Skip to main content

Company can't stop flat mortgage

The right to occupy a flat is a species of right to property and the flat can be mortgaged to avail of a loan for the flat owner's benefit, the Supreme Court stated last week while dismissing the appeal of Hill Properties Ltd against the attachment of a Malabar Hill flat at the instance of a petition by Union Bank of India before the Debt Recovery Tribunal.

 A shareholder of the building company mortgaged the flat, which was attached under the Securitisation Act. The company challenged it. Dismissing its appeal, the court stated: "We find that neither the Companies Act nor any other statute make any provision prohibiting the transfer of species of interest to third parties or to avail of loan for the flat owners' benefit. A legal bar on the saleability or transferability of such a species of interest, in our view, will create chaos and confusion. The right or interest to occupy any such flat is a species of property and hence has a stamp of transferability," the court said while upholding the view of the Bombay High Court. The company had argued that the occupier had permission only to use the flat owned by it and the rest of the substantial rights belonged to the company. A shareholder could not mortgage the flat without the permission of the company which was in violation of the articles of association of the company, it was argued by the company. The Supreme Court rejected this line of argument. It said: "It is too late in the day to contend that flat owners cannot sell, let, hypothecate or mortgage their flat for availing of loan without permission of the builder, society or the company. So far as a builder is concerned, the flat owner should pay the price of the flat. So far as the society or company in which the flat owner is a member, he is bound by the laws or articles of association of the company, but the species of his right over the flat is exclusively that of his. That right is always transferable and heritable."
Article referred: http://www.pressdisplay.com/pressdisplay/viewer.aspx

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

Procedure to be followed on admissibility of additional evidence at appeal stage

In The Corporation of Madras vs M. Parthasarathy & Ors., the trial court had allowed the respondent company to file evidence in the form of photocopies and had dismissed all the four suits filed by the respondents with costs as the evidence were in the form of photocopies and were objected to by the respondents. On appeal the Additional District Judge allowed the respondents to file additional evidence in the form the original documents of the earlier admitted photocopies and based on the same allowed the appeal. In its turn the High Court also dismissed the appeal filed by the appellants who in turn approached the Supreme Court. The Supreme Court decided that the first Appellate Court committed two jurisdictional errors in allowing the appeals.  Referring to earlier judgements of the Supreme Court in Land Acquisition Officer, City Improvement Trust Board vs. H. Narayanaiah & Ors., , Shalimar Chemical Works Ltd. vs. Surendra Oil & Dal Mills (Refineri...
Post a Comment
Read more