MANU/SC/0950/2017

Equivalent Citation: 2017(5)ALT31, 2017 (7) SC J 4

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 9777-9778 of 2017 (Arising out of SLP (C) Nos. 28064-28065 of
2014)
Decided On: 26.07.2017
Appellants: The Greater Bombay Co-operative Bank Limited
Vs.
Respondent: Nagaraj Ganeshmal Jain and Ors.
Hon'ble Judges/Coram:
Madan B. Lokur and Deepak Gupta, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Babu H. Marlapalle, Sr. Adv., Shridhar Y. Chitale,
Vivek Ranjan Mohanty, Ajit Wagh, Aditya Gaggar, Apoorv Shukla and Abhijat P. Medh,
Advs.
For Respondents/Defendant: Sudhanshu S. Choudhari and Surabhi Guleria, Advs.
JUDGMENT
Deepak Gupta, J.
1. Leave granted.
2. These appeals are directed against the judgment dated 02.04.2014 passed by the
Bombay High Court in Writ Petition No. 195 of 2014, whereby the writ petition filed
by the Petitioner-Appellant, (hereinafter referred to as "the Bank") was dismissed and
the attachment order dated 14.12.2001, relating to flat No. 12, 5th Floor, New
Shrinath Kunj, CHS Ltd., Vile Parle (West), Mumbai, 400056 was set aside and a
further direction was given to enrol the Respondent No. 1 as member of the New
Shrinath Housing Co-operative Society (hereinafter referred to as "the Society").
3 . The undisputed facts are that the flat in question was owned by Shri Dhillon P.
Shah. Mr. Shah and his wife Smt. Shivangi Shah were Directors of a Company known
as M/s. Mahaganesh Texpro Private Limited. The Bank granted a cash credit facility of
Rs. 2.25 crores to the Company. The Directors including Shri Dillon P. Shah and Smt.
Shivangi P. Shah stood guarantee for the repayment of the cash credit facilities.
4. The Company did not repay the amount due to the Bank and finally on 30.08.2001
recovery certificate for an amount of Rs. 2,98,94,363/- along with interest was issued
by the Assistant Registrar of the Cooperative Societies and proceedings initiated for
recovery of the amount from the Company and the guarantors. Demand notice was
sent to the Company and also to Shri Dhillon P. Shah and Smt. Shivangi P. Shah on
12.12.2001. In the notice it was stated that the property of these persons including
Flat No. 12/5 Gopal Bhuvan, New Shrinath Kunj Co-operative Housing Society
Bapubhai Vash Road, Ville Parle (West) Mumbai (hereinafter referred to as the 'suit
property) and another bungalow owned by Smt. and Shri Dhillon P. Shah, were to be
attached and sold for recovery of the dues of the Bank. Both the properties including

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the suit property were attached. The bungalow was sold for a sum of Rs. 1.6 crores.
That sale is subject matter of separate proceedings.
5. The attachment order was issued on 14.12.2001 and the same was served on Shri
Dhillon P. Shah and his wife. They both challenged these attachment proceedings
before various fora, but never took the objection that the suit property had already
been sold or transferred. Mr. Dhillon P. Shah expired on 20.07.2004.
6. On 01.11.2004, Smt. Shivangi P. Shah, widow of late Shri Dhillon P. Shah, sent a
letter to the Society requesting that duplicate share certificate be issued, since the
original share certificate was not traceable. In this letter she made no mention of the
attachment of the flat or of the fact that dues were payable to the bank. She sent
another similar letter on 28.12.2004. Thereafter, on 28.12.2004, the Respondent No.
1 for the first time claimed ownership of the suit property and, under some amnesty
scheme, paid the stamp duty payable on the agreement to sell the suit property.
7. On 20.01.2005, the Respondent No. 1 applied to the Society praying that he may
be granted membership of the Society. This application was rejected by the Society
vide letter dated 28.01.2005. In this letter it was clearly stated that neither late Shri
Dhillon P. Shah nor Mrs. Shivangi P. Shah had informed the other members of the
Society about the fact that they had transferred the flat. This, despite the fact that
there had been several meetings between the members of the Society and Shri
Dhillon P. Shah and his wife. The Respondent No. 1 was also informed that the flat
has already been attached.
8. It was only thereafter, on 03.02.2005, the Respondent No. 1 filed objections Under
Rule 107 (19) (c) of the Maharashtra Cooperative Societies Rules, 1961 challenging
the attachment order on the allegation that he had purchased the flat through
agreement dated 04.10.1995 and was in possession of the same from 12.04.1996.
9. The Respondent No. 1 also challenged the decision of the Society refusing to grant
him membership. The Deputy Registrar vide order dated 18.09.2006 allowed the
appeal of the Respondent No. 1 and directed the Society to admit him as a member.
It would be pertinent to mention here that in these proceedings the Bank was not a
party. The Bank on coming to know about the order of the Deputy Registrar dated
18.09.2006 also filed a Revision Application before the Divisional Joint Registrar on
16.07.2010 challenging the order directing the society to grant membership to
Respondent No. 1.
1 0 . The Bank contested the proceedings filed by the Respondent challenging the
order of attachment of property and a prayer was made that the documents especially
the alleged agreement to sell be sent to a handwriting expert for ascertaining whether
the signature on the document were of Shri Dhillon P. Shah or not. This prayer was
allowed on 12.11.2006 in the presence of the counsel for the Respondent No. 1.
11. The forensic expert sent his report dated 21.07.2010 in which he found that the
signature on the photocopy did not appear to be of Shri Dhillon P. Shah. On
09.10.2010, the objection petition filed by the Respondent No. 1 was dismissed and
it was held that he had no right title or interest in the suit flat.
1 2 . Thereafter Respondent No. 1 filed Revision Petition, which was allowed on
28.10.2013. The Bank thereafter filed writ petition No. 195 of 2014, which was
dismissed giving rise to these appeals.

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13. As far as the issue of transfer of the suit flat is concerned, the Bombay High
Court has dismissed the petition of the Bank only on the ground that since the
attachment order was passed in the year 2001 and the agreement of sale was
executed prior thereto, therefore, the attachment order is not valid. The High Court
did not go into the questions raised by the Bank that no right, title or interest in the
flat could have been transferred by the said agreement.
14. Here, it would be pertinent to mention that admittedly the Respondent No. 1 was
a close friend of Shri Dhillon P. Shah and he also states that he had a lot of business
dealings with him. According to the Respondent No. 1 an amount of Rs. 20 lakhs
were advanced by M/s. Hitesh Corporation a proprietary firm of the Respondent No. 1
to Shri Dhillon P. Shah on 05.12.2004. Admittedly, this advance was made not in
connection with the flat but either as a loan or part of some business transactions.
According to the Respondent No. 1, since Shri Dhillon P. Shah could not repay the
amount of Rs. 20 lakh on 04.10.1994 he executed the alleged agreement to sell in his
favour. Pursuant thereto Respondent No. 1 took possession of the said flat on
12.04.1996 and thereafter had been paying the electricity bills etc.
15. Immoveable property can be transferred only by a Registered document. There
can be no transfer of any right, title or interest in any immoveable property except by
way of a registered document. In this behalf we may make reference to the judgment
of this Court in Suraj Lamp & Industries (P) Ltd. v. State of Haryana
MANU/SC/1222/2011 : (2012) 1 SCC 656, wherein it was held as follows.
18. It is thus clear that a transfer of immovable property by way of sale can
only be by a deed of conveyance (sale deed). In the absence of a deed of
conveyance (duly stamped and registered as required by law), no right, title
or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not a registered deed of
conveyance (deed of sale) would fall short of the requirements of Sections 54
and 55 of TP Act and will not confer any title nor transfer any interest in an
immovable property (except to the limited right granted Under Section 53A of
TP Act). According to the TP Act, an agreement of sale, whether with
possession or without possession, is not a conveyance. Section 54 of the TP
Act enacts that sale of immoveable property can be made only by a registered
instrument and an agreement of sale does not create any interest or charge
on its subject matter.
xxx xxx xxx
24. We therefore reiterate that immovable property can be legally and lawfully
transferred/conveyed only by a registered deed of conveyance. Transactions of the
nature of 'GPA sales' or 'SA/GPA/will transfers' do not convey title and do not amount
to transfer, nor can they be recognized or valid mode of transfer of immovable
property. The courts will not treat such transactions as completed or concluded
transfers or as conveyances as they neither convey title nor create any interest in an
immovable property. They cannot be recognised as deeds of title, except to the limited
extent of Section 53A of the TP Act. Such transactions cannot be relied upon or made
the basis for mutations in municipal or revenue records. What is stated above will
apply not only to deeds of conveyance in regard to freehold property but also to
transfer of leasehold property. A lease can be validly transferred only under a
registered assignment of lease. It is time that an end is put to the pernicious practice

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of SA/GPA/will transactions known as GPA sales.
16. This Court clearly held that an agreement to sell which is not a registered deed of
conveyance would not meet the requirements of Section 54 and 55 of the Transfer of
Property Act. With respect to Section 53A of the Transfer of Property Act, it is well
settled that the same can only be used as a defence in proceedings initiated by the
transferor or by any person claiming under him.
17. As far as the present case is concerned, the very foundation of the case of the
Respondent No. 1 i.e. agreement to sell is doubtful. The original has not seen the
light of day and only photocopy thereof was filed. There are doubts with regard to
the signature of Shri Dhillon P. Shah. As pointed out earlier, 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 No. 1, during the life time of Shri Dhillon P. Shah never claimed
ownership of the flat.
18. Shri Dhillon P. Shah and his wife never disclosed the fact of the alleged sale of
the suit property to anybody including any member of the Society. It is more than
obvious that with a view to wriggle out of the recovery proceedings, after the death
of Shri Dhillon P. Shah this document has been fabricated. This document does not
transfer any right, title or interest of the property and, therefore, the Revisional Court
and the High Court erred in allowing the claim of the Respondent No. 1.
19. The appeals are accordingly allowed and the order of the High Court and the
revisional/Appellate authority accepting the claim of Respondent No. 1 are set aside
and the claim of the Respondent No. 1 is rejected. It is held that Respondent No. 1
has no right, title or interest in the suit property. Therefore, he cannot claim
membership of the New Shrinath Kunj Housing Co-operative Society.
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