Madras High Court
Sarasu Vargheese vs Jammu And Kashmir Bank Ltd on 26 July, 2018
Bench: S.Manikumar, Subramonium Prasad
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.07.2018
CORAM:
THE HONOURABLE MR.JUSTICE S.MANIKUMAR
and
THE HONOURABLE MR.JUSTICE SUBRAMONIUM PRASAD
W.P.No.4300 of 2018
and W.M.P.Nos.5287 and 5288 of 2018
Sarasu Vargheese .. Petitioner
vs.
1.Jammu and Kashmir Bank Ltd.
No.787 Anna Salai
Chennai - 600 002
Represented by its Chief Manager.
2.M/s.Pan Clothing & Consolidated Co. Ltd.,
(Since wound up)
Corporate Office at
Flat No.160, Luz Church Road,
Chennai - 600 002
Now represented by Official Liquidators
(vide order dated 20.05.2014 in I.A.No.124/2004)
3.Sreyas Sripal
4.T.P.Anandh
5.C.Nataraj Kumar
6.Narayan Vyas
7.Niranjan Vyas
8.Lakshmi Reddy
9.Bharathi Prasad
Kunjoonjamma (Deceased)
10.Punjab & Sind Bank,
No.161, Anna Salai,
Chennai - 600 002.
11.Indian Bank,
No.31, Rajaji Salai,
P.O.Box No.1384,
Chennai - 600 001.
12.The Registrar,
Debts Recovery Appellate Tribunal,
4th Floor, Indian Bank Circle Office,
No.55 Ethiraj Salai,
Chennai - 600 008. .. Respondents
Prayer: Writ petition filed under Article 226 of the Constitution of India, for a writ of certiorari, calling for the records of the order dated 13.11.2017 passed by the Debts Recovery Appellate Tribunal, Chennai in RA No.28 of 2017 and quash the same.
For Petitioner : Mrs.Nalini Chidambaram,
Senior Counsel
for Mr.N.R.R.Arun Natarajan
For Respondents : Mr.J.Senthil Kumar
ORDER
(Judgment of this Court was made by S.MANIKUMAR, J.) Instant writ petition has been filed under Article 226 of the Constitution of India, for a writ of certiorari, calling for the records of the order dated 13.11.2017 passed by the Debts Recovery Appellate Tribunal, Chennai in RA No.28 of 2017 and to quash the same.
2. Short facts leading to the filing of the writ petition are that the petitioner purchased a property measuring an extent of 2 grounds and 200 sq.ft. in Plot No.2489 in AK-107, 10th Main Road, Anna Nagar, Chennai - 600 040, jointly with her mother Mrs.Kunjoonamma (Deceased), from Mr.M.M.Mathew, vide registered Sale Deed dated 18.10.1989. Sale consideration of the subject property was paid by Mr.K.Vargheese, husband of the petitioner.
3. During the year 1997, Mr.J.R.Jaya Gopinath of M/s.Magum Business Services Limited, approached the mother of the petitioner and misused her trust, due to her old age and took the original title deeds pertaining to the subject property to obtain a loan for M/s.Magnum Business Services Limited offering the subject property, as security. Mother of the petitioner, as a gesture of good will, agreed to offer the subject property as security, even without consideration, to enable Mr.Jaya Gopinath to avail loan. The petitioner was not informed about the handing over of the title deeds of the subject property by the mother of the petitioner to Mr.J.R.Jaya Gopinath, since during the relevant time, the petitioner was living in USA along with her husband. The transaction is not binding on the petitioner even though she is a co-owner of the subject property.
4. Contention has been made that during August 1997, Mr.R.Jaya Gopinath, in breach of the trust reposed by the mother of the petitioner and without the consent of the petitioner, fraudulently permitted M/s.Pan Clothing & Consolidated Co Ltd/2nd respondent, to offer the subject property, as security to Jammu and Kashmir Bank Ltd/1st respondent for the loans availed by the second respondent. The second respondent deposited the title deeds of the subject property and availed loan facilities from the 1st respondent.
5. Petitioner has further submitted that on realising the fraud played upon her mother, she called upon Mr.J.R.Jaya Gopinath, to return the original title deeds of the subject property, for which Mr.J.R.Jaya Gopinath, promised to return the deeds, but he did not keep up the promise.
6. The Petitioner has further stated that no sooner she came to know that the subject property was mortgaged with the 1st respondent bank, she personally met the officers of the 1st respondent bank and vide letters dated 25.04.2000 and 28.08.2000 respectively, she requested the 1st respondent to return the original title deeds relating to the subject property. However, the 1st respondent did not reply to any of her letters. Hence the petitioner preferred a complaint dated 04.12.2000 to the Inspector of Police, Crime Branch, Egmore, for initiating action against Mr.J.R.Jaya Gopinath and his firm M/s.Magnum Business Services Limited.
7. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has filed O.A.No.706 of 2001, before the Debt Recovery Tribunal-II, Chennai, for a direction to the defendants therein, to pay to the applicants, jointly and severally a sum of Rs.5,76,59,191.15 together with interest and other reliefs. In the mean while, a notice, dated 29.04.2006, was issued by the 1st respondent to the petitioner, under Section 13(2) of the SARFAESI Act, calling upon her to pay a sum of Rs.11,80,21,483/- and the said notice was received by the petitioner/10th defendant therein on 11.05.2006.
8. The petitioner, by her legal notice, dated 24.06.2006, called upon the 1st respondent-Bank to produce certain documents, such as, mortgage created by Pan Clothing & Consolidated Company Ltd., in respect of the property, measuring an extent of 2 Grounds and 200 Sq.Ft., (Plot No.2489), Anna Nagar, Chennai-40 and copy of the authorization given by the owner of the said property to Pan Clothing & Consolidated Company Ltd., or any of its Directors to give the said property, as security for the loan given by the Bank to Pan Clothing Company Ltd., and also the copy of the document of personal guarntee allegedly signed by Mrs.Sarasu Vargheese, giving her personal guarantee for the loan given by Jammu and Kashmir Bank to Pan Clothing & Consolidated Company Ltd., within one week. The 1st respondent bank, by its letter, dated 03.07.2006, stated that the petitioner along with her mother, are liable to repay the mortgage loan arrears created by the borrower and refused to give the details, as required by the petitioner, in her legal notice, dated 24.06.2006.
9. Aggrieved by the action of the respondents, in not providing the abovesaid documents, the petitioner filed W.P.No.24423 of 2006, for a Mandamus, directing respondents 1 and 2 therein, to furnish the said documents, stated in the notice, dated 24.06.2006. This Court, vide order, dated 29.11.2010, allowed the W.P.No.24423 of 2006, directing the 2nd respondent-Bank to furnish the said documents, within eight weeks.
10. Against which, the 1st respondent has filed an appeal in W.A.No.873 of 2011 and a Hon'ble Division Bench of this Court dismissed the appeal and directed the 1st respondent to handover the copies of the documents sought for, in the writ petition, to the petitioner. Thereafter on 27.06.2011, the 1st respondent furnished copies of the said documents. Upon perusal of the said documents, the petitioner found that her signatures were forged in the following documents, "(i) The Memorandum of deposit of Title Deeds, dated 19.01.1998, allegedly executed by (Kunjoonamma) the 10th respondent and the petitioner.
(ii) The Deed of Guarantee, dated 19.01.1998 allegedly executed by Kunjoonamma the 10th respondent and the petitioner.
(iii) Letter, dated 19.01.1998 issued by the 1st respondent for the Acknowledgement and Confirmation of Deposit of Title Deeds with the Bank and allegedly signed by the Kunjoonamma 10th respondent and petitioner.
(iv) Letter of Confirmation of Guarantee and Mortgage by Guarantors dated 27.01.1998 allegedly issued by Kunjoonamma the 10th Respondent and Petitioner to the 1st respondent.
(v) The General Letter of Loan and Set Off from the Guarantor/Mortgagor dated 27.01.1998 issued by the 10th Respondent and petitioner to the 1st respondent."
11. It is the specific case of the petitioner that she did not sign the abovesaid documents and her signatures found in the above documents were forged. According to her, on a comparison of the petitioner's actual signature in her passport with that of the alleged signatures in the abovesaid five documents, it could be seen that both the signatures are completely different and, therefore, the aforesaid five documents have been forged.
12. The petitioner has filed I.A.No.90 of 2015 in O.A.No.311 of 2014, before the Debts Recovery Tribunal-II, Chennai, to refer the abovesaid documents, to a handwriting expert, to verify the authenticity of the signatures of the petitioner, affixed therein and to direct the handwriting expert to file a report of his opinion, before the Tribunal.
13. On 15.07.2015, DRT-II, Chennai, by order, dated 15.07.2015, has dismissed the said I.A., holding that the Tribunal has power to compare the signatures, in the alleged documents, as forged or not, and that the same will be decided by DRT-II, Chennai, by comparing the signatures of the petitioner found, in the passport and driving licence.
14. Debts Recovery Tribunal-II, Chennai, by order, dated 11.12.2015, in O.A. No.311 of 2014 held that the passport and driving licence revealed that the 10th respondent's photograph has been affixed with her signatures, as "S.M.Varghese". But in the alleged bank documents i.e. in the Guarantee and Mortgage, 10th respondent's signature was found as S.Vargheese. Alphabet 'M' was not found. Debts Recovery Tribunal-II, Chennai, has further held that on comparison of both the signatures, all the letters are entirely different.
15. Debts Recovery Tribunal-II, Chennai, has further held that it is crystal clear that the 10th respondent was not the signatory, to the deed of guarantee and Memorandum of Deposit of Title Deeds. The Tribunal further held that the 10th respondent is not liable to the claim made by the bank. In the result, Original Application No.311 of 2014, was allowed, as follows:
"(a) The applicant is entitled to recover a total sum of Rs.5,76,59,191.15 paise (Rupees five crores seventy six lakhs fifty nine thousand one hundred and ninety nine and paise fifteen only) with rate of interest at 12% p.a., (simple) in respect fund based limits and non fund based limits from the defendants 1 to 6 and 9 jointly and severally from the date of OA till the date of realisation together with costs. The payment of Rs.2.10 crores made by D7 and Rs.1.25 cores made by D8 have to be adjusted on the appropriate date with the loan account.
(b) D7, D8 and A and B Schedule properties are discharged from this OA.
(b) OA is dismissed against D-10.
(d) In case D1 to D6 and D9 fail to repay the amount due, the applicant Bank is entitled to proceed with 50% of D9's share in C Schedule property."
16. Respondent bank took up the matter on appeal in RA No.28 of 2017 before the Hon'ble Debts Recovery Appellate Tribunal at Chennai challenging that portion of the order dated 11.12.2015 passed by DRT-II, Chennai, by which OA No.311 of 2014 was dismissed, as against petitioner's share in the subject property.
17. Debts Recovery Appellate Tribunal, Chennai, by order dated 13.11.2017, allowed R.A. No.28 of 2017 and ordered as follows:
"8. In my considered opinion, while the identity of person is not disputed, then, mainly on the basis of difference in names only whether she is S.Varghese or S.M.Varghese, not much difference will be made in the case of the bank. Main thing is whether Mr.J.R.Jayagopinath played a fraud with R10/D10 in collusion with borrowers and Bank officers or not? It appears that R10/D10 did not go to appellant bank at the time of submission that R10/D10 did not go to appellant bank at the time of submission of title deeds. Rather document signed before Notary was produced in the Bank.
9. It is true that R10/D10 preferred police complaint against erring persons, but did not pursue it seriously. But this is also not very clear that whether through Notary or by directly appearing in bank, has Mrs.Vargheese signed the documents in the presence of remaining two directors? There could have been various methods of proving forgeries in civil matters. If the documents are taken into consideration in totality of the circumstances, in view of the facts and circumstances of this case, it becomes clear that the deed of R10/D10 was used by the appellant bank for the borrowing. A difference in signature as compared to passport and driving licence of USA will not ultimately dispute and question the identity of the person. Complaint made by R10/D10 against J.R.Jayagopinath and other guilty persons whoseover they may be, was not pursued upto logical end.
10. In such a situation, Bank should not be made to lose its money, which can be realized from the guarantor also. Accordingly, O.A., should have been decreed against R10/D10 also like all other borrowers/guarantors in the matter. Merely on the ground that documents were made available to Bank through a Notary and there is variation in signatures, liability of R10/D10 will not come to an end.
11. In my considered opinion, R10/D10 is also equally liable for the claim amount as other Respondents/Defendants in the O.A.
12. Appeals stands allowed. Impugned order is modified as indicated above."
18. Being aggrieved, instant writ petition has been filed by the petitioner/10th defendant in O.A.No.311 of 2014, on the grounds inter alia that,
(i) The Appellate Tribunal failed to appreciate that no valid security interest was created in respect of the Subject Property belonging to the petitioner in favour of the 1st Respondent bank for the loan availed by the 2nd respondent. The Appellate Tribunal despite holding that the title documents of the subject property belonging to the petitioner were misused in getting a loan in favour of the 2nd respondent, the Appellate Tribunal failed to restrain the 1st respondent from proceedings against the petitioner's share in the subject property.
(ii) The Appellate Tribunal in the impugned order held as follows:
In fact, these documents have been handed over to one Mr.J.R.Jayagoinath, a family friend of R 10/D10, who had links in Bank also and with borrowers also and acted in malafide manner with collusion, misused the confidence of family members and deposited the title deeds in the bank. Mr.J.R.Gopinath took the documents of R10/D10 from R9/D9 saying that he will obtain loan of Rs.15 lakhs for his company, M/s. Magnum Business Services Ltd, but ultimately these documents have been misused by respondent No.1 company borrowing of more than Rs.5 crores in dishonest manner. As per the above finding of the Appellate Tribunal, it is clear that the petitioner has not created any security interest in the subject property in favour of the 1st respondent bank for the loans availed by the 2nd respondent. If there is no valid security interest then there can be no valid mortgage. If there is no valid mortgage, then the 1st respondent cannot be permitted to proceed against the subject property for recovery of the loans availed by the 2nd respondent.
(iii) The Appellate Tribunal has failed to appreciate that the petitioner's signature was forged in the following five documents:
1. The Memorandum of Deposit of Title Deeds dated 19.01.1998 allegedly executed by the 10th respondent and petitioner.
2. The deed of Guarantee dated 19.01.1998 allegedly executed by the 10th respondent and petitioner.
3. Letter dated 19.01.1998 issued by 1st respondent for the acknowledgment and confirmation of deposit of title deeds with the bank and allegedly signed by the 10th respondent and petitioner.
4. Letter of confirmation of Guarantee and Mortgage by Guarantors dated 27.01.1998 allegedly issued by the 10th respondent and petitioner to the 1st respondent.
5. The General Letter of Lien and set off from the Guarantor/Mortgagor dated 27-01-1998 issued by the 10th respondent and petitioner to the 1st respondent.
(iv) The Appellate Tribunal has failed to appreciate that the petitioner produced the passport and driving license which revealed that the petitioner's photograph was affixed and her signatures were mentioned as S.M.VARGHESE. But in the alleged bank documents i.e. the above said Guarantee and Mortgage, petitioner's signature was found as S.Vargheese. The alphabet M was not found. Further, on comparison of both the signatures, all the letters are entirely different. Under Section 73 of the Evidence Act, 1872, the DRT was well within its power to compare the signatures. Therefore, it is crystal clear that the petitioner was not the signatory in the Deed of Guarantee and Memorandum of deposit of title deeds, confirmation letter and General Letter of lien. However, the Appellate Tribunal failed to appreciate that the petitioner's signature was forged and no valid security was created in respect of the subject property.
(v) The Appellate Tribunal has misconstrued the main issue in dispute. The Appellate Tribunal in the impugned order, held as follows:
8. In my considered opinion, while the identity of person is not disputed, then, mainly on the basis of difference in names only whether she is S.Verghese or S.M.Verghese, not much difference will be made on case of the bank. Main thing is whether Mr.J.R.Gopinath played a fraud with R10/D10 in collusion with borrowers and bank officers or not. It appears that R10/D10 did not go to the appellant bank at the time of submission of the title deeds. Rather document signed before Notary was produced in the bank. The Appellate Tribunal wrongly appreciated the issue involved and was only concerned as to the identity of the petitioner whether it was S.Verghese or S.M.Verghese. The petitioner is called Sarasu Verghese but she signs as S.M.Verghese. The 2nd respondent in collusion with the 1st respondent forged the petitioner's signatures as S.Verghese in the five mortgage documents mentioned above. The petitioner produced her driving license and passport wherein the petitioner's signature is found as S.M.Verghese. The Appellate Tribunal did not appreciate that the petitioner's signature was forged in the mortgage documents submitted to the 1st respondent bank.
(vi) The Appellate Tribunal has failed to appreciate out the five documents submitted to the 1st respondent bank namely,
1) Memorandum of deposit of title deed dated 19.01.1998, executed by Kunjoonjamma Philip and S.Varghese,
2) Deed of Guarantee dated 19.01.1998,
3) Acknowledgment and confirmation letter dated 19.01.1998,
4) Letter of confirmation of Guarantee and Mortgage dated 27.01.1998 by Kunjoonjamma Philip nad S.Vargheese
5) General letter of lien and set off dated 27.01.1998 from Kunjoonjamma Philip and S.Vargheese, only the deed of guarantee dated 19.01.1998 was notarized and the other four documents have not been notarized. The mandatory procedure while executing the Memorandum of deposit of title deed, is that the owner of the property appears before the bank and signs the Memorandum of deposit of title deed and other surety documents. Even in case of revocation and replacement of surety, the earlier surety should appear before the bank to cancel the surety and new surety will have to appear before the bank to replace the earlier surety. Hence in the absence of the petitioner appearing before the 1st respondent bank and affixing her signatures in the memorandum of deposit of title deed and other surety documents, it cannot be considered as a valid mortgage in respect of the subject property. The Appellate Tribunal has clearly held that the petitioner did not appear before the 1st respondent bank while executing the memorandum of deposit of title deed and other surety documents. Further the document signed before notary cannot be produced/relied at the time of creation of the surety documents, since out of five documents, only one document was notarized. In any event, for creation of interest in a property, the owner of the property or his power agent will have to be present at the time of creation of interest as the same is akin to registration of documents before the registration authorities.
(vii) The Appellate Tribunal has failed to appreciate that the petitioner has not signed any document with 1st respondent bank for sanction of the loan to the 2nd respondent. The petitioner has not mortgaged the subject property to 1st respondent bank. The petitioner had not given power to the 2nd respondent to mortgage the subject property with the 1st respondent bank. Hence the subject property belonging to the petitioner cannot be proceeded against for recovering the loan availed by the 2nd respondent.
(viii) The Appellate Tribunal has erred in holding that the interest of the 1st respondent bank will hold primacy over the interest of the 1st respondent bank will hold primacy over the interest of the petitioner. From the order dated 11-12-2015 passed by DRT-II, Chennai in O.A.No.311 of 2014, which was set aside by the Appellate Tribunal by the impugned order, it is clear that the 1st respondent has produced forged and fabricated documents before DRT-II, Chennai and has interfered with the administration of justice. The 1st respondent is liable to be punished for committing criminal contempt. It is settled law that fraud vitiates all solemn acts. The above documents in which the signatures of the petitioner were found to be forged by DRT-II, Chennai, also contains the signatures of the 10th respondent. The 1st respondent who has forged and fabricated the signatures of the petitioner and misled this Tribunal, cannot take advantage of the very same documents and cannot be permitted to proceed against the balance 50% share of the 10th respondent in the subject property.
19. During the course of hearing of the instant writ petition, Mrs.Nalini Chidambaram, learned Senior Counsel drew the attention of this Court to the interpolation in the documents viz., (1). The Memorandum of Deposit of Title Deeds dated 19.01.1998 allegedly executed by the 10th respondent and petitioner;
(2) The deed of Guarantee dated 19.01.1998 allegedly executed by the 10th respondent and petitioner;
(3) Letter dated 19.01.1998 issued by 1st respondent for the acknowledgment and confirmation of deposit of title deeds with the bank and allegedly signed by the 10th respondent and petitioner;
(4) Letter of confirmation of Guarantee and Mortgage by Guarantors dated 27.01.1998 allegedly issued by the 10th respondent and petitioner to the 1st respondent;
(5) The General Letter of Lien and set off from the Guarantor/Mortgagor dated 27-01-1998 issued by the 10th respondent and petitioner to the 1st respondent, wherein the words Mrs.S.Vargheese has been interpreted.
20. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, in the counter affidavit, has submitted that for the purpose of obtaining loan, M/s.Pan Clothing and Consolidated Co. Ltd., Chennai, 2nd respondent herein, executed all security documents, as per the standard norms of the bank, including hypothecation of stocks and other movables of the Company, on 19.01.1998, by hypothecating stocks, book debts and other movables of the company on 19.01.1998, and the defendants in O.A.No.311 of 2014, have also executed Deed of Guarantee, in favour of the bank, guaranteeing all the advances of the M/s.Pan Clothing and Consolidated Co. Ltd., Chennai, 2nd respondent herein, while availing the loan initially. During the currency of the loan, the 2nd respondent-Company sold the hypothecated assets and stocks, without the knowledge of the Jammy and Kashmir Bank Ltd. Hypothecation charge was created in favour of the bank on pari pasu basis, along with the charge in favour of the Indian Bank, Chennai, 11th respondent, for Rs.580 Lakhs and Punjab and Sind Bank, 10th respondent herein, for Rs.850 Lakhs and thus, the abovesaid two banks were also impleaded, as formal parties, in the suit filed before the Debt Recovery Tribunal, by Jammu and Kashmir Bank. Hypothecation charge in favour of 1st respondent- bank, was duly registered with Registrar of Companies (Tamil Nadu), as soon as it was created.
21. It is submitted that the following properties were mortgaged by some of the respondents in favour of the 1st respondent-Bank, as collateral security,
(a) Respondent No.8 (Mrs.Lakshmi Reddy), mortgaged her properties on 19.01.1998, morefully described in Schedule-A to the Original Application filed before the learned DRT-I, Chennai, by the respondent-Bank. However, the said Lakshmi Reddy and her property, were discharged by the Debts Recovery Tribunal, after recording satisfaction from the Bank of having received money to the tune of Rs.2.10 Crore, from the said Mr.Lakshmi Reddy.
(b) Respondent No.9 (Mrs.Bharathi Prasad) also created equitable mortgage on 19.01.1998 of her immovable property, which is morefully described in Schedule B to the Original Application. The said Mrs.Bharathi Prasad and the property mortgaged by her were discharged by the DRT, after recording satisfaction from the Bank of having received money to the tune of Rs.1.25 Crore, from her.
(c) Petitioner and her mother, Mrs.Kunjoonjamma Philip, jointly created deposit of title deeds of their property, jointly owned by them and now located at Anna Nagar, Chennai, as plot No.2489 on 19.01.1998, which is morefully described in Schedule C to the Original Application, filed by the Bank, before the DRT.
22. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has further submitted that respondents 8 and 9, including petitioner's mother, Mrs.Kunjoonamma have confirmed their creation of mortgage by executing confirmation letters, in favour of the bank on 19.01.1998. Further, respondents 2 to 9 have executed various loan documents and general lien letter, waiver letter, guarantee deeds and letters, letter of lien and set off, etc., in favour of the 1st respondent-Bank on 27.01.1998, in pursuance to the said loan agreements.
23. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, further submitted that M/s.Pan Clothing & Condlidated Co. Ltd., Chennai, 2nd respondent, as the principal borrower, has admitted their dues, under all loan documents, on various dates, like, 16.02.1999, 04.08.1999, 27.01.2000, 28.03.2000 and also on 01.06.2000. Again, subsequently on 18.01.2001, the 2nd respondent-Company acknowledged their debts, by way of confirmation of balance, as on 31.12.2000.
24. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has further submitted that the M/s.Pan Clothing & Condlidated Co. Ltd., Chennai, 2nd respondent, has committed default of non-payment of dues and various other irregularities, which are continued and not complied with various other terms and conditions, subject to which, the loans were sanctioned by the 1st respondent-bank and availed by M/s.Pan Clothing & Condlidated Co. Ltd., Chennai, 2nd respondent and hence, the 1st respondent-Bank herein, filed Original Application against all the respondents, including the petitioner herein, who stood as mortgagor, for the loan availed by the 2nd respondent-Company, for total dues of Rs.5,75,59,191.15 as on the date of the Original Application, with further interest thereon, accruing thereafter. 1st respondent-Bank has further submitted that the application before the DRT was filed in the year 2001 and service was completed shortly thereafter. Writ petitioner has entered appearance only in the year 2006 and started contesting from the year 2011.
25. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has further submitted that the writ petitioner herein along with her mother, Kunjoonjamma Philip, whose property was mortgaged to the respondent-Bank as one of the securities, based on which, the loans were sanctioned, disbursed and availed by the 2nd respondent. But when the calling up notice was issued, they did not raise any objections, nor even sent a reply to the notice, but subsequently, when the proceedings continued, the petitioner herein, raised her objection, stating that her mother, Mrs.Kunjoonjamma, joint owner of the property, deposited the title deeds, with the 1st respondent-Bank, through one Mr.Jaya Gopinath, representing an organisation, called Magnum Business Services, which facts were not known to the 1st respondent-Bank and the petitioner also alleged that depositing of title deeds and execution of equitable mortgage were made during the period, when the writ petitioner was out of country. To prove that, the writ petitioner produced her passport, issued by United States of America, in which, her name was mentioned as "VARGHESE SARSUSU MARY". The writ petitioner also produced the driving licence alleged to have been issued by the Department of Public Safety, Texas USA. In the Driving licence, her name has been differently, spelled as "VARHSESE SARASU PHILIP". Before DRT, the writ petitioner herein, produced only the photocopies of the abovesaid passport and driving licence. According to the 1st respondent-Bank, originals were not even shown nor the writ petitioner marked the abovesaid original documents, before the DRT.
26. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has pointed out that what was relied on by the bank are the documents executed by the writ petitioner in the presence of Notary public, which was irrebutable evidence, and conclusive proof of the facts. Furthermore, no material was produced on record to show that the writ petitioner was not in India, when the documents relied on by the 1st respondent-Bank, came to be executed. Moreover when the petitioner signed the Memorandum of Equitable mortgage and guarantee agreement etc, they were witnessed, by two other directors/respondents, namely, "T.P.Anand" and "Narayana Vyas". Co-owner of the property, petitioner's mother was added as party (defendant 9) in the application filed by the bank. However, she remained exparte as such the writ petitioner did not make any attempt to prove the fact that it was only her mother who executed the documents without her consent. Moreover writ petitioner's name was spelled only as S.Varghese in the Sale Deed document No.4763 of 1989 and so, the writ petitioner did not dispute the same by mentioning that her name as S.M.Varghese not "S.Varghese".
27. It is the contention of the 1st respondent-bank that bank has rightly acted upon the name of the petitioner as S.Varghese, as it was the name found in the Sale Deed of the subject property and the 1st respondent-bank could not have acted otherwise and the writ petitioner having had her name as "S.Varghese" when the loans were availed, is estopped from disputing it now that she is S.M.Varghese and not S.Varghese. The correspondences of petitioner's mother, co-owner of the property, had with the 1st respondent-bank, would show that her mother had willingly parted with the possession of the document for a consideration. Hence the property jointly owned by her mother along with the petitioner is totally liable for the loan dues.
28. Debts Recovery Tribunal-II, Chennai, vide order, dated 11.12.2015, disagreed with the contentions made by Jammu and Kashmir Bank, Chennai, 1st respondent herein. Aggrieved over the said order, the 1st respondent-Bank has filed an appeal before DRAT. After hearing the parties and the documents produced on record, the DRAT came to the conclusion that valid mortgage was created on the property as per the memorandum of documents of title deeds and also the guarantee agreements.
29. Before this Court, in the present writ petition, the Bank has contended that taking into consideration, facts and circumstances of the case, the DRAT, has come to the conclusion that it becomes clear that title deeds R10/D10 (petitioner herein) were used by the second respondent-Company, for borrowing.
30. The Appellate Tribunal has further held that adifference in signature as compared to passport and driving licence of United States would not ultimately question the identity of the person. Complaint made by R10/D10 against J.R.Jayagopinath and others, whosoever has not pursued to logical end. In such a situation, the 1st respondent-bank should not be made to lose its money which can be realised from the guarantor also. Accordingly, the Appellate Tribunal has held that the original application should have been decreed against R10/D10 (i.e. petitioner herein) like all other borrowers/guarantors in the matter. Appellate Tribunal further held that merely on the ground that the documents were made available to the bank through a Notary and there is a variation in signature, liability of R10/D10 (petitioner herein) will not come to an end.
31. Instant writ petition is filed challenging the order passed by the DRAT, Chennai and the 1st respondent-Bank denies all the allegations contained in the affidavit filed in support of the writ petition, as false and frivolous. The allegation that consideration for the subject property was paid by petitioner's husband K.Varghese, is denied as false. The averments that the petitioner does not have the knowledge of handing over of the title deeds to the said Jayagopinath and during the relevant time, the writ petitioner was living in USA are denied as false. The transaction is binding on the petitioner.
32. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, has further contended that the allegation that the said Jayagopinath, in breach of the trust reposed by writ petitioner's mother, permitted the second respondent-Company to offer the subject property as security to the 1st respondent-Bank, is denied as false, and that they are invented only for the purpose of this case. Writ petitioner did not take any steps to examine the said Jayagopinath to prove the same. Not even petitioner's mother has entered appearance and examined herself, to prove that Jayagopinath defrauded her. When the documents creating mortgage and personal guarantee were executed before a Notary, the allegation that the writ petitioner was not a party to those documents, cannot be countenanced. Averment that the writ petitioner, during the relevant point of time, was living in US and not aware of the transactions, are all denied and those allegations were made only to escape liability.
33. It is the further contention of Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, that if the writ petitioner sincerely believed that she was defrauded by the said Jayagopinath, then the criminal complaint preferred, ought to have been pursued till it reached a logical end. With regard to the allegations, as regards issuance of notice to this respondent, the same would not in any way improve the case of the writ petitioner.
34. With regard to the averment that the Debts Recovery Appellate Tribunal has failed to appreciate misuse of the property documents in favour of the bank, it is the contention of the bank that documents were duly deposited and valid mortgage was created by the petitioner and her mother in favour of the bank, which fact was certified by the Notary public and witnessed by two other directors/respondents.
35. Jammu and Kashmir Bank Ltd., Chennai, 1st respondent herein, further submitted that there is a valid security on the properties mortgaged and that the 1st respondent bank is entitled to exercise the rights of recovery from the properties. It is the further contention of the respondent bank that the petitioner's signatures were not forged in the five documents mentioned therein.
36. It is the contention of the respondent that even though attested photocopies of passport and driving licence issued in United States were produced before the DRT, for verification, nevertheless the originals were not produced. Moreover these extraneous documents were not marked as exhibits to enable the bank counsel to cross examine the witness, and so the same cannot be relied for any purpose. Hence it is submitted that the variance in the name of the petitioner as "Varghese Sarasu Mary" in passport & "Varheese Sarasu Philip" in driving licence and "S.Varghese" in the bank documents and as well as the sale deed, all belonged to one and the same person, that is the petitioner herein and so there was no reason to suspect that the petitioner has not executed the documents.
37. The 1st respondent-Bank has further contended that it is strange that the petitioner is suggesting that there is collusion between the 1st respondent bank and the 2nd respondent. When DRAT has held that there is a valid mortgage and personal guarantee executed in favour of this respondent, the petitioner could not in any way be aggrieved by the fact that there was no direction issued by DRAT for filing of a complaint under Section 466 of IPC.
38. The 1st respondent-Bank has further contended that the petitioner along with her mother jointly deposited the title deeds of the properties with the 1st respondent by a creating charge thereon personally, which was witnessed by two other respondents, namely T.P.Anand and Mr.Narayana Vyas and these facts were attested by the Notary public also. Thus there is a conclusive proof of mortgage created by the petitioner.
39. The 1st respondent-bank has further contended that the petitioner along with her mother created mortgage personally and that the same is valid and binding on the petitioner. It is further submitted that the petitioner even though lodged a complaint against Mr.Jayagopinath, the petitioner did not pursue the matter only for reasons best known to her. No where in the proceedings before the DRT and DRAT, the petitioner explained why the criminal proceeding said to have been initiated by her, was not pursued till it reaches a logical conclusion. The 1st respondent-Bank has further contended that all the original documents are with DRT and hence, the bank could not provide copies of documents as required by the petitioner. However the bank has furnished the documents subsequently as per the orders of this court.
40. Bank has also filed an additional typed set of documents. On the averments made, both the learned Senior counsel for the parties made submissions.
41. During the pendency of OA.No.311 of 2014, petitioner has filed I.A.No.90 of 2015, to refer the documents in the said IA, to handwriting expert to verify the signatures of the petitioner and to file a report of his opinion to the Tribunal. Said application has been opposed. Though DRT-II, Chennai declined to grant the relief as prayed for, by observing that as per Section 73 of the Evidence Act, Tribunal itself has the power to decide as to whether the documents were forged or not, decided to compare the signatures in the disputed documents with the signatures found in the passport, licence and other documents.
42. Accordingly dismissed I.A.No.90 of 2015 in O.A.No.311 of 2014. For brevity, order in I.A.No.90 of 2015 made in O.A.No.311 of 2014, on the file of the DRT-II, Chennai, is reproduced hereinunder:-
7. The petitioner filed copy of passport to verify the signatures. If we sent the same to Handwriting expert it will take time. This OA was filed in the year 2001. This Tribunal has power to compare the signature and decide whether the signature in the documents are forged or not as per section 73 of Evidence Act. Therefore, I find that this petition is not necessary. Whether the signatures in the alleged documents are forged or not will be decided by this Tribunal by comparing the signatures found in the passport. Hence, I find that there is no loss to the petitioner for not sending the documents to Handwriting Expert.
43. Therefore, DRT-II, in its final order made in O.A.No.311 of 2014, dated 11.12.2015, held that the signatures in the disputed documents are different, and details of the order, are extracted in the foregoing paragraphs. When the bank filed R.A.No.28 of 2017, against the dismissal of O.A.No.311 of 2014, as against the 10th defendant therein/petitioner, before the Appellate Tribunal, bank has contended that, identity of person referred to, in title deeds of the mortgaged property, driving licence and passport etc. is not disputed. A slight difference in name and style and accordingly in signatures will not change the identity of the person. These variations in name and signatures are possible and willful also. Copies of alleged passport and driving licence of U.S.A. of R10/D10 were not made available to bank for perusal also. Bank had no opportunity to give explanation regarding the variation in names and signatures. Such documents have been made available by R10/D10 in casual manner in the Court. They were taken on record in very informal manner.
44. Opposing the said contention, petitioner in R.A. No.28 of 2017 has contended that, respondent No.10/Defendant No.10 was residing in U.S.A. and her name was misused by the borrower, in collusion with the Appellant Bank Officers. Tribunals/Courts can compare and consider the differences and variations in writing and signatures of R10/D10, when they are apparent from the fact of the record.
45. Adverting to the rival contentions, Debts Recovery Appellate Tribunal, Chennai, in its order in R.A.No.28 of 2017 dated 13.11.2017, held as follows:-
6. After considering the pleadings of the parties, submissions of the counsel of the parties and record, it becomes clear that Memorandum of deposit of title deeds was singed on 19.1.1998. On 27.1.1998, letter of confirmation of guarantee of R10/D10 was signed. After about 14 years, i.e. on 17.2.2012, counter affidavit was filed by R10/D10 before DRT mainly stating that she had purchased the property in question from one M.M.Mathew vide registered Sale Deed on 18.10.1989. After about nine years of the purchase, these documents have been used in Bank. In fact, these documents have been handed over to one Mr.R.Jayagopinath a family friend of R10/D10, who had his links in Bank also and with borrowers also and acted in malafide manner with collusion, misused the confidence of family members and deposited the title deeds in Bank. Mr.J.R.Jaigopinath took the documents of R10/D10 from R9/D9 saying that he will obtain loan of Rs.15 lakhs for his company M/s. Magum Business Services Ltd., but ultimately these documents have been misused by Respondent No.1 Company borrowers in the matter of borrowing of more than Rs.5 Crores in dishonest manner.
7. Record reveals that on 18.10.1989, there had been no provision of signatures of purchasers of the title deeds. Hence, no other authentic document was available except her Passport and Driving Licence. It is true that both these documents have been prepared in U.S.A. Name of R10/D10 available on Passport was Sarasu Mary Vergheese.
8. In my considered opinion, while the identity of person is not disputed, then, mainly on the basis of difference in names only whether she is S.Varghese or S.M.Varghese, not much difference will be made in the case of the Bank. Main thing is whether Mr.J.R.Jayagopinath played a fraud with R10/D10 in collusion with borrowers and Bank Officers or not? It appears that R10/D10 did not go to Appellant Bank at the time of submission of title deeds. Rather document signed before Notary was produced in the Bank.
9. It is true that R10/D10 preferred Police complaint against erring persons, but did not pursue it seriously. But this is also not very clear that whether through Notary or by directly appearing in Bank, has Mrs.Varghese signed the documents in the presence of remaining two Directors? There could have been various methods of proving forgeries in civil matters. If the documents are taken into consideration in totality of the circumstances, in view of the facts and circumstances of this case, it becomes clear that title deed of R10/D10 was used by the Appellant Bank for the borrowing. A difference in signature as compared to Passport and Driving Licence of U.S.A. will not ultimately dispute and question the identity of the person. Complaint made by R10/D10 against J.R.Jayagopinath and other guilty persons whosoever they may be, was not pursued upto logical end.
10. In such a situation, Bank should not be made to lose its money which can be realised from the guarantor also. Accordingly, O.A. Should have been decreed against R10/D10 also like all other borrowers/guarantors in the matter. Merely on the ground that documents were made available to Bank through a Notary and there is variation in signatures, liability of R10/D10 will not come to an end.
11. In my considered opinion, R10/D10 is also equally liable for the claim amount as other Respondents/Defendants in the O.A.
12. Appeal stands allowed. Impugned order is modified as indicated above.
46. Identity of the petitioner is not the dispute before the Tribunal, but the question to be considered was whether the abovesaid documents were forged or not? The Appellate Tribunal, while adverting to the finding recorded by DRT-II, Chennai on the variance in the signatures, has observed that, mainly on the basis of difference in names, whether she is S.Varghese or S.M.Varghese, not much difference will be made in the case of the Bank.
47. The Appellate Tribunal, has proceeded on the basis that the documents have been signed in the presence of Notary and produced before the bank. When the petitioner has disputed the signatures in the said documents and when there is a clear finding of variance in the signatures, by DRT-II, in O.A.No.311 of 2014, dated 13.11.2017, the Appellate Tribunal ought to have addressed in the said finding, instead of proceeding with the case, on the premise that the documents have been signed. At the risk of repetition, para No.8 of the order in R.A.No.28 of 2017 dated 13.11.2017, on the file of the Appellate Tribunal is reproduced hereunder:
9. It is true that R10/D10 preferred Police complaint against erring persons, but did not pursue it seriously. But this is also not very clear that whether through Notary or by directly appearing in Bank, has Mrs.Varghese signed the documents in the presence of remaining two Directors? There could have been various methods of proving forgeries in civil matters. If the documents are taken into consideration in totality of the circumstances, in view of the facts and circumstances of this case, it becomes clear that title deed of R10/D10 was used by the Appellant Bank for the borrowing. A difference in signature as compared to Passport and Driving Licence of U.S.A. will not ultimately dispute and question the identity of the person. Complaint made by R10/D10 against J.R.Jayagopinath and other guilty persons whosoever they may be, was not pursued upto logical end.
48. Crux of the matter is who signed the documents? and not the identity. Though on the basis of the documents such as, Power of Attorney, executed by the petitioner and her mother; affidavit signed by the petitioner and her mother; and Certificate issued by Karur Vysya Bank, Anna Nagar, Chennai, filed in the additional typed set of papers, in particular, Certificate dated 03.02.1998, issued by Karur Vysya Bank, Anna Nagar, Chennai, Mr.B.Kumar learned Senior counsel submitted that before the said bank, the petitioner's signature has been attested by Manager of the said bank, and therefore, this Court can compare the signatures of the petitioner with the disputed documents, Mrs.Nalini Chidambaram, learned Senior counsel for the petitioner, opposed the said request, on the grounds that the said signatures, were also forged and therefore, no comparison can be made. Learned Senior counsel prayed for comparison of the signatures with the latest passport and other documents.
49. Fact remains that the documents in the typed set of papers, dated 09.07.2018, filed by the bank, in the present writ petition were not, produced before the Tribunal, and therefore, we reject the contention of both parties, raised on the basis of additional evidence, which cannot be permitted, at this stage, in this writ petition, when both the parties have not filed any application for marking new documents, either before the Tribunal or the appellate forum. Signatures in the disputed documents, have been compared with passport and licence, by the Debts Recovery Tribunal, Chennai and not other documents. Considering the complexity of the matter, which requires an expert opinion, as to whether, signatures have been forged or not, notwithstanding the fact that the Court/Tribunal can compare the signatures, on its own, without reference to an expert, on the peculiar facts and circumstances of this case, we deem it fit not to carry out such exercise, but to leave it to an expert to do decide and submit a report, with his opinion.
50. Though rival contentions have been made on the correctness of the order made in R.A.No.28 of 2015, dated 13.11.2017, on the file of the DRT-II, Chennai, both the learned Senior Counsel for the parties agreed that the said order be set aside, with a direction to the Handwriting Export, Forensic Sciences Department, Chennai, to compare the signatures, in the abovesaid disputed documents, with the passport and licence, produced before the Tribunal and accordingly, a report be submitted to DRAT, Chennai, with his opinion. Submission of both the learned Senior Counsel is placed on record.
51. For the reasons, stated supra, we are not inclined to subscribe to the decision of the appellate forum. Impugned order of the DRAT, Chennai in R.A.No.28 of 2015, is set aside.
52. Documents, viz., (i) Memorandum of title deed executed by K.Philip and S.Vargheese, (ii) Deed of Guarantee, (iii) Acknowledgement Confirmation letter, (iv) Letter of Confirmation of guarantee and mortgage by K.Philip and S.Vargheese and (v) General letter of lien and set off from K.Philip and S.Vargheese, are directed to be sent to the Handwriting Expert, Forensic Department, Chennai, within two weeks, from today, to compare the signatures in the said documents, with the signatures found in the original of the cancelled passport and driving licence, produced before the DRT-II, Chennai, and submit a report with his opinion, to DRAT, Chennai, within one month thereafter.
53. Writ petitioner is directed to submit the original of the driving licence produced before the Tribunal within such time. Original of the cancelled passport produced before this court is directed to be sent along with copy of this order.
54. On receipt of the report from the Handwriting Expert, DRAT, Chennai, is requested to take up R.A.No.28 of 2015 for disposal, without being influenced by the observations, made in the said order. Registry is directed to keep the passport and licence, in safe custody.
55. With the above direction and observations, writ petition is disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.
(S.M.K., J) (S.P., J.) 26.07.2018 Note to Office:
Issue order copy on 27/6/2018 asr/dm To The Registrar, Debts Recovery Appellate Tribunal, 4th Floor, Indian Bank Circle Office, No.55 Ethiraj Salai, Chennai - 600 008.
S. MANIKUMAR, J.
AND SUBRAMONIUM PRASAD, J.
asr/dm W.P.No.4300 of 2018 and W.M.P.Nos.5287 and 5288 of 2018 Dated : 26.07.2018