Bank of India & Ors. v. Rajendra S/o Parshuram Gainkar & Ors.
…Appellant
…Respondent
Case No: Appeal No. 94/2013
Date of Judgement: 07/09/2023
Judges:
Mr Justice Ashok Menon, Chairperson
For Appellant: Mr. O.A. Das along with Ms Pallavi Chari i/b Mr O.A. Das, Advocate.
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Facts:
These appeals (No. 94/2013, 95/2013, 96/2013, and 97/2013) concern identical issues regarding agreements to sell and consequent mortgages created over properties that were later sold to different parties, ignoring the earlier registered agreements to sell and mortgages.
- Bank of India (Appellant)
- M/s Suman Amrut Construction (Builder, a proprietorship represented by Praful Amrutrao Gajbe)
- Kishor Sukhdeorao Barbade (Owner of the land and developer)
Arguments by the Parties:
Arguments by the Appellant Bank:
Arguments by the Union Bank of India (Respondent):
The sale never concluded in favor of the borrowers, as the agreements clearly stated that the sale deed would be executed and registered after full and final settlement of accounts upon receipt of the bank loan or within one month, whichever was earlier. The possession of the property was agreed to be delivered only at the time of executing the sale deed, and the agreement specified that time was the essence of the contract. The borrowers failed to fulfill their obligation to pay the balance amount, get the sale deed registered, and take possession, rendering the agreement invalid. The borrowers, and consequently the Appellants as mortgagees, have no right, title, or interest over the flats.
The Presiding Officer concluded that apart from the agreement to sell the flats upon completion, no sale deeds were executed in favor of the borrowers, giving them no right, title, interest, or possession over the flats. On the other hand, the Applicants in the S.As., through the registration of sale deeds in their favor, gained possession of the properties in 2009 and were in exclusive enjoyment until filing the S.As. Unless there was a concluded sale in favor of the borrowers, they did not have exclusive rights, title, and interest over the flats to create a valid mortgage. The agreements to sell can be deemed conveyances under the Bombay Stamp Act only if coupled with handing over possession of the property to the purchaser, which did not occur in these cases. The agreements indicated that there was no concluded contract, as the sale deeds were to be executed and possession delivered after full payment and within a specified time, which did not happen. The borrowers did not pay any taxes for the building, indicating that the agreements were never acted upon, and the Bank did not pursue the matter to ensure compliance with the agreements. The agreements suggest that the flats remained with the seller until the sale deeds were executed and possession delivered. No action for specific performance was sought, and it is now time-barred. Collusion between the borrowers (members of the same family) and the builders/developers to avail the loan cannot be ruled out. The Applicants have been in exclusive possession and enjoyment of the properties since the sale deeds were executed in their favor. The Presiding Officer was justified in passing the order allowing the S.As and quashing the SARFAESI measures initiated by the Appellants.
Cases Cited:
Sections and Laws Referred:
Facts:
These appeals (No. 94/2013, 95/2013, 96/2013, and 97/2013) concern identical issues regarding agreements to sell and consequent mortgages created over properties that were later sold to different parties, ignoring the earlier registered agreements to sell and mortgages.
Arguments by the Parties: Arguments by the Appellant Bank: Arguments by the Union Bank of India (Respondent): The sale never concluded in favor of the borrowers, as the agreements clearly stated that the sale deed would be executed and registered after full and final settlement of accounts upon receipt of the bank loan or within one month, whichever was earlier. The possession of the property was agreed to be delivered only at the time of executing the sale deed, and the agreement specified that time was the essence of the contract. The borrowers failed to fulfill their obligation to pay the balance amount, get the sale deed registered, and take possession, rendering the agreement invalid. The borrowers, and consequently the Appellants as mortgagees, have no right, title, or interest over the flats. The Presiding Officer concluded that apart from the agreement to sell the flats upon completion, no sale deeds were executed in favor of the borrowers, giving them no right, title, interest, or possession over the flats. On the other hand, the Applicants in the S.As., through the registration of sale deeds in their favor, gained possession of the properties in 2009 and were in exclusive enjoyment until filing the S.As. Unless there was a concluded sale in favor of the borrowers, they did not have exclusive rights, title, and interest over the flats to create a valid mortgage. The agreements to sell can be deemed conveyances under the Bombay Stamp Act only if coupled with handing over possession of the property to the purchaser, which did not occur in these cases. The agreements indicated that there was no concluded contract, as the sale deeds were to be executed and possession delivered after full payment and within a specified time, which did not happen. The borrowers did not pay any taxes for the building, indicating that the agreements were never acted upon, and the Bank did not pursue the matter to ensure compliance with the agreements. The agreements suggest that the flats remained with the seller until the sale deeds were executed and possession delivered. No action for specific performance was sought, and it is now time-barred. Collusion between the borrowers (members of the same family) and the builders/developers to avail the loan cannot be ruled out. The Applicants have been in exclusive possession and enjoyment of the properties since the sale deeds were executed in their favor. The Presiding Officer was justified in passing the order allowing the S.As and quashing the SARFAESI measures initiated by the Appellants. Cases Cited: Sections and Laws Referred: