Skip to main content

Secured creditor has no role after property sale

The issue raised in the writ petition United Bank of India & Anr. Vs. State of West Bengal & Ors., is whether a secured creditor is entitled to invoke the provisions of Section 14 of the Act of 2002 subsequent to the sale of an immovable property over which it claims security interest?

The petitioners submited that, the first petitioner had made an application under Section 14 of the Act of 2002 before the concerned District Magistrate on September 9, 2013. Such application has not been considered and decided till date. He seeked expeditious disposal of such application.

The Calcutta High Court said that the words ‘sale and ‘transfer’ used in Section 14 of the Act of 2002 are not synonymous. The word ‘transfer’ used as a verb means that, a person is conveying or removing from one place or one person to another or is passing or handing over something to another person. It can also mean changeover of the possession or control of a given thing. Transfer is, therefore, wider than sale. As noted above, it may include an element of making over of possession.

The word ‘transfer’ used in Section 14, therefore, can mean making over of possession of an immovable property. It is contended by the petitioners that, since the word ‘transfer’ used in Section 14 of the Act of 2002 includes an act of making over of possession, the petitioner as the secured creditor can legitimately invoke Section 14 of the Act of 2002 even after a conveyance in respect of an immovable property sold, has been executed and registered. With respect, this contention of the petitioner overlooks the fact that, the right, title and interest of the secured creditor and the vendor stands transferred to and vested with the purchaser upon the execution and registration of the deed of conveyance which is otherwise duly stamped. On and from the date of such document, the secured creditor ceases to have any interest in respect of the immovable property concerned. The legal or the deeming fiction of Section 13 ceases to operate upon such sale deed being registered. Therefore, the secured creditor does not retain any further right to meddle with the immovable property under the provisions of the Act of 2002 in order to invoke Section 14 of the Act of 2002 for the purpose of possession or otherwise.

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

Mere Agreement To Sell The Leased Property To Tenant Would Not Terminate Landlord-Tenant Relationship

In CIVIL APPEAL Nos. 1237­1238 OF 2019, Dr. H.K. Sharma vs Shri Ram Lal, the tenant had objected against the eviction suit filed by the landlord, claiming that the landlord-tenant relationship between them had ceased to exist by virtue of an agreement for sale entered between them and that he has already paid some money in advance based on the agreement. The tenant contented as the landlord-tenant relationship did not exist, the landlord cannot evict him. The matter went through various forums and finally landed before the Supreme Court in appeal. The Supreme Court referring to the judgment in Shah Mathuradas Maganlal & Co. vs. Nagappa Shankarappa Malage & Ors., held that in the instant case the lease agreement included no clauses on the fate of the tenancy. A fortiori, the parties did not intend to surrender the tenancy rights despite entering into an agreement of sale of the tenanted property. In other words, if the parties really intended to surrender their tenancy ...
2 comments
Read more

Valuation Report of Jewellery once made is effective for Four Assessment Years

The division Bench of the Delhi High Court in Pr.Commissioner of Wealth Tax vs. Raghu Hari Dalmia held that a valuation report made by a registered valuer once adopted shall be in effect for four assessment years unless an event has occurred whereby the value is increased or decreased. The High Court made it clear that the event of “search” under Section 132 of the Income Tax Act, 1961 cannot compel the assessee to undertake a fresh valuation.
2 comments
Read more