AI OCR 
TaxTMI 
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TaxTMI 
2020 (5) TMI 11
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....espondent is the Asst.General Manager and Authorized Officer, RACPC of the 1st respondent bank and the 7th respondent is the Chief General Manager of the 1st respondent Bank at it's Local head Office, in Hyderabad. (They will be collectively referred to as 'The Bank'.) 5. The petitioner is in occupation of Flat No.511, Uday Balaji residency, H.No.1-1-17/A, Jawahar Nagar, Hyderabad. 6. According to the petitioner he intended to purchase an apartment by taking a loan from financial institutions and since Banks are reluctant to grant loans to Advocates, and since he was an Advocate, he persuaded the 5th respondent to apply and obtain a loan of Rs. 50 Lakhs from the State Bank of India i.e the Bank to purchase the above property; that the 5th respondent readily agreed to do so; and a loan was granted on 14.2.2016 by the Bank to 5th respondent of Rs. 50 lakhs. 7. This is disputed by the 5th respondent, who claims that he himself intended to purchase the said property after 2014; that petitioner helped him to identify the above property and after satisfying himself about the title of the vendor, 5th respondent negotiated with the builder M/s Udaya Heights Pvt.Ltd ( for short 'th....
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....ESI Act,2002 ( for short the 'Act') as the 5th respondent's loan account had become NPA in June 2017 itself. 16. A notice under Sec.13 (2) of the Act was issued by the Bank to the 5th respondent on 16.10.2018 alleging that the loan account was classified as an NPA on 10.10.2018 and asking him to pay Rs. 54,66,865/- in 2 months. 17. On 10.11.2018, petitioner sent objections under Sec.13 (3A) of the Act to the Bank stating that he obtained the loan on the name of the 5th respondent as Advocates were not being encouraged by Banks to take loans, that 5th respondent agreed to it, obtained the loan , that petitioner had paid the builder and also the Bank for purchase of the property, but because of marital disputes between 5th respondent and his wife since December, 2016 , the 5th respondent had persuaded the Bank to make the loan as an NPA and petitioner would be put to grave prejudice, if the Bank were to sell the property. He requested that he be permitted to deposit monthly installments regularly. The instant Writ petition 18. The petitioner then filed the instant Writ Petition on 19-12-2018 challenging the action of the Bank in (i) classifying the Home loan account of 5t....
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....5,10,000/- to the Bank towards the loan of the 5th respondent and yet the account is maintained as an NPA by it, and the pendency of the W.P. was not mentioned in the e-auction sale notice by the Bank. He contended that under the Rule 8 (5) (d) of the Secirity Interest (Enforcement0 Rules,2002, the Bank can also sell the property to him under a private treaty, in the facts and circumstances of the case. 30. On 29.4.2019, the same Division Bench directed that if the auction to be held on 15.5.2019 goes on, the sale shall not be confirmed and directed it to be listed on 10.6.2019. However it appears that the auction did not take place on that day. 31. Petitioner challenged it before the Supreme Court of India in SLP.No.12374/2019 but it was dismissed on 1.7.2019 directing this Court to decide the Writ petition expeditiously. I.A no.6/2019 32. Petitioner filed I.A no.6/2019 to receive certain Bank Statements which according to the petitioner prove that petitioner had made substantial payments to the builder and to the Bank for the loan granted by it to the 5th respondent. None of these documents were disputed by the Bank or the 5th respondent. 33. IA 6/2019 is therefore....
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....ion) Act 1988, there was a presumption that the transaction made in the name of the wife and children is for their benefit. By Benami Amendment Act, 2016, Section 3(2) of the Benami Transaction Act, 1988 the statutory presumption, which was rebuttable, has been omitted. It is the case on behalf of the Respondents that therefore in view of omission of Section 3(2) of the Benami Transaction Act, the plea of statutory presumption that the purchase made in the name of wife or children is for their benefit would not be available in the present case. Aforesaid cannot be accepted. As held by this Court in the case of Binapani Paul (Binapani Paul v. Pratima Ghosh ... 2007 (6) SCC 100) (Supra) the Benami Transaction (Prohibition) Act would not be applicable retrospectively." ( emphasis supplied) 43. Section 2(a) of the said Act defines 'benami transaction' as meaning 'any transaction in which property is transferred to one person for a consideration paid or provided by another person'. 44. In Valliammal v. Subramaniam (2004) 7 SCC 233 , the Supreme Court set out the parameters to determine what a 'benami transaction' is. It explained : " 14. .... the question whether a partic....
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....ose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity." A plain reading of the above will show that no suit, claim or action to enforce a right in respect of any property held benami shall lie against the person in whose name the property is held or against any other person at the instance of a person claiming to be the real owner of such property. 47. The circumstances in which the purchase in question was made in the name of the 5th respondent assumes great importance while determining whether the 5th respondent in whose name the property was acquired stood in a fiduciary capacity towards the petitioner and 8th respondent. 48. In Marcel Martins v. M. Peter (2012) 5 SCC 342 , a residential house, which was originally owned by a Municipal Corporation of Bangalore was leased to one S. The appellant was her only son. The respondents were her daughters. In 1978 the Corporation decided 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 ....
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....e the sale deed was executed in name of appellant only; the other legal heirs had not abandoned their rights as tenants and also to the benefits that would flow from the Corporation's decision to sell the property to the occupants; that this is fortified by the fact that all the legal heirs contributed towards the sale consideration paid for acquisition of the property in favor of the appellant. It further held that the parties were closely related to each other which lends considerable support to the case of the plaintiffs that the appellant-defendant held tenancy rights and the ostensible title to the suit property in a fiduciary capacity vis-à-vis his siblings, who had by reasons of their contribution and contribution made by their father continued to evince interest in the property and it's ownership. It held that reposing confidence and faith in the appellant was in the facts and circumstances of the case not unusual nor unnatural especially when the possession over the suit property continued to be enjoyed by the plaintiffs who would in 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 tha....
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....ere was an internal arrangement in the family and the 5th respondent was only a nominal owner. 56. This Bench asked the 5th respondent to file his Income Tax returns for assessment years 2017-18 and 2018-19 to check whether the plea of 5th respondent that Batchala Murali Krishna was in occupation as tenant is substantiated by showing the alleged rental income of Rs. 20,000/- p.m. Through a memo dt.11-12-2019, these returns were filed by counsel for 5th respondent. 57. A perusal of these Income Tax returns of the 5th respondent shows that for the assessment year 2017-18 (Financial year 2016-17), no rental income was offered to tax by him. He mentioned that it was let out but claimed a loss of Rs. 3,44,435/-. 58. This shows that his plea of award of tenancy of the subject property to Batchala Murali Krishna from 15-6-2016 to 31-7-2017 is a false plea, though an unregistered lease deed is filed to support the said contention,. 59. It is thus established by 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 Rs. 25,000/-. (b) Other contributions made by petitioner/his wife for property p....
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....an account with the Bank. 69. According to the petitioner the EMI payment commenced on 30-3-2016; for easy payment of loan installments, the SBI had issued Green Card with No.0060022555176 called a Green Remit Card, and through this card, petitioner regularly remitted EMI to SB a/c of 5th respondent No.31186759226 with SBI, Visakhapatnam, and the same was again transferred to the loan a/c no.00000035570955008. 70. He relies on the following table contained in the affidavit filed by him in IA.No.6 of 2019 showing how the 5th respondent was financed by petitioner and his wife to make these payments : DATE PAYMENT MODE AMOUNT DESCRPITON 2016 Cash paid to I. Shanti Srujan ( 5respondent) 1,00,000 As per I. Shanti Srujan's request paid Rs. 1,00,000 cash 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 ....
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....o contended that Rs. 2,50,000/- for registration of sale deed was paid by him, that he paid Rs. 2,25,000/- to Godrej Intero modular kitchen and spent Rs. 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 Rs. 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/NEFT or transferred through Cheques, and so they cannot cannot be denied by 5th respondent. 77. Though counsel for the 5th respondent feebly protested about this material, the evidence adduced by petitioner is overwhelming and we are convinced that the 5th respondent's plea that he took the loan to purchase the subject pro....
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....inanced 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 Act, then the petitioner would fall in the category of both borrower and mortgagor. 84. Next it is urged that only in a civil suit the claim of the petitioner can be decided. This contention is without any merit because the Supreme Court in ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others (2004)....
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....hat 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' as he was not other wise eligible for a loan. The Bank has not stated why the petitioner is ineligible for the Home loan in the first place. It is an open secret that Banks are reluctant to grant loans to Advocates/ lawyers and there is an unofficial policy adopted by them on the said lines. When the petitioner felt that he was unjustly being denied a loan by th....
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....ents 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 Rs. 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 Rs. 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 Rs. 9 lakhs to 5th respondent. The Bank account statement of the 8th respondent filed by petitioner does not show any amount in excess of Rs. 10,000/- prior to 10.11.2015 and the plea of the 5th respondent that he had kept Rs. 9 lakhs with her and that he got the said amount again retransferred to himself, is a false plea. 92. The 5th respondent accuses the petitioner of having a criminal intention of cheating to grab the subject flat, but the evidence placed on record in fact indicates that ....