Gauhati High Court
WP(C)/920/2025 on 3 April, 2025
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GAHC010034682025
2025:GAU-AS:3944
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
WP (C) NO.920 OF 2025
Shri Apurba Dev Sarma,
Son of Late Keshab Chandra Sarma,
Resident of Flat No.B2, Second Floor, Orchid Residency,
House No.53, Milanpur, Guwahati, District: Kamrup
(Metro), Assam, Pin - 781021.
.....Petitioner
-Versus-
1. The District Magistrate, Kamrup (Metro),
Guwahati, Assam.
2. The Additional District Magistrate, New Guwahati Co-
District, Kamrup (Metro), Guwahati.
3. Hdfc Bank Limited, Hdfc Bank House, Senapati Bapat
Marg, Lower Parel (West), Mumbai - 400013.
4. Hdfc Bank Limited, Retail Portfolio Management,
Swagota Enivision, Khanapara, opposite Agriculture
Office, G.S. Road, Six Mile, Guwahati - 781022.
5. The Authorised Officer, Hdfc Bank Limited, Retail
Portfolio Management, Swagota Enivision, Khanapara,
opposite Agriculture Office, G.S. Road, Six Mile,
Guwahati - 781022.
6. Shri Dibyajyoti Pathak,
Resident of Jnb Road, House No.126, Pension Para
Road, Care of Late Mahendra Das, Near Maharshi Vidya
Mandir, Silpukhuri, Assam - 781003.
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7. Sri Ramdhan Pathak,
Resident of House No.126, Mrd Road, Chandmari,
Goswami Service, Guwahati - 781003.
8. Ester Rupa Sahu Jyrwa,
Wife of Rupam Das, Resident of House No.1,
Madhuban, Government Press, Guwahati - 781021.
9. M/s H.B. Developers, a Partnership Firm, having its
Registered Office at House No.28, Chandan Nagar, Vip
Road, Six Mile, PS: Dispur, Guwahati - 781022.
.....Respondents
– BEFORE –
HON’BLE THE CHIEF JUSTICE MR. VIJAY BISHNOI
HON’BLE MR. JUSTICE N. UNNI KRISHNAN NAIR
For the Appellant(s) : Mr. D. Das, Senior Advocate, assisted by Mr. T.
Chakraborty, Advocate.
For the Respondent(s) : Mr. N. Das, Junior Government Advocate, Assam for
respondent Nos.1 & 2.
: Mr. K.P. Pathak, Advocate for respondent Nos.3, 4 & 5.
Date of Hearing : 24.03.2025.
Date of judgment : 03.04.2025.
JUDGMENT & ORDER (CAV)
(Vijay Bishnoi, CJ)
The petitioner has filed this writ petition seeking the following relief:-
“In the premises aforesaid, the petitioners pray that Your Lordships
may be pleased to call for the records, issue Rule calling upon the
respondents to show cause as to why
1. A writ in the nature of Mandamus shall not be issued declaring that
the respondent authorities have no jurisdiction, authority and sanction
under law to initiate proceeding under SARFAESI Act, 2002 against the flat
purchased by the petitioner vide Deed No.19669 dated 27.09.2023.
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2. A writ in the nature of Certiorari shall not be issued setting aside and
quashing the entire proceeding initiated by the respondent authorities under
SARFAESI Act, 2002 so far relating to the flat of the petitioner.
3. A writ in the nature of Certiorari shall not be issued setting aside and
quashing the notice dated 01.02.2025 issued by the Addl. District
Magistrate, New Guwahati Co-District, Kamrup (M) under the provision of
the SARFAESI Act, 2002.
4. A writ in the nature of Mandamus shall not be issued directing the
respondent bank not to disturb the possession of the petitioner in respect of
flat in question.
-AND-
Upon cause or causes being shown and after hearing the parties make the
Rule absolute and/or pass such further or other order(s) as Your Lordships
may seem fit and proper in the facts and circumstances of the instant case.”
2. This writ petition came up for consideration before this Court for the
first time on 19.02.2025, when this Court, after hearing the learned senior
counsel for the petitioner, opined that the petitioner is having an alternative and
efficacious remedy to approach the Debts Recovery Tribunal under Section 17 of
the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (hereinafter to be referred as the “SARFAESI Act“)
against the measures taken by the respondent bank under the provisions of the
SARFAESI Act.
3. At that time, Mr. D. Das, learned senior counsel appearing for the
petitioner argued that the petitioner is not covered under the expression “any
person” used in Section 17(1) of the SARFAESI Act and, therefore, he cannot
avail the remedy of approaching the Debts Recovery Tribunal under Section 17
of the SARFAESI Act. In the alternative, Mr. Das also submitted that the remedy
under Section 17 is not an efficacious remedy and, therefore, the only remedy
available with the petitioner is to approach this Court by way of filing a writ
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petition under Article 226 of the Constitution of India. Mr. Das also argued that
in the facts and circumstances of the present case, the provisions of the
SARFAESI Act has no application in the case of the petitioner and on this ground
also the matter requires consideration by this Court under Article 226 of the
Constitution of India.
4. Having considered those submissions of Mr. D. Das, learned senior
counsel appearing for the petitioner and taking into consideration the fact that
the petitioner did not avail loan facility from the HDFC Bank for purchasing a flat
located at 2nd Floor of Orchid Residency, situated at Milanpur Road, Chandmari,
Guwahati, Kamrup (Metro), Assam and he purchased the property from the
respondent No.8, which as per the petitioner, was free from all encumbrances,
we decided to issue notice to the respondent Nos.3, 4 & 5, i.e. the authorities of
the HDFC Bank, seeking clarification from them.
5. The brief facts of the case are that the respondent Nos.6 & 7 applied
for availing a home loan of Rs.36,50,000/- from the HDFC Bank Limited
(respondent No.3) for purchasing a flat located at the 2 nd Floor of Orchid
Residency, situated at Milanpur Road, Chandmari, Guwahati, Kamrup (Metro),
Assam (hereinafter to be referred as the “property in question”). The
respondent Nos.6 & 7 submitted application before the HDFC Bank stating that
90% of the work of the said building, in which the property in question is
situated, is already completed and the HDFC Bank would be able to obtain first
mortgage of the dwelling unit. The respondent Nos.6 & 7 also submitted a
registered agreement for sale dated 28.06.2015 executed between the
respondent No.6 and the builder of the property in question, i.e. the respondent
No.9. Along with the application, the respondent Nos.6 & 7 had also submitted
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an allotment letter dated 16.08.2015 issued in favour of the respondent No.6
allotting the property in question which they sought to purchase from the
builder.
6. A letter dated 18.08.2015 written by the builder to the Bank was also
submitted, wherein it was stated that the builder had no objection if a loan is
advanced by the HDFC Bank to the respondent Nos.6 & 7 mortgaging the
aforesaid property in question.
Vide letter dated 18.08.2015, the builder has also confirmed that the
transfer or exchange of the aforesaid property in question would not take place
unless written consent of the HDFC Bank is obtained and the deed of
conveyance, as and when executed between the builder and the respondent
No.6, would be forwarded to the HDFC Bank directly.
7. Before sanctioning the loan, a tripartite agreement dated 20.08.2015
was executed between the respondent No.6, the builder and the HDFC Bank,
wherein the respondent No.6 and the builder unequivocally agreed that the loan
advanced to the respondent Nos.6 & 7 would be secured against the first and
exclusive mortgage of the property in question. The respondent Nos.6 & 7 also
agreed to repay the loan advanced to them by way of Equated Monthly
Installments (EMIs) on the first day of the following the month in which the
disbursement of the loan is completed. In the said tripartite agreement, the
builder promised that in the event of failure of the borrower to repay the loan or
in the event of death of the borrower or cancellation of allotment of the flat, the
builder will refund the entire amount advanced to it by the HDFC Bank forthwith
and also agreed to indemnify the HDFC Bank against all losses, costs and
expenses that may incur in the event it does not complete the development and
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construction of the Project.
8. As per the HDFC Bank, the respondent Nos.6 & 7 as well as the builder
clearly conferred an enforceable security interest in favour of the Bank and,
therefore, the Bank decided to sanction an amount of Rs.36,50,000/- as loan to
the respondent Nos.6 & 7. The said loan was to be repaid in EMIs of
Rs.34,982/- payable over 240 months and, as such, the security for the principal
sum of loan, interest, commitment and other charges and uses under this
agreement, an enforceable security interest was created on the property in
question. Further, an agreement dated 25.08.2015 was executed between the
respondent Nos.6 & 7 and the HDFC Bank and a promissory note was also
executed in favour of it promising to pay an amount of Rs.36,50,000/- along
with interest.
9. After sanction of the loan, an amount of Rs.31,90,000/- was deposited
by the HDFC Bank in the bank account of the builder through Cheque on
25.08.2015. A further amount of Rs.2,30,000/- was also paid to the builder on
08.01.2016. Along with the aforesaid amount advanced to the respondent Nos.6
& 7 as house loan, another sum of Rs.1,21,680/- was advanced as premium for
Insurance Policy to secure repayment of the loan in the event of death,
disability, etc., and a promissory note dated 30.09.2015 was also executed by
the respondent Nos.6 & 7 promising to pay the amount of Rs.1,21,680/-.
10. It appears that the respondent Nos.6 & 7 failed to continue payment of
the EMIs despite repeated requests, reminders and demands made by the HDFC
Bank and in such circumstances, the loan account was classified as Non
Performing Assets (NPA). Accordingly, the entire loan amount, including
principal, interest, cost and charges were recalled and a notice was issued by
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the Bank to the respondent Nos.6 & 7 to repay the entire outstanding amount.
11. When no response was received from the said respondents, the Bank
issued a notice dated 05.12.2017 to the respondent Nos.6 & 7 under Section
13(2) of the SARFAESI Act with a caution that if the amount is not repaid,
measures envisaged under Section 13(4) of the SARFAESI Act would be taken.
In that process, the HDFC Bank also wrote a letter to the builder on 28.02.2018
highlighting that as per the provisions of the tripartite agreement dated
20.08.2015, the allotment of the property in question made in favour of the
respondent Nos.6 & 7 be cancelled and the money advanced by the Bank be
deposited.
12. The HDFC Bank got another notice dated 09.03.2018 issued under the
head of authorized officer, which was published in both English and vernacular
newspapers on 11.03.2018 stating that the HDFC Bank has a security interest
over the property in question. Thereafter, on 07.09.2022, the HDFC Bank also
wrote a letter to the builder informing about the default in repayment of the
loan sanctioned to the respondent Nos.6 & 7 and they were also asked to
inform the Bank about the issuance of the Sale Deed in favour of the defaulters
and also as to whether possession of the flat had been given to them or not.
13. It appears that even after publication of the notice in the newspapers
as well as after receipt of the letter dated 07.09.2022, the builder sold the
property in question to one Ester Rupa Sahu Jyrwa (respondent No.8) vide Sale
Deed dated 18.09.2022, which was subsequently registered on 30.09.2022,
whereas, as per the Bank, they have security interest over the property in
question. The Bank is claiming that though the builder already made a
commitment to the respondent Bank that it would have the first charge over the
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property in question, over which a security interest was created, however, in
violation of the agreement executed between the HDFC Bank, respondent Nos.6
& 7 and the builder, the said property was sold to the respondent No.8 by the
builder.
14. The respondent No.8, in turn, sold the property in question to the
petitioner herein on 27.09.2023 by a registered Sale Deed. It is the case of the
Bank that they were not aware about the said fact that the builder had sold the
property in question to the respondent No.8 and, later on, the respondent No.8
sold the property in question to the writ petitioner.
15. On 20.07.2024, the authorized officer of the Bank wrote a letter to the
District Authorities for taking possession of the property in question under
Section 14 of the SARFAESI Act and, pursuant to that, the Additional District
Magistrate, New Guwahati Co-District, Kamrup (Metro) has passed an order
dated 01.02.2025, which is under challenge in this writ petition.
16. Mr. D. Das, learned senior counsel for the petitioner has argued that on
the basis of the agreement for sale, no security interest can be created over the
property in question nor can the same be treated as a commitment for creation
of a security interest in favour of the respondent Bank. It is contended that it is
not in dispute that the property in question was never sold by the builder to the
respondent No.6 at any point of time, however, only an agreement for sale was
executed between them. It is settled law that no title of the property can be
conferred on any of the parties only on the basis of the agreement for sale. It is
contended that in the absence of a registered Sale Deed, no immovable
property can be said to be transferred and, as such, no security interest is
created in favour of the respondent Bank in relation to the property in question.
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Referring to Section 54 of the Transfer of Property Act, 1882, learned
senior counsel for the petitioner has argued that a contract for sale of an
immovable property is a contract evidencing the fact that the sale of such
property shall take place on the terms settled between the parties but it does
not create any interest or charge on such property. It is contended that unless a
registered Sale Deed is executed in favour of the respondent Nos.6 & 7, the title
of the property in question cannot be conferred on the said respondents.
In support of the above contention, Mr. Das has placed reliance on the
decisions of the Hon’ble Supreme Court rendered in Rambhau Namdeo Gajre
-Vs- Narayan Bapuji Dhotra (dead) through Lrs. , reported in (2004) 8 SCC 614;
Bank of India -Vs- Abhay D. Narottam & Ors. , reported in (2005) 11 SCC 520;
Suraj Lamp & Industries Private Limited -Vs- State of Haryana & Anr. ,
reported in (2012) 1 SCC 656; Shakeel Ahmed -Vs- Syed Akhlaq Hussain,
reported in (2023) SCC OnLine SC 1526 and Cosmos Co. Operative Bank
Limited -Vs- Central Bank of India & Ors., decided on 04.02.2025 in Civil
Appeal No.1565/2025.
17. The learned senior counsel for the petitioner has further submitted that
the respondent No.8 had purchased the property in question from the builder
through a registered Sale Deed and thereafter, the petitioner has purchased the
said property in question from the respondent No.8, that too, through a
registered Sale Deed and, as such, at present the title of the property in
question vests on the petitioner and in the above-referred circumstances, the
action of the Additional District Magistrate of passing the order dated
01.02.2025 deputing the Executive Magistrate to oversee the law and order
situation during taking over of possession of the property in question by the
Bank authority is absolutely without jurisdiction and is liable to be interfered
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with.
18. Mr. D. Das, learned senior counsel for the petitioner has submitted that
the respondent No.8 purchased the property in question by obtaining house
loan from the Punjab National Bank and subsequently the loan was duly repaid
by the petitioner on 23.08.2023. It is contended that the Punjab National Bank
sanctioned the housing loan to the respondent No.8 after applying due diligence
and obtaining charge report of the property in question and this fact
demonstrates that no prior charge whatsoever was created over the property in
question by any person in favour of any other bank, including the HDFC Bank. It
is further reiterated on behalf of the petitioner that on the basis of the
agreement for sale, no security interest can be created nor the same can be
treated as a contract for creation of security interest in favour of the HDFC
Bank.
19. The sum and substance of the arguments of Mr. D. Das, learned senior
counsel for the petitioner is that simply on the basis of an agreement for sale,
no security interest can be created in respect of the property in question in
favour of the HDFC Bank and, therefore, the exercise undertaken by the Bank
against the petitioner, who is the lawful owner of the property in question,
under the provisions of the SARFAESI Act are absolutely illegal and without
jurisdiction.
20. Refuting the stand of the petitioner, Mr. K.P. Pathak, learned counsel
appearing for the respondent HDFC Bank has vehemently contended that a
security interest was created in favour of the HDFC Bank the moment the
tripartite agreement was executed between the respondent No.6, the builder
and the HDFC Bank. Referring to the definition of “security interest” provided in
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Section 2(1)(zf) of the SARFAESI Act, Mr. Pathak has submitted that the security
interest in a property can be created even on the basis of an agreement. The
learned counsel has submitted that prior to the amendment in the definition of
term “security interest”, it was only confined up to mortgage, charge,
hypothecation and assignment only. However, with the substitution of new
definition of “security interest” by Act No.44 of 2016, i.e. with effect from
01.09.2016, the scope of the definition has been widened and it also covers an
agreement which secures obligation to pay any unpaid portion of the purchase
price of the asset or an obligation incurred or credit provided to enable the
borrower to acquire the tangible asset.
21. The learned counsel has further submitted that the statement of
objects and reasons of the SARFAESI Act clearly provides that the said Act is
enacted with the intention to empower the banks and the financial institutions
to take possession of the securities and to sell them without intervention, and
taking into consideration the said fact, it is wrong to say that simply by entering
into an agreement, no security interest was created in favour of the bank in
respect of the property in question.
22. The learned counsel has further contended that the HDFC Bank has
already issued a warning on 11.03.2018 by publishing a notice in the
newspapers, both English and vernacular languages, clearly stating that the
Bank has a security interest over the property in question and intends to enforce
the security interest in case of non-payment of the loan by the respondent
Nos.6 & 7. It is further contended that in the present case, the builder, in sheer
violation of the commitment made through the agreements has illegally sold the
property in question to the respondent No.8 without any authority of law.
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However, such an action of the builder cannot undermine the security interest
created in favour of the respondent bank in respect of the property in question.
It is further submitted that it is obligatory upon a person, who buys such
encumbered property, to get verified the facts and thereafter purchase the
property in which a security interest has already been created in favour of a
bank or a financial institution.
23. The learned counsel has submitted that in the facts and circumstances
of this case, the respondent bank is well within its rights to invoke the
provisions of the SARFAESI Act and the challenge of the petitioner to the same
is without any basis and is liable to be dismissed.
In support of his contention, Mr. Pathak, learned counsel for the
respondent HDFC Bank has placed reliance on a decision of the Division Bench
of the High Court of Madras rendered in Vishwanath M. Pai & Anr. -Vs-
Corporation Bank (A Government of India Enterprise) & Ors. , reported in 2019
SCC OnLine Mad 29493.
24. Heard the learned counsel appearing for the parties and perused the
material available on record.
25. The core question which is to be answered by this Court in this writ
proceeding is that “whether in the facts and circumstances of the case, any
security interest is created in favour of the HDFC Bank in respect of the
property in question or not?”
26. If we go through the statement of objects and reasons of the
SARFAESI Act, it is seen that the legislature felt that in India the banking and
financial sector do not have a level playing field as compared to the other
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participants in the financial markets in the world. It was noticed that there was
no legal provision for facilitating securitization of financial assets of bank and
financial institution, whereas the international banks possessed the power to
take possession of the securities and sell them. It was also considered that the
existing legal framework in India relating to the commercial transactions was
not enough to keep pace with the changing commercial practices and the
financial sector reforms, which resulted in slow pace of recovery of defaulting
loans and mounting levels of non-performing assets of banks and financial
institutions. Keeping in view the above referred circumstances and considering
the recommendations made by the Narasimham Committee I and II and
Andhyarujina Committee, the SARFAESI Act has been enacted to enable the
banks and financial institutions to realize long-term assets, manage problem of
liquidity, asset liability mismatches and improve recovery by exercising powers
to take possession of securities, sell them and reduce non-performing assets by
adopting measures for recovery and reconstruction.
27. The terms “securitization”; “security agreement”; “secured asset”;
“secured creditor” and “secured interest” have been defined in Sections 2(1)(z);
(zb); (zc); (zd) and (ze), respectively, of the SARFAESI Act. The term “security
interest” is defined in Section 2(1)(zf). Prior to 2016, i.e. 01.09.2016, the
definition of the term “security interest” was as under:-
“(zf) ‘Security interest’ means right, title and interest of any kind whatsoever
upon property, created in favour of any secured creditor and includes any
mortgage, charge, hypothecation, assignment other than those specified in
section 31.”
However, by Act No.44 of 2016, which came into force with effect from
01.09.2016, the definition of “security interest” is substituted as under:-
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“(zf) ‘Security interest’ means right, title or interest of any kind, other than
those specified in section 31, upon property created in favour of any secured
creditor and includes –
(i) Any mortgage, charge, hypothecation, assignment or any
right, title or interest of any kind, on tangible asset, retained by the
secured creditor as an owner of the property, given on hire or financial
lease or conditional sale or under any other contract which secures the
obligation to pay any unpaid portion of the purchase price of the asset
or an obligation incurred or credit provided to enable the borrower to
acquire the tangible asset; or
(ii) Such right, title or interest in any intangible asset or
assignment or licence of such intangible asset which secures the
obligation to pay any unpaid portion of the purchase price of the
intangible asset or the obligation incurred or any credit provided to
enable the borrower to acquire the intangible asset or licence of
intangible asset.”
28. From the above, it is clear that earlier the term “security interest”
includes only mortgage, charge, hypothecation and assignment, whereas now
the definition of “security interest” is widened and it also includes any other
contract, which secures the obligation to pay any unpaid portion of the purchase
price of the asset or an obligation incurred or credit provided to enable the
borrower to acquire the tangible asset.
29. In the present case, the respondent Nos.6 & 7 took a loan from the
HDFC Bank for the purpose of acquiring a tangible asset. A tripartite agreement
was also executed between the respondent Nos.6 & 7, the builder and the HDFC
Bank. The respondent Nos.6 & 7 had also executed a promissory note promising
to repay the loan. The builder of the property in question had also made a
promise that in the event of failure of the borrower to repay the loan or in the
event of death of the borrower or cancellation of allotment of the flat, the
builder will refund the entire amount advanced to it by the HDFC Bank
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forthwith.
30. From the above facts and circumstances of the case and from the
definition of “security interest”, provided in Section 2(1)(zf) of the SARFAESI
Act, it is clear that in the present case, a security interest was created in favour
of the HDFC Bank and, therefore, the claim of the petitioner that no security
interest was created in favour of the HDFC Bank in respect of the property in
question cannot be accepted.
From the averments of the writ petition, it is also clear that the
petitioner has placed reliance on the old definition of “security interest” as
provided under Section 2(1)(zf) of the SARFAESI Act, which was in vogue before
substitution of the new definition of “security interest” in Section 2(1)(zf) by Act
No.44 of 2016, i.e. with effect from 01.09.2016.
31. The High Court of Madras in Vishwanath M. Pai (supra) in a similar
situation has held that a security interest can be created on a property which
was not in existence on the basis of a tripartite agreement as per Section 2(1)
(zf) of the SARFAESI Act. Relevant portion of the said judgment is reproduced
hereunder:-
“4. The petitioners challenged the possession notice issued to the
respondents 2 & 3 before the Debts Recovery Tribunal, Bangalore on the
ground that they are the owners of the property on the basis of the
registered Sale Deed dated 21.05.2010 and are in actual possession of the
property. Further, the petitioners contended that they are neither borrowers
nor guarantors of the loan. The petitioners contended that they obtained
loan for the purchase of the property from Syndicate Bank on 06.02.2010
and thereafter, the loan was taken over by the 4 th respondent – Bank. The
Debts Recovery Tribunal set aside the possession notice observing that on
the basis of the Tripartite Agreement, there cannot be a secured mortgage,
particularly, the property in question was not even in existence. The 1 st
Page No.# 16/19respondent – Bank contended that the Debts Recovery Tribunal had failed to
consider the element of security interest according to Section 2(1)(f) of the
SARFAESI Act.
4.1. In these circumstances, it is appropriate to extract the definition of
‘security interest’ as per Section 2(1)(zf) of the SARFAESI Act, which reads
as follows:
‘Section 2(1)(zf) of the SARFAESI Act defines Security Interest as
follows:
‘Security Interest’ means right, title and interest of any kind, other than
those specified in Section 31, upon property created in favour of any
secured creditor and includes–
(i) any mortgage, charge, hypothecation, assignment or any right,
title or interest of any kind, on tangible asset, retained by the
secured creditor as an owner of the property, given on hire or
financial lease or conditional sale or under any other contract
which secures the obligation to pay any unpaid portion of the
purchase price of the asset or an obligation incurred or credit
provided to enable the borrower to acquire the tangible asset; or
(ii) such right, title or interest in any intangible asset or
assignment or licence of such intangible asset which secures the
obligation to pay any unpaid portion of the purchase price of the
intangible asset or the obligation incurred or any credit provided to
enable the borrower to acquire the intangible asset or licence of
intangible asset.
5. The contention of the petitioners that a charge was never created
on the property because it was not in existence on the date of Tripartite
Agreement, cannot hold good as per the provisions of Section 2(1)(zf) of the
SARFAESI Act.
6. It is also pertinent to note that on 16.09.2009, the 2 nd respondent
also acknowledged the debt outstanding of Rs. 48.18 lakhs and executed a
demand pro-note and the 2nd respondent was also paying the monthly
installments to the 1st respondent – Bank. The petitioners purchased the
property from Mrs. Pratima Vijay Kumar and others on 06.02.2010 by
availing loan from the Syndicate Bank, which was taken over by the State
Bank of India subsequently.
7. From the materials available on record, it is clear that the 1 st
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respondent – Bank had granted the loan of Rs. 48 lakhs based on the same
property. The respondents 2 & 3 conveniently remained exparte before the
Tribunal below. The 3rd respondent viz., M/s. Bhoomija Builders were given
Power of Attorney by the owners of the land viz., Mrs. Pratima Vijay Kumar
and others, who sold the property to the petitioners. It is also clear that in
respect of the same property, the 1 st respondent – Bank and also the 4th
respondent – Bank, sanctioned loans to the tune of Rs. 90 lakhs. A sum of
Rs. 42.28 lakhs was obtained by the petitioners from the Syndicate Bank,
which was subsequently taken over by the 4 th respondent and a sum of Rs.
48 lakhs was obtained by the 2nd respondent from the 1st respondent –
Bank. At the time of availing the loan from the 1 st respondent – Bank, the
Tripartite Agreement, Construction Agreement and Agreement for Sale were
given in respect of the property in question.
8. As per Section 58 of the Transfer of Property Act, where a person
delivers to a creditor or his agent document of title to immovable property,
should have intention to create a security thereon, the mortgage is created
by deposit of Title Deeds. Therefore, with an intention to create mortgage in
favour of the 1st respondent – Bank, the 2nd respondent had handed over the
Tripartite Agreement, Construction Agreement and Agreement for Sale and
also acknowledged the debt. The Sale Deed was executed in favour of the
1st respondent only on 21.05.2010. When the documents were handed over
to the 1st respondent, which includes the Agreement for Construction of the
property, with the consent of the land owners, now the petitioners cannot
take a different stand and cause loss to the 1 st respondent – Bank, which is
dealing with public money.
9. The learned senior counsel appearing for the petitioners, in support
of his contention, relied upon a judgment reported in (2012) 1 SCC 656
[Suraj Lamp and Industries Private Limited (2) through Director v. State of
Haryana] wherein the Hon’ble Supreme Court held as follows:
‘… 18. It is thus clear that a transfer of immovable property by way of
sale can only be a deed of conveyance (sale deed). In the absence of a
deed of conveyance (duly stamped and registered as required by law),
no right, title or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not a registered
deed of conveyance (deed of sale) would fall short of the requirements
of Sections 54 & 55 of the TP Act and will not confer any title nor
transfer any interest in an immovable property (except to the limited
Page No.# 18/19right granted under Section 53-A of the TP Act). According to the TP Act,
an agreement of sale, whether with possession or without possession,
is not a conveyance. Section 54 of the TP Act enacts that sale of
immovable property can be made only by a registered instrument and
an agreement of sale does not create any interest or charge on its
subject-matter.’9.1. The said judgment relates to Sections 54 & 55 of the Transfer of
Property Act and that Agreement of Sale does not create any interest or
charge on its subject matter.
9.2. There cannot be any dispute with regard to the ratio laid down in
the judgment cited supra. However, as per Section 58 of the Transfer of
Property Act, since the 2nd respondent had an intention to create mortgage
by deposit of Title Deeds, the loan advanced by the 1 st respondent – Bank
which is a public money, cannot be allowed to go un-recovered. In these
circumstances, the judgment relied upon by the learned senior counsel
appearing for the petitioners is not applicable to the facts and circumstances
of the present case.”
We are in perfect agreement with the view taken by the High Court of
Madras.
32. There is no quarrel about the proposition laid down by the Hon’ble
Supreme Court in the decisions on which the learned senior counsel for the
petitioner has placed reliance. However, the same are not applicable to the facts
and circumstances of the present case and, therefore, the same are of no help
to the petitioner.
33. So far as the contention of the learned senior counsel for the petitioner
that the petitioner is not covered by the expression “any person aggrieved”, as
used in Section 17(1) of the SARFAESI Act is concerned, we are of the view that
the same has no merit. The expression “any person” used in Section 17(1) of
the SARFAESI Act is wide enough to cover any person who is aggrieved by the
measures adopted by a bank in terms of Section 13(4) and Section 17 of the
Page No.# 19/19
34. The Hon’ble Supreme Court in United Bank of India -Vs- Satyawati
Tondon, reported in (2010) 8 SCC 110, has held as under:-
“42. There is another reason why the impugned order should be set
aside. If Respondent 1 had any tangible grievance against the notice issued
under Section 13(4) or action taken under Section 14, then she could have
availed remedy by filing an application under Section 17(1). The expression
“any person” used in Section 17(1) is of wide import. It takes within its fold,
not only the borrower but also the guarantor or any other person who may
be affected by the action taken under Section 13(4) or Section 14. ……..”
35. In view of the above discussions, we find no merit in this writ petition
and the same is accordingly dismissed. However, the petitioner is at liberty to
approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act
against the action of the respondent Bank, if so advised.
JUDGE CHIEF JUSTICE Comparing Assistant
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