SYNDICATE BANK versus ESTATE OFFICER & MANAGER, A.P.I.I.C. LTD. & ORS.

Citation: [2007] 9 S.C.R. 619 · Decided: 30-08-2007 · Supreme Court of India · Bench: S.B. SINHA, MARKANDEY KATJU · Disposal: Matter referred to larger bench
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Judgment (excerpt)

SYNOICA TE BANK 
A 
v. 
ESTA TE OFFICER & MANAGER, A.P.1.1.C. LTD. & ORS. 
AUGUST 30, 2007 
(S.B.SINHAANDMARKANDEYKATJU,JJ.J 
B 
Transfer of Property Act, 1882: 
ss. 54 and 58-Mortgage of land by allottee-Necessity of showing 
complete/good title and depositing of all the documents of titl(!-land allotted C 
to a Company for setting up an industrial unit-Allotment letter issued to 
Company-50% of the total cost deposited by company-Agreement be"'!'een 
the Industrial Corporation and the Company stipulating that on full payment 
oj entire consideration amount, sale deed would be executed and registered 
in the name of company-Company permitted to mortgage the land to any D 
scheduled bank to obtain financial assistance to the project-Company 
obtaining loan by mortgaging land with the bank on the basis of allotment 
letter and the said permission-Validity of mortgage-HELD: There is no 
clear authority on the question as to whether in absence of any title deed, 
the property can be a subject matter of mortgage-Besides, the effect of an 
admission by an authorized representative of the State having regard to the E 
rules of executive business or otherwise vis-a-vis the appellant-Bank also 
requires consideration-Keeping in view the importance of the issues, the 
questions: whether for satisfying the requirement of s.58(j) of the Act, it was 
necessary to deposit documents showing complete title or good title and 
whether all the documents of title to the property were required to be F 
deposited; and whether in all such cases, the property should have been 
acquired by reason of a registered document, require consideration by a 
larger bench so that an authoritative pronouncement can be made thereupon. 
Bank of India v. Abhay D. Narottam and Ors., (20051 11 SCC 520; 
Alapati Venkataramiah v. Commissioner of Income Tax, Hyderabad, (196513 G 
SCR 567; KJ. Nathan v. S. V. Maruty Reddy and Ors., (19641 6 SCR 727; 
1 -4.. 
Angu Pillai and Ors. v. MS.M Kasiviswanathan Chettiar and Ors., AIR (1974) 
Mad. 16; MM T. C. Ltd v. S. Mohamed Gani and Anr. AIR 2002 Mad. 378 and 
Amulya Gopal Majumdar v. United Industrial Bank Ltd. and Ors., AIR (1981) 
619 
H 
620 
SUPREME COURT REPORTS 
[2007] 9 S.C.R. 
A Cal. 404, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7824-7828 of 
2004. 
From the final Judgment and Order dated 6.8.2003 of the High Court of 
B Andhra Pradesh in Writ Petition Nos. 14174, 24502, 36133 and 24060 of 1998 
and 17443 ofl999. 
c 
WITH 
C.A. Nos. 7833-7837 of2004. 
Adarsh B. Dial, Sum~ti Anand and Rajiv Nanda for the Appellant. 
Vahanavati, Solicitor General, A.K. Ganguli, K. Ramamurthy, H.S. Gururaja, 
Devdath Karnath, T. Anamika, Guntur Prabhakar, S. Madhusudhan Basu, 
Mukesh K. Giri, Manoj Saxena, Rajnish Kumar Singh, Rahul Shukla, T. V. 
D George, Jayant Muthuraj (for C.K. Sasi), Manik Karanjawala and Anil Kumar 
Tandale for the· Respondents. 
E 
The Order of the Court was delivered by 
ORDER 
On or about 19.03.1969, United Auto Tractor Ltd'. (for short, 'the 
Company') filed an application before the St~te.Government for allotment of 
l 00 acres of land in the industrial area for setting up an industrial unit for the 
purpose of manufacture of agricultural tractors and implements. The 
Government of Andhra Pradesh pursuant to or in furtherance thereof made 
F allotment of 5 I acres of land in the Industrial Development Area, Nacharam, 
Andhra Pradesh to the Company for the aforementioned purpose in tenns of 
an order dated 18.07.1972. On 03.0.8.1972, an agreement was·entered into by 
and between the Government ?f Andhra Pradesh and the Company in relation 
thereto; some of the tenns and conditions whereof are as under : 
G 
"6. 
Only on the. completion and full payment of the er.tire 
H 
consideration amount, the sale deed shall be executed apd 
registered in the name of the Company. 
8(a) Without prejudice to the rights of the State Bank of India or any 
SYNDICATEBANKv.ESTATEOFFICER&MANAGER,A.P.l.l.C.LTD.621 
other financing agency approved by the Government as first A 
mortgagees, Government have a second charge on the land, 
buildings, plant and machinery which shall be converted into a 
first charge when the obligation of the financing agencies are 
liquidated. 
8(b) If the Financing Institutions were to advance more than 60% of B 
the value of the land, building, machinery and structure, prior 
agreement of the Government will be required. 
JOO( 
JOO( 
JOO( 
13. The company shall bear, pay
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