M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED versus STATE BANK OF INDIA & ORS.

Citation: [2020] 7 S.C.R. 626 · Decided: 24-04-2020 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Case Partly allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 7 S.C.R.
M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED
v.
STATE BANK OF INDIA & ORS.
(Civil Appeal No. 2373 of 2020)
APRIL 24, 2020
[A. M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Debt – Recovery of – Return of original documents deposited
with DRT – Respondent no. 3-borrower had availed of financial
credit from the bank, for which the respondent no. 2-guarantor
had offered its immovable property by way of mortgage to the Bank
– The borrower committed default – The bank filed O.A. No.
11/2008 before the DRT – Thereafter, took symbolic possession of
the secured assets – The guarantor filed a petition challenging the
possession notice by the bank, which came to be rejected by the
DRT – The secured assets were auctioned and a sale certificate in
respect of the secured assets was issued to the appellant – Before
the auction was finalised, the bank had moved an application before
the DRT for return of the original documents to hand over the same
to the auction purchaser upon issue of sale certificate – That
application was rejected by the DRT on the ground that the issue
was raised by the guarantor that there was no valid mortgage as
the same was created by incompetent persons and the said issue
was still to be examined by DRT in O.A. No. 11/2008 – However, the
DRAT reversed the decision of DRT and directed return of original
documents – Aggrieved, guarantor filed writ petition before the High
Court and the order passed by the DRT was restored – Before the
Supreme Court, in addition to the validity of mortgage, it was also
contended that the sale certificate issued by the Bank refers to a
land bearing Paimash no. 722/4 and the ancestors of respondent
nos. 11 & 12 were owners of the said land – Thus, the said land
could not have been made subject matter of mortgage in favour of
the bank, as the guarantor had no title over it – Held: The guarantor
has successively raised the issue regarding the validity of subject
mortgage in different proceedings unsuccessfully – The concerned
forum/Court unambiguously rejected the same – More importantly,
the guarantor through its director had offered to pay the entire
[2020] 7 S.C.R. 626
626
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outstanding dues and also admitted on affidavit the factum of
existence of subject mortgage in favour of the bank – Now, the
guarantor cannot be permitted to resile from the admission of its
liability – Notably, the auction sale stands concluded in favour of
the appellant – Resultantly, the Bank is under legal obligation to
handover the title deeds or the original documents – As far as the
land bearing Paimash no.722/4 is concerned, 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 said extent of land referred to in the decree passed
by the District Court in favour of the respondent no. 11, 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 is made by DRT – Therefore, the operative order
of the DRAT is modified to the effect that application filed by the
bank is partly allowed by ordering return of the original documents,
except in respect of the land bearing Paimash No. 722/4 – Therefore,
the impugned decision of the High Court is reversed.
Partly allowing the appeal, the Court
HELD: 1. Suffice it to observe that the guarantor has
successively raised the issue regarding the validity of subject
mortgage in different proceedings unsuccessfully. 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 sale. [Para 14][645-G-H; 646-
A-B]
2. The sale certificate, as issued by the Bank, does make
reference to land bearing survey No

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