The Greater Bombay Cooperative Bank ... vs Mr. Nagaraj Ganeshmal Jain And Ors.

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.

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.

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.

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.

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.

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

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