Aejaz Ahmed And Anr vs Asset Reconstruction Company And ...
2017 Latest Caselaw 4323 Bom

                                                             WP-1717-2016.DOC




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


                    WRIT PETITION NO. 1717 OF 2016


 1. Mr. Aejaz Ahmed
 Son of Late Shri Amir Ahmed
 Aged about 50 yrs., Indian Inhabitant,
 R/at 802/B, Evergreen Apts., Belvedere
 Road, Mazgaon, Mumbai 400 010.

 2. Mrs. Shamim Siddqui,
 Daughter of Late Shir Amir Ahmed
 Aged 66 yrs., Indian Inhabitant,
 R/at. 1-C, 44, Swagat Apts., Narendra
 Park, Naya Nagar, Mira Road, Thane- 401                    ...Petitioners
 105.

         Versus

 1. Asset Reconstruction Company
 A    Company      incorporated    under
 Companies Act, 1956 having its Office at
 The 10th Ruby, 29, Senapati Bapat Marg,
 Dadar (W), Mumbai 400 028.

 2. Mr. Anees Ahmed
 Adult, Indian inhabitant R/at. Flat No.71,
 Sanjay Apartments, Sanjay Ashok CHS
 Ltd., 16, Hansraj Lane, Byculla,           ...Respondents
 Mumbai 400 027.


 Mr. Girish Thanvi, for the Petitioner.
 Mr. Mayur Khandeparkar, with Mr. Vinod Kothari and Mr.
      Phiroze Merchant for the Respondent No.1.



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                                                                      WP-1717-2016.DOC




                               CORAM:       B.R. GAVAI AND
                                            RIYAZ I. CHAGLA, JJ.

                               DATED:       11th July 2017
 PC:-


 J U D G M E N T :- (Per Riyaz I. Chagla J.)


 1.      The       Petitioners     are     the       brother     and      sister      of

Respondent No.2. Respondent No.2 is the borrower who

had availed of Export Credit Facility from the State Bank of

India ("SBI") (Assignor of Respondent No.1). The Petitioners

appear to have filed the present Petition a heirs of the

deceased father and representing his estate. The Petition

challenges an order dated 18th February 2015 passed by the

Debts Recovery Appellate Tribunal, Mumbai (DRAT-

Mumbai).

2. The Respondent No.2 had created on equitable

mortgage in respect of Flat No.71, Sanjay Apartments,

Hansraj Lane, Byculla, Mumbai 400 027 (the subject flat) with

SBI for securing Export Credit Facilities. Respondent No.2

had deposited the original share certificate with SBI on the

basis of loan granted. The society had also granted an NOC

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to the bank in relation to the mortgage. On account of

defaults in payments of dues the SBI filed a Suit for recovery

of debts in this Court which was later transferred to the Debts

Recovery Tribunal (DRT) and renumbered as original

Application No. 3582 of 2000. On 9th August 2002, the

original Application was allowed by an order passed by the

DRT. It is ordered that the recovery certificate be issued in

terms of the said order. The said order has also recorded

that the outstandings were secured by a valid mortgage of

the subject flat and the mortgagor is at liberty to pay all the

outstandings within three months from the date of the order to

avoid sale of the subject flat. Respondent No.2 had not

challenged the said order and Respondent No.1 initiated

recovery proceedings for executing the said order.

3. An application came to be filed under Section 22(2) of

the Maharashtra Co-Operative Societies Act (MCS Act) by

the now deceased father of Respondent No.2, Mr. Anees

Ahmed seeking transfer of the share certificate in relation to

the subject flat in his name. The application came to be

rejected by the Deputy Registrar on 4th November 2003 and

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it was clearly recorded that it would not be appropriate to

transfer the membership of the society in relation to the

subject flat having regard to the mortgage already created in

favour of SBI. On 30th March 2005, SBI assigned its debts

recoverable along with underlying security interest from

Respondent No.2, to Respondent No.1. Mr. Anees Ahmed

filed a Miscellaneous Application No. 38 of 2009 under

Section 19 (25) of the RDDB & FI Act seeking modification of

the order dated 9th August 2002 insofar as it related to

declaration of a validity mortgage of the said flat. The DRT

dismissed the Miscellaneous Application and has held that

the aspect of ownership can only be decided by a Civil Court.

The DRT has also observed that the agreement for sale

relied upon by the Applicant contained the words in hand "for

and on behalf of" and which according to the DRT had been

put subsequently by the Applicant and could not have been

present in the agreement for sale under which Respondent

No.2 had purchased the subject flat.

4. Mr. Anees Ahmed filed an Appeal before DRT being

Appeal No. 210 of 2009. During the pendency of the Appeal,

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the Mr Anees Ahmed passed away and the Petitioners were

brought on records as Appellants. The DRAT by the

impugned order dated 18th February 2015 dismissed the

Appeal and has held that the DRAT cannot decide title of the

Petitioners / Appellants who were representing the estate of

the deceased father as against Respondent No.2 and the

same is required to be adjudicated upon before the

appropriate forum. In any event, Mr. Anees Ahmed had filed

a Suit for declaration of title before this Court and the same

was pending consideration. The DRAT has also recorded

that the subject flat had been purchased in 1978 and that the

father of Respondent No.2 had come to India in 1980 and

had kept quite till 2001 and is now adjudicating his right which

is impermissible in law. The DRAT has accordingly dismissed

the Appeal.

5. Shri Girish Thanvi, learned counsel for the Petitioners

has contended that mere deposit of share certificate by

Respondent No.2 with SBI would not constitute a valid

mortgage and that the original title deed was lying with the

Petitioners and hence the mortgage in favour of the bank was

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defective, improper and could not be enforced. The

Petitioners have contended that DRT / DRAT ought to have

decided the issue of whether the equitable mortgage could

have been created by deposit of share certificate and that the

subject flat could not be disposed of by Respondent No.1

without deciding this issue. Shri Thanvi has submitted a

synopsis-cum-written arguments which contains various

dates in order to contend that the Petitioners father had the

title to the subject flat and that the deposit of share certificate

by Respondent No.2 in favour of SBI was behind back of the

Petitioners deceased father. The list of dates also mention

the proceedings which were instituted by the Petitioners

deceased father and which have been referred to above.

6. Shri Khandeparkar, learned counsel for the Respondent

No.1 has submitted that the Petitioners had filed these

proceedings representing the estate of the deceased father

and the Petitioners have alleged that the title to the subject

flat belonged to the deceased father. Shri Khandeparkar has

contended that it is not open for the Petitioners to allege that

their deceased father, who is also the father of Respondent

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No.2, was not aware of the mortgage having been created of

the subject flat and / or the deposit of the original share

certificate with the bank. Shri Khandeparkar has stated that

the DRAT in the impugned order has correctly observed that

the deceased father of Respondent No.2 had come to India in

1980 and had kept quite till 2001 and is now adjudicating his

right which is impermissible in law. Further, the deceased

father had instituted proceedings by filing a Suit for

declaration of title before this Court which is pending

consideration. Shri Khandeparkar has accordingly submitted

that the Petition is not maintainable and that the Petition

ought to be dismissed.

7. We are of the considered view that the Petitioners have

no independent right, title or interest in the subject flat, other

than alleging that the subject flat belonging to the deceased

father of the Petitioners and Respondent No.2. We are of the

view that the Petitioners had availed of the alternate remedy

by instituting proceedings before the DRT / DRAT, first by the

deceased father and later by the Petitioners filing the Appeal

before DRAT, which was disposed of by the impugned order.

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We are of the considered view that the DRAT has correctly

held that the issue of title ought to be determined in separate

proceedings which have already been instituted by the

deceased father i.e. by filling a Suit in this Court, which is

pending consideration. It is not open for the Petitioners to

raise the issue in this Petition as to whether Respondent No.2

could have created a mortgage in favour of SBI by depositing

share certificate of subject flat. In any event, this mortgage

had been created in 1984 and it is now not open for the

Petitioners to contend otherwise. The Petitioners representing

estate of the deceased father who was also the father of

Respondent No.2 cannot contend that he was unaware of the

subject flat having been mortgaged in favour of SBI. The

Petitioners' deceased father had not taken any steps during

his lifetime to challenge the mortgage created in favour of the

Bank and it was only in 2004 that the Petitioners' father had

filed a Suit claiming title to the subject property and that

Respondent No.2 had no right, title or interest of any nature

in the Suit property.

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8. We are of the considered view that there is no infirmity

in the impugned order and that the application of the

Petitioners for raising the attachment and contending that the

subject flat was in possession of their deceased father has

been justifiably rejected by the DRT and which order has

been upheld in the impugned order by the DRAT.

9. We accordingly dismiss the Petition with no order as to

costs.

      (RIYAZ I. CHAGLA J.)                       ( B.R. GAVAI J.)





                               10th July 2017