Case: M/S. Ormi Textiles  Vs. State Of U.P.

3. Before, however, adverting to the said question, we may notice the basic factual matrix of the matter. Appellant No. 1 is a partnership firm. It was constituted in the year 1973. It established a factory at Kadrabad in the town of Modi Nagar, U.P. A loan of Rs. 3.96 lakhs was applied for but a sum of Rs. 3.14 lakhs was sanctioned in 1974. Appellant No. 1 was in possession of 1100 sq. yards in Khasra Plot No. 397M, Khata No. 80 situated in Village Kadrabad Pargana Jalalabad. The factory is situated on a land measuring 800 sq. yards. The schedule of the land which was the subject matter of mortgage in favour of the respondent - Corporation reads asthat piece or parcel of land measuring 800 sq. yards out of Seven Biswas and Five Bigamain, bearing Khasra plot number 397 M Khata No. 80, situate in village Eadarkad, Pargana, Jalalabad, tehsil Ghaziabad district Meerut and bounded:On the North by: remaining land of Khasra No. 397 F,On the South by: remaining land of owned by Gur Charan Jit Kaur of Khasra No. 397 MOn the east by: D.K. RoadOn the west by: Land belonging to otherwas furthermore granted loan for a sum of Rs.1.51 lakhs as also for a sum of Rs.3,19,800/- during the period 1977-79. According to the appellant, although a substantial part of the loan had been repaid, a sum of Rs.3,19,800/- is still owing and due to the respondent. It has been contended that the mortgaged land admeasuring 800 sq. yards continued to be the security for the said loans.The industrial unit of the appellant, however, became sick. Efforts to revive the said unit failed. It was contended that the respondent - Corporation acknowledged that out of an area of 1350 sq. yards which was in possession of the appellant, only 800 sq. yards was mortgaged in its favour, wherefor a demand for demarcation was made by it in terms of a letter dated 17.07.1990,actual area of land belonging to your unit at present is around 1350 sq. yards approx. So, therefore, it could not be identified which portion of land has been mortgaged to the Corporation. In the absence of the demarcating of land mortgaged to the Corporation, we may not be in a position to evaluate the assets mortgaged at site. Keeping in view of this, you are hereby advised to submit the following papers for clarification/identification for the plot mortgaged to the Corporation so that we may take action at our end.A notice dated 28.12.2005 under Section 29 of the Act was issued by the respondent - Corporation. A writ petition was filed questioning the legality thereof. Pursuant to an interim order passed by the High Court in the said writ petition, the appellant deposited a further amount of Rs. 2 lakhs. In the meantime, another unit of the appellant became sick and subjected to a notice under Section 29 of the Act wherefor also a writ petition was filed before the High Court which was marked as Civil Misc. Petition No. 7219 of 2006.5. An advertisement was issued for sale of the appellants unit covering the land area 7 Siswa, 5 Biswansi (951.25 sq. mtr.) in a newspaper known as Amar Ujala on or about 6.06.2006.6. The High Court by reason of the impugned judgment dismissed the writ petition filed by the appellants questioning the validity of the said notice,the Petitioner approached earlier also this Court against the proceeding initiated under Section 29, of the State Financial Corporations Act, 1951 in Writ Petition No. 6703 of 2006 wherein this Court granted indulgence permitting the Petitioner to pay certain amount within a prescribed time and in the meantime interim order was passed. Thereafter, again the said order was modified and further opportunity was granted to the Petitioner but the Petitioner failed to comply both the said order though undertaking has been given before this Court in the aforesaid Writ Petition in order to obtain the interim order. In the circumstances, the Respondent Nos. 2 and 3 proceed to take over possession under Section 29 of the State Financial Corporations Act, 1951 and hence the present Writ Petition is filed.In my view, against the same cause of action the present Writ Petition is filed which is not maintainable. Further, the Petitioner has also approached this Court with unclean hands inasmuch as he has already got interim orders from this Court by giving certain undertakings but failed to honour the same and, thus, is not entitled for any equitable relief under Article 226 of the Constitution of India.In view of the aforesaid facts and circumstances, the Writ Petition is dismissed in limine."

Reasoning:
11. A mortgagee can have a right to sell a property even under the contract. The same must necessarily mean that the property to be sold is the one over which he has the right, title and interest. A sale without any right would be a nullity.We, therefore, are of the opinion that the right to sell the property by the Corporation must be exercised only in respect of the mortgaged property and not the one which is not the subject matter thereof.15. Keeping in view the fact that the extent of property mortgaged has been described in the deed of mortgage, it will be open to the respondents herein to get the area of the said property duly demarcated.