Certificate of Family Members obtained from Tahsildar Office Admissible to Prove Legal Heirship: DRAT Allows BOI to Claim Property for Debt Recovery

Instant appeal has arisen against the Judgment and Order dated 30.01.2024 passed by DRT-2, Hyderabad whereby the DRT allowed the OA against defendants 1 to 4 holding that they are jointly and severally liable to pay to the applicant bank an amount of Rs.3,27,73,695.78 ps with future interest @12% p.a. simple pendete lite and future.

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Further it was directed that the OA claim is secured by way of equitable mortgage of OA Schedule-A immovable property and the applicant bank is entitled to proceed against the same to realize its debt. Bank is also entitled to proceed against the person and properties of defendants 1 to 4 to realize its dues. However, the OA claim against Schedule-B immovable property was dismissed. Feeling aggrieved by this finding, Appellant Bank preferred the Appeal.

Defendant No.1 is the partnership firm, respondents 2 and 3 are its partners who availed a cash credit loan of Rs.2.40 crores vide sanction letter dated 22.07.2013. Necessary documents were executed. Respondent No.4 is the guarantor of the loan and Deed of Guarantee was also executed. Defendant No.3, V. Nagesh Dayal who is now represented through his legal heirs i.e., Respondents 4, 5 and 6 in the Appeal, created an equitable mortgage by deposit of title deeds. Account became irregular, it was also classified as NPA on 29.07.2015. Demand Notice dated 30.07.2015 was issued and possession notice was issued on 20.04.2016. Legal notices were also issued to the Defendants but the amount was not paid and accordingly OA was filed.

In the OA proceedings, Defendant Nos.1 and 2 put in their appearance and filed the written statement wherein it was stated that the OA was barred by limitation, Bank charged interest contrary to terms of the agreement, Bank obtained signatures on blank forms, details of Schedule-B property were not properly described and mortgage created by Defendant No.3 was not valid.

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After going through the evidence led by the parties, DRT passed the impugned order. It was held that the Defendant No.3 had no right over the property without obtaining legal heir certificate through court proceedings and the mortgage created by Defendant No.3 should not have been accepted. Accordingly on this count, the OA claim against Schedule-B property was dismissed.

Counsel for the Appellant Bank submitted that the equitable mortgage was duly created by V. Nagesh Dayal who was the son of P. Vidya Ratan Dayal. Memorandum of Deposit of Title Deeds was executed and DRT erred in recording a finding in respect of Schedule-B property. Counsel for the Bank further submits that OA schedule-B property has already been sold under the SARFAESI proceedings.

Counsel for the Respondent No.2 submitted that a settlement has been arrived with the Bank but the Respondent No.2, as far as the Appeal is concerned, did not contest the same.

As far as equitable mortgage created by V. Nagesh Dayal is concerned, he was Defendant No.3 in the OA proceedings. He was the son of P. Vidyaratan Dayal who died on 31.03.2008 and a family member certificate was obtained from the Tahsildar, Patancheru Mandal on 27.06.2008 wherein V. Nagesh Dayal was shown as the only family member being son of P. Vidya Ratan Dayal. The death certificate of P. Vidya Ratan Dayal is also on record.

It showed that he died on 31.03.2008. Memorandum of Deposit of Title Deeds was duly executed by V. Nagesh Dayal in favour of the Bank on 27.07.2013 wherein title deed being Document No.2828 of 1999 dated 09.07.1999 registered with SRO, Sangareddy was deposited by V. Nagesh Dayal.

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The Chairperson, Justice Anil Kumar Srivastava viewed that DRT erred in recording a finding that a certificate of family members should have been obtained from the civil court rather when the family member certificate was obtained from a competent authority of the office of Tahsildar, Patanchru Mandal, which is not in dispute, the same is admissible in evidence. Equitable mortgage was duly created by V.Nagesh Dayal which fact is not disputed by him by putting appearance before the Tribunal.

DRT erred in dismissing the OA claim against the OA schedule-B property. The impugned judgment and order are modified to the extent that the claim against OA schedule-B property is also allowed. Appellant Bank would be at liberty to realize its dues from the OA schedule-B property.

Ms. Anindita Das appeared for the appellant and Mr.Debasish Chakraborty appeared for the respondents.

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