M K RAMESH KUMAR Vs. RECOSTRUCTION COMPANY

JUDGEMENT

(1.) WHETHER conveyance deed dated 11-6-1996 executed by the Government of Andhra Pradesh in favour of Smt. Krishna Balachander in respect of plot bearing No. 240/a admeasuring 4622 square feet situated at Marredpalli, secunderabad could be treated as an accession to mortgage executed by her in favour of the State Bank of India (for short 'the Bank') within the meaning of Section 70 of the Transfer of Property Act, 1882 (for short, 'the 1882 Act') and whether respondent No. 1 -Asset Reconstruction Company (India) Ltd. with whom the Bank entered into assignment Agreement dated 31 -3-2005 and transferred all the loan incidents can recover its dues by disposing of the plot and the building constructed over it, are the questions which arise for determination in this petition filed under Article 226 of the Constitution of India by Shri M. K. Ramesh kumar through his General Power of Attorney M. Kartikeyan for quashing order dated 30-4-2007 passed by the Debts Recovery appellate Tribunal at Chennai (for short, 'the appellate Tribunal') in SARFAESI - 105/ 2007 confirming order dated 13-2-2007 passed by the Debts Recovery Tribunal, hyderabad (for short, 'the Tribunal') in S. A. No. 125 of 2006.

(2.) THE Government of Andhra Pradesh owned the plot in question. The same was leased out to Uppalanchi Venkateswara Rao and Uppalanchi Bala Rajaiah for a period of 30 years commencing from 3-6-1970. After the plot changed three hands, Shri indraprakash sold leasehold rights in favour of Smt. Krishna Balachander by registered deed dated 13-8-1975. She created an eq-uitable mortgage in favour of the Bank on 24-7-1979 by depositing the sale deed as a security for the credit facilities provided by the Bank to M/s. Abilash Rubber Products and India Rubber Products. On 28-1-1998, smt. Krishna Balachander extended the equitable mortgage for securing further credit facilities in favour of M/s. India Rubber Products, of which her husband was a director. While doing so, she unequivocally stated that the property is in her sole occupation and there is neither any subsisting agreement for the sale of the property nor there is any prospect of any intending purchaser taking possession of it or part thereof.

(3.) AFTER four years of extending the term of equitable mortgage executed in favour of the Bank, Smt. Krishna Balachander is said to have sold the property, which bears number MCH 10-2-240/a (new number 10-2-347/1) to the petitioner by registered sale deed dated 9-12-2002 by representing that she has purchased the land from the government vide registered conveyance deed dated 10-6-1996 and there was no encumbrance over it.