LexM/S. L.K. TRUST versus EDC LTD. & ORS.
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[2011) 7 S.C.R: 569 M/S. L.K. TRUST v. EDC LTD. & ORS. (Civil Appeal Nos. 4214-4215 of 2011) MAY 10, 2011 [J.M. PANCHAL AND CYRIAC JOSEPH, JJ.] Transfer of Property Act, .1882 - ss. 60 and 54 - Right A B of redemption - Nature and scope of - When can be exercised and when extinguished - Held: Right of redemption C is a statutory right - A mortgage being a security for the debt, the right of redemption continues although the mortgagor fails to pay the debt on the due date - Any provision inserted to prevent, evade or hamper redempti<y1 is void - Right of redemption is an incident of a subsisting mortgage and o subsists so long as the mortgage itself subsists - It stands extinguished on execution of conveyance and the registration of transfer of the mortgagor's interest by registered instrument or by decree of a court - Dismissal of an earlier suit for redemption whether as abated or as withdrawn or in default E would not debar the mortgagor from filing a second suit for redemption so long as the mortgage subsists - On facts, no sale/transfer worth the name of the mortgaged property had taken place in favour of the contender of the mortgaged property - There was no concluded contract between. the F contender and the mortgagee - Thus, it cannot be said that that the mortgagor had lost its right to redeem the mortgaged property or that by the acts of the contender for the mortgaged property and mortgagee, the right of the mortgagor to redeem the property was extinguished - Acceptance of proposal of the G mortgagor by the mortgagee to permit it to redeem the property cannot be said to be illegal in any manner - The statutory right of redemption available to the mortgagor was never Jost - Mortgage. 569 H 570 SUPREME COURT REPORTS [2011] 7 S.C.R. A Constitution of India, 1950 - Article 136 - Special Leave Petition filed against the order passed in the application filed in writ petition by which the status-quo order granted earlier was modified as well as SLP filed against the order passed in another writ petition permitting withdrawal of the writ petition B - Maintainability of - Held: Petitions filed under Article 136 should not be rejected on the ground of availability of alternative remedy nor it should be rejected on the ground that SLP is filed against order permitting withdrawal of writ petition. Respondent No. 3 company took loan of Rs. 7.00 C crores from the respondent No. 1 company against mortgage of the property. It also took loan from respondent No. 2-State Bank of India. Respondent no. 3 was unable to repay the loan amount and respondent No. 1 attached the property of respondent No. 3. Thereafter, D respondent No. 1 made several attempts to auction the property. By private negotiation respondent No. 1 accepted the proposal of appellant-trust to sell the said property for a sum of Rs.12.99 crores and informed respondent No. 3 as also gave them three days time to E bring in matching offers. Res'pondent No. 3 made an offer through third party 'C' for Rs. 14 crores but respondent No. 1 did not consider the same. Aggrieved, respondent No. 3 filed Writ Petition No. 19 of 2006. The appellant was impleaded in the petition. During the pendency of the writ F petition, the appellant trus~ issued cheques to respondent No. 1, purporting to be in full payment. The High Court dismissed the writ petition holding that there was a concluded contract between respondent No. 1 and the appellant. Thereafter, the unit holders in the hotel project G of respondent No. 3 filed Writ Petition No. 124 of 2006 challenging the action of respondent No. 1 in selling the property to the appellant-trust. They offered to pay higher amount than offered by the appellant-trust and the same was conveyed to the respondent No. 1. H L.K. TRUST v. EDC LTD. & ORS. 571 Aggrieved, against the dismissal of the Writ Petition A No. 19 of 2006, respondent No. 3 filed Special Leave Petition. This Court rejected the highest offer made by responde.nt No. 3 through third party and dismissed the SLP on August 24, 2006. The Board of Directors of respondent No. 1 were not informed that the appellant- B trust had defaulted in making the balance payment and as such they rejected the offer made by respondent No. 3 through 'C'. Thereafter, the Board of Directors noted that the cheques issued by the appellant-trust were dishonoured and resolved to accept the higher bid of c offe
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