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Shashi R. Jatia vs. Prudent ARC & Ors.

Writ Petition (Civil) · CNR No. DLHC010236492026Decided 13 Oct 2026New Delhi Bench
W.P.(C) 7203/2026CNR: DLHC010236492026
Justice Jasmeet Singh

Background

Shashi Jatia, a senior citizen co-owner of a one-third share in a Delhi property, discovered in 2021 that her sister-in-law and brother-in-law had taken loans worth nearly Rs. 15 crore from ICICI Bank by mortgaging the property, using what she said were forged signatures on the loan papers. A forensic report and a police (Economic Offences Wing) investigation both found her signatures were indeed forged, and a criminal case was registered. While her civil case over this was still pending, the loan was sold to an asset-recovery company (Prudent ARC), which then issued a notice to auction the property to recover the debt.

Decision Breakdown

The bank and the recovery company argued she should go through the specialised debt-recovery tribunal instead of the High Court. The Court held that where a person credibly alleges that the loan and mortgage itself were created through fraud and forgery, not merely disputing how the loan is being recovered, courts can step in directly, especially where independent forensic evidence supports the fraud claim. The Court excluded her one-third share from the auction until the forgery allegations are finally decided by a competent court, while allowing the auction to proceed for the remaining two-thirds share.

Lesson Learnt

If you discover a loan or mortgage was taken out in your name through forgery, you are not necessarily stuck going through the ordinary debt-recovery process built for genuine borrowers: courts can intervene directly to stop a sale of your property while the fraud claim is pending, provided you have real evidence (such as a forensic signature report) and act promptly once you learn of the fraud.

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