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ASREC Ltd. v/s Cross Seas Leasing And Investment Co. Pvt. Ltd. & Others

    Appeal No. 175 of 2013

    Decided On, 07 January 2020

    At, Debts Recovery Appellate Tribunal At Mumbai


    For the Appellant: Ismail Nashikwala along with N.I. Bakali, Usha Mattam, Advocates. For the Respondents: R2, Karl Shroff along with Hema Desai, i/b M/s. Singhi & Co., Advocates.

Judgment Text

This appeal is preferred against judgment 3.1.2011 in Original Application (O.A.) No. 260/2001 on the file of Debts Recovery Tribunal No. 1, Mumbai (the Tribunal below).2. Appellant herein filed above referred O.A. for recovery of a sum of Rs. 1,64,42,723.69 against defendant Nos. 1 to 3 together with further interest in respect of Cash Credit Account-I and another sum of Rs. 2,24,34,773.13 against defendant Nos. 1 to 4 together with further interest in respect of Cash Credit Account-II. The said O.A. is contested and on consideration of material evidence, Tribunal below granted Recovery Certificate (R.C.) for the amount claimed under both the accounts with simple interest @10% per annum from the date of the suit till realization, but only granted personal decree and refused mortgage. Aggrieved by the said judgment, applicant Bank preferred present appeal contending that the Tribunal below erred in not granting mortgage decree.3. I have perused the material papers. This matter is originally filed before Hon’ble Court of Bombay in March, 1992 and thereafter it was transferred to the Tribunal below after establishment of Debts Recovery Tribunals under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the RDDB & FI Act). As per the plaint first relief is against defendant No. 1 for declaration and second relief is in the event of mortgage being created under orders of Tribunal below, then pass a mortgage decree. That was the relief claimed which shows that relief of declaration is sought for mortgage. Now, it may be relevant to examine pleadings with reference to mortgage in Para Nos. 19, 20 and 21 which are as follows:“19. By a letter dated 10th September, 1990 the 2nd defendant agreed to create an equitable mortgage in respect of his residential flat, and more particularly described in Exhibit “X” to the plaint. By the said letter dated 10th September, 1990, the 2nd defendant informed the plaintiff’s that the share certificate of the Co-operative Housing Society was with the Current Department of the plaintiff’s Main Branch at Bombay and that the same would be handed over to the plaintiffs on or before 11th September, 1990. The defendant No. 2 requested the plaintiffs to write a letter to the Co-operative Housing Society for necessary permission. A copy of the said letter dated 10th September, 1990 is hereto annexed and marked Exhibit “Y”.20. Under the instructions of the defendant No. 2, the Current Department of the plaintiffs, by their Memo dated 10th September, 1990 have forwarded the Share Certificate of the Society in respect of the said flat to the custody of Cash Credit Department of the plaintiffs to secure payments of the amounts due by the defendant Nos. 1 and 2 to the plaintiffs. The said original title deeds namely, the Share Certificate in respect of the flat described more particularly in Exhibit “X” to the plaint is in possession of the plaintiffs to secure the repayment of the amounts due and payable by the 1st defendants to the plaintiffs. The internal Memo of the plaintiffs will be referred to if necessary.21. The plaintiffs were informed by Ramjharukha Co-operative Housing Society that they would not be able to recognize the rights of the plaintiffs. The plaintiffs, therefore, called upon the 2nd defendants to create a valid mortgage in favour of the plaintiffs under the mistaken belief that permission of society was a must. The 2nd defendant offered to substitute the security. However, the 2nd defendant did not adhere to the same The plaintiffs are advised that though there is no permission of society, the said flat is validly mortgaged.”4. The Tribunal below while considering these aspects recorded in Para 19 of the judgment that three ingredients are required for granting a mortgage decree, firstly there should be an existence of a debt, secondly there should be deposit of original title deeds with the mortgagee and thirdly there should be a document showing the intention of a party to create equitable mortgage. After considering the material, the Tribunal below held that as there is no evidence showing compliance of all three requirements as per Section 58(f) of the Transfer of Property Act, 1882, therefore, rejected the relief of mortgage.5. Now, Advocate for appellant contended that by letter dated 10.9.1990 respondent No. 2 has agreed to create mortgage and the Tribunal below ought to have granted relief of specific performance. On the other hand, Advocate for opposite party submitted that Tribunal below cannot grant a decree of specific performance and for that appellant has to approach Civil Court. In answer to above argument, Advocate for appellant submitted as per decision dated 19.3.2004 of this Tribunal in Appeal No. 113/2002, the Tribunals have powers to grant specific performance decrees also and specifically submitted that he is relying on that judgment in support of his argument. He submitted that as this Tribunal held that DRT has power to grant relief of specific performance, the order of the Tribunal below has to be set aside.6. When it was put to Advocate for appellant how the relief of specific performance would fall within the definition of ‘debt’. He submitted that specific performance is ancillary relief for the relief of ‘debt’. I am not in agreement with submission of learned Counsel for appellant. When the Act is very specific with regard to the jurisdiction of Tribunals which clarified that it can only entertain debt claims relating to Banks and Financial Institutions and did not refer to any ancillary reliefs. The decision relied on by appellant is contrary to the provisions of Act and that too it is not binding on DRAT. In fact it is not expected from the appellant to cite judgments of my predecessors, when they are not having bi

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nding force. Advocate for appellant conceded that he is not relying on letter dated 10.9.1990 for the relief of mortgage, but the letter is relied only for relief of specific performance. As the DRT is not expected to pass any decree for specific performance, the Tribunal below was right in dismissing claim of mortgage because as per own submission of learned Counsel for appellant, this document is not enforceable document for relief of mortgage.7. For the above reasons, appeal is dismissed with costs quantified at Rs. 20,000 (Rupees Twenty Thousand only).8. All Miscellaneous applications, if any, are dismissed as infructuous.Appeal dismissed.