Bangalore District Court
Sri. Rajashekaraiah vs Sri. Jagadeesh S. Bhatt on 13 April, 2017
IN THE COURT OF THE XXXVII ADDL. CITY CIVIL &
SESSIONS JUDGE (CCH-38), BANGALORE CITY.
PRESENT:
SRI. VENKATARAMAN BHAT, B.Sc.,., LL.B. (Spl.)
XXXVII ADDL. CITY CIVIL JUDGE, (CCH-38)
BANGALORE
DATED: THIS THE 13TH DAY OF APRIL 2017
OS.NO.2600 OF 2013
PLAINTIFF/S SRI. RAJASHEKARAIAH
S/O LATE REVANNA
AGED ABOUT 66 YEARS,
RESIDING AT No 26,
4TH CROSS, 10TH MAIN,
RPC LAYOUT, HAMPINAGAR,
BANGALORE - 560 104.
(By Sri. N. Shashi Bhushan,
Advocate)
Versus
DEFENDANT/S 1. SRI. JAGADEESH S. BHATT,
S/O LATE SHIVARAM BHATT,
AGED ABOUT 54 YEARS,
RESIDING AT No12, 1ST
CROSS, 2ND MAIN, BAHUBALI
NAGAR, JALAHALLI POST,
BANGALORE - 560 013.
2. SMT. SHAMBHAVI S. NAYAK
W/O SRINIVASA NAYAK,A GED
ABOUT 54 YEARS, RESIDING
AT No. 127, S.N. MEN'S
CORNER, K.G. NAGAR,
BANGALORE -= 560 019.
2
O.S.No. 2600 / 2013
3. HOUSING DEVELOPMENT
FINANCE CORPORATION,
(HDFC) BANK LIMITED, NO. 51,
KASTURBA ROAD,
BANGALORE - 560 001,
REPRESENTED BY ITS
AUTHORIZED OFFICER.
(Defendants No.1 and 2 - Exparte
Defendant No.3 - by Sri. B.S.M. Adv.)
Date of Institution of the 03.04.2013
suit
Nature of suit Suit for declaration and
permanent injunction.
Date of commencement of 20.06.2014
recording of evidence.
Date on which judgment 13.04.2017
was pronounced.
Total Duration. Years Months Days
04 00 10
XXXVII ACCJ, BANGALORE
3
O.S.No. 2600 / 2013
JUDGMENT
Plaintiff filed this suit against the defendants with the following reliefs.
(a) Declaring the plaintiff as the absolute owner of the 'B' schedule property having acquired the same under a sale deed dated 21.08.2003 executed by Smt. Lalithamma in favour of plaintiff, duly registered as Document. No.12912/03-04 of Book I, stored in CD No.137 at the office of the Sub-Registrar, Kengeri, Bangalore.
(b) Consequently, declare the sale deed dated 10.12.2001 executed by Sri. M.R. Govindaraju, Sri. R. Tukaram, Sri. R. Lakshminarayana and Sri. R.Prakash, sons of late Ramaiah in favour of the second defendant, registered as Document.
No.11778/2001-02 stored in CD No. 76 at the office of the Sub-Registrar, Kengeri, Bangalore as null and void in law.
(c) Consequently, declare the sale deed dated 19.12.2011, registered as Document. No.BSK- 1-07746/211-12 stored in CD No.BSKD-139 at the office of the Sub-Registrar, Basavanagudi (Banashankari), Bangalore executed by the second defendant in favour of first defendant as null and void in law.
(d) Consequently refraining the defendants from in any manner interfering with the plaintiffs peaceful possession and enjoyment of the 'B' schedule property.
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O.S.No. 2600 / 2013
2. The brief facts of the case are as follows.
One Sri. M. Ramaiah S/o late Chennappa was the absolute owner of the property measuring 5 acres 35 guntas of land in Sy. No. 11/2, Uttarahalli Village, Bangalore South Taluk. Out of this extent 7 guntas pot- karab is excluded. Sri. Ramaiah divided the said land into several plots of land and sold in favour of different purchasers for valuable consideration under different sale deeds. Plaintiff's vendor Smt. Lalithamma had purchased one such plot of land / site / Thaku Jameenu, No. 5 & 6 admeasuring 2.2 guntas, out of Sy. No. 11/2, Uttarahalli Village, Uttarahalli Hobli, Bangalore South Taluk, under a registered sale deed dated 21.08.1980. The said property is more particularly shown as 'A' Schedule property. Katha has been changed into the name of Smt. Lalithamma. She has been put into physical possession of 'A' schedule property by Ramaiah. The name of Lalithamma has been mutated as per M.R. no. 95/1980-
81. The said Ramaiah had sons by names M.R. Govindraju, R. Tukaram, R. Lakhminarayana and Sri. R. Prakash. They confirmed the execution of sale deed by 5 O.S.No. 2600 / 2013 their father in favour of Smt. Lalithamma and to that effect they sworn an affidavit. Thereafter the present plaintiff had purchased the 'A' schedule property from Smt. Lalithamma, under a registered sale deed dated 21.08.2003. Katha has been changed into the name of plaintiff. Possession has been handed over to the plaintiff by her vendor. Name of the plaintiff has been mutated as per M.R. No. 3/2003-04. Thereafter the property has come within the jurisdiction of Bruhat Bangalore Mahanagara Palike. The BBMP recognized the ownership of plaintiff over the A-schedule property and issued Katha in the name of plaintiff. BBMP started to collect the property tax from the plaintiff for the period 2008-09. As an abundant caution, plaintiff took public notice in Kannada daily newspaper Sanjevani, Bangalore Edition on 11.03.2009 informing the public about title of the plaintiff over the A-schedule property and called upon the objection, if any. Advocate for plaintiff issued certificate that nobody filed objection to the said notice. BBMP has issued form B-Katha assessing the property taxes vide Katha dated 10.11.2010. The plaintiff was shocked 6 O.S.No. 2600 / 2013 on 10.02.2013 to see a Flex Banner put upon by defendant No.3 - Bank on a portion of A-schedule property claiming that the site No.5, out of Sy. No. 11/2 has been mortgaged by defendant No.1 in favour of defendant No.3 - Bank. In fact, subject matter of this suit is pertaining to B-Schedule property which is shown as under.
B-SCHEDULE PROPERTY (Half part of the A-schedule property which is the subject matter of this suit) All that piece and parcel of the plot / site / Thaku Jameenu NOI.5 measuring 1.1 (one point one) Guntas of land, formed out of Sy. No. 11/2, Uttarahalli Village, Uttarahalli Hobli, Bangalore South Taluk, now coming under the jurisdiction of the Bruhat Bangalore Mahanagara Palike Ward No. 187 and assigned new Municipal, No. 5, Sy. No. 11/5, Uttarahalli Bangalore and comprising of a dwelling unit constructed therein of 1 square ACCORDING sheet roof house with brick-wall red-oxide flooring, jungle wood door and window with water, light and sanitation including all privileges, easementary rights and appurtenance thereto and the site measuring.
East to West : 30 feet.
North to South : 40 feet
Admeasuring : 1200 sq.ft.
and bounded as follows
East by : Site No.6
West by ; Site No.4
North by : Private property and
South by : Road.
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O.S.No. 2600 / 2013
Thereafter, plaintiff got issued legal notice dated 13.02.2013 to defendant No.3 to explain its action with respect of B-schedule property. Defendant No.3 by way of explanation replied to the notice through its advocate on 25.02.2013 to the effect that the defendant No.1 is the owner of the B-schedule property and purchased the same from defendant No.2 under a registered sale deed dated 19.12.2011. It is further stated that the defendant No.1 had availed huge loan by mortgaging the said B- schedule property in favour of defendant No.3 Bank. However, defendant No.1 became defaulter in repayment of the said loan. Under these circumstances defendant No.3 initiated action against defendant No.1 under the provisions of SARFAESI Act. On further enquiry plaintiff came to know that sons of Sri. Ramaiah knowing fully well that during the life time of his father executed registered sale deed in respect of A-schedule property in favour of Smt. Lalithamma with fraudulent intention executed registered sale deed in favour of defendant No.2 8 O.S.No. 2600 / 2013 on 10.12.2001 with respect to B-schedule property. Thereafter defendant No.2 had executed registered sale deed in favour of defendant No.1 on 19.12.2011. According to the plaintiff, the said transaction is fraudulent transaction and no title has been transferred in favour of defendant No.2 nor defendant No.1. It is further stated that by knowing fully well that they confirmed the sale deed executed by their father, sons of Ramaiah, with fraudulent intention executed this deed in favour of defendant No.1. It is submitted that there is denial of title and possession of the plaintiff over the B- schedule property. There is interference with possession and enjoyment of the plaintiff over the B-schedule property. It is submitted that neither sale deed of defendant NOI.2 dated 10.12.2001 nor sale deed of defendant No.1 dated 19.12.2011 are not binding on the plaintiff. Under these circumstances, plaintiff filed this suit for declaration of sale deeds of defendants No.1 and 2 with consequential relief of permanent injunction. 9
O.S.No. 2600 / 2013
3. On being summoned, defendants No.1 and 2 failed to appear before the Court in spite of service of summons. Accordingly, defendants No.1 and 2 were placed exparte. Defendant No3 being Bank put appearance through its advocate and filed written statement as under.
At the outset it is pleaded that suit is not maintainable either in law or on facts. It is submitted that defendant No.1 had approached the defendant No.3 for sanction of home loan in respect of B-schedule property. After processing the documents, defendant No.3 sanctioned a sum of Rs. 31 lakhs as loan in favour of defendant No.1 on 17.12.2011. The loan carried interest at 11% p.a. Defendant No.1 has created the mortgage by way of deposit of title deeds. However, defendant No.1 became defaulter in repayment of loan. Under these circumstances, defendant No.3 issued a notice on 31.03.2013 and later issued demand notice under Section 13 (2) of SARFAESI Act 2002 to pay the entire due amount. It is alleged that plaintiff colluded with defendants No.1 and 2 and filed this frivolous suit against defendant No.3.
10
O.S.No. 2600 / 2013 It is submitted that notice under Section 13 (2) of SARFAESI Act, has been received by borrower of the loan. It is specifically pleaded that the suit is barred under Section 34 of SARFAESI Act. It is further pleaded that as per Section 32 of SARFAESI Act, no suit or transaction or legal proceedings shall lie against any secured creditors or any officers or Manager exclusively any of the rights of the secured creditor in good faith. It is further pleaded that Section 35 of SARFAESI Act, has over-riding provision against all other Acts and Laws.
All other plaint averments are specifically denied by this defendant. Action of the defendant No.3 to recover the loan amount from defendant No.1 in respect of mortgaged B-schedule property is justified. There is no cause of action to file this suit. On these grounds defendant No.3 seeks dismissal of the suit with cost.
4. Out of the above pleadings, my predecessor has framed the following issues.
(1) Does the plaintiff prove that, he is the absolute owner of the plaint B-Schedule property as contended in the plaint?
11
O.S.No. 2600 / 2013 (2) Does the plaintiff prove that he was in possession of the plaint B-schedule property as on the date of filing of the suit?
(3) Does the plaintiff prove that, defendants were interfering in his possession over the plaint schedule property?
(4) Does the plaintiff prove that the sale deed executed by M.R. Govindraju, R. Thukaram, R. Lakshminarayana and R. Prakash in favour of 2nd defendant on 10.12.2001 is null and void for the reasons stated in the plaint? (5) Does the plaintiff prove that sale deed dated 19.12.2011 executed by defendant No.2 in favour of defendant No.1 is null and void for the reasons stated in the plaint?
(6) Does the 3rd defendant prove that this court has no jurisdiction to entertain this suit under Section 34 of SARFAESI Act?
(7) Does the plaintiff prove that suit is properly valued and court fee paid on the plaint is sufficient?
(8) What order or decree?
5. During the course of trial, plaintiff was examined as PW 1 and Ex.P1 to P27 got marked. Manager and General Power of Attorney holder of defendant No.3 Bank was examined as DW 1 and Ex.D1 to D26 got marked. 12
O.S.No. 2600 / 2013
6. Heard oral arguments of advocate for plaintiff. Advocate for defendant No.3 Bank submitted notes of argument with authorities.
7. My findings on the above issues are as under.
Issue No.1 : In affirmative
Issue No.2 : In affirmative
Issue No.3 : In affirmative
Issue No.4 : In affirmative
Issue No.5 : In affirmative
Issue No.6 : In negative
Issue No.7 : In affirmative
Issue No.8 : As per final order, for the following.
REASONS
8. ISSUE NO.6: Before going to discuss other issues
on merits of the case, I would like to discuss this issue. One of the principle issue involved in this suit is with regard to the jurisdiction of the Civil court. Defendant No3 has taken up a specific contention in the written statement to the effect that the suit is barred under Section 34 of SARFAESI Act. In other words, the learned advocate for the defendant No.3 would submit that in view of Section 34 of SARFAESI Act the remedy of the plaintiff is to file an appeal under Section 17 of 13 O.S.No. 2600 / 2013 SARFAESI Act and jurisdiction of Civil Court is ousted. On the other hand, advocate for plaintiff submitted that since plaintiff is setting up an independent title over the disputed property, the civil court has got jurisdiction to entertain this suit. Both Advocates referred decisions in support of their contentions. Taking into consideration the rival submissions made before this Court, now I would like to see whether jurisdiction of civil court is barred to entertain this suit as contended by defendant No.3.
9. On the perusal of written statement filed by defendant No.3 it discloses that defendant No.1 had availed a home loan from defendant No.3 by mortgaging the site No.5, EP Katha No. 11/2 of Uttarahalli Village, Uttarahalli Hobli, Bangalore and obtained a loan of Rs. 31 lakhs on 17.12.2011. The said mortgaged property by sale deed is subject matter of this suit, more particularly shown as Schedule-B property, which is part of A- schedule property. It further discloses that defendant No.1 became chronic defaulter in repayment of loan. 14
O.S.No. 2600 / 2013 Under these circumstances, the defendant No.3 Bank as secured creditor initiated action, under the provisions of SARFAESI Act for the recovery of loan amount. Accordingly, a demand notice came to be issued on 31.03.2013. According to the plaintiff defendant No.3 put up a flex banner on 10.02.2013 over the B-schedule property which is part of A-schedule property to the effect that this property has been mortgaged in favour of defendant No.3 Bank. Thereafter plaintiff got issued a legal notice dated 13.02.2013. Defendant No.3 replied the said notice on 25.02.2013. ON enquiry plaintiff came to know that defendant No.1 purchased the B-schedule property (mortgaged property) from defendant No.2 under a registered sale deed dated 19.12.2011. ON further enquiry plaintiff came to know that defendant No.2 had purchased the said property from legal representatives of one Ramaiah i.e. M.R. Govindaraju, R. Tukaram, R. Lakshminarayana and R. Prakash. It is specific contention of the plaintiff that his vendor by name Smt. Lalithamma had purchased plaint Schedule-A property from M. Ramaiah directly under the registered sale deed 15 O.S.No. 2600 / 2013 dated 21.08.1980. The vendor of the plaintiff was put into possession of plaint A-schedule property and her name has been mutated as per M.R. no. 95/1980-81. Subsequently, plaintiff had purchased the plaintiff A- schedule property from Smt. Lalithamma under a registered sale deed dated 21.08.2003. As far as validity of the sale deed of the plaintiff , as well as defendants No.1 and 2 is concerned, the same will be discussed in the later part of the judgment while giving finding on other issues. Now, the question for consideration is whether suit is barred under Section 34 of SARFAESI Act. It can be noticed that sale deed of the vendor of the plaintiff is much earlier than vendor of the sale deed of the defendant No.1. Likewise, sale deed of plaintiff is much earlier than the sale deed of defendant No.1. By that time, defendant No.1 purportedly purchased the B- schedule property from defendant No.2, already the sale deed was in existence in favour of plaintiff with respect to plaint A-schedule property. It is pertinent to note that B- schedule property is the disputed property and part of A- schedule property. Plaintiff claims absolute ownership 16 O.S.No. 2600 / 2013 over the site No.5 and 6 of Sy. No. 11/5 of Uttarahalli Village. Whether suit is barred under Section 34 of SARFAESI Act, it is more relevant to extract Section 34 of SARFAESI Act.
"34. Civil court not to have jurisdiction - No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)".
10. On plain reading of Section 34 of the said Act, it discloses that no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine. The learned advocate for defendant No.3 in support of his argument referred decisions reported in (1) AIR 2004 SC 2371 (MADIA CHEMICALS LTD. VS. UNION OF INDIA) and (2) 2011 (3) AIR KAR 102 (M.G. ASHWATHA 17 O.S.No. 2600 / 2013 SHASTRI VS. CANARA BANK, CHAMARAJPET BRANCH, CHAMARAJPET, BANGALORE AND OTHERS).
11. On the other hand, the learned Advocate for plaintiff referred the following decisions.
(1) AIR 2017 RAJASTHAN 5 (SYNDICATE BANK AND ANOTEHR VS. SITA RAM PITTI).
(2) AIR 2016 ORRISA 58 (RANJAN KUMAR DAS VS. PUNJAB NATIONAL BANK, PURI AND ANOTHER).
(3) AIR 1969 SUPREME COURT 78 (BHULABHAI ETC. VS. STATE OF MADHYA PRADESH AND ANOTHER).
(4) AIR 1996 SUPREME COURT 1718 (ABDUL WAHEEB KHAN VS. BHAWANI AND OTHERS).
(5) AIR 1964 PUNJAB 26 (KIRORI MAL VS.
COLLECTOR, DELHI STATE, DELHI AND OTHERS).
(6) AIR 1965 SC 1519 (UNION BANK OF INDIA VS.LOKARAM SOMARAM & CO. AND OTHERS)
12. Hon'ble Supreme Court in AIR 2004 SC 2371 (MADIA CHEMICALS LTD. VS. UNION OF INDIA) at para 50 & 51 held as under.
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O.S.No. 2600 / 2013 "To a very limited extent jurisdiction of the civil court can also be invoked, where for example the action of the secured creditor is alleged to be fraudulent or their claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the Civil Court in the cases of English mortgages. (para 51)."
"A full reading of S. 34 shows that the jurisdiction of the civil court is barred in rerspect of matters which a Debt Recovery Tribunal or Appellate Tribunal is empowered to determine in respect of any action taken or to be taken in pursuance of any power conferred under this Act. That is to say prohibition covers even matters which can be taken cognizance of by the Debt Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of S.13. It is further to be noted that he bar of jurisdiction is in respect of proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later, the Civil Court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal, apart from those matter in which measures have already been taken under sub-section (4) of S. 13. Therefore, it is incorrect to say that before any action or measure is taken under sub-sec. (4) of S. 13 there would be no bar to approach the Civil Court (para 50)."
13. In AIR 2017 RAJASTHAN 5 (SYNDICATE BANK AND ANOTEHR VS. SITA RAM PITTI), it is held in Head Note as under.
19
O.S.No. 2600 / 2013 "Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (54 of 2002) Sec. 17, 34 - Civil P.C. (5 of 1908) Sec. 9 - Outer of Civil Court's jurisdiction - Lis between auction purchaser and secured creditor / bank regarding forfeiture of bid amount - Does not oust Civil Court's jurisdiction - Ouster specified in Sec. 34 of Act is limited to disputes regarding measurers adopted by Bank for recovery of secured debts.
14. In AIR 2016 ORRISA 58 (RANJAN KUMAR DAS VS. PUNJAB NATIONAL BANK, PURI AND ANOTHER), it is held in Head Note as under.
""Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (54 of 2002) Sec. 34 - Bar to jurisdiction of Civil Court - Is not applicable when rights of third party are involved - Third Party alleging fraud played against him by borrower - DRT only empowered to adjudicate dispute between secured creditor and borrower Civil Courts jurisdiction to adjudicate rights of third party, not barred."
15. The learned Advocate for plaintiff submitted that it is settled principles of law that exclusion of jurisdiction of Civil court cannot be readily inferred. On this aspect he referred a decision reported in AIR 1969 SUPREME 20 O.S.No. 2600 / 2013 COURT 78 (BHULABHAI ETC. VS. STATE OF MADHYA PRADESH AND ANOTHER).
16. In the light of the above legal principles laid down in these decisions now I would like to see whether suit of the plaintiff is barred under Section 34 of SARFAESI Act . It is pertinent to note that plaintiff is neither borrower nor guarantor or claiming under defendant No.1, who availed loan from defendant No.3. By the time, defendant No.1 had availed loan from defendant No.3 already title of disputed property has been vested with plaintiff. On the perusal of the documents produced before this Court it discloses that vendor of the plaintiff was put in to possession of plaint A-schedule property by M. Ramaiah. M. Ramaiah had purchased 5 acres 35 guntas in Sy. No. 11/2 from his vendor. Likewise, plaintiff was put into possession of plaint A-schedule property by virtue of the registered sale deed dated 21.08.2003. In other words, plaintiff has been in possession of A-schedule property much before availment of loan by defendant No.1 from defendant No.3. There is pleading to the effect that sons 21 O.S.No. 2600 / 2013 of Ramaiah by names. M.R. Govidaraju, R. Tukaram, R. Lakshminarayana and R. Prakash knowing fully well that their father executed registered sale deed with respect to plaint A-schedule property in favour of Smt. Lalithamma under sale deed dated 21.08.1980 illegally transferred B- schedule property in favour of defendant No.2. There is clear pleading in the plaint to the effect that sons of M. Ramaiah effected fraudulent transaction. It is further pleaded that the cause of action arose to file this suit when the plaintiff had realized that fraud has been committed by defendants. As per the legal principles laid down by Hon'ble Supreme Court in the decisions referred supra "to a very limited extent jurisdiction of the civil court can also be invoked, where for example the action of the secured creditor is alleged to be fraudulent or their claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the Civil Court in the cases of English mortgages". In the case on hand, also according to the plaintiff, defendants committed fraud. It is settled principle of law that if there 22 O.S.No. 2600 / 2013 is any dispute between earlier sale deed and later sale deed, earlier sale deed prevails over later sale deed. In the present case, the sale deed of the vendor of the plaintiff is earlier than vendor of the defendant No.1. Likewise, sale deed of the plaintiff is earlier than the sale deed of defendant No.1, who mortgaged the B-schedule property in favour of defendant No.3 Bank and availed loan. When plaintiff was put into possession of the B- schedule property, how could it possible to obtain defendant No.1 possession of B-schedule property unless plaintiff has been dispossessed in accordance with law. One thing is very clear that by the time defendant No.1 had approached the Bank, already right has been vested with the plaintiff. Once the right has been vested with the plaintiff same cannot be divested except by another mode of conveyance. It is not the case of the defendant No.2 that plaintiff had sold B-schedule property in his favour. It goes to very clear that Legal representatives of M.Ramnaiah had created false sale deed in favour of defendant No.2. In fact, they had no right to sell B- schedule property in favour of defendant No.2 on the 23 O.S.No. 2600 / 2013 relevant date. When legal representatives of M. Ramaiah had no right to sell B-schedule property in favour of defendant No.2, it is against the law and same is unenforceable. Any subsequent sale deed by defendant No.2 in favour of defendant No.1 does not transfer any title muchless right in favour of defendant No.1. DW 1 was subjected into cross examination regarding enquiry made by the Bank officials before sanctioning the loan to the defendant No.1. It is not free from doubt. Evidence discloses that no reasonable enquiry has been made with regard to title of the defendant No.1 over the B-schedule property. Otherwise any prudent man could have known the existence of earlier sale deed in favour of the plaintiff. As per Transfer of Property Act, execution of sale deed is a constructive notice against whole world. In the case on hand, sale deed of plaintiff was much earlier executed than the sale deed of the defendant No.1. In other words, the defendant No.3 in the eye of law and construction notice of execution of sale deed in favour of plaintiff by his vendor Smt. Lalithamma. That being the position, there is evidence to show that fraud has been committed 24 O.S.No. 2600 / 2013 by the defendants together with sons of M. Ramaiah with respect to B-schedule property. More over, plaintiff is not challenging the measures taken under Section 13 (4) of SARFAESI Act. On the other hand, plaintiff has set up an independent title over the B-schedule property as well as A-schedule property. Plaintiff is third party for all practical purposes. The plaintiff is seeking declaration of sale deed of defendants No.1 and 2 respectively. DRT or the Appellate Authority cannot declare the sale deed as null and void. More over subject matter like fraud, fraudulent transaction can alone be decided by civil court. As per Section 34 of SARFAESI Act, measurer taken by secured creditor under Section 13 (4) of the said Act cannot be challenged before the civil court. There is appeal provision under the said Act. In the case on hand, taking into consideration the pleadings of respective parties and substantial question involved with regard to title of the plaintiff and existence of earlier sale deeds, I find considerable force in the submission of advocate for plaintiff that civil court has got jurisdiction to entertain this suit. Accordingly, I answer issue No.6 in negative. 25
O.S.No. 2600 / 2013
17. ISSUES No.1 TO 3: For the sake of convenience and also to avoid repetition of facts, I would like to discuss these three issues together. By holding common discussion on these issues, no party will be put to any prejudice. It can be noticed that though suit summons served on defendants No.1 and 2 they remained absent. In other words, there is scope to hold that defendants No.1 and 2 admitted the averments of the plaint. It is not in dispute that one Sri. M. Ramaiah S/o Chennaiah had purchased 5 acres 35 guntas in Sy. No. 11/2 of Uttarahalli Village, Bangalore South Taluk. After the purchase of the said land, M. Ramaiah effected several small residential plots and sold in favour of various persons. It discloses that vendor of the plaintiff by name Smt. Lalithamma had purchased site Nos. 5 & 6 totally measuring 2.2 guntas in Sy. No. 11/2 from M. Ramaiah under a registered sale deed dated 21.08.1981. Ex.P1 is the original sale deed of vendor of plaintiff. On the perusal of recital of Ex.P1 it discloses that M. Ramaiah had purchased 5 acres 35 guntas, out of Sy. No. 11/2 as 26 O.S.No. 2600 / 2013 self acquired property under the registered sale deed dated 24.01.1949 from one Smt. Medamma. As per the recitals of Ex.P1 Smt. Lalithamma was put into possession of A-schedule property. Recital as to delivery of possession reads as under.
" £À£ÀUÉ ¨ÉAUÀ¼ÀÆgÀÄ ¸À¨ï jf¸ÁÖçgï gÀªÀgÀ D¦üù£À°è vÁjÃRÄ 24.1.1949 gÀ®Äè 1£Éà §ÄPï 1036 £Éà ªÁ®ÆåA 175- 179£Éà ¥ÀÅlUÀ¼À°è 4056£Éà £ÀA§gÁV jf¸ÀÖgç ï ªÀÄÆ®PÀ ²æêÀÄw ªÉÃzÀªÀÄä£ÀªjÀ AzÀ ±ÀÄzÀÞ PÀæAiÀĪÁV §A¢gÀĪÀ ¨ÉAUÀ¼ÀÆgÀÄ zÀQët vÁ®ÄèPÀÄ GvÀÛgÀºÀ½î UÁæªÀÄzÀ ¸ÀªÉð 11B2£Éà £ÀA§gÀÄ ¥ÉÊQ F PɼÀUÉ µÉqÀÆå¯ï£À°è PÀAqÀ LlA ¸ÀévÀÛ£ÀÄß ¤ªÀÄUÉ UËgÀߪÉÄAmï 1000-00 MAzÀÄ ¸Á«gÀ gÀÆ¥Á¬ÄUÀ½UÉ ±ÀÄzÀÝ PÀæAiÀÄ ªÀiÁr PÀæAiÀÄzÀ ªÉƧ®UÀ£ÀÄß F PɼÀUÉ ºÁQgÀĪÀ ¸ÁQëUÀ¼À ¸ÀªÀÄPÀëªÀÄ £ÀUz À ÁV ¥ÀqÉzÀÄ ¸ÀévÀÛ£ÀÄß F ¢£ÀªÉà ¤ªÀÄä ¸Áé¢üãÀ¥Àr¹gÀÄvÉÛãÉ.
18. The description of the plaint A-schedule property tallies with description of schedule property under Ex.P1. According to the plaintiff, plaint B-schedule property is part of plaint A-schedule property, bearing Site Noi.5. Ex.P2 is the mutation register bearing MR No.95/1980-
81. By virtue of this mutation, name of Smt. Lalithamma has been entered in the records of rights. Ex.P4 is the 27 O.S.No. 2600 / 2013 RTC pertaining to the plaint A-schedule property. One thing is very clear that M. Ramaiah handed over the possession of plaint A-schedule property in favour of vendor of the plaintiff. Thereafter the plaintiff has purchased the plaint A-schedule property on 21.08.2003 from Smt. Lalithamma. Ex.P3 is the original sale deed of plaintiff dated 21.08.2003. The relevant portion of the sale deed reads as under.
" F PÀæAiÀÄzÀ ¨Á§ÄÛ E£ÀÄß K£ÀÆ ¨Ár §gÀ¨ÉÃPÁVgÀĪÀÅ¢®è. DzÀÝjAzÀ F PÀæAiÀÄ¥ÀvÀæªÀ£ÀÄß ¤ªÀÄä ºÉ¸ÀjUÉ jf¸ÀÖgç ï ªÀiÁr¹PÉÆlÄÖ µÉqÀÆå¯ï d«ÄãÀ£ÀÄß ¸ÀºÀ F ¢£ÀªÉà ¤ªÀÄä ¸Áé¢üãÀPÉÌ ©lÖPÉÆnÖgÀÄvÉÛãÉ.É
19. On the perusal of Ex.P3 it can be noticed that plaintiff was put into possession of plaint A-schedule property by virtue of Ex.P3. It further discloses that on the strength of Ex.P3 name of plaintiff has been mutated in the Record of Rights as per M.R. No. 3/2003-04. Ex.P4 is the copy of mutation register No. MR No.3/2003-04. Ex.P5 is the tax paid receipt in respect of A-schedule 28 O.S.No. 2600 / 2013 property. Subsequent to purchase of plaint A-schedule property it has been included within the jurisdiction of BBMP. BBMP recognized the ownership of plaintiff in respect of plaint A-schedule property and started to collect the property taxes. B-Katha has been issued since the plaint A-schedule property is unconverted land. Plaintiff has produced tax paid receipt which got marked during the course of evidence of PW 1. It is pertinent to note that by the time Ex.P1 got marked during the course of evidence of PW 1, it became a document of more than 30 years. As per Section 90 of Evidence Act, it is ancient document which is more than 30 years old. There is presumption regarding execution of sale deed and its contents also. As per Section 90 of Evidence Act, sale deed of plaintiff has been produced from the proper custody. Likewise, sale deed of vendor of the plaintiff has been properly produced from the custody of the plaintiff. As per Section 90, if any document is more than 30 years is produced from the proper custody there is no need to prove the signature and handwriting of the executant. That being the position, the court may presume that M. 29 O.S.No. 2600 / 2013 Ramaiah had executed sale deed of the vendor of the plaintiff and signature of M. Ramaiah has been duly proved. Subsequently, Smt. Lalithamma transferred her title over the plaint A-schedule property by virtue of Ex.P3. Revenue records discloses the name of plaintiff. Recitals of Ex.P3 discloses actual possession delivered in favour of plaintiff by his vendor. Under these circumstances, it is held that title has been transferred in favour of Smt. Lalithamma by virtue of Ex.P1 from M. Ramaiah. It further discloses that Smt. Lalithamma transferred title in favour of plaintiff by virtue of Ex.P3.
20. Now, the question for consideration is whether property said to be purchased by defendant No.1 is a portion of property purchased by plaintiff. Ex.P3 is original sale deed of vendor of the plaintiff. On going through Ex.P3 it discloses that vendor of the defendant No.1 had executed registered sale deed in favour of defendant No.1 on 19.12.2011. It can be noticed that by virtue of this sale deed, defendant No.1 had purchased land measuring 30 x 40 sq.ft. bearing site No.5, V.P. 30 O.S.No. 2600 / 2013 Katha No.11/2 situated at Uttarahalli Village, totally measuring 1200 sq.ft. Ex.D5 is the original sale deed of vendor of defendant No.1. As per Ex.P3 plaintiff had purchased plaint A-schedule property bearing site No.5 & 6, out of Sy. No. 11/2 totally measuring 2.2 guntas situated at Uttarahalli Village. On taking into consideration the boundaries as mentioned in the sale deed of the plaintiff as well as sale deed of defendant No.1, it discloses that disputed property is part of plaint A-schedule property, more particularly out of site No.5. It is pertinent to note that the sale deed of vendor of the plaintiff is much earlier than the sale deed of vendor of defendant No.1. Likewise, the sale deed of the plaintiff is much earlier than the sale deed of defendant No.1. As it is already stated if there is dispute between earlier sale deed and later sale deed earlier sale deed prevails over the later sale deed. More over when the plaintiff was put into possession of the plaint A-schedule property by virtue of Ex.P3. Unless he is dispossessed by due process of law, how could it possible to deliver the possession of disputed property by sons of M. Ramaiah 31 O.S.No. 2600 / 2013 either in favour of vendor of the defendant No.2 or defendant No.1. Taking into consideration the legal position, existence of earlier sale deed, the possession of the plaintiff over the B-schedule property has been duly proved. By virtue of Ex.P3, plaintiff became absolute owner of plaint B-schedule property which is part of A- schedule property.
21. With regard to interference: According to plaintiff he saw flex banner put up by the defendant No.3 over the portion of A-schedule property i.e. plaint B-schedule property on 10.02.2013 to the effect that defendant No.1 has mortgaged the said property in favour of defendant No.3. According to the plaintiff this act of defendant No.1 amounts to interference in his possession and enjoyment of the disputed property. On the other hand, according to defendant No.3, defendant No.1 had availed a sum of Rs. 31 lakhs to purchase the plaint B-schedule property on 17.12.2011. However, defendant No.1 became defaulter in repayment of loan. Under these circumstances, defendant No.3 as secured creditor 32 O.S.No. 2600 / 2013 initiated action under Section 13 (2) of SARFAESI Act. A notice came to be issued against defendant No.1. Ex.D10 is the copy of notice issued under Section 13 (2) of SARFAESI Act dated 09.04.2013. Ex.D11 is the Possession notice dated 22.11.2013. Now, the question for consideration is to what extent the action taken by defendant No.3 is legal in putting up flex banner over the B-schedule property. It has come in the evidence that much before defendant No.1 had purchased the disputed property, already plaintiff has got title over the plaint A- schedule property by virtue of Ex.P3. In other words, much before the execution of sale deed of defendant No.1, plaintiff was put into possession of disputed property, which is part of plaint A-schedule property. In spite of this defendant No.3 had sanctioned a sum of Rs.31 lakhs as home loan in favour of defendant No.1. Whether actually spot inspection was conducted or not is doubtful before sanctioning the loan. DW 1 has duly admitted to the effect that there is no document with regard to spot inspection conducted by officials of defendant No.3 Bank before sanctioning of loan. Registration of sale deed is 33 O.S.No. 2600 / 2013 constructive notice against whole world. It can be stated that defendant No.3 has knowledge of execution of sale deed in favour of plaintiff. If really a spot inspection was conducted probably defendant No.3 would not have ventured into sanction of loan in favour of defendant No.1. However, the said property has been mortgaged by deposit of title deeds in favour of defendant No.3. Evidence discloses that all is not well in sanctioning the loan in favour of defendant No.1. If defendant No.3 being a Finance Bank without any verification, sanctioned a huge amount of loan in favour of defendant No.1, that too on property which belonged to the plaintiff, it is nothing but one type of fraud committed by the defendant No.3 Bank with the co-operation of defendant No.1. When defendant No.1 has no title over the disputed property as on the date of sanction of loan or subsequently, any mortgage by deposit of title deeds, has no legal consequences. Putting up a flex banner over the property of the plaintiff on the said date, certainly amounts to interference by defendants in peaceful possession and enjoyment of the plaintiff. There is no iota of evidence 34 O.S.No. 2600 / 2013 supporting the title of the defendant No.1 as on the date of sanctioning the loan by defendant No.3. That being the position, it is held that defendants, more particularly defendant No.3 interfered with the possession of plaintiff over the plaint B-schedule property as alleged. Accordingly, I answer issues No.1 to 3 in affirmative.
22. ISSUES No.4 & 5: Plaintiff seeks declaration of sale deed of the vendor of the defendant No.1 as well as defendant No.1 as null and void. As it is already stated vendor of the defendant No.1 i.e. defendant No.2 is said to be purchased the disputed property from sons of M. Ramaiah i.e. M.R. Govindaraju, R. Tukaram, R. Lakshminarayana and R. Prakash on 10.12.2001. It is already held that, by the time this sale deed was executed already father of these persons i.e. M. Ramaiah had sold the plaint A-schedule property in favour of Smt. Lalithamma, by virtue of Ex.P1. Likewise, as per Ex.P3, plaintiff had purchased plaint A-schedule property from Smt. Lalithamma on 21.08.2003. In fact, sons of M. Ramaiah had no right, title and interest over the plaint 35 O.S.No. 2600 / 2013 A-schedule property as on the date of execution of sale deed in favour of defendant No.2. Without any right, title and interest sons of R. Ramaiah had executed sale deed in favour of defendant No.2. In other words, when sons of R.Ramaiah executed sale deed in favour of defendant No.2 as per Ex.D5, without any right, it becomes void document and non-est. Likewise, when Shambaavi Nayak who is defendant No.2 had no right title over the disputed property, by virtue of Ex.D5, no right has been acquired by defendant No.1, on the basis of Ex.D3. In other words, sale deed of defendant No.1 also became void and non-est. At this stage, with regard to position of law, as to subsequent sale deed, this court had an occasion to go through the decision reported in 2016 (2) KCCR 1655 (SMT. SIDDAMMA VS. BHAVANI HOUSING CO-OPERATIVE SOCIETY LIMITED, BANGALORE AND OTHERS). Hon'ble High Court of Karnataka in this decision held as under.
"In Binny Mill Labour Welfare House Building Co- operative Society Limited Vs. D.R. Mruthunjaya Aradhya, 2008 (3) KCCR 1692, the first principles of law as to how such sale deeds executed in the face of a subsisting sale deed would be void ab- initio are 36 O.S.No. 2600 / 2013 succinctly and comprehensively discussed. The said decision would apply on all fours to the present case in so far as the invalidity of the sale deeds set up by respondents No.2 and 3 are concerned."
23. In the case of BINNY MILL LABOUR WELFARE HOUSE BUILDING CO-OPERATIVE SOCIETY LIMITED VS. D.R. MRUTHUNJAYA ARADHYA, REPORTED IN 2009 (2) KAR.L.J. 291. it is more profitable to refer para 36 and 37 of the judgment, which enlighten this court to arrive for a proper finding on the subject matter of the suit. It is extracted as under.
"In the case of a sale deed executed and registered the owner completely loses his right over the property and the purchaser becomes the absolute owner. It cannot be nullified by executing a deed of cancellation because by execution and registration of a sale deed, the properties are being vested in the purchaser and the title cannot be divested by mere execution of a deed of cancellation. Therefore, even by consent or agreement between the purchaser and the vendor, the said sale deed cannot be annulled. If the purchaser wants to give back the property, it has to be by another deed of conveyance. If the deed is vitiated by fraud or other grounds mentioned in the Contract Act, there is no possibility of parties agreeing by mutual consent to cancel the deed. It is only the court which can cancel the deed duly executed, under the circumstances mentioned in Section 31 and other provisions of the Specific Relief Act, 1963. Therefore, the power to cancel a deed vests with a court and it cannot be exercised by the vendor of a property.........Both void and voidable 37 O.S.No. 2600 / 2013 instruments can be cancelled by the court. The cause of action for such an action is an apprehension, if such an instrument is left outstanding may cause serious injury to the person against whom the written instrument is void or voidable. Such a person has the discretion to approach a competent Civil Court for adjudging the said instruments to be delivered up and cancelled. Even though in law a void instrument is unenforceable, has no value in the eye of law, void ab initio, the very physical existence of such a document may cause a cloud on the title of the party or cause injury or one can play mischief. Therefore, the law provides for cancellation of such instruments which are also non est, but which are in existence as a fact physically to get over the effect of such instrument. One such an instrument is registered, the said registration has the effect of informing and giving notice to the World at large that such a document has been executed. Registration of a document is a notice to all the subsequent purchasers or encumbrances of the same property. The doctrine of constructive notice is attracted. Therefore, the effect of registration of an instrument not only affects parties who may claim under them. Therefore, once such an instrument is ordered to be delivered up and cancelled an obligation is cast upon the court to send a copy of its decree to the officer in whose office the instrument was registered, so that such an officer shall notice on the copy of the instrument contained in his books the fact of its cancellation. Once such an entry is made in the books of the Sub-Registrar about the cancellation of the registered instrument, it also acts as a notice of cancellation of the registered instrument, it also acts as a notice of cancellation of the said instrument.....".
24. In the case on hand, sale deed of the defendant No1 and 2 are void and non-est in the eye of law. If the 38 O.S.No. 2600 / 2013 document is void document, there is no need to ask for declaration. It is unenforceable document. Of course, sons of M. Ramaiah are not parties to the said suit. If they are pleaded as parties there is no change in the position of law. Sons of M. Ramaiah had no right, title and interest to execute the sale deed in favour of defendant No.2. Under these circumstances, though plaintiff has not asked for cancellation of sale deeds, there is no bar to declare the sale deed of the defendants No.1 and 2 as null and void. .
25. If Ex.D3 andD5 are left outstanding, it may cause injury to plaintiff. There is every reason to hold that existence of Ex.D3 and D5 is putting hardship and amounts to denial of title of the plaintiff over the disputed property. Accordingly, I answer issues No.4 and 5 in affirmative.
26. ISSUE No.7: This issue is pertaining to valuation and payment of court fee regarding subject matter of the suit. It can be noticed that in fact, this 39 O.S.No. 2600 / 2013 issue is not seriously pressed into service during the course of trial. No cross examination was conducted on behalf of the contested defendant. On perusal of calculation sheet it discloses that plaintiff has paid court fee of Rs.1,29,600/-. In my view the valuation for the purpose of court fee is sufficient and no further discussion is necessary in this regard. Accordingly, I answer issue No.7 in affirmative.
27. ISSUE No.8: Already a finding has been given to the effect that this court has jurisdiction to entertain the suit. Defendant No.3 cannot take shelter under Section 34 or 35 of SARFAESI Act. A specific finding has been given to the effect that sale deed of defendant No.2 and defendant No.1 are void written instruments and not binding on plaintiff. The physical existence of Ex.D3 and D5 is left outstanding may cause injury to the plaintiff in all respects. There is denial to the title of the plaintiff over the suit schedule property. Already defendant No.3 had filed a suit for recovery against defendant No.1 and it was decreed. Ex.D27 is the certified copy of the 40 O.S.No. 2600 / 2013 judgment of recovery suit. Defendant No.1 remained exparte in that suit. No hardship will be caused to Defendant No.3 in case this suit is decreed. More over the fraud vitiated the entire loan sanction and execution of sale deeds Ex.D3 and D5. A ground is made out to decree the suit.
28. In the result, I proceed to pass the following:
ORDER (1) Suit is decreed, with cost.
(2) It is declared that plaintiff is absolute owner of the B-schedule property having acquired the same under sale deed dated 21.08.2003 executed by Smt. Lalithamma.
(3) Sale deed dated 10.12.2001 executed by Sri. M.R. Govindaraju, Sri. R. Tukaram, Sri. R. Lakshminarayana and Sri. R.Prakash, sons of late Ramaiah in favour of the second defendant, registered as Document.
No.11778/2001-02 stored in CD No. 76 at the 41 O.S.No. 2600 / 2013 office of the Sub-Registrar, Kengeri, Bangalore is declared as null and void.
(4) Sale Deed dated 19.12.2011, registered as Document. No.BSK-1-07746/211-12 stored in CD No.BSKD-139 at the office of the Sub- Registrar, Basavanagudi (Banashankari), Bangalore executed by the second defendant in favour of first defendant is declared as null and void.
(5) Defendants are hereby restrained from interfering with the possession and enjoyment of plaintiff over the suit B-Schedule property.
(6) Draw decree accordingly.
(Dictated to the Judgment Writer Online, corrected and then pronounced by me in open court, this the 13th DAY OF APRIL 2017) (VENKATARAMAN BHAT) XXXVII ADDL. CITY CIVIL JUDGE, (CCH-38) BANGALORE ANNEXURE List of witnesses examined on behalf of the plaintiff/s:
PW1 Sri. Rajashekaraiah
42
O.S.No. 2600 / 2013
Documents marked on behalf of the plaintiff/s:
Ex.P1 - Sale Deed of Lalithamma
Ex.P2 - Mutation Register
Ex.P3 - Sale Deed
Ex.P4 - Mutation Register
Ex.P5 - Pahani
Ex.P6 - Tax Assessment
Ex.P7 - Paper Publication
Ex.P8 - Certificate of Advocate
Ex.P9 - Katha of BBMP
Ex.P10to12- Tax paid receipts
Ex.P13to17- Legal notice dated 13.04.2011
Ex.P18 - Affidavit
Ex.P19 - Copy of legal notice.
Ex.P20 - Postal Acknowledgement
Ex.P21 - Reply notice.
Ex.P22 - Copy of sale deed
Ex.P23 - Copy of sale deed
Ex.P24 - Certified copy of O.S. No.4460/2014
Ex.P25 - Certified copy of Affidavit evidence in O.S.
No.4460/2014.
Ex.P26 - Judgment dated 11.12.2015
Ex.P27 - Decree dated 18.12.2015.
List of witnesses examined on behalf of the Defendant/s:
DW1 Sri. Manoj J. Shah Documents marked on behalf of the Defendant/s:
Ex.D1 Power of Attorney
Ex.D2 Resolution
Ex.D3 Sale Deed
Ex.D4 Copy of Sale agreement
Ex.D5 Sale deed
Ex.D6 Death Certificate
Ex.D7 Katha Certificate
43
O.S.No. 2600 / 2013
Ex.D8 Tax Paid receipt
Ex.D9 Encumbrance Certificate
Ex.D10 Demand Notice
Ex.D11 Possession notice.
Ex.D12 Statement of account.
Ex.D13 Affidavit
Ex.D14 Certificate
Ex.D15to18 Newspaper publication
Ex.D19 Loan application
Ex.D20 Sanction letter
Ex.D21 Loan agreement
Ex.D22 Promissory Note
Ex.D23 Letter of Guarantee
Ex.D24&25 Legal notices
Ex.D26 Statement of account.
XXXVII ADDL. CITY CIVIL JUDGE,
(CCH-38), BANGALORE.