1 AO-801-11.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION Mhi APPEAL FROM ORDER NO. 801 OF 2011 WITH CIVIL APPLICATION NO. 1057 OF 2011 Vidya Sahakari Bank Limited ... Applicant/appellant (Orig. Plaintiff) vs. Indiabulls Housing Finance Ltd. & Ors. Respondents (Org. defendants) Mr. Y.S.Jahagirdar, Senior Counsel i/b. S.S.Kanetkar,Advocate, for the appellant Mr.Ashish Kamat, i/b. Kartikeya & Associates,Advocates for the respondent No.1. CORAM: J.H.BHATIA,J. DATE : 26th July, 2011. P.C. 1. The appeal is preferred by the original plaintiff, which is a Co- operative Bank. According to the plaintiff, the suit property belonging to the respondent Nos. 2 to 4 has been mortgaged with the plaintiff-Bank and presently amount of Rs.3,12,00,000/- approximately is due. The said property is scheduled to be auctioned on 28.7.2011 by the defendant/respondent no.1, which is a private financial institution. The respondent No.1 claims that same property was mortgaged by respondent Nos. 2 to 4 with the respondent No.1 prior in time by depositing title deeds. The plaintiff filed the suit to stop the auction claiming that the defendant/respondent No.1 cannot put the property to auction. The trial Court 2 AO-801-11.sxw rejected the application Exhibit 5 for temporary injunction to restrain respodent No.1 from proceeding with the auction. That order is challenged in the present Appeal. 2. It appears that the property was first mortgaged with respondent No.1 by depositing title deeds. Thereafter the same property was also mortgaged with the plaintiff-Bank by a registered document. In view of this, respondent No.1 has first charge over the property and after the respondent recovers, whatever remains that may be taken by the plaintiff/appellant to recover ts dues. 3. The learned Counsel for the appellant contended that as per the valuation carried out at the instance of the appellant on 15.4.2011, each of the two properties is worth Rs.3,60,00,000/-. Thus, total value of the property would be Rs.7,40,00,000/-. According to the responent No.1, the property was valued on 8.3.2001 and the total value of both the properties was Rs.4,20,00,000/-. However, there was no buyer at the said price. Therefore, auction notice was issued reserving price of Rs.1,90,00,000/- for each property. There is apprehension in the mind of the Plaintiff-Bank that the property may be sold at a price which may be less than the market price and the claim of the plaintiff may be put in jeopardy. 3 AO-801-11.sxw 4. After some discussion and after taking instructions from their respective clients, the learned Counsel for the parties agree that the Appeal and the application may be disposed of with the following directions :- (i) The proposed auction to be held on 28.7.2011 will be recalled and cancelled. (ii) The plaintiff/appellant shall be at liberty to get both the properties valued afresh at its own cost. (iii) The plaintiff and defendant No.1 shall issue a joint notice of auction putting the properties to public auction within three months. (iv) Whatever price is fetched in the said auction, the claim of the defendant No.1 - Indiabulls Housing Finance Ltd. will be first satisfied and balance, if any, will be retained by the plaintiff-Bank to satisfy its claim and balance, if any, after satisfaction of the claim of plaintiff,shall be paid to the owners of the property. 4 AO-801-11.sxw (v) In case the property may not be sold in such auction, the plaintiff shall be at liberty to pay the dues of the defendant No.1 and satisfy the claim of the defendant No.1 within one month thereafter and take over the rights of the defendant No.1 and take action as per law for recovery of its dues, including the amount which may be paid to the defendant No.1 for satisfying the claim of the defendant No.1. (vi) In case the plaintiff fails to satisfy the claim of the defendant no.1 within one month, the defendant No.1 shall be at liberty to proceed to recover its dues by selling the property. After satisfaction of claim of the defendant No.1, any amount remains, that will be deposited with the plaintiff-Bank. Appeal and Application stand disposed of accordingly. (J.H.BHATIA,J.)