[Senior Citizens Act] Bank Can Seek Quashing Of Order Voiding Gift Deed In Case Of Default On Loan By Children: Karnataka High Court

The Karnataka High Court recently quashed an order passed by the Assistant Commissioner, Hassan made under the provisions of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, cancelling the gift deed executed by an aged father in favour of his children. The order came to be passed on the petition filed by a Bank from whom the children had taken a loan by mortgaging the property received as gift, and subsequently defaulted in repayment.Justice M G S Kamal said, “This Court under the peculiar facts situation of the case, is of the considered view that the petitioner-bank is entitled to maintain the writ petition, more so when it is required to recover the loan amount advanced by it in the larger public interest.” The court made an exception in this case since the provisions of the act did not provide for filing an appeal by a person/body like the petitioner-bank whose cause in the matter is completely different and distinct. It said:"The Act 2007 does not define the term “Aggrieved Person”. Thus, in the circumstances there is no possibility of petitioner-bank having any recourse for any remedy under the Act, 2007. Therefore, the only option available to the petitioner-bank is to approach this Court invoking its extraordinary jurisdiction under Article 226 of the Constitution of India.” Facts of the caseAXIS Bank had loaned Rs 18 lakh to Mir Anasar Ali and another who had mortgaged the property gifted to them by their father Mir Johari Ali. The said Deed of Gift was absolute without any conditions attached to the conveyance. They defaulted in repayment. Later, the bank learnt from the third parties that father and son had in collusion with each other with an intention of defeating and defrauding the rights of the petitioner-bank had surreptitiously got the said Deed of Gift dated 05.06.2014 cancelled. The bank contended that the Assistant Commissioner had grossly erred in passing the impugned order in purported exercise of his powers under Section 23 of the Act 2007. The provision can be invoked only when there is a specific condition in the Deed of Gift that the transferee shall provide the basic amenities and physical needs to the transferor and if such transferee refuses to maintain or provide amenities and physical needs of the transferor the transfer of property in favour of the beneficiary shall be deemed to have been made by fraud or coercion or undue influence and at the option of transferor be declared void. Further, in view of the erroneous order passed the respondent No.1 cancelling the deed of gift the interest of the petitioner-bank has been adversely affected in that it has taken away the right of the petitioner-bank as a mortgagee to recover the amount advanced to the respondent Nos.3 and 4.It was also claimed that the Assistant Commissioner had no jurisdiction to cancel the deed of gift of this nature. The only option that was available to respondent No.2 (father) was to initiate the proceedings before the Civil Court. Finally, it said since there is no specific provision provided under the Act, 2007 for petitioner banks to file an appeal it has no other option but to approach this Court by filing the present writ petition. Findings: The court went through the records of the case, the object and purpose of the Act 2007, which is essentially to provide speedy and inexpensive remedies to elderly persons who are not being looked after by their families and the relevant provisions in the Act. Observing that the Tribunal constituted under the Act, 2007 would get jurisdiction to declare a transaction contemplated under Section 23 of Act as void only if the conditions specified thereunder are satisfied.It noted there is no specific condition attached in the Deed of Gift that respondent No.3 being the son and the transferee, shall provide the basic amenities and basic physical needs to Respondent No.2. Moreover, the father cannot claim to be the absolute owner of the entire extent of the subject property, inasmuch as upon the demise of Ahmadi Begum-owner, (wife) of Respondent No.2. The children, respectively, became entitled for a specific share in the subject property in terms of the law of inheritance applicable to the parties.Then the court held, “The impugned order as seen above is as cryptic as it could be without there being any reason whatsoever. The respondent No.1-Assistant Commissioner has neither adverted to the facts of the matter nor has he adverted to the provisions of Section 23 of the Act, 2007 justifying him invoking his jurisdiction thereunder. There is also no whisper as to if the Respondent No.2 had made out case warranting interference at the hands of the respondent No.1. The impugned order ex-facie being one without jurisdiction is arbitrary and perverse, cannot be sustained.” Before parting, the court raised the concern of the Act of 2007 being misused. It said “Though the object of the Act, 2007 is lofty and laudable the same has been deliberately misused ...

[Senior Citizens Act] Bank Can Seek Quashing Of Order Voiding Gift Deed In Case Of Default On Loan By Children: Karnataka High Court

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[Senior Citizens Act] Bank Can Seek Quashing Of Order Voiding Gift Deed In Case Of Default On Loan By Children: Karnataka High Court

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