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The Greater Bombay Co-operative Bank Limited v. Mr. Nagraj Ganeshmal Jain & Ors.

Civil Appeal · 2017 INSC 671Decided 26 Jul 2017
Civil Appeal Nos. 009777-009778 of 2017
Justice Madan B. Lokur · Justice Deepak Gupta

Background

A company owned by Mr. Dhillon P. Shah and his wife defaulted on a cash-credit facility from the appellant Bank, leading the Bank to attach their flat in 2001 to recover the dues. Years after the attachment and after Mr. Shah's death in 2004, the respondent, a close friend and business associate of Shah, came forward claiming he had bought the flat under an unregistered photocopy "agreement to sell" dated 1994 and sought to be admitted as a member of the housing society on that basis. A forensic report found the signature on the agreement did not appear to be genuine, and Shah and his wife had never disclosed any such sale during their lifetime despite contesting the attachment for years.

Decision Breakdown

The Supreme Court held that under the Transfer of Property Act, immovable property can only be transferred by a registered deed of conveyance: an unregistered agreement to sell, especially one only produced as a photocopy with a doubtful signature, confers no title or ownership rights, relying on its earlier ruling in Suraj Lamp & Industries vs. State of Haryana. Given the suspicious timing (the claim surfaced only after Shah's death and years after the Bank's attachment, with no disclosure during Shah's lifetime despite ongoing litigation), the Court concluded the document was fabricated to defeat the Bank's recovery and that the respondent had no genuine right, title, or interest in the flat. It set aside the High Court's and the cooperative revisional authorities' orders that had favoured the respondent and rejected his claim to society membership.

Lesson Learnt

An unregistered "agreement to sell", particularly one produced only as a photocopy long after the alleged transaction and the seller's death, cannot defeat a bank's valid attachment or establish ownership; only a registered deed of conveyance legally transfers property in India.

Official source (sci.gov.in)View Judgment (PDF)

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