TMI Blog2020 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... t is settled law that Section 54 of the Transfer of Property Act does not lay down a law as to whether in all situations an apparent state of affairs as contained in a deed of sale would be treated to be the real state of affairs. It does not bar a benami transaction. There is no embargo in getting a property registered in the name of one person; although the real beneficiary thereof would be another. [see Jai Narain Parasrampuria v. Pushpa Devi Saraf - 2006 (8) TMI 527 - SUPREME COURT ] Though the regd. sale deed dt.5.3.2016 stands in the name of the 5th respondent, he has no title to it and the actual owner is the petitioner and his wife. Petition is disposed of declaring that the 5th respondent was only the ostensible owner of the subject property and the real owner was the petitioner who financed the purchase of the subject property; and respondent nos.1 to 4 and 7 are directed to transfer the subject property to the petitioner by private treaty invoking Rule 8(5)(d) of the Security Interest Enforcement Rules, 2002 subject to the petitioner mortgaging the said property to the Bank to repay the balance payable to it and continuing to pay the installments fixed by it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r short the builder ), paid him by cheques dt.16.11.2015 and 20.11.2015, ₹ 5,00,000/- and ₹ 4,00,000/- respectively; and that thereafter loan was sanctioned to him on 14.2.2016 by the Bank. 8. Though the 5th respondent signed all the loan documents with the Bank, it is not in dispute that the petitioner acted as 5th respondent s agent and attended the registration work in connection with the sale deed which was executed on 5.3.2016 in favor of 5th respondent by the builder of the flat as proxy of the 5th respondent. According to the petitioner, 5th respondent authorized him to get the registration done. 9. It is undisputed that the loan was released by 2nd respondent by two cheques both dt. 20.3.2016, one for ₹ 23,80,000/- and ₹ 26,20,000/- in favor of the builder and that the monthly EMI was ₹ 43,859/-. The inter-se disputes between 5th respondent and his wife 10. Disputes the arose between the 5th respondent and his wife since December, 2016. 11. Wife of 5th respondent filed OP.No.1260 of 2017 in Family Court, Hyderabad to dissolve their marriage and also a DVC.No.206/2018. She also filed CC No.607 of 2017 before the PD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the action of the Bank in (i) classifying the Home loan account of 5th respondent as a Non Performing Asset , (ii) not replying to his objections made to the Notice dt.16.10.2018 issued under Sec.13(2) of the Act, (iii) and to set aside the said notice. 19. On 2-1-2019, a symbolic possession notice under rule 8 (i) of the Security Interest Enforcement Rules, was issued by the 3rd respondent on behalf of the Bank. The interim order dt. 4.2.2019 in IA.No. 1 of 2018 in WP.No.46380 of 2018 20. A Division Bench of this Court presided over by Justice V.Ramasubramanian and Justice Keshav Rao on 4.1.2019 noted that a notice under sec.13(4) of the Act was issued on that day and adjourned the matter to 22-1-2019 and granted status quo till then, but permitted the petitioner to make payment of loan installments . 21. On 22-1-2019, the said interim order was directed to continue and the matter was adjourned by 2 weeks. 22. Pursuant to the said liberty given to petitioner, he paid ₹ 5,10,000/- to the Home loan account of 5th respondent with the Bank till April,2019. 23. IA.No.2 of 2019 is filed by the Bank/respondents 1-4 and 7 to vacate the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the 5th respondent. None of these documents were disputed by the Bank or the 5th respondent. 33. IA 6/2019 is therefore allowed and the said documents are received on record. IA No.1 of 2020 34. In November, 2019, the Bank filed Crl.M.P.No.104 of 2019 before the Chief Metropolitan Magistrate, Hyderabad invoking Sec.14 of the Act to take possession of the subject property without impleading the petitioner and on 29.11.2019, an order was granted in it s favor. 35. Petitioner therefore filed IA No.1 of 2020 to stay the operation of the said order. 36. On 28.1.2020, there was interim stay of the order dt.29.11.2019 in Crl.M.P.No. 104 of 2019 granted in IA No.1 of 2020. 37. This completes the narration of the facts in the case. The contentions raised will be considered as under. Consideration by the Court 38. According to the petitioner, Banks are reluctant to grant loans to advocates, and he was an advocate, he persuaded the 5th respondent, whose wife (the 8th respondent) and petitioner s wife are sisters, to take the loan from the State Bank of India in 5th respondent s name and buy the subject property; that petitioner is the beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) 7 SCC 233 , the Supreme Court set out the parameters to determine what a benami transaction is. It explained : 14. . the question whether a particular sale is a benami or not, is largely one of fact, and for determining the question no absolute formulas or acid test, uniformly applicable in all situations can be laid. After saying so, this Court spelt out the following six circumstances which can be taken as a guide to determine the nature of the transaction: (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties concerned in dealing with the property after the sale. ( Jaydayal Poddar v. Bibi Hazra (1974) 1 SCC 3 , SCC p. 7, para 6) 14. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source from where the purchase money came and the motive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to sell it to it s occupant. But before the sale of the house could take place in favor of S, she died leaving behind her husband C, the appellant and the respondents. The respondents contended that the Corporation desired that the transfer of tenancy rights should be made in the name of one of the legal representatives of S, the respondents and C consented to transfer in favor of the appellant; and that in order to satisfy the Corporation s demand of sale consideration of ₹ 48,636/-, according to the respondents, each of the 3 children contributed ₹ 5,000/- while C contributed ₹ 35,636/- and a sale deed was executed in favor of the appellant in 1987. But appellant claimed that it belonged to him exclusively and that he alone paid entire sale consideration. The respondents/plaintiffs filed a suit to declare that they are co-owners of the house to the extent of their contribution and for an injunction restraining the appellant/defendant from interfering with their possession of the same. The trial court dismissed the suit, but the High Court decreed it in favor of the respondents. The Supreme Court dismissed the appeal filed by the appellant. It held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on a parity of reasoning be deemed to be holding the title to the property for the benefit of the plaintiffs. It concluded that the suit filed by the plaintiffs-respondents was not barred and was saved by Sec. 4 (3) (b). 49. Therefore how the sale transaction of the subject property was financed in the instant case assumes considerable importance. 50. The sale consideration mentioned in the sale deed executed by the builder in favor of the 5th respondent is ₹ 35,20,000/- . Admittedly this amount was arranged by 5th respondent by paying the builder ₹ 26,20,000/- out of the Home loan granted by the Bank, and the balance of ₹ 9,00,000/- was paid to the vendor/builder vide chq.059766 dt.16.11.2015 for ₹ 5,00,000/- and another chq.no.059767 dt.20-11-2015 for ₹ 4,00,000/-. 51. The Bank statements filed by the petitioner along with IA No.6 of 2019 indicates that ₹ 10,00,000/- was transferred by Prameela Rani, the wife of the petitioner, through a bank transfer from her Indian Overseas bank account at Chikkadpally, Hyderabad to her sister Padmaja Rani ( respondent no.8), wife of 5th respondent on 10-11-2015. 52. On 16-11-2015, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of 5th respondent that petitioner is in occupation of the subject property though he claimed that he was a tenant on a rent of ₹ 25,000/-. (b) Other contributions made by petitioner/his wife for property purchase/ loan transaction of 5th respondent PAYMENTS TO BUILDER 60. We have already discussed that ₹ 9,00,000/- paid for purchase of the subject property to the builder was not with the funds of the 5th respondent and he had utilized the money transferred by petitioner s wife to 8th respondent, which the 8th respondent then transferred to him. 61. On 4-3-2016, the wife of the petitioner, through RTGS, transferred from her SB a/c in Indian Overseas Bank, ₹ 2,11,250/- to the builder. Another payment of ₹ 40,000/- was also made by the petitioner to the builder by Chq.645149 on 25-1-2017. The Bank statements filed by petitioner along with IA No.6 of 2019 corroborate this fact. 62. Along with the Writ Petition, petitioner filed photocopy of receipt dt.23-1-2017 for ₹ 8,00,000/- (by cheque) issued by the builder in the name of the 5th respondent. Even for this payment, the said amount was paid by petitioner vide Chq.6451 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash 26.08.2016 Cheque 142177 S.B.I. 2,00,000 Transferred to I. Shanti Srujan s account which was later transferred to the builder on the same date 30.08.2016 Cheque 142179 SBI 2,00,000 Trasnsferred to I. Shanti Srujan s account which was later transferred to the builder on the said date 30.08.2016 Transfer SB IOB 86,000 07.02.2017 Cheque 682436 SBI 50,000 Paid to I. Shanti Srujan s SB account 23.02.2017 Cheque IOB Joint account of G. Tuhin Kumar and his wife Prameela Rani 645145 1,25,000 Paid directly to the builder 03.03.2017 Cheque 682442 SBI 50,000 Paid to I. Shanti Srujan s SB account 04.04.2017 Cheque 682449 SBI 25,000 Paid to I. Shanti Srujan s SB account 03.05.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 028/ on 3-3-2017, 2 payments of ₹ 25,000/- each on 4-4-2017 and ₹ 30,000/- on 8-10-2018. 73. Petitioner also claims that EMI s dt.24-7-2017,12-9-2018,18-9- 2018 and 18-10-2018 were directly paid by him into the Home loan account of the 5th respondent with the Bank. 74. Petitioner also contended that ₹ 2,50,000/- for registration of sale deed was paid by him, that he paid ₹ 2,25,000/- to Godrej Intero modular kitchen and spent ₹ 15,00,000/- for other interior works. 75. For 2018-19 and 2019-20 assessment years (Financial years 2017-18 and 2018-19), 5th respondent showed ₹ 3,00,000/- rental income for the subject property, as if such rent was paid by petitioner, but did not show any of the amounts received by him directly from petitioner or his wife or through the 8th respondent in his SB a/c or loan a/c or paid to the builder by petitioner or his wife, even as a loan in his Income Tax returns. 76. It is obvious that these payments were made by petitioner or his wife to 5th respondent s SB a/c or loan account with the Bank without any intention to do so gratuitously. Almost all of the above payments have been made through RTGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other pleas of the respondent Nos.1 to 4 and 7: 82. The Bank in it s vacate stay application IA 2 of 2019 contended firstly that Writ Petition filed by the petitioner is not maintainable as it had not violated any constitutional or statutory right of the petitioner. We do not agree with this contention because the petitioner, having financed the sale, and having been declared by us as one of the real owners of the subject property, can certainly approach this Court under Art.226 of the Constitution of India, when he is sought to be deprived of the same by invoking provisions of the SARFAESI Act,2002. 83. Next it is urged that petitioner is neither a borrower nor a guarantor nor mortgagor to the home loan availed by 5th respondent and that this is a speculative litigation. It is alleged that petitioner s claim over the property does not have any contractual or legal basis. The legal basis of petitioner s claim has already been set out above. If the 5th respondent is a benamidar for the petitioner at the relevant point of time, and the transaction is not hit by Sec. 3 of the Benami Transactions ( Prohibition) Act,1988 and is saved by Sec. 4 (3) (b) of the said A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d since the Bank statements substantiate petitioner s case, there is not much dispute about the facts, and there is no necessity to drive the petitioner to a civil suit. 85. It is next contended that petitioner cannot invoke the jurisdiction of this Court to dispute the right and title of the 5th respondent which is a solely private dispute. It is also stated that the dispute raised in the Writ Petition is totally unconnected with the Bank. The dispute in the Writ Petition is about the action of the respondents 1-4 and 7 in initiating proceedings under the SARFAESI Act,2002 against the property of which the petitioner and his wife are in occupation as beneficiaries of the transaction between the petitioner and 5th respondent, in which the latter stood in a fiduciary capcity. The Writ Petition is not filed to decide the title dispute between them, though incidentally, the said aspect came to be decided because it is intrinsically connected with the main relief sought in the Writ Petition. 86. It is alleged by the Bank that petitioner indulged in an illegal and wrong method to secure sanction of a home loan and that he got the loan sanctioned in the name of his benami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s counsel, the Bank would suffer no prejudice, if it did not sell the subject property in a public auction. Other pleas of 5th respondent : 90. It is the contention of the 5th respondent that he gave a hand loan of ₹ 6 lakhs in 2013 to the petitioner subject to re-payment of principle with interest at 12% p.a. in three years and that petitioner repaid it in several installments from March, 2016 to July, 2017. But, no document evidencing the said loan or its acknowledgment by the petitioner is filed by 5th respondent to substantiate the said plea. Therefore, the said plea is disbelieved. 91. He also contended that on 16.11.2015 he got ₹ 9 lakhs transferred from 8th respondent s account to his account out of savings amount which he kept with her. We have already pointed out that the petitioner s wife transferred ₹ 10 lakhs from her savings bank account in Indian Overseas Bank, Chikkadpally to the savings bank account of 8th respondent in Indian Overseas Bank, Peda Waltair on 10.11.2015 and that out of this amount, the 8th respondent had transferred ₹ 9 lakhs to 5th respondent. The Bank account statement of the 8th respondent filed by pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said person and pay it to the builder because of good relations between the petitioner and 5th respondent at that point of time, but no such promissory note has been filed before this Court. Even otherwise, the capacity of the 5th respondent to give hand loans of ₹ 12 lakhs to the said person and ₹ 6 lakhs to the petitioner is doubtful considering that he was only an employee in a Bank from which he also resigned in 2019. 97. In this regard the silence of the 5th respondent, by not even sending a reply to the legal notice sent on 04.09.2017 till date is very significant. 98. When the petitioner in the reply-affidavit alleged that there is no affixture of notice dt.02.01.2019 under Section 13(4) of the Act on the subject property as mandated by Rule 8(1) of the Security Interest Enforcement Rules, 2002, the Bank did not produced any material to prove such affixture on the outer door or at conspicuous place of the property. This vitiates the action taken by the Bank under the Act. 99. Under Rule 8(5), the authorized officer of the Bank, before affecting sale of the subject property has to obtain valuation of the property from an approved valuer and in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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