Sarfaesi appeal
vishal kumar
(Querist) 11 June 2012
This query is : Resolved
A landed property was mortgaged to a Bank-A in the year 2003 by the deposit of orignal sale deed. Bank-A has taken the possession of the mortgaged property. The same property was mortgaged again to Bank-B in the year 2006 by thee desposit of original sale deed of the same number and same date. In the mean time mortgagor expired leaving behind minor son. Bank-B filed Original Application in DRT and obtained certificate without the knowledge of Bank-A. Sumultaneosly Bank -B went for auction sale proceedings of the said property under SARFAESI Act. Bank-A filed appeal against Bank-B before DRT to stop the auction sale of the property since having prior mortgage. It is in the hearing stage. Bank-A also filed recovery suit in DRT recently. I am getting hint the SARFAESI Appeal will be dismissed since DRT having no jurisdiction to try dispute between two Banks. Can such dispute between two Banks be tried by DRT under SARFAESI Appeal. If yes, can you provide any recent case laws and provisions relating to dispute between two bank under SARFAESI Appeal taken up by DRT. If no, what is the remedy ultimately?
Anirudh
(Expert) 11 June 2012
First clear the doubt, how the original sale deeds can be deposited with two different banks?
Kiran Kumar
(Expert) 11 June 2012
How you concluded that the DRT cannot adjudicate upon the issue?
Please refer to some relevant provisions of SARFAESI Act and DRT Act.
Yours is a good technical proposition.
Advocate M.Bhadra
(Expert) 11 June 2012
Any original Deed have its own original one,DRT can proceed the recovery for the two banks(A&B)and after auction the Banks got proportionate realization as per loan amount,no others court have jurisdiction.
Kiran Kumar
(Expert) 11 June 2012
Mr. Bhadra his query is that whether DRT can stop the proceedings of Bank B in favour of Bank A.
RAJU O.F.,
(Expert) 12 June 2012
If the first mortgage was done properly with original documents, the said mortgagee bank would get priority in sale of the property. The DRT can pass order for sale of property and to appropriate the proceeds, by adjusting first towards the dues of the first mortgagee and the balance to the second mortgagee bank, who was cheated by the mortgagor. If the two banks dispute, there is provision under Sec.11 of SARFAESI Act to settle the dispute under conciliation and arbitration as provided in the Arbitration and conciliation Act 1996.
c.p.s. ramachary
(Expert) 13 June 2012
In your query you have not stated clearly how deposit of title deeds were made with bank-B when they were deposited with the bank-A initially. In any event bank-A will have priority over the sale proceeds realized out of the mortgage property. sarfaesi application is not maintainable by bank-A as DRT cannot pass any declaratory decree either in OA or SA filed before it in view of Supreme Court judgment in Nahar Industrial Investments Ltd. Vs. H.S.B.C 2009 CTC 74. It is only civil court which has jurisdiction to decide the order of priority in the mortgage. However if a second charge holder i.e bank-B sells the mortgage property in it is accountable to the bank-A including all damages sustained by bank-A because of hasty action by bank-B
vishal kumar
(Querist) 14 June 2012
The mortgage was created fradulently by the mortgagor by producing two original sale deeds of the same owner, same registration number, same date , same stamp duty and same registration charges which was delivered to him by the Registering Office possibly. Sarfaesi Appeal has been filed in the DRT by Bank-A only to quash and stay the SARFAESI proceedings initiated by Bank-B for the sale of the mortgaged property which is also mortgaged to Bank-A. This case is fixed for hearing on 26th of June. If the case is dismissed , then possibly Bank-A will have to move to the High Court for arbitration and conciliation proceedings. But the question is whether I can fight in DRT itself? If yes , then on what provisions? Thank you for all your replies and support. I am very much oblidged. I shall inform you the fate of the case after 26th June. Thanks again.
c.p.s. ramachary
(Expert) 17 June 2012
If bank-A filed SA on the ground of priority of charge bank-B does not have case at all and it has to drop the action or the DRT may set aside the same.If bank-A alleged fraud DRT cannot enquire about fraud for want of jurisdiction as held by Supreme Court in Nahar Industrial Invest-ments case referred to above and the SA may be dismissed on that ground.
