THE GREATER BOMBAY COOPERATIVE BANK LIMITED v. MR. NAGARAJ GANESHMAL JAIN AND ORS. INSC 577

THE GREATER BOMBAY CO-OPERATIVE BANK LTD. V. NAGARAJ GANESHMAL JAIN & ORS.

Citation: AIR 2017 SC 3548 Appellant: The Greater Bombay Co-operative Bank Ltd. Respondent: Nagaraj Ganeshmal Jain and Ors.

FACTS The appeals are against the judgement passed by the Bombay High Court where the writ petition filed by the Petitioner / Appellant (the Bank) was dismissed and the attachment order relating to suit property was set aside. A further direction was given to enrol the Respondent as a member of the New Shrinath Housing Co-operative Society (the Society). The flat was owned by Shri Dhillon P. Shah. He and His wife were directors of a company which took a loan of Rs. 2.25 Crores from the Bank. The Directors stood guarantee for the repayment. The Company could not repay and a recovery certificate was issued. A demand notice was sent in which it was stated that the suite property and another bungalow owned by Smt. and Shri Dhillon P. Shah. was to be sold for recovery. Mr. P. Shah expired on 20.07.2004. On 28.12.2004, the Respondent for the first time claimed ownership of the suit property. Later the Respondent applied for the membership of the Society which was rejected. The Respondent challenged the attachment order on allegation that he had purchased the flat and was in possession of the same from 12.04.1996. He also challenged the decision of the Society for refusing him membership. The Deputy Registrar allowed the appeal and directed the society to admit him as a member. The Bank was not a member in these proceedings. The Bank filed a Revision Application challenging the order directing the Society to grant membership. The bank wanted to verify the signature of Shri P. Shah. The prayer was allowed. In the Forensic Report it was discovered that the signature did not appear to be of Shri. Dhillon P. Shah. Therefore, the objection petition filed by the Respondent was dismissed. As for the issue of transfer of suit property, the Bombay High Court dismissed the petition of the Bank on merely the ground that the sale agreement was executed prior to the attachment order, the order is not valid. The Respondent was admittedly a close friend of Shri P. Shah and in a business matter he gave Mr. Shah Rs. 20 Lakhs which he could not repay and sold the suit property to him.

ISSUES Whether the suit property belonged to the Respondent? Whether the Respondent can claim membership of the society?

HOLDING The Court allowed the appeals of the Bank. The Court dismissed the order of the High Court and the Appellate Authority’s acceptance of the Respondent’s claim was set aside. The Respondent’s claim was rejected. The Court held that the Respondent had no right, title or interest in the suit property. Therefore, he cannot claim membership of the New Shrinath Kunj Housing Co-operative Society.

RATIONALE Immovable Property can be transferred only by a deed of conveyance / sale deed, which is a registered document. There can be no transfer of right, title or interest in any immovable property except by way of a registered document. The Court held that an agreement to sell which is not a registered deed would not meet the requirements of the Transfer Property Act. The original agreement to sell was never shown and only a photocopy was filed. Shri P. Shah’s signature itself was found to be fraud. 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, during the lifetime of Shri Dhillon P. Shah never claimed ownership of the flat. The Court felt that the documents were fabricated after Shri Shah’s death. His wife and he never disclosed the fact that they had sold off the suit property to the Respondent, to anybody including the members of the society. Therefore, the Court allowed the appeal.