A.Subramaniyan Vs Authorized Officer (DRAT Chennai)
The case of A. Subramaniyan vs. Authorized Officer at the ITAT Chennai concerns an appeal filed against an order by the Debts Recovery Tribunal (DRT). The appellants, A. Subramaniyan and another, sought to challenge measures initiated by a bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The appellants, who purchased properties in 2003, claimed they were bona fide purchasers and were not the borrowers or guarantors of any loan, nor was a security interest created on the properties they owned.
The bank, however, argued that the properties were already under an equitable mortgage created by a previous owner, Late Sundareswaran, on December 12, 1969, for availing credit facilities. The bank stated that the original title deeds were deposited to create this mortgage. It was found that a subsequent gift deed, dated December 28, 1975, was used to transfer the title to a third party, from whom the appellants later purchased the property in 2003. The bank’s position was that the appellants’ purchase was subject to the existing mortgage.
The DRT dismissed the appellants’ original application, prompting them to file this appeal with the ITAT. The ITAT reviewed the submissions and found that the main point of contention was the validity of the security interest. The tribunal summoned the relevant documents from the DRT and confirmed that the original title deeds had indeed been deposited by the borrower in 1969, creating a valid equitable mortgage. The ITAT noted that both the gift deed and the subsequent sale to the appellants occurred while this mortgage was still in effect.
