N.P. Bhavsar And Anr vs Uco Bank And 4 Ors
2017 Latest Caselaw 9386 Bom

                                                                930.WPL.3351.17.doc

              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  ORDINARY ORIGINAL CIVIL JURISDICTION

                     WRIT PETITION (L) NO. 3351 OF 2017


 N.P. Bhavsar & Anr.                                ...   Petitioners
       V/s.
 UCO Bank & Ors.                                    ...   Respondents


 Mr. Karan Bhosale a/w Mr. Datta Mane and Mr. Naveen Kumar i/b 
 Mr. Naveen Kumar and Siraj Faruk Ghiwala for the Petitioners.
 Mr. Pravin Patel a/w Mr. Sunil A. Humbre for Respondent No.1.


                                     CORAM : B.R. GAVAI AND
                                               MANISH PITALE, JJ.

                                     DATE    :  07th DECEMBER, 2017.

 JUDGMENT [PER : MANISH PITALE, J.] 


 1                  Rule.   Rule made returnable forthwith.   Heard finally 

 by consent of both the parties.  


 2                  Mr. Patel waives service of Respondent No.1.


 3                  By   consent   of   parties,   Petition   is   taken   up   for   final 

 hearing.


 4                  The Petitioners have filed this Writ Petition challenging 

the order dated 07.11.2017 passed by the Debt Recovery Appellate

Tribunal (hereinafter referred to as 'the Appellate Tribunal'),

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whereby the Appellate Tribunal has dismissed the Appeal of the

Petitioners and confirmed the orders passed by the Debt Recovery

Tribunal, Mumbai.

5 The facts leading to the filing of the present Petition are

as follows :-

Respondent Nos.2 and 3 purchased flat No.204, in

Monalisa Apartment, Kasturba Road, Malad (West), Mumbai, on

21.04.1999 by a registered agreement for sale from one M/s. Chirag

Builders. On 24.04.2003, the Petitioners claimed to have entered

into an agreement for sale with Respondent Nos.2 and 3 for

purchase of the said flat. It was projected by Respondent Nos.2 and

3 that there were no encumbrances on the said flat, although

Respondent No.1-Bank had granted loan to the said Respondents in

respect of the said flat and the loan amount was yet to be repaid.

6 On 18.06.2003, Respondent No.1-Bank filed an

application before the Debt Recovery Tribunal at Mumbai, for

recovery of its dues against Respondent Nos.2 and 3, in respect of

the said flat. Although Respondent Nos.2 and 3 were served in the

said proceedings, they remained absent throughout, resulting in an

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ex-parte judgment and order being passed against them by the Debt

Recovery Tribunal and recovery certificate was issued.

7 It is claimed by the Petitioners that they were not

aware of the said proceedings initiated by Respondent No.1-Bank

culminating in the aforesaid judgment and order dated 20.11.2003

and that they came to know about the same for the first time on

10.06.2004, when they received a letter from Respondent No.1-

Bank informing them about the orders passed by the Debt Recovery

Tribunal. It is further claimed by the Petitioners that upon

becoming aware of the said proceedings and the orders passed by

the Debt Recovery Tribunal, they approached Respondent Nos. 2

and 3, who assured them that they would obtain necessary

clarifications from Respondent No.1-Bank and that there was no

cause for worry. Thereafter, on 08.08.2005, a public notice was

issued by the Debt Recovery Officer, Mumbai, for auction sale of the

said flat. Upon this, the Petitioners filed Intervention Application

before the Debt Recovery Tribunal in Recovery Application No.48 of

2004, raising an objection to the said auction sale and attachment,

claiming further consequential reliefs.

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                                                            930.WPL.3351.17.doc

 8                 The said Intervention Application was dismissed by the 

Debt Recovery Tribunal on 31.07.2006, against which the

Petitioners filed Miscellaneous Appeal. The said Appeal suffered

from delay of 75 days and it was accompanied by an application for

condonation of delay. This Appeal was dismissed in default on

02.08.2007. Thereafter, the auction sale of the flat was conducted

by the Debt Recovery Officer on 27.09.2007, wherein Respondent

No.4 purchased the said flat in auction. On 27.10.2007, the said

auction sale was confirmed by the Debt Recovery Tribunal. The

Petitioners then filed a Miscellaneous Application for modification of

the said orders, which was rejected on 29.09.2008. The Petitioners

filed further proceedings in the matter, which also stood rejected.

9 Aggrieved by the order of the Debt Recovery Tribunal

dated 29.09.2008, the Petitioners filed Appeal before the Appellate

Tribunal which remained pending for about nine years. On

07.11.2017, the Appellate Tribunal has dismissed the Appeal,

mainly on the ground that the Petitioners failed to initiate any

action or proceeding against Respondent Nos.2 and 3 from whom

they had purchased the property and that they initiated proceeding

only against Respondent No.1-Bank. The Appellate Tribunal took

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the view that if the Petitioners had been bonafide purchasers, they

would have immediately taken appropriate action against

Respondent Nos.2 and 3 for having cheated them into buying a

property which was already encumbered and it was subject matter

of proceeding at the behest of Respondent No.1-Bank. The

Petitioners have filed this Writ Petition challenging the said order

dated 07.11.2017 passed by the Appellate Tribunal.

10 Mr. Bhosale, learned counsel appearing for the

Petitioners submitted that the Appellate Tribunal had erred in

dismissing the Appeal without appreciating that the Respondent

No.1-Bank had been negligent inasmuch as it had failed to verify

whether the original title documents of the flat were in its custody

when it initiated proceedings against Respondent Nos.2 and 3

before the Debt Recovery Tribunal. It is submitted that Respondent

No.1-Bank had in its custody only certified copies of the agreement

for sale dated 21.04.1999 and not the original documents and that,

therefore, the entire proceedings initiated by Respondent No.1-Bank

stood vitiated.

11 We have considered the submissions made on behalf of

the Petitioners and we have perused the documents on record. A

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perusal of the same shows that according to the Petitioners, they

became aware of the pendency of the proceedings before the Debt

Recovery Tribunal in respect of the flat in question, on 10.06.2004,

when they received a letter from Respondent No.1-Bank informing

them that order dated 27.04.2004 had been passed by the Debt

Recovery Tribunal. It is also on record that since 10.06.2004, the

Petitioners did not initiate any civil or criminal proceedings against

Respondent Nos.2 and 3, their vendors, who had clearly cheated

them into buying a property which was encumbered and subject

matter of proceedings before the Debt Recovery Tribunal. The

Petitioners only filed an Intervention Application before the Debt

Recovery Tribunal, out of which the impugned order passed by the

Appellate Tribunal has arisen.

12 The record shows that Respondent Nos.2 and 3 are the

next door neighbours of the Petitioners, as said Respondents are in

flat No.203 of the said complex whereas the Petitioners are in flat

No.204 of the same complex. The fact that the Petitioners failed to

initiate any action against Respondent Nos.2 and 3, despite

becoming aware in June 2004 itself that the said Respondents had

cheated them into buying an encumbered property, shows that there

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is collusion between the Petitioners and Respondent Nos.2 and 3.

The Appellate Tribunal has correctly concluded that if the

Petitioners were real bonafide purchasers, having realized that the

very same flat which Respondent Nos.2 and 3 had sold to them, was

subject matter of mortgage with Respondent No.1-Bank, they ought

to have immediately initiated appropriate proceeding against

Respondent Nos.2 and 3, apart from approaching the Debt Recovery

Tribunal. It appears that the Petitioners and Respondent Nos.2 and

3 have colluded to prolong the litigation before the Debt Recovery

Tribunal and Appellate Tribunal, so as to frustrate the attempts of

Respondent No.1-Bank to take possession of the said flat, as

Respondent Nos.2 and 3 had failed to repay the debt.

13 In this backdrop it is evident that the plea regarding

Respondent No.1-Bank having been negligent as it had only certified

copies of the agreement for sale dated 01.04.1999 instead of

original documents, is without any substance. It is also apparent

from the record that even the Petitioners do not have original

documents in their custody as they were allegedly stolen from the

custody of the Office Assistant of the Petitioner No.1. In any case,

we do not propose to go into the said submission of the Petitioners

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because it is an attempt to divert the Court from the main issue,

which is, as to whether the impugned order passed by the Appellate

Tribunal confirming the orders of the Debt Recovery Tribunal, was

correct.

14 We find that there is no error committed by the

Appellate Tribunal and that the Petitioners cannot any further be

permitted to frustrate the proceedings initiated by Respondent No.1-

Bank, way back in the year 2003, for recovery of its dues, pursuant

to which the auction sale of the flat was undertaken and it was

purchased in auction by Respondent No.4. Hence, we do not find

any merit in the Writ Petition, which is dismissed. Rule is

discharged with no order as to cost.

  (MANISH PITALE, J.)                                            (B.R. GAVAI, J.)




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