w w w . L a w y e r S e r v i c e s . i n



M/s. Lakshmi Ganga Educational & Cultural Society & Another v/s M/s. Cholamandlam Investment & Finance Ltd. & Others

    Appeal No. 367 of 2018

    Decided On, 25 May 2021

    At, Debts Recovery Appellate Tribunal at Delhi

    By, THE HONOURABLE MR. JUSTICE P.K. BHASIN CHAIRPERSON

    For the Appellants: Sunita Sharma, Advocate. For the Respondents: R1, Sanjeev Bhandari, R2 & R3, Reema Khorana, Advocate.



Judgment Text

1. The challenge in this appeal by the two appellants, who claim protection against their dispossession at the hands of respondent no.1 herein(secured creditor) from the property in question, as described in the impugned order by DRT, in which they claim to be in occupation, except second floor, as tenants of the respondents 2 and 3 herein, mortgagors of the property in question, is to the final order dated 06.07.2018 passed by the tribunal below(DRT-III, Delhi) whereby their Securitisation Application(S.A.) filed under Section 17(1) of the SARFAESI Act has been rejected.

2. The impugned order of the DRT gives the entire factual background of the case leading to the filing of the S.A. by the appellants and the present appeal and the respective stands of the parties and the arguments advanced by their advocates at the time of final hearing. In order to avoid repetition of facts etc. it is deemed appropriate to re-produce the impugned order itself. The same reads as under:-

“1. The present Securitization Application has been filed on behalf of the applicant for restraining the respondent bank from taking any further action under the SARFAESI Act, 2002 in respect of the property bearing no. WZ-267, out of Khasra no. 498/444/171, 497/47/171/7 situated at Nangal Raya, Jail Road, New Delhi (hereinafter referred as property in question).

2. The brief facts of the case are that the applicant submitted that the applicant no. 1 is an educational society running in the name and style of Lakshmi Ganga Educational and Cultural Society and running a school in the name and style Radiant Model School i.e.applicant no.2, recognised since 1986. The applicant no.1 through applicant no.2 has been running a school upto 8th standard without aid w.e.f. academic session 1980-1981. The said school is duly recognised with Directorate of Education vide letter dated 01.01.1986. The applicant no.2 is imparting the education to the poor children of the vicinity area and more than 400 children are getting education from applicant no.2.

3. It is further submitted that the applicants are aggrieved by a wrong action of the respondent no.1 bank initiated under Section 13 of the SARFAESI Act, 2002 and falls in the category of any person other than borrower/guarantor/mortgagor and at present the lesse of the property in question and serving the society by educating the poor children.

4. The applicant further stated that the respondent no.2 is the land lord/owner and lessor of the property in question and applicant no.2 is tenant/lessee of the property in question since 1980. In the year 1980, the respondent no. 2 & 3 agreed for giving the property in question on rent and it was agreed that the applicants can run a school at ground, first and third floor and respondent no.2 & 3 would reside at second floor of the said premises. The rent as agreed was Rs. 12,000/- per annum and at present the same has been mutually agreed and increased upto Rs. 36,000/- per annum. The respondent no.3 is the wife of respondent no.2 as well as the guarantor of respondent no.1.

5. It is further submitted that after having a consent from respondent no.2 & 3, the applicants started their process for taking sanction from the respective authorities and spent substantial amount for setting up infrastructure of the school and at present 400 students are studying in the school and applicant no.2 is paying a rent of Rs. 36,000/- per annum to the respondent no.2 and the same is reflected in the balance sheets of the applicant no.2.

6. It is further submitted that the applicants came to know from the notice affixed in the school that respondent no.1 had landed a sum of Rs. 1,04,00,000/- vide sanction letter dated 31.12.2013 against the mortgage of second floor of the property in question to respondent no.2 & 3 and respondent no. 1 & 2 have also taken another loan facility of Rs. 86 lacs against the mortgage of first and second floor of the property in question to respondent no.2 & 3 and respondent no. 1& 2 have also taken another loan facility of Rs. 86 lacs against the mortgage of first and second floor of the property in question vide sanction letter dated 12.10.2014 but applicants were never informed by the respondent no.2 & 3 nor by respondent no.1 about the above said loans.

7. It is further stated that on 29.07.2017, the respondent no.1 officials pasted/affixed a notice on the property in question and respondent no.2 & 3 were directed to hand over the possession of the property in question by 04.09.2017 at 11 a.m. It is further stated that neither the applicants were party to the said notice nor informed by the Court Receiver about the said proceedings and only affixation had taken place and after that applicant no. 2 immediately approached the respondent no.2 & 3, who briefed the applicants about the loan taken from respondent no.1 and thereafter their default for non-payment of EMI.

8. It is further stated that the order passed by the Ld. CMM is contrary to the fact and circumstances as well as law of the land and against the laws for tenant and the ground, third and fourth floor of the property in question well mortgaged to the respondent no.1 even then, the respondent no.1 through Ld. CMM and through receiver has given the notice of possession of the entire property in question. It is further submitted that the property in question was leased out in the year1984 and loan in question was sanctioned in the year 2013-14 and applicant no.2 is regularly paying the rent to the respondent no.2 and respondent bank has wrongly initiated the SARFAESI proceedings against the part of the property, which is not mortgaged with the bank i.e. ground and third floor of the property in question.

9. It is further stated that the Ld. CMM has failed to consider the fact that the school is running in the premises in, question and number of children are in the mid-session of the academic session and it would be very difficult to transfer them at this juncture and the order passed by the Ld. CMM is against the natural justice as well as contrary to the law as the applicants are necessary parties but applicants were not arrayed as defendants/respondents, hence the full case is bad for non-joinder of necessary parties. It is also stated that no notice has ever been given to the applicants before proceedings under the SARFAESI Act, 2002 and the action of the respondent no.1 under the Act in respect of the property in question is arbitrary, illegal, null and void –ab-initio, hence the same is liable to be quashed.

10. Reply was filed on behalf of respondent FI, denying all the averments made in the application and submitted that the present SA is not maintainable and liable to be dismissed, as the applicant has not come with clean hands before this Tribunal and applicant herein has no locus to file the present SA. The applicant, in order to delay the recovery proceedings, has filed the present SA, wherein the family members of the applicant are main borrowers of the said loan and upon default committed by the borrowers, they in connivance of the present applicant had filed the present SA. It is further submitted that under no imagination the rent could not be Rs. 36,000/- per annum because as per the prevailing market rent, the same should not be less than Rs. One lac per month.

11. It is further submitted that the applicants had availed a Home Equity Loan of Rs. 1.90 crores, wherein the borrower i.e. respondent no.2 & 3 being the mortgagor had mortgaged the property in question and signed relevant documents. However, the borrowers failed to adhere to the financial discipline and account of the firm was classified as NPA and accordingly the notice under section 13 (2) was issued, however, the borrowers failed to repay the said outstanding amount and as on date an amount of Rs. 2,09,25,513/- is due and payable by the borrowers i.e. respondent no.2 & 3 and the present in connivance with the borrowers has filed the present SA in order to delay the recovery proceedings. Hence, all the action/measures taken by the respondent bank were in accordance with law, accordingly, prayed for dismissal of the present SA.

12. On behalf of respondent no.2 & 3, reply of the SA has been filed submitting that on 31.12.2013, the respondent no.1 bank had sanctioned a loan to respondent no.2 to the tune of Rs. 1.04 crore and respondent no.3 stood as guarantor, but it was a clean loan and no mortgage whatsoever except the documents of the property in question had been taken just for showing its worthiness. Thereafter, on 12.10.2014, the respondent no. 1 has sanctioned a loan to the tune of Rs. 86 lacs and documents, which were already with the respondent no.1 had been retained and in this loan also, the answering respondents had given the guarantee.

13. It is further submitted that it is without imagination that respondent no.2 & 3 would have mortgaged the property in question and in the property, which claimed said to have been mortgaged by them, is a school which is running since 1980 and respondent no.2 & 3 leased out the said property to the applicant on a monthly rent of Rs. 36,000/- and if the said property would have been mortgaged as per the system of the banks/FI, then the advocate who had been assigned the task of Legal Security Report must have mentioned in the report. Further, the person who had been assigned the task of valuation report would not have cleared the same for the reasons, a school is running in the property and in case of default, it would be almost impossible to take possession.

14. It is further stated that before amendment of Act, the school being a lessee could not be directed to vacate the property and it is worth mentioning that the loans in question are before the amendments incorporated in the SARFAESI Act, 2002 and the respondent bank did not submit any documents having anything, by which, any parameters well mentioned. It is further stated that the structure/architecture of the property is such that ingress and egress of all the floors are so interconnected that one has to use all the floors to go to the other floor or any floor in such a situation practically it is not possible to take the possession of the 2nd floor. It is further stated that not only the notice under Section 13 (2) of the SARFAESI Act is defective and do not stand as per cannons of SARFAESI Act, 2002. Hence the proceedings initiated by the respondent no.1 against the applicants are liable to be rejected, as the loan taken by the respondent no.2 & 3 was a clean loan and no property, whatsoever was mortgaged by them, even there is no document, which shows that they have mortgaged the property and only the documents were kept by the respondent no.1 FI just to ascertain the net worth of the respondent no.2 & 3. Rest of the paras of the SA denied. Accordingly, made prayer for allowing the SA of the applicant.

15. Rejoinder of the reply on behalf of respondent FI, filed by the applicant. All the averments made in the reply were denied and further all the corresponding paras of the SA reiterated by the applicant and prayed for acceptance of the SA.

16. In order to prove her case, the securitization applicant has filed evidence by way of affidavit of Ms. Nanda Singh and exhibited the documents such as List of governing body/executive members as Ex. PW1/A (Colly), application filed by applicant no.1 is Ex. PW1/B (Colly). Registration certificate, Bye Laws, list of governing body/executive members and pan are annexed as Annexure A-1 (Colly) and the same exhibited as PW1/1 (Colly). She further proved the documents such as recognition letter dated 01.01.1986 terminal examination sheet, registers of different years, Fee Register since 2013 to 2017 of different classes and staff list are enclosed as Annexure- A/2 (Colly) and same is exhibited as PW1/2 (Colly), audited balance sheet of last few years and last three years of applicant no. 2 are enclosed as Annexure A/3 (Colly) and the same is exhibited as PW1/3 (Colly). Sanction letter dated 31.12.2013 & 12.10.2014, which are enclosed as Annexure A/4 & A/5 are exhibited as PW1/4 and PW1/5. Order dated 17.07.2017 passed by Ld. CMM enclosed as Annexure A-6 is exhibited as PW1/6 and possession notice dated 12.08.2017, enclosed as Annexure A/7 is exhibited as PW1/7 respectively.

17. The respondent FI has filed its evidence by way of affidavit of Shri Gaurav Dahiya, Area Manager Legal of respondent FI and he has exhibited various documents such as Board Resolution as Ex. RW1/1, Gazette Notification dated 05.08.2016 as EX. RW1/2, Loan documents and loan agreement as EX. RW1/3, Notice under Section 13 (2) as EX. RW1/4, Copy of statement of account as Ex. RW1/5 respectively.

18. The respondent no.2 has also filed its evidence by way of affidavit of Raghuvender Singh and exhibited the reply to SA as Ex. RW-2/A (Colly), Judgement passed in the matter of Mardia Chemical as Ex RW2/1 Rent receipts as Ex. RW2/2 and notice under Section 13 (2) as RW2/3, Order dated 17.07.2017 passed by Ld. CMM as RW2/4.

19. The respondent no.3 has also filed its evidence by way of affidavit of Geeta and exhibited the reply to SA as EX. RW-3/A (Colly).

20. Heard and the record has been perused thoroughly. The applicant no.1 i.e. M/s Lakshmi Ganga Educational & Society through its Secretary –Mrs. Nanda Singh filed their evidence in order to corroborate their case and reiterated the facts as stated in the SA. They have also relied upon the Bye Laws of the applicant no.1 society and list of governing body of executive members as Ex. AW-1/A (Colly), registration certificate, Bye Laws, List of governing body/executive members and PAN card as Ex. AW-1/1 (Colly), recognition letter dated 01.01.1986, terminal examination sheet/register of different years, fee register since 2013 to 2017 of different classes and staff list are Ex. AW-1/2 (Colly) and the audited balance sheets last few years and last three years of applicant no.2 are Ex. AW-1/3 (Colly).

21. On other hand the respondent no.1 FI has also filed the evidence by way of affidavit of Shri Gaurav Dahiya – Area Manager and he has reiterated all the facts as stated in the reply.

22. The respondent no.2 has also filed the evidence by way of his affidavit and he has also reiterated all the facts as stated in the reply.

23. In the present matter after going through the facts and evidence placed on record, there are two following questions for determination:

(i). Whether the applicant no.1 M/s Lakshmi Ganga Educational & Cultural Society was running a school in the entire disputed premises and valid tenancy was created in its favour by the respondents no.2 and 3 or not with respect to ground, first and second floors of the property in question?

(ii). Whether the loan was duly sanctioned by the respondent bank in favour of respondent nos. 2 and 3 and the collateral security was created by mortgaging the first and second floor of the property in question?

(iii). Whether the action/measures of the respondent bank initiated under the SARFAESI Act, 2002 qua the property in question was valid or not?

FINDINGS WITH REASON:

Point (i):

24. In this regard, though the applicant no.1 through Mrs. Nanda Singh as well as respondent no.2 –Raghvendra Singh has placed on record their respective affidavits along with documents i.e. recognition letter dated 01.01.1986, terminal examination sheet/register of different years, fee register since 2013 to 2017 of different classes and staff list Ex. AW-1/2 (colly) and it was also deposed that earlier the rent was agreed at Rs. 12,000/- per annum, but presently it was mutually agreed to increase rent to Rs. 3,60,000/- per annum. It is also being submitted by Nanda Singh as well as Reghuvendra Singh that they were running a school in the disputed premises under the name and style of “Radiant Model School” since the year 1986. The respondent no.2 who is the owner of the property in question is residing in the second floor of the property in question, whereas the rest floors i.e. ground and first floors were given on rent @ Rs. 3,60,000/- per annum and the said amount was duly reflected in the balance sheet.

25. The respondent no.2 also stated that the rent was increased to Rs. 3,60,000/- and that is being paid regularly. However, on behalf of either of the parties, no such rent agreement has been placed on to show that alleged school is running there and for what period of lease was created. There is no registered or unregistered rent agreement on record to corroborate the fact that the said premises were duly given on rent by the respondents no.2 & 3 to the applicant no.1. Though, the rent of Rs. 36,000/- is being reflected in the statement of account showing that the rent is being paid, but no income tax return of the respondent no.2 has been placed on record to support the said fact that the rent of Rs. 36,000/- is being received by the respondent no.2 and was being reflected in income tax return. Further there is contradiction regarding rent as at some occasion it was mentioned as Rs. 3.60 Lacs and other time as Rs. 36,000/- p.a. Moreover, the rent also does not seem to be appropriate as per the area of the building allegedly to be rented out and where more than 600 students said to have been accommodated, which created a doubt about the tenancy of both the floors. No such unregistered/registered rent agreement and rent receipts have been placed to support their contention. Therefore, it could not be said that the said premises were rented out by the respondents no.2 and 3 to the applicant no.1 for a particular period or unlimited period, thus tenancy, if any, in such manner cannot be treated as a valid tenancy.

26. Even, for the sake of argument, if it is presumed that the first floor of the said premise was given on rent, then the tenancy could be treated at the most month to month basis, because of the reason that there is no such registered or unregistered rent agreement has been placed on record. Merely, that some documents placed on record supported the fact that some students are studying and salary is being paid to the teachers there and their carrier would affect does not mean that the owner/borrower would escape from their liability to pay the dues of the respondent bank.

27. Moreover, no such record since the year 1986 has been placed on record, except four years i.e. between 2013 to 2017, regarding the tenancy created between the applicant no. 1 and the respondents no.2 & 3, that too, when the tenancy was created for such a long period, if so, there must be some registered agreement for creating valid tenancy. Section 107 of the Transfer of property act provides that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument and all other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Hence, if any of the appellants claim that they are entitled to possession of a secured asset for any term exceeding one year from the date of the lease made in his favour, he has to produce proof of execution of a registered instrument in his favour by the lessor. Where he does not produce proof of execution of a registered instrument in his favour and instead relies on an unregistered instrument or oral agreement accompanied by delivery of possession. None of the applicants could produce registered or unregistered lease deed in their favour executed by the respondents no.2 & 3, and the said leases have to be construed as no valid lease, therefore, no rights would flow to resist the order passed by the learned Chief Metropolitan Magistrate under Section 14 of the Act. In this regard reliance can be made from the citation of Hon’ble High Court of Andhra Pradesh in the matter of Smt. P. Kiranmal Vs. The Bank of Maharashtra- Writ Petition nos. 34750 of 2015 decided on 05.01.2016.

28. ld. Counsel for the applicant has relied upon the citation of Hon’ble Supreme Court in the matter of Vishal N Kalsaria Vs. BOI- 2016 Lawsuit (SC) 48. There is no doubt about the proposition laid down, but unless it is proved on record that valid tenancy was created, the applicant is not entitled to any help of the same. Further the said principle was laid down as per the unamended Act, whereas subsequent to the amendment the Parliament in its wisdom had given power to the Debt Recovery Tribunals to deal with such cases, where the applicants are coming under the SARFAESI Act, 2002 on the basis of creation of tenancy. Therefore this issue can be dealt with by this Tribunal. In the present case, the applicant relied upon the oral agreement came up at the time to delivery of possession as alleged. Thus, even otherwise the applicant is not entitled to possess the secured asset for more than 11 months at the most from the date of delivery of possession, therefore, the secured creditor is duly empowered to take the possession of the secured asset after the automatic termination of tenancy. Though, it is being submitted that mortgage was created after creation of tenancy, but it is a matter of fact that no such documents have been placed on record to support their contention that valid tenancy was created after creation of tenancy was created between the applicant no.1 and the respondents no.2 and 3. In the present matter, the loan facility was advanced by the respondent no.1 FI on 31.12.2013 and equitable mortgage qua the property in question was created by depositing the title documents of the property in question in favour of the respondent no.1 FI. All the documents regarding running of school, registration certificate salary register etc. have been placed, but the same pertains to the year 2013 to 2017 only. In this context, Section 65A of Transfer of Property Act is reproduced, which is as under:

“...65A. Mortgagor’s power to lease – (1) Subject to the provisions of Sub-Section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make lease thereof which shall be binding on the morgagee.

(2) (a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law custom or usage.

(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.

(c) No such lease shall contain a convent for renewal.

(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.

(e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a convenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified....”

29. No doubt, as per the Section 65A (d & e) of the Transfer of Property Act, the borrowers/mortgagor has a right to lease out the property, but such lease should not be later than six months from the date, on which it is made and the duration of the lease shall in no case exceed three years and the lease shall contain a covenant for payment. Though it is being contended that the rent was being paid regularly by the applicant, but no such receipts have been placed on record. The respondent no.2 withheld the material documents i.e. income return and municipal receipt etc., which would corroborate the payment of rent. Therefore, at the most it is to be considered that the tenancy was created on month to monthbasis. For the sake of argument, even, if it is presumed that the applicant was enjoying the tenancy in the said property, that stands terminated by efflux of period. Therefore, from all the angles the said tenancy is no more existence as per the law.

Point no. (ii):

30. Now, it is to be seen whether the entire property i.e. first and second floors of the property in question were validly mortgaged by the respondents no.2 and 3 with the respondent no.1. Undisputedly, a loan of Rs. 1.04 Crores was sanctioned by the respondent no.1 to the respondents no.2 and 3 on 31.12.2013 (sanction letter Ex. PW-1/4) and further loan of Rs. 86.00 lacs was also sanctioned to the respondents no.2 and 3 against the mortgage of first and second floors of the property in question. It is admitted fact that equitable mortgage was created by depositing the title documents in favour of the respondent no.1 FI, but it is being contended on behalf of the respondents no.2 and 3 that only second floor of the property in question was mortgaged with the respondent no.1 bank and the document reflecting the first and second floors was later on forged & fabricated by the respondent no. 1 FI.

31. On the other hand, Ld. Counsel for the respondent no.1 FI vehemently contended that no such forgery was committed by the respondent no.1 FI and the entire first and second floors of the property in question were validly mortgaged with the respondent no.1 FI by the respondents no.2 and 3 and presently, more than Rs. 2.04 crores is due against the respondents no.2 and 3 and now they are taking one plea or other just to avoid their liability.

32. On the respondents no.2 and 3 it is being contended that there is no ingress outgress on the second floor except the same gate by which the ground, first and second floors portion are being used and in case the same is sealed, no other part of the property can be used. In this context, it is to be mentioned that the from the documents PW-1/4, wherein it is mentioned that second floor has been mentioned in the last column of sanction letter, wherein no doubt, the address of the property has been mentioned as second floor at the time of sanction of loan of Rs. 1.04 crores on 31.12.2013. further loan of Rs. 86.00 lacs was also sanctioned and documents have been exhibited by the applicant himself as PW-1/5 i.e. sanction letter with respect to loan of Rs. 86.00 lacs sanctioned on 02.10.2014, wherein the address of the security has been mentioned as first and second floor and this fact stands corroborated from the loan documents, wherein the description of the assets in the sanction letter mentioned as first and second floor. However, it is being argued on behalf of the applicant no.1 and the respondents no.2 & 3 that word FI has been added later on, accordingly, forgery was committed by the respondent no.1 FI.

33. Apparently, the document placed on record does not show that such word was added later on. Even otherwise, no such complaint has ever been made to the police authorities or any higher authorities regarding such forgery committed by the respondent no.1 FI. Had it been so, the same would have corroborated that first floor was not mortgaged with the respondent no.1 FI by the respondent nos. 2 and 3. No such application was made to send the documents to FSL to examine the same. Now, the respondents no.2 and 3 came out of hibernation to take such plea that the document was forged, which has no basis. It is also stated above that earlier the loan was extended for a sum of Rs. 1.04 crores against the mortgage of second floor, however, later on another loan of Rs. 86.00 lacs was also extended and in order to secure the said loan facilities, both the first and second floor of the said property were mortgaged by the respondents no.2 and 3. Therefore, there is no force in the contention of the Ld. Counsels for the applicant and the respondents no.2 & 3 that the first floor of the said property was not mortgaged with the respondent no.1 FI. Therefore, it is proved on record that the loan for a sum of Rs. 1.04 crores and another loan of Rs. 86.00 lacs were extended on 31.12.2013 on 02.10.2014, respectively and in order to secure the said loan facilities the respondents no.2 and 3 equitably mortgaged the first and second floor of the property in question in favour of the respondent no.1 FI.

Point no. (iii):

34. Now, it has to be looked into the case, whether actions/measures of the respondent no. FI under the SARFAESI Act, 2002 by issuing the notice under section 13 (2) and 13 (4) of the Act, 2002 and declaration of the account as NPA were illegal or malafide one. In this context it is to be mentioned that it is not disputed on the part of the borrower/guarantor i.e. respondents no.2 and 3 that notice under Section 13 (2) and 13 (4) of the Act, 2002 were not served upon them and the account was wrongly declared as NPA. Even, otherwise there iota of evidence on record to show that the actions/measures of the respondent bank are illegal or irregular. Apparently, the proxy litigation is launched by the respondents no.2 and 3 through the present securitization applicant, in order to avoid their liabilities. Therefore, it is not proved on record that the actions/measures of the respondent no.1 under the SARFAESI Act, 2002 qua the property in question are absolutely illegal, irregular and null & void. It is only contended on behalf of the respondents no.2 and 3 that a sum of Rs. 8.00 lacs has already been deposited with the respondent FI after the declaration of the account as NPA, however, the same shall be credited in accordance with law.

35. Therefore, actions/measures of the respondent no.1 FI under the SARFAESI Act, 2002 have rightly been taken against the secured asset of the respondents no.2 and 3 and there is no illegality or irregularity in the actions/measures taken by the respondent no.1 FI qua the secured assets.

36. In sequel of abovesaid discussion, this Tribunal is of view that there was no tenancy created by the respondents no.2 and 3 in favour of the applicant with respect to the first floor of the disputed property and the first and second floor of the dispute property were duly equitably mortgaged with the respondent bank by the respondents no.2 and 3 as security towards the loan facility extended for a sum of Rs. 1.04 crores and the respondents no.2 and 3 committed wilful default in repayment of the same, as such there was no illegality or irregularity in the actions/measures of the respondent bank under the SARFAESI Act, 2002 towards the first and second floor of the property in question.

37. Consequently, the present securitization application fails, accordingly, stands dismissed.

File be consigned to records.”

3. Feeling aggrieved the appellants have come up in appeal which this Tribunal can say unhesitatingly to be without any merit and is liable to be dismissed.

4. After carefully and minutely examining the material available on

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record I have also no hesitation in concurring with the final decision of the learned DRT quashing the auction sale. Hon’ble Supreme Court had in two of its judgments reported as 2001(3) SCC 179 and AIR 1967 SC 1124 had held that if the appellate court is in general agreement with the decision of the trial court then elaborate discussion of evidence etc. need not be undertaken. Therefore, I am not entering into detailed discussion and examination of the evidence adduced by the appellants in support of their claim of being tenants in the ground, first and third floors of the property in question title deeds of which entire property admittedly were deposited with the respondent no.1 FI by respondents 2 and 3 to create equitable mortgage to secure the repayment of the loan of over a crore of rupees in the year 2013. Though the appellants and respondents 2 and 3 had sought to establish that the title deeds were deposited with respondent no.1 at the time of sanction of loan to show their financial worth but subsequently the FI taking undue advantage of the situation was using the custody of title documents t show that there was an equitable mortgage but this plea of theirs hardly inspires confidence and highly improbable also. 5. The appellants though had pleaded in their S.A. that they had entered into the ground, first and third floors of the property in question as a tenant in the early eighties but that have not placed on record any agreement between them and respondents 2 and 3 and it is not believable that for creating tenancy of non residential purpose in a residential premises there would have been only oral understanding between the owner of the property and the tenant. The appellants have claimed that after taking on rent the property in question they had approached the education department of the Government and had got recognition for their school. They could have placed on record some document to show that they had declared before the concerned authority that it was a case of oral tenancy for running a school. No such document has been filed by the appellants. In these circumstances, the plea of the FI that this is a case of collusion between the appellants and respondents who have to pay crores of rupees(public money) to the FI appears to be quite probable and acceptable also. 6. Learned counsel for the appellants had argued that for the creation of a tenancy no written document is necessary and so there was nothing wrong in the respondents entering into an oral agreement of tenancy. However, in the facts and this case that argument s not acceptable. I have already observed that in the facts and circumstances is highly improbable that a non-residential tenancy would have been created just by way of an oral understanding between the appellants and respondents 2 and 3. 7. Thus, while generally agreeing with the findings of the DRT this Tribunal finds no reason to interfere with the decision of the DRT. In view of this conclusion I need not go into the question raised on behalf of the auction purchaser to whom the property in question stands sold by the FI during the pendency of this appeal and who had moved an application for impleadment but withdraw, as well as the FI that the property is being actually used for running a non-vegetarian eating house contrary to the claim of the appellants that school is being run there. 8. This appeal being devoid of any merit is dismissed.
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