A bank fails to create a valid mortgage by deposit of title deeds where the execution of guarantee documents is shrouded in unresolved discrepancies regarding the identity, age, and relationship details of the mortgagor, and where the claim of security covers properties already alienated prior to the mortgage creation.

BETWEEN

The Authorised Officer

ICICI Bank Ltd.,

ICICI Bank Towers- RMAG

SP-24, South Phase,

4th Floor, West Wing,

Ambattur Industrial Estate,

Ambattur, Chennai – 600 058.

…..Appellant

AND

1. A. Chittibabu

S/o (Late) D. Aravamudhan

Old No.5, New No.37,

Sournambigai Street,

Kodambakkam

Chennai – 600024

2. C. Gopinath

S/o A. Chittibabu

Old No.5, New No.37,

Sournambigai Street,

Kodambakkam

Chennai – 600024

3. M/s. Jakshan Rubbers

P.O. Pulikkal,

Malappuram District,

Kerala.

4. C. Kunhi Moideen (since deceased)

Pattancherry House,

Nallur P.O., Feroke,

Calicut – 673631, Kerala.

4(a) Mr. Jhamshad,

Pattanchery House,

Nallur P.O, Feroke,

Calicut-673631,

Kerala.

5. D. Palani Chettiar

S/o Dharmalinga Chettiar

No.3/43, Vaniar Street,

Senneer Kuppam, Poonamallee,

Chennai 600 056

….Respondents

Counsel for Appellant : Mr. S. Suresh for M/s. T. Srinivasaraghavan & Associates

Counsel for R1 & R2 : Mr. B. Thilak Narayanan for Mr/ K. Srinivasan

ORDER

1. The Respondents 1 and 2 filed SA 161/2012 challenging the Possession Notice dated 16.02.2012 on the file of DRT-III, Chennai.

1.1 Learned Presiding Officer, set aside the Possession Notice dated 16.02.2012 in respect of an extent of 38,659.5 sq.ft, and restored possession with Respondents 1 and 2/Applicants before Tribunal. Aggrieved against said order, Appellant, the ICICI Bank Ltd., filed the Appeal in RA (SA) 46/2013.

1.2 Learned Predecessor, on 06.07.2023, upon finding that the sale in respect of an extent of 24,368 sq. ft. covered by two sale deeds dated 13.05.1999 and 24.02.2005, had come into existence prior to creation of the mortgage in favour of the Bank over a total extent of 51,836 sq.ft, held that the Bank cannot proceed against said extent of 24,360 sq. ft. covered by the aforementioned sale deeds. Learned Predecessor also found that the Bank is entitled to proceed against the remaining extent of land measuring 27,476 sq. ft. Thus, confirmed the order of the Tribunal below in setting aside Possession Notice dated 16.02.2012 and granted liberty to the Respondent Bank to initiate fresh measures under Section 13(4) of SARFAESI Act, 2002 in respect of an extent of 27,468 sq. ft.

1.3 Aggrieved by the said order dated 06.07.2023, the Respondents 1 and 2 filed CRP No. 3845/2024 before the Hon’ble High Court of Madras. Hon’ble High Court observed that this Tribunal has not answered the Respondents’ objection that there was no valid mortgage, which contention was accepted by the DRT. The DRT gave a finding that the mortgagors had no title or possession in respect of 38,659.5 sq. ft., which was already assigned to Petitioners/Respondents. In the said circumstances, the order of this Tribunal dated 06.07.2023 was set aside and the matter was remanded to this Tribunal for de novo consideration, to the limited extent of 14,291.5 sq. ft., to find out whether there was a valid mortgage existed in favour of the Bank. That is how this Appeal is taken up for hearing.

2. Learned Counsel for Appellant submitted that SA 161/2012 was filed challenging the Possession Notice dated 16.02.2012 in respect of an extent of 51,836 sq. ft. This Application was allowed in respect of an extent of 38,659.5 sq. ft., and restoration of possession was ordered. Respondent No.3, M/s. Jakshan Rubbers is the borrower. Respondents 1 and 2 are the Applicants before the Tribunal. Respondents 4 and 5 are the guarantors, and Respondent No.5 is the mortgagor cum guarantor. On the death of Respondent No.4, C. Kunhi Moideen, his Legal Representative, Mr. Jhamshad was impleaded as Respondent No.4 (a) in the Appeal.

2.1 It is further submitted that the property concerned in this case was owned by Mrs. Kuppammal, mother of Respondent No.5, D. Palani Chettiar. In the year 1955,