SARFAESI; Angel Distribution Vs. Kotak Mahindra Bank [Calcutta High Court, 20-05-2016]

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Secured Asset – Bank Guarantor – the petitioner no. 2 is trying to both approbate and reprobate by on the one hand purporting to stand as Guarantor for the loan of his sons’ Partnership Firm, and then denying any liability by contending that the property mortgaged does not belong to him but to the Company, of which he appears to be the sole Director according to the Cause Title of the Writ petition. Such conduct of the petitioners is not appreciable. They have clearly not come before this Court with clean hands and are therefore not entitled to the relief prayed for. For the aforesaid reasons the writ petition is dismissed.

Bank


IN THE HIGH COURT AT CALCUTTA

(Ordinary Original Civil Jurisdiction)

Original Side

Present: The Hon’ble Justice Sudip Ahluwalia

Judgement On : 20-05-2016

W.P. No. 493 of 2011 With G.A No. 2776 of 2012

Angel Distribution Co. Pvt. Ltd. & Anr. Vs. Kotak Mahindra Bank Ltd. & Ors.

For the Petitioners : Mr. Sakya Sen, Adv., Mr. Sukrit Mukherjee, Adv., Mrs. Reshmi Ghosh, Adv.; For the Respondents : Mr. Sudeb Deb, Adv., Mr. A.K. Gandhi, Adv., Mr. B. Ghosh, Adv.

SUDIP AHLUWALIA, J.

The writ petition was originally filed seeking the following principal relief:-

“a) A writ of or in the nature of Mandamus do issued commanding the respondents to forthwith take steps for release of and/or handing over the Flat No. A-1 belonging to the petitioners to them without any undue delay.”

2. It was dismissed by the Hon’ble Justice Jayanta Kumar Biswas (as His Lordship then was) originally on 5th May, 2011. An appeal was thereafter preferred by the writ petitioner which was allowed by a Division Bench of this Court vide a judgement passed on 8th June, 2011. It was directed therein-

“His Lordship (that is the Trial Court) shall take decision independently. This Court only has settled the issue on consent of the parties in this matter on the question of alternative remedy and not otherwise.

It is agreed by the parties that the observations recorded in our order on the question of alternative remedy are acceptable in this case only.”

3. It is therefore clear that the above observations by the learned Appellate Court were made in the context of the fact that the writ petition was originally dismissed without even the affidavit-in-opposition having been filed by the respondents simply on the ground of existence of the alternative remedy. Therefore, in essence the direction of the Ld. Appellate Court was to allow the respondents to file their affidavit-in-opposition and to decide the matter on merits after completion of the pleadings. Subsequently, the respondents have also filed this application praying for dismissal of the writ petition on the ground of its alleged non-maintainability.

4. It is submitted on behalf of the writ petitioners that the disputed part of the properties described as “Secured Asset” the respondent bank happens to be a Ground Floor Flat for which the title is of the Company itself and not that of its Director in his personal capacity. As such there cannot be any scope of conveying the property in question lawfully by the Petitioner no. 2, if done in his private capacity. The back ground of the matter as narrated/summarised by the Writ Petitioners in their written notes of arguments is as follows:-

“1. The petitioner no. 1 company obtained a sub-lease for a term of 99 years in respect of flat no. A1 located in the ground floor of AB Block in the building known as Gopal Bhavan situated at 43, Kailash Bose Street, Kolkata – 700 006 from one Mahesh Properties Limited by a registered deed dated October 11, 1999. [Annexure P1 to the writ petition at pages 25 to 64]

2. In or about April 2007 M/s. Mitra Brothers, the respondent No. 3 herein, entered into talks with Kotak Mahindra Bank, the respondent no. 1, for the purpose of obtaining financial assistance.

3. Initially the petitioner no. 2 had offered to stand as surety against the loan to be sanctioned by the respondent no. 3 bank and the petitioner no. 1 had offered to secure the loan by way of an equitable mortgage of the leasehold rights in respect of the above- mentioned flat. At the time, in or about June-July, 2007 a few documents including a deed of personal guarantee dated July 19, 2007 executed by the petitioner no. 2 had been signed and made over to the respondent no. 3.

4. However, since the respondent bank was delaying disbursement of the loan, the respondent no. 3 firm decided no to transfer the loan account from UTI Bank. In the above backdrop, most of the original documents that had previously been executed for the purpose of having the loan account transferred including inter alia the deed of personal guarantee dated July 19, 2007 were returned by the respondent bank to the petitioners. The original registered deed of sub-lease dated October 11, 2007 and the original deed of personal guarantee singed by the petitioner no. 2 on July 19, 2007 are lying and have at all material times been in the custody of the petitioners. [Photocopy of the original deed of personal guarantee dated July 19, 2007 is Annexure B to the affidavit in reply at pages 19 to 27]

5. By way of a notice dated May 20, 2009 addressed only to the respondent no. 3 firm and its partners, with a copy marked to the petitioner no. 2, the respondent bank purported to invoke the provisions of Section 13(2) of the

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

[Annexure P-2 to the writ petition at pages 65 to 72 thereof]

6. On January 24, 2011 the respondent bank illegally and forcibly took possession of the flat in question from the petitioner no. 1 with the assistance of police force.

7. The instant application was thereafter filed challenging the arbitrary, illegal and wrongful manner in which the respondent bank had purported to invoke the provisions of the Act of 2002.”

5. It is therefore the contention that no action lies in relation to that particular property since it could not have been conveyed by the Director in his private capacity. It may be mentioned here that the writ petitioner no. 1 is the company itself while the writ petitioner no. 2 is Mr. Ahim Mitra, its Director who according to the bank had placed the disputed premises as a “Secured Asset” ostensibly as Guarantor for the respondent No. 3 namely “M/s. Mitra Brothers”, a Partnership firm of which his own two sons are the partners. It is also the contention that in any case no such original deed sub-lease was delivered by the petitioner no. 1 to the bank authorities, and so, any document in that regard relied upon or in possession of the authorities would be forged and fictitious.

6. On the other hand it has been asserted on behalf of the respondent bank that –

“…….a) The original registered deed of sub-lease dated October 11, 1999 is in its custody;

b) the petitioner no. 2 had executed several documents in relation to the loan in question including a deed of personal guarantee dated July 31, 2007 [Annexure B at pages 27 to 34 of the Affidavit in Opposition];

c) the partners of the respondent no. 3 firm had created an equitable mortgage in respect of the flat in question by depositing an original registered deed of gift dated June 5, 2002 executed by the petitioner no. 2 in favour of the two partners of the respondent no. 3 firm [Annexure C at pages 38 to 44 of the Affidavit in Opposition] and further by executing a memorandum of deposit of title deeds on September 15, 2007 [Annexure D appearing at pages 109 to 113of the Affidavit in Opposition]…….”

8. It is the assertion of the writ petitioners that the writ petitioner no. 1 namely the Company is not bound by the private act of its director in relation to the disputed property and that even assuming that any such mortgage was created, the bank itself should not have accepted the same without satisfying itself about the Director’s title and authority to do so in terms of Section 41 of the Transfer of Property Act. In support of these contentions the writ petitioners have also referred to some citations.

9. In