LexALLOKAM PEDDABBAYYA AND ANOTHER versus ALLAHABAD BANK AND OTHERS
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[2017] 8 S.C.R. 121 ALLOKAM PEDDABBAYYA AND ANOTHER v. ALLAHABAD BANK AND OTHERS (Civil Appeal Nos. 2763-2764 of2008) JUNE 19, 2017 [RANJAN GOGOi AND NAVIN SINHA, JJ.I Transfer of Property Act, 1882: s. 60, Proviso - Operation of - Equitable mortgage of property A B c by Def No.3 and 4 in 1979 in favour of bank for a loan - Non- payment of loan - Foreclosure suit by bank in 1987 for recove1y of loan by sale of mortgaged property - Property was auction sold in 1993 in favour of Def No.2, auction purchaser - Plaintiffs- appellants stating to have purchased the mortgaged property in 1985 filed suit for redemption of mortgage in 1999 - Suit decreed D by trial court but reversed in appeal by auction purchaser - Second appeal by plaintiffs dismissed - On appeal, held: Right to enforce a claim for equity of redemption is a statutory right under the Act - It necessarily presupposes the existence of a mortgage - The right to redeem can stand extinguished either by the act of parties or by operation of law in the form of a decree of the Court under the E proviso to s. 60 - In the instant case, plaintiffs lost the right to sue for redemption of the mortgaged property by virtue of proviso to s.60 when the mortgaged property was put to auction sale in a suit ·for foreclosure by bank and sale certificate was issued in favour of auction purchaser - Thus, there was no subsisting mortgage to be redeemed on the date of filing of the suit by plaintiffs - Right to redemption could not be claimed in the abstract. s.91 - Rights under, of purchaser of equity of redemption - Held: Appellants being purchasers of equity of redemption can claim F no better rights u/s. 9 I than what their predecessor-in-interest had u!s.60 - Their rights could not be any superior or separate from G that of their predecessor-in-interest. Mortgage - Right of redemption - Waiver by conduct. - When - Suit property mortgaged by Def No.3 and.4 in 1979 in favour of bank for a loan - Non-payment of loan - Property was 121 H 122 SUPREME COURT REPORTS [2017] 8 S.C.R. A auction sold by bank in 1993 in favour of Def No.2 - Plaintiffs stating to have purchased the mortgaged property in 1985 filed suit in 1994 seeking permanent injunction against Def Nos. 2 to 4 - Held: Bank was not impleaded as a defendant in this suit - Def No.2 made full disclosure in this suit about the mortgage, foreclosure B suit flied by Bank, and the consequent auction sale - At this stage, sale certificate was not issued in favour of Def No.2 - However. plaintiffs did not take any steps to either amend the relief sought in the suit or seek redemption of mortgaged property by offering to deposit mortgage dues or even to set aside the auction sale u/Or. XXXIV, r.l, CPC- Thus, behaviour of Plaintiffs raises issue of waiver C by conduct w.r.t their right to redemption, notwithstanding the subsistence of the period of limitation to seek redemption - Limitation Act, 1963 -Art. 61 (a) - Code of Civil Procedure, 1908 - Or. XXXJV, r.l - Doctrine of Waiver. Code of Civil Procedure, 1908 - Or. XXXlV, r.8 - Non- o applicability of- Held: Suit for redemption of mortgage by plaintijfs- appellants was misconceived as ulr. 8 the right to redemption survived only till confirmation of the sale and not thereafter - Suit was instituted by appellants in 1999 only after issuance of sale certificate in favour of Def No.2 and thus the question for E redemption had become irrelevant. Dismissing the appeals, the Court HELD: 1.1 The right to enforce a claim for equity of redemption is a statutory right under the Act. It necessarily presupposes the existence of a mortgage. The right to redeem F can stand extinguished either by the act of the parties or by operation of the law in the form of a Decree of the Court under the proviso to Section 60 of the Transfer of Property Act, 1882. The Appellants being purchasers of the equity of redemption can have or claim no better rights under Section 91, than what their predecessor-in-interest had under Section 60 of the Act. (Para 91 G [129-E] 1.2 The Plaintiffs preferred suit in 1994 claiming possession of the Suit lands, seeking permanent injunction against any interference by the Defendant No. 2 to 4 acting in collusion. The Bank was not impleaded as a party defendant. In his written H statement, Defendant No.2 made full disclosure about the ALLOKAM PEDDABBAYYA v. ALLAHABAD BANK 123 mortgage, the Suit fi
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