Govinda Choudhary v. The Saraswat Co-operative Bank Ltd. & Ors.

Govinda Choudhary

…Appellant

…Respondent

Case No: Misc. Appeal No. 67/2023

Date of Judgement: 15/09/2023

Judges:

Mr Justice Ashok Menon, Chairperson

For Appellant: Mr V.N. Ajikumar, Advocate.

Download Court Copy CLICK HERE

Facts:

Arguments by the Appellant:

Arguments by the First Respondent (Saraswat Co-operative Bank Ltd.):

The first Respondent argues that the agreement for sale in favor of the second Respondent borrower by the third Respondent on 13.02.2017 was a registered document, and neither the Appellant nor his creditor (fourth Respondent bank) conducted proper due diligence before purchasing or financing the secured asset. The first Respondent contends that the existence of a registered agreement to sell could not have gone unnoticed, and there is a tripartite agreement dated 01.02.2021 between the first Respondent bank, second Respondent borrower, and third Respondent builder, where the existence of the agreement of sale between the second Respondent and third Respondent is admitted. The first Respondent argues that the Housing Society was not yet registered in 2017 and could not have issued a share certificate in favor of the second Respondent. The first Respondent points out that the builder has subsequently challenged the execution of the tripartite agreement and accused the bank of forgery, which is being investigated. The first Respondent contends that a registered agreement for sale could not have been canceled by an unregistered memorandum relied upon by the third Respondent. The first Respondent argues that the Appellant and the fourth Respondent did not perform due diligence, as the encumbrance certificate was obtained by the Appellant only for a period of one year from 12.06.2019.

Cases Cited:

K.J. Nathan vs. S.V. Maruthi Rao AIR 1965 SC 430

Dahiben vs. Arvindbhai Kalyanji Bhanusali (2020) 7 SCC 366

Sections and Laws Referred:

Section 13(4) and Section 14 of the SARFAESI Act

Section 48 of the Transfer Property Act

Proviso to Section 48 of the Registration Act

Sections 465 and 468 of the Indian Penal Code (IPC)