Greater Bombay Coop. Bank Ltd. vs Nagraj Ganeshmal Jain

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 009777-009778 OF 2017 [Arising out of SLP (C) Nos. 28064-28065 of 2014]

The Greater Bombay Co-operative Bank Limited ... Appellant

Versus

Mr. Nagraj Ganeshmal Jain & Ors. ... Respondents

JUDGMENT

Deepak Gupta, J.

Leave granted.

2. These appeals are directed against the Judgment dated

02.04.2014 passed by the Bombay High Court in Writ Petition No.

195 of 2014, whereby the writ petition filed by the

Petitioner-appellant, (hereinafter referred to as “the Bank”) was

dismissed and the attachment order dated 14.12.2001, relating to Signature Not Verified

flat Digitally signed by SANJAY KUMAR No. 12, 5th Floor, New Shrinath Kunj, CHS Ltd, Vile Parle Date: 2017.07.26 15:22:43 IST Reason:

(West), Mumbai, 400056 was set aside and a further direction 2

was given to enrol the respondent No.1 as member of the New

Shrinath Housing Co-operative Society (hereinafter referred to as

“the Society”).

3. The undisputed facts are that the flat in question was owned

by Shri Dhillon P. Shah. Mr. Shah and his wife Smt. Shivangi

Shah were Directors of a Company known as M/s. Mahaganesh

Texpro Private Limited. The Bank granted a cash credit facility of

Rs. 2.25 crores to the Company. The Directors including Shri

Dillon P. Shah and Smt. Shivangi P. Shah stood guarantee for

the repayment of the cash credit facilities.

4. The Company did not repay the amount due to the Bank

and finally on 30.08.2001 recovery certificate for an amount of

Rs. 2,98,94,363/- along with interest was issued by the

Assistant Registrar of the Cooperative Societies and proceedings

initiated for recovery of the amount from the Company and the

guarantors. Demand notice was sent to the Company and also to

Shri Dhillon P. Shah and Smt. Shivangi P. Shah on 12.12.2001.

In the notice it was stated that the property of these persons

including Flat No. 12/5 Gopal Bhuvan, New Shrinath Kunj

Co-operative Housing Society Bapubhai Vash Road, Ville Parle 3

(West) Mumbai (hereinafter referred to as the ‘suit property) and

another bungalow owned by Smt. and Shri Dhillon P. Shah, were

to be attached and sold for recovery of the dues of the Bank.

Both the properties including the suit property were attached.

The bungalow was sold for a sum of Rs. 1.6 crores. That sale is

subject matter of separate proceedings.

5. The attachment order was issued on 14.12.2001 and the

same was served on Shri Dhillon P. Shah and his wife. They both

challenged these attachment proceedings before various fora, but

never took the objection that the suit property had already been

sold or transferred. Mr. Dhillon P. Shah expired on 20.07. 2004.

6. On 01.11.2004, Smt. Shivangi P. Shah, widow of late Shri

Dhillon P. Shah, sent a letter to the Society requesting that

duplicate share certificate be issued, since the original share

certificate was not traceable. In this letter she made no mention

of the attachment of the flat or of the fact that dues were payable

to the bank. She sent another similar letter on 28.12.2004.

Thereafter, on 28.12.2004, the respondent No.1 for the first time

claimed ownership of the suit property and, under some amnesty 4

scheme, paid the stamp duty payable on the agreement to sell the

suit property.

7. On 20.01.2005, the respondent No.1 applied to the Society

praying that he may be granted membership of the Society. This

application was rejected by the Society vide letter dated

28.01.2005. In this letter it was clearly stated that neither late

Shri Dhillon P. Shah nor Mrs. Shivangi P. Shah had informed

the other members of the Society about the fact that they had

transferred the flat. This, despite the fact that there had been

several meetings between the members of the Society and Shri

Dhillon P. Shah and his wife. The respondent No.1 was also

informed that the flat had already been attached.

8. It was only thereafter, on 03.02.2005, the respondent No.1

filed objections under Rule 107 (19) (c) of the Maharashtra

Cooperative Societies Rules, 1961 challenging the attachment

order on the allegation that he had purchased the flat through

agreement dated 04.10.1995 and was in possession of the same

from 12.04.1996.

9. The respondent No.1 also challenged the decision of the

Society refusing to grant him membership. The Deputy Registrar 5

vide order dated 18.09.2006 allowed the appeal of the respondent

No.1 and directed the Society to admit him as a member. It

would be pertinent to mention here that in these proceedings the

Bank was not a party. The Bank on coming to know about the

order of the Deputy Registrar dated 18.09.2006 also filed a

Revision Application before the Divisional Joint Registrar on

16.07.2010 challenging the order directing the society to grant

membership to respondent No1.

10. The Bank contested the proceedings filed by the respondent

challenging the order of attachment of property and a prayer was

made that the documents especially the alleged agreement to sell

be sent to a handwriting expert for ascertaining whether the

signature on the document were of Shri Dhillon P. Shah or not.

This prayer was allowed on 12.11.2006 in the presence of the

counsel for the respondent No.1.

11. The forensic expert sent his report dated 21.07.2010 in

which he found that the signature on the photocopy did not

appear to be of Shri Dhillon P. Shah. On 09.10.2010, the

objection petition filed by the respondent No.1 was dismissed and

it was held that he had no right title or interest in the suit flat. 6

12. Thereafter respondent No.1 filed Revision Petition, which

was allowed on 28.10.2013. The Bank thereafter filed writ

petition No.195 of 2014, which was dismissed giving rise to these

appeals.

13. As far as the issue of transfer of the suit flat is concerned,

the Bombay High Court has dismissed the petition of the Bank

only on the ground that since the attachment order was passed in

the year 2001 and the agreement of sale was executed prior

thereto, therefore, the attachment order is not valid. The High

Court did not go into the questions raised by the Bank that no

right, title or interest in the flat could have been transferred by

the said agreement.

14. Here, it would be pertinent to mention that admittedly the

respondent No.1 was a close friend of Shri Dhillon P.Shah and he

also states that he had a lot of business dealings with him.

According to the respondent No.1 an amount of Rs. 20 lakhs were

advanced by M/s. Hitesh Corporation a proprietary firm of the

respondent No.1 to Shri Dhillon P. Shah on 05.12.2004.

Admittedly, this advance was made not in connection with the flat 7

but either as a loan or part of some business transactions.

According to the respondent No.1, since Shri Dhillon P. Shah

could not repay the amount of Rs. 20 lakh on 04.10.1994 he

executed the alleged agreement to sell in his favour. Pursuant

thereto respondent No.1 took possession of the said flat on

12.04.1996 and thereafter had been paying the electricity

bills etc.

15. Immoveable property can be transferred only by a Registered

document. There can be no transfer of any right, title or interest

in any immoveable property except by way of a registered

document. In this behalf we may make reference to the

judgment of this Court in Suraj Lamp & Industries (P) Ltd. Vs.

State of Haryana (2012) 1 SCC 656, wherein it was held as

follows.

“18. It is thus clear that a transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred.

19. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of Sections 54 and 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except 8

to the limited right granted under section 53A of TP Act). According to the TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance. Section 54 of the TP Act enacts that sale of immoveable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.

xxx xxx xxx

24. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.

Transactions of the nature of `GPA sales' or `SA/GPA/will transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognised as deeds of title, except to the limited extent of Section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in municipal or revenue records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/will transactions known as GPA sales.”

16. This Court clearly held that an agreement to sell which is

not a registered deed of conveyance would not meet the

requirements of Section 54 and 55 of the Transfer of Property Act.

With respect to Section 53A of the Transfer of Property Act, it is 9

well settled that the same can only be used as a defence in

proceedings initiated by the transferor or by any person claiming

under him.

17. As far as the present case is concerned, the very foundation

of the case of the respondent No.1 i.e. agreement to sell is

doubtful. The original has not seen the light of day and only

photocopy thereof was filed. There are doubts with regard to the

signature of Shri Dhillon P. Shah. As pointed out earlier, the

Bank attached the property in question in the year 2001. Shri

Dhillon P. Shah died in the year 2004 and during these three

years though Shri Shah and his wife filed various legal

proceedings, they never disclosed that this flat had been sold by

them. The respondent No.1, during the life time of Shri Dhillon

P. Shah never claimed ownership of the flat.

18. Shri Dhillon P. Shah and his wife never disclosed the fact of

the alleged sale of the suit property to anybody including any

member of the Society. It is more than obvious that with a view

to wriggle out of the recovery proceedings, after the death of Shri

Dhillon P. Shah this document has been fabricated. This

document does not transfer any right, title or interest of the 10

property and, therefore, the Revisional Court and the High Court

erred in allowing the claim of the respondent No.1

19. The appeals are accordingly allowed and the order of the

High Court and the revisional/appellate authority accepting the

claim of respondent No.1 are set aside and the claim of the

respondent No.1 is rejected. It is held that respondent No.1 has

no right, title or interest in the suit property. Therefore, he

cannot claim membership of the New Shrinath Kunj Housing

Co-operative Society.

…………………………J (MADAN B. LOKUR )

………………………..J. (DEEPAK GUPTA)

New Delhi July 26, 2017