Case: M/S TRIPOWER ENTERPRISES (PRIVATE) LIMITED Vs. STATE BANK OF INDIA &amp; ORS

legal obligation to handover the title deeds or original documents being Exhibits A110 to A114 to the appellant for completion of the formalities of sale. 15. Thus understood, the High Court should have been loath in entertaining the writ petition filed by the guarantor, raising the same plea ad nauseam. The reason weighed with the High Court, in our opinion, is flimsy and untenable. That cannot be countenanced at the instance of the guarantor. The inevitable effect of entertaining the stated plea of guarantor will entail encouraging vexatious plea and procrastination of the concluded auction sale by delaying handing over of title documents to the highest bidder, in whose favour sale certificate has already been issued. It is a different matter that the direction for handing over of original documents would ostensibly appear to be in reference to an interim application in the pending O.A., but that course is inevitable in the fact situation of the present case. 16. The next question is: whether despite the decree of a Court of competent jurisdiction in favour of respondent No. 11 (A.R. Sridharan) concerning land bearing Paimash No. 722/4 admeasuring 1.80 acres, can the documents pertaining to that land be still made over to the appellant/auction purchaser, merely because sale certificate has been issued by the Bank in that regard? The sale certificate, as issued by the Bank, does make reference to land bearing survey No. 282, which inter alia, consists of old Paimash No. 722/4. Therefore, to the extent of land referred to in the decree dated 16.2.1990 passed by the Court of District Munsiff, Chengalpattu in O.S. No. 186/1976 in favour of the respondent No. 11 (A.R. Sridharan), despite the issuance of sale certificate, the title document in respect of old Paimash No. 722/4 ought not to be released until the final decision in O.A. No. 11/2008. We say so because the decree passed by the Court of competent jurisdiction, which had attained finality with the dismissal of the special leave petition by this Court on 11.5.1992 cannot be disregarded. The fact that other proceedings, including about the title in respect of land admeasuring 1.80 acres bearing Paimash No. 722/4 are pending between the parties, cannot be the basis to overlook the claim of the respondent No. 11 (A.R. Sridharan) until a Court of competent jurisdiction declares that the respondent No. 11 (A.R. Sridharan) had no subsisting right, title or interest in that property. 17. Reverting to the argument canvassed before us by the learned counsel for the contesting respondents that the appeal by the appellant ought not to be entertained, in our opinion, the same deserves to be rejected. We say so because the appellant is the auction purchaser and sale certificate has also been issued in its favour by the Bank. As a consequence thereof, the appellant is entitled to receive the title documents in respect of the properties referred to in the sale certificate. The fact that the Bank did not challenge the impugned decision of the High Court, cannot undermine the direct interest of the appellant in getting the relief which was claimed by the Bank to fulfil its obligation of handing over the original documents to the auction purchaser. Admittedly, the appellant is party to the O.A., as well as, in the application filed by the Bank for return of documents. The Bank has supported the stand taken by the appellant. We find no infirmity in the appellant having approached this Court instead of the Bank, the applicant before the DRT. Even the appellant could have itself approached the DRT for this very relief. Taking any view of the matter, the objection under consideration is of no avail to the contesting respondents. 18. It was faintly urged by the contesting respondents that the Bank had filed the application in question for return of original documents, on 11.11.2016, even before the auction sale in which the appellant turned out to be the highest bidder was conducted on 28.2.2017, or the sale certificate issued on 29.4.2017. This argument, in our opinion, is an argument of desperation. The same overlooks the factual matrix and the background in which the subject application was moved by the Bank on 11.11.2016. By that time, the Bank had already commenced the auction sale process. It is a different matter that the auction process had to be repeated as no fair offer was forthcoming. In other words, the subject application was filed by the Bank in anticipation that the auction would be concluded and by the time the application was decided, the sale certificate in favour of the highest bidder would have been issued. There is nothing wrong in Bank moving such application before the conclusion of the auction process and issuance of a sale certificate, in anticipation. No provision has been brought to our notice, which prohibits such a course to be adopted by the Bank. Accordingly, even this objection of the respondents is rejected. 19. Both sides have invited our attention to the decisions of this Court on the proposition whether the DRT is competent to answer the question regarding validity of the subject mortgage and also res judicata. We do not wish to dilate on the said decisions as the factum of validity of mortgage need not detain us, in the facts of the present case. Similarly, the issue of res judicata will be of no avail in light of the unambiguous stand taken by and on behalf of the guarantor, acknowledging the mortgage in question and also offering to pay all the outstanding dues of the Bank. Further, the O.A. is still pending before the DRT, in which both the parties would be free to urge all contentions, as may be permissible in law. The DRT may consider those contentions appropriately. In the present appeal, we must confine our consideration as to whether the DRT ought to have allowed the application filed by the Bank for return of original documents in view of peculiar indisputable facts of this case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. Considering the fact that the guarantor had filed writ petition before the High Court assailing the order passed by the DRAT, dated 29.3.2019, allowing the application filed by the Bank for return of original documents, we must first address the argument of the appellant (auction purchaser) that the guarantor cannot be allowed to approbate and reprobate and moreso, in view of the unambiguous affidavit admitting the mortgage and offer given by its Director to pay the outstanding dues of the Bank in the earlier proceedings including the findings recorded by the DRT/DRAT against it in relation to the plea of validity of the mortgage in question11. For that, we may first refer to the decision of the DRT, in earliest point of time, on the petition moved by the guarantor being S.A. No. 225/2008 challenging the possession notice dated 15.10.2008 issued by the Bank under Section 13(4) of the 2002 ActThe guarantor (the applicant therein) had not disputed the correctness of the aforementioned finding of fact recorded by the DRT. Mr. M. Shanmugham (respondent No. 7s deceased father), Mr. S. Balasubramaniam (respondent No. 4), Mr. S. Kumarappan (respondent No. 5) and Mr. S. Thiagarajan (respondent No. 8) were the Directors of the guarantor company. One of them – Mr. S. Thiagarajan (respondent No. 8) had even filed affidavit before the DRT on 27.1.2011 stating that the guarantor company was willing to pay the sum of Rs.350.12 lakhs within the time frame fixed by the DRT to be minimum six months. These facts clearly belie the claim of the guarantor. The guarantor cannot be permitted to resile from the admission of its liability. Similarly, the guarantor had filed a detailed counter affidavit in Writ Petition No. 710/1997, admitting the mortgage of the property with the Bank, but had alleged fraud and fabrication of documents by the respondent No. 11 (A.R. Sridharan). That, however, cannot come to the aid of the guarantor who had otherwise admitted its liability and the mortgage in question, in particular12. As aforesaid, the finding/opinion recorded by the DRT vide order dated 10.2.2011 has attained finality with the dismissal of the appeal (filed by the guarantor) before the DRAT on 8.2.2013 albeit on the ground of failure to comply with the pre-deposit condition. The guarantor cannot be allowed to approbate and reprobate from the commitment made in successive proceedings before the DRT and the High Court, as referred hitherto13. Notably, even in the subsequent proceedings before the DRT-III at Chennai, bearing S.I.A. SR No. 581/2015 in S.A. No. 356/2014 filed by the guarantor, for grant of injunction to restrain the Bank from bringing the scheduled property to sale till the disposal of S.A. No. 356/2014, the guarantor raised the same issue about the validity of the subject mortgageEven this decision has become final and must operate against the guarantor. The guarantor filed yet another application being I.A. No. 23/2018 in O.A. No. 11/2008 for impleadment of the appellant herein as the twelfth (12 th ) defendant in O.A. No. 11/2008, raising the same plea of validity of mortgage in question. That has been noted and negatived in paragraph 8 of the order of the DRT at Madurai, dated 15.2.2019 in the following words: -8. The petitioner company filed SA No. 225/2008 challenging the possession notice dated 15.10.08 issued by the R-bank. One of the contentions raised by the petitioner company is that there is no valid creation of mortgage over the properties, which are the subject matter of OA B Schedule. This Tribunal passed order in above SA on 10.02.11 by holding that there are no violations of provisions of the SARFAESI Act 2002 in respect of issuance of the possession notice. A finding has been given in the above said order that valid security interest has been created over the above said properties. Admittedly, it cannot be disputed that the appeal preferred by the petitioner company against the above order of this Tribunal before the Honble DRAT, Chennai was dismissed for non compliance of the conditional order passed by the Honble DRAT, to satisfy the 2 nd proviso u/s 18 of the SARFAESI Act 2002. Therefore, the order of this Tribunal passed in SA No. 225/2008 still holds goodThe guarantor continued to raise the same plea in the application being M.A. No. 92/2017 in SASR No. 4969/2017 filed before the DRT-III at Chennai, challenging the auction sale notice dated 9.2.2017, sale held on 28.2.2017 and consequential sale certificate issued to the appellant herein on 29.4.2017. That application was, however, rejected vide order dated 6.5.2019 on the ground of proceedings being barred by limitation14. Suffice it to observe that the guarantor has successively raised the issue regarding the validity of subject mortgage in different proceedings unsuccessfully. As aforestated, the concerned forum/Court unambiguously rejected the same. More importantly, the guarantor through its Director(s) having offered to pay the entire outstanding dues and also admitting on affidavit the factum of existence of subject mortgage in favour of the Bank, the question of showing any indulgence to the guarantor (by the High Court) did not arise. The guarantor cannot be allowed to raise the same plea repeatedly on every occasion/in every proceeding. Notably, the auction sale stands concluded and followed by issuance of sale certificate in favour of the appellant. Resultantly, the Bank is under legal obligation to handover the title deeds or original documents being Exhibits A110 to A114 to the appellant for completion of the formalities of sale15. Thus understood, the High Court should have been loath in entertaining the writ petition filed by the guarantor, raising the same plea ad nauseam. The reason weighed with the High Court, in our opinion, is flimsy and untenable. That cannot be countenanced at the instance of the guarantor. The inevitable effect of entertaining the stated plea of guarantor will entail encouraging vexatious plea and procrastination of the concluded auction sale by delaying handing over of title documents to the highest bidder, in whose favour sale certificate has already been issued. It is a different matter that the direction for handing over of original documents would ostensibly appear to be in reference to an interim application in the pending O.A., but that course is inevitable in the fact situation of the present caseThe sale certificate, as issued by the Bank, does make reference to land bearing survey No. 282, which inter alia, consists of old Paimash No. 722/4. Therefore, to the extent of land referred to in the decree dated 16.2.1990 passed by the Court of District Munsiff, Chengalpattu in O.S. No. 186/1976 in favour of the respondent No. 11 (A.R. Sridharan), despite the issuance of sale certificate, the title document in respect of old Paimash No. 722/4 ought not to be released until the final decision in O.A. No. 11/2008. We say so because the decree passed by the Court of competent jurisdiction, which had attained finality with the dismissal of the special leave petition by this Court on 11.5.1992 cannot be disregarded. The fact that other proceedings, including about the title in respect of land admeasuring 1.80 acres bearing Paimash No. 722/4 are pending between the parties, cannot be the basis to overlook the claim of the respondent No. 11 (A.R. Sridharan) until a Court of competent jurisdiction declares that the respondent No. 11 (A.R. Sridharan) had no subsisting right, title or interest in that property17. Reverting to the argument canvassed before us by the learned counsel for the contesting respondents that the appeal by the appellant ought not to be entertained, in our opinion, the same deserves to be rejected. We say so because the appellant is the auction purchaser and sale certificate has also been issued in its favour by the Bank. As a consequence thereof, the appellant is entitled to receive the title documents in respect of the properties referred to in the sale certificate. The fact that the Bank did not challenge the impugned decision of the High Court, cannot undermine the direct interest of the appellant in getting the relief which was claimed by the Bank to fulfil its obligation of handing over the original documents to the auction purchaser. Admittedly, the appellant is party to the O.A., as well as, in the application filed by the Bank for return of documents. The Bank has supported the stand taken by the appellant. We find no infirmity in the appellant having approached this Court instead of the Bank, the applicant before the DRT. Even the appellant could have itself approached the DRT for this very relief. Taking any view of the matter, the objection under consideration is of no avail to the contesting respondentsThis argument, in our opinion, is an argument of desperation. The same overlooks the factual matrix and the background in which the subject application was moved by the Bank on 11.11.2016. By that time, the Bank had already commenced the auction sale process. It is a different matter that the auction process had to be repeated as no fair offer was forthcoming. In other words, the subject application was filed by the Bank in anticipation that the auction would be concluded and by the time the application was decided, the sale certificate in favour of the highest bidder would have been issued. There is nothing wrong in Bank moving such application before the conclusion of the auction process and issuance of a sale certificate, in anticipation. No provision has been brought to our notice, which prohibits such a course to be adopted by the Bank. Accordingly, even this objection of the respondents is rejected19. Both sides have invited our attention to the decisions of this Court on the proposition whether the DRT is competent to answer the question regarding validity of the subject mortgage and also res judicata. We do not wish to dilate on the said decisions as the factum of validity of mortgage need not detain us, in the facts of the present case. Similarly, the issue of res judicata will be of no avail in light of the unambiguous stand taken by and on behalf of the guarantor, acknowledging the mortgage in question and also offering to pay all the outstanding dues of the Bank. Further, the O.A. is still pending before the DRT, in which both the parties would be free to urge all contentions, as may be permissible in law. The DRT may consider those contentions appropriately. In the present appeal, we must confine our consideration as to whether the DRT ought to have allowed the application filed by the Bank for return of original documents in view of peculiar indisputable facts of this case.