Case: M/S MONA PACKAGING PRODUCTS AND ORS Vs. M/S INDIAN BANK AND ORS.ETC

1. An ex parte decree dated 11th May, 2004 was passed against the appellants in a proceeding instituted by the respondent – Bank before the Debts Recovery Tribunal, Chennai (hereinafter referred to as ?Tribunal?). The appellants moved the learned Tribunal by filing applications for setting aside the aforesaid ex parte decree and for interim injunction restraining the respondent Bank from bringing the mortgaged property in question to sale by public auction along with application for condonation of delay (i.e. I.A. No.98, 99 and 100). The learned Tribunal made a conditional order dated 1st March, 2006 requiring the appellants to deposit a sum of Rs.40 lakhs. The aforesaid deposit was not made by the appellants and the decree was executed by auction of the property mortgaged. Sale certificate was also issued on 31st March, 20062. Against the conditional order, the appellants moved the Debts Recovery Appellate Tribunal (hereinafter referred to as ?Appellate Tribunal?). By order dated 1st March, 2007 the learned Appellate Tribunal after taking into account the fact that the appellants had deposited the aforesaid amount of Rs.40 lakhs, though with delay, gave a fresh opportunity to the appellants to prosecute the applications and directed the learned Tribunal to dispose of the applications (i.e. I.A. No.98, 99 and 100) filed by the appellants3. By order dated 14th May, 2007 the learned Tribunal dismissed the aforesaid applications (i.e. I.A. No.98,99 and 100) of the appellants holding that no explanation for condoning the delay had been given. Aggrieved, the appellants filed Appeal before the learned Appellate Tribunal. By order dated 23rd May, 2007 the learned Appellate Tribunal passed an order directing deposit of Rs.10 lakhs by the appellants with the respondent – Bank and issued notice in the appeal. This order had been challenged before the High Court, inter alia, by the auction purchaser and the respondent – Bank. The High Court having set aside the orders dated 1st March, 2007 and 23rd May, 2007 of the learned Appellate Tribunal the present appeals have been filed by the borrowers.

Court's reasoning:
5. Auction of the mortgaged properties have taken place. The auction purchaser had deposited the amount tendered by him and Sale Certificate, as already noticed by us, was issued in favour of the auction purchaser on 31st March, 2006. If that is so, we must understand that the right of the borrowers to redeem the mortgaged property no longer existed inasmuch as the decree has been executed. This is what Section 60 of the Transfer of Property Act, 1882 contemplates6. In such a situation, the appeal in which order dated 23rd May, 2007 was passed which was set aside by the High Court had become infructuous. We can, therefore, find no infirmity with the order of the High CourtWe are unable to agree. The appeal has been rendered infructuous by the auction sale that had taken place which has extinguished the right to redemption of the mortgagor(s)/borrower(s) in the property in question.