.2007 and in their letter dated 08.02.2007 has further informed that the sanction was made by way of long term house building loan for purchase of the said hotel and requested the petitioner firm to arrange for execution of a sale deed in favour of the petitioner firm.
5. Thereafter the respondent no. 3 was reluctant to execute the sale deed and as such, the proforma respondent no. 4 in their letter dated 26.02.2007 directed the respondent no. 3 either to repay the loan or arrange registration in favour of the petitioner firm within 08.03.2007 in default the term deposit in lien to the interest of loan account was to be adjusted. Thereafter, the respondent no. 3 informed the proforma respondent no. 4 in his letter dated 26.02.2007 that he had already instructed Hotel Sonar Bangla (Digha) to take care of the said loan account by adjusting the entire loan amount against consideration for the said purchase by the partnership firm. Thereafter, the petitioner firm became owner, proprietor and occupier of the said Hotel Omega since renamed as “Hotel Songar Bangla (Digha)” by virtue of a registered sale deed dated 30.03.2007 which was registered on 05.04.2007 at the office of the Additional District Sub Registrar, Ramnagar, Purba Medinipur recorded in Book No. 1, Volume No. 18, Pages 76 to 93 being No. 506 for the year 2007. Accordingly the petitioner is running the said Hotel Sonar Bangla (Digha) being absolute owner and possessor of the same which is under mortgage to the proforma respondent no. 4 against their loan of Rs. 50,00,000/-.
6. Suddenly the petitioner firm came to know publication of notice of possession cum sale of immovable property by tender cum public auction issued by the authorised officer of the State Bank of India, defendant no. 1 published in The Statesman on 12.11.2007 purported to be a notice under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest (Enforcement) Rules, 2002. In the said notice the proposed sale has been shown as Hotel Omega (Digha) which is in fact the Hotel Sonar Bangla (Digha). In fact the petitioner did not take any loan from the State Bank of India in respect of the said Hotel
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