M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITEDversusSTATE BANK OF INDIA & ORS.

626                     [2020]REPORTS
              SUPREME COURT    7 S.C.R. 626               [2020] 7 S.C.R.


A          M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED
                                       v.
                      STATE BANK OF INDIA & ORS.
                        (Civil Appeal No. 2373 of 2020)
B                               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
C     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
D     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
E     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
F     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
G     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
H
                                      626
    M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                       627
              STATE BANK OF INDIA & ORS.

outstanding dues and also admitted on affidavit the factum of            A
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       B
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       C
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,
                                                                         D
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          E
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           F
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          G
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. 282, which inter alia,
consists of old Paimash No. 722/4. Therefore, to the extent of           H
628           SUPREME COURT REPORTS                      [2020] 7 S.C.R.


A     land referred to in the decree dated 16.2.1990 passed by the
      Court of District Munsiff, Chengalpattu in O.S. No. 186/1976 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. This Court says so because the decree passed by the
B
      Court of competent jurisdiction, which had attained finality with
      the dismissal of the special leave petition by this Court on
      11.5.1992 cannot be disregarded. The fact that other proceedings,
      including about the title in respect of land admeasuring 1.80 acres
      bearing Paimash No. 722/4 are pending between the parties,
C     cannot be the basis to overlook the claim of the respondent No.
      11 until a Court of competent jurisdiction declares that the
      respondent No. 11 had no subsisting right, title or interest in
      that property. [Para 16][646-F-H; 647-A]
            3. Although this Court is inclined to reverse the impugned
D     decision of the High Court, however, considering the nature of
      controversy, it may be appropriate to modify the operative order
      of the DRAT to the effect that the application filed by the Bank
      being I.A. No. 995/2017 in O.A. No. 11/2008 is partly allowed by
      ordering return of the original documents, except in respect of
      the land bearing Paimash No. 722/4 admeasuring 1.80 acres being
E     subject matter of decree in O.S. No. 186/1976. [Para 20][648-D-
      E]
            Transcore v. Union of India & Anr. (2008) 1 SCC 125 :
            [2006] 9 Suppl. SCR 785; Authorised Officer, Indian
            Overseas Bank & Anr. v. Ashok Saw Mill (2009) 8 SCC
F           366 : [2009] 11 SCR 599; Standard Chartered Bank v.
            Dharminder Bhohi & Ors. (2013) 15 SCC 341 : [2013]
            9 SCR 410; Axis Bank v. SBS Organics Private Limited
            & Anr. (2016) 12 SCC 18 : [2016] 2 SCR 920; M.D.
            Frozen Foods Exports Private Limited & Ors. v. Hero
G           Fincorp Limited (2017) 16 SCC 741 : [2017] 13 SCR
            800; Shakeena & Anr. v. Bank of India & Ors. (2019)
            SCC OnLine SC 1059; E. Subbulakshmi v. State of Tamil
            Nadu through Secretary to Government & Ors. (2017)
            1 SCC 757; The Ahmedabad Municipal Corporation
            of the City of Ahmedabad v. Haji Abdulgafur Haji
H           Hussenbhai (1971) 1 SCC 757 – referred to.
    M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                         629
              STATE BANK OF INDIA & ORS.

                        Case Law Reference                                 A
[2006] 9 Suppl. SCR 785          referred to              Para 7
[2009] 11 SCR 599                referred to              Para 7
[2013] 9 SCR 410                 referred to              Para 7
[2016] 2 SCR 920                 referred to              Para 7           B
[2017] 13 SCR 800                referred to              Para 7
(2017) 1 SCC 757                 referred to              Para 7
(1971) 1 SCC 757                 referred to              Para 7
                                                                           C
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2373
of 2020.
      From the Judgment and Order dated 06.09.2019 of the High Court
of Judicature at Madras in W.P. No. 11522 of 2019.
      Tushar Mehta, SG, Vinay Prabhakar Navare, V. Giri, Gopal             D
Shankarnarayan, Sr. Advs., A. Radhakrishnan, Sanjay Kapur, Harshal
Narayan, Ms. Megha Karnwal, C.S. Kiran, P. Ravishankar Rao, Amith,
Aswathi M.K., Ms. M. Venmani, Ms. Gayathri Verma, Ms. Shivani Jena,
G. Venkateswaramoorthy, S. Gowthaman, Advs. for the appearing parties.
      The Judgment of the Court was delivered by                           E
      A. M. KHANWILKAR, J.
      1. Leave granted.
       2. This appeal takes exception to the judgment and order dated
6.9.2019 passed by the High Court of Judicature at Madras (for short,
                                                                           F
“the High Court”) in Writ Petition No. 11522/2019, whereby the High
Court reversed the order dated 29.3.2019 passed by the Debts Recovery
Appellate Tribunal (for short, “the DRAT”) at Chennai in M.A. No. 90/
2018 allowing the application filed by the respondent No. 1 - State Bank
of India (for short, “the Bank”) before the Debts Recovery Tribunal (for
short, “the DRT”) at Madurai being I.A. No. 995/2017 in O.A. No. 11/       G
2008, directing return of original documents – Exhibits A110 to A114
deposited by the Bank before the DRT in O.A. No. 11/2008. In other
words, the High Court affirmed the order of the DRT rejecting subject
application.
                                                                           H
630            SUPREME COURT REPORTS                          [2020] 7 S.C.R.


A            3. Shorn of unnecessary factual matrix, suffice it to observe that
      the respondent No. 3 – M/s. Rukmini Mills Ltd. (for short, “the borrower”)
      had availed of financial credit from the Bank, for which the respondent
      No. 2 – Associated Trading Corporation Pvt. Ltd. (for short, “the
      guarantor”) had offered its immovable property by way of mortgage to
      the Bank. The borrower committed default, as a result of which the
B
      Bank declared it as a Non-Performing Asset (for short, “NPA”) and
      then proceeded to file O.A. No. 11/2008 before the DRT at Madurai.
      The Bank also issued notice for taking symbolic possession of the secured
      assets, on 13.5.2008 and after considering the reply of the guarantor,
      took symbolic possession of the secured assets on 15.10.2008. The
C     guarantor filed a petition being SA No. 225/2008 before the DRT at
      Madurai, challenging the possession notice dated 15.10.2008 issued by
      the Bank under Section 13(4) of the Securitisation and Reconstruction
      of Financial Assets and Enforcement of Security Interest Act, 2002 (for
      short, “the 2002 Act”), which came to be rejected by the DRT on
      10.2.2011. The guarantor then filed an appeal being AIR(SA) No.
D
      222/2011 against this decision, which was dismissed on 8.2.2013 on the
      ground of non-payment of pre-deposit amount. The guarantor did not
      carry that matter any further.
             4. The secured assets offered by the guarantor were eventually
      put up for public auction by the Bank for recovery of outstanding dues to
E     the extent of Rs.350.12 lakhs. The appellant ultimately turned out to be
      the highest bidder in the e-auction conducted by the Bank on 28.2.2017.
      Sale certificate in respect of the secured assets purchased by the
      appellant in public auction conducted by the Bank, was issued on
      29.4.2017. Before the auction was finalised in favour of the appellant,
F     the Bank had already moved an application before the DRT being I.A.
      No. 995/2017 in O.A. No. 11/2008 for return of the original documents
      deposited with the DRT, as the Bank would be obliged to hand over the
      same to the auction purchaser upon issue of sale certificate. That
      application was rejected by the DRT on 9.11.2018, essentially on the
      ground that the issue raised by the guarantor that there was no valid
G     mortgage in respect of the secured assets referred to as ‘B’ schedule
      properties and that equitable mortgage in respect of the said properties
      have been created by incompetent persons, was still to be examined by
      the DRT in the main proceedings being O.A. No. 11/2008. The DRT
      rejected the application for the following reasons: -
H
 M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                             631
STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

   “4……. it was decided that the property absolutely belonged to            A
   them and that therefore, any mortgage created in respect of their
   property is illegal and void and that the petitioner bank has itself
   stated in para-5 & 6 of the counter proof affidavit that D-10 &
   D-11 have been added as parties to the OA, since they claim over
   a part of the ‘B’ schedule property mortgaged by D-4 company
                                                                            B
   and that in order to avoid multiplicity of proceedings, D-8 to D-11
   have been added as parties to the Original Application for better
   adjudication of respective claim over the mortgaged properties.
   The Ld. Counsel for R-10 further contended that the marked
   documents cannot be returned unless final order is passed in the
   main OA and that if the documents are handed over to the auction         C
   purchaser, before passing of final order, it will create more problems
   and multiplicity of proceedings and that therefore, the petition is
   liable to be dismissed.
   5. Even though, R-2 & R-3 who are said to represent the R-1 mill
   used to appear before in person before this Tribunal for all hearings,   D
   neither filed any counter statement nor did advance any argument.
   Similarly, the R-5, who is represented by his counsel neither filed
   any counter statement nor did advance argument.
   6. The petitioner bank has filed the original application OA No.
   11/2008 against the Respondents 1 to 11 herein, who are                  E
   the Defendants-1 to 11, for recovery of sum of Rs.25,49,19,820.41
   ps/- with future interest thereon. The contention of the petitioner
   bank with regard to creation of equitable mortgage over the OA
   ‘B’ Schedule mentioned properties by R-4 company, in favour of
   the petitioner bank for the above said loan facilities availed by
   R-1 company has been stoutly denied by R-4 company, in its written       F
   statement, filed in the OA. There is no dispute with regard to sale
   of some of the OA’B’ Schedule mentioned properties in the
   e-auction held on 28.02.17 under the SARFAESI proceedings
   initiated by the petitioner bank herein, to M/s. Tripower Enterprise
   Pvt. Ltd., Chennai-115.                                                  G
   7. R-4 company has filed its written statement in the OA, wherein
   it has been alleged that no valid mortgage over OA ‘B’ schedule
   properties had been created by R-4 company and that equitable
   mortgage over the above said properties had been created by
   incompetent persons on behalf of R-4 company by fabricating              H
632            SUPREME COURT REPORTS                             [2020] 7 S.C.R.


A           false records. But the rival contention of the petitioner bank is
            that valid equitable mortgage has been created over the above
            said properties by R-4 company. This vital issue has to be decided
            only after conclusion of the inquiry in the original application pending
            before this Tribunal. In the meanwhile, this petition has been filed
            for return of the original documents, which have been marked as
B
            Exh. A-110 to A-114.
            8. The mere reason that R-4 company and R-10 have not raised
            the above said issue during the SARFAESI proceedings, cannot
            be a valid reason to strengthen the contention of the petitioner
            bank that R-4 company & R-10 cannot raise this objection in the
C           original application, since the SARFAESI proceedings are of
            summary proceedings in nature. In the original application, all the
            contesting defendants have filed their written statement and that
            OA has reached the stage for inquiry. Therefore, this Tribunal is
            of the considered view that the issue as to whether there is valid
D           creation of equitable mortgage over the OA ‘B’ schedule
            mentioned properties, has to be decided only in the original
            application, along with the issue as to whether the petitioner bank
            is entitled for recovery of sum of Rs.25,49,19,820.41ps/- and with
            future interest thereon. Further the documents, which are sought
            for by the petitioner bank, have already been marked as Exh.A-
E           110 to A-114. Therefore, passing an order in this petition for
            return of the above mentioned documents to the petitioner bank
            would cause prejudice, at this stage, to decide the vital issue as to
            whether valid mortgage has been created over some of the OA
            ‘B’ schedule properties by R-4 company.
F           In view of the foregoing reasons, this petition stand dismissed.”
             The Bank carried the matter in appeal before the DRAT at Chennai
      by way of M.A. No. 90/2018. The DRAT, however, reversed the decision
      of the DRT and observed thus: -

G           “7. On careful perusal of pleadings of parties and submission of
            counsel of parties and record, it becomes clear that R4 has
            preferred an appeal against order passed in SA 225/2008. But it
            was dismissed for want of compliance OD pre-deposit. On
            09.06.2015, in OA 11/2008 by way of IA 357, 3544448, 359,
            Mr. Balasubramanian and Mr. Thiagarajan brought some facts
H
 M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                          633
STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

   on record regarding objections pertains to signature of               A
   memorandum of deposit of titles deeds by unauthorised persons.
   The record reveals that borrowers/guarantors availed loan from
   appellant bank decaded ago (i.e.) in the years 1990, relationship
   between bank and guarantor had taken and for loan of R1
   company R4 company stood as guarantor and behind both
                                                                         B
   companies the same person was the instrument. It can safely be
   presumed and inferred that loan was availed by common
   predecessor of respondents/defendants who floated various
   Companies according to need and convenience in such a
   background if OA filed in the year 2008 was kept pending even
   after 10 years, then bank had a right for recovery of money. In       C
   this background, bank had proceeded for sale of property in the
   year 2017 and bonfire auction purchaser has spent more than
   Rs.60 crores on it. In such a situation, the memo of part
   satisfaction of IA should have been taken on record in that spirit
   only.
                                                                         D
   8. In so far as disputes regarding ownership of the company
   between brothers and extended relatives should not adversely
   affect the right of recovery. Such disputes are endless. Bonafides
   of defaulters can be perceived and presumed if they were willing
   to repay the dues. During the course of arguments also it was
   transpired that R-4 is not feeling himself liable for any repayment   E
   whatsoever. The SARFAESI appeal filed by R-4 in the year 2008
   itself had attained finality. In such a situation recovery made by
   bank under SARFAESI Act should be acknowledged and respected
   for all purposes. The dispute/battle between family members of
   defaulters should not create or cause or prejudice against bank or    F
   bonfire purchaser. When seeing the gestures of repayments to be
   made by respondents, their objection cannot be created as a sign
   of honesty and bonfires. Rather they can be presumed as a culprit
   and deferring the recovery proceedings.
   9. In this back drop, IA filed by bank deserves to be allowed and     G
   it should have been allowed by presiding officer. The bank has to
   receive the relevant five documents after keeping the photocopy
   of documents on record because bank has also a responsibility
   towards auction purchaser who had spent [sic] a sum of more
   than Rs.60 crores about two years ago.
                                                                         H
634            SUPREME COURT REPORTS                           [2020] 7 S.C.R.


A           10. Hence, Appeal stands allowed and impugned order is set aside.
            It is made clear that this tribunal has not expressed any opinion
            about legality of mortgage. The presiding officer will decide this
            issue on merits after hearing of parties according to law without
            being influenced by this order at all. Simply in view of the fact
            that bank had a recovery of a sum of Rs.60 crores and defaulters
B
            are not willing and has no capacity of sum of Rs.60 crores and
            defaulters are not willing and has no capacity of such payment,
            impugned order is set aside. DRT will return the documents to the
            bank for further proceedings and presiding Officer will adjudicate
            the OA after hearing both parties according to law.
C           11. Impugned order is set aside.”
           Accordingly, the DRAT allowed the application preferred by the
      Bank and directed return of the original documents - Exhibits A110 to
      A114 to the Bank.
D            5. Feeling aggrieved, the guarantor filed a writ petition before the
      High Court, being Writ Petition No. 11522/2019. The High Court, after
      considering the factual matrix, was pleased to restore the order passed
      by the DRT, rejecting the application preferred by the Bank. For doing
      so, the High Court observed as follows: -

E           “10. On a careful consideration of the materials available on record,
            the judgment relied upon by the learned counsel appearing for the
            1st respondent and the submissions made by the learned counsel
            on either side, it could be seen that O.A. No. 11 of 2008 was filed
            by the 1 st respondent-Bank for recovery of a sum of
            Rs.25,49,19,820.41 together with future interest. Schedule ‘B’ in
F           the Schedule of properties mentioned in O.A. No. 11 of 2008 was
            sold in e-auction on 28.02.2017 for a sale consideration of
            Rs.60,25,00,000/- under the SARFAESI proceedings to the auction
            purchaser, viz., M/s. Tripower Enterprises Private Limited and
            the sale certificate was also issued in their favour. However, the
G           auction purchaser, is not a party either in the Original Application
            or in this Writ Petition. The 1st respondent also filed a memo for
            recording part satisfaction.
            11. It is also not in dispute that the sale made in favour of
            M/s. Tripower Enterprises Private Limited by the 1st respondent-
            Bank has not been challenged by the petitioner Company, who
H
 M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                             635
STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

   claimed title to the property. The petitioner has challenged the         A
   possession notice dated 10.02.2011 in S.A. No. 225 of 2008 and
   the same was dismissed by the Debts Recovery Tribunal.
   However, the Tribunal did not go into the other issues relating to
   the subsequent extension of the mortgage done by the persons,
   since the proceedings under Section 17 of the SARFAESI Act is
                                                                            B
   summary proceedings.
   12. The petitioner contended that there is no valid creation of
   mortgage or extension of mortgage over the Schedule ‘B’ property.
   The respondents 10 and 11 claimed that the property originally
   belonged to their father and by virtue of the decree granted by a
   competent Civil Court, declaring them as absolute owners of an           C
   extent of 1.80 acres, they became the absolute owners. Further,
   the 10th respondent has stated that out of the extent of 1.80 acres,
   an extent of 1.40 acres was acquired by the Government for Thillai
   Ganga Nagar Subway and in the remaining 40 cents, some extent
   of properties were sold to third parties and therefore, the petitioner   D
   could not have mortgaged an extent of 1.80 acres with the 1st
   respondent-Bank. The petitioner also contended that there was
   no valid mortgage in respect of Schedule ‘B’ property mentioned
   in O.A.No.11 of 2008 and the mortgage was created by an
   incompetent person on behalf of the petitioner Company by
   fabricating false records.                                               E

   13. The case put up by the respective parties is a matter for
   evidence and the same can be decided only after the conclusion
   of the trial in the Original Application pending before the Debts
   Recovery Tribunal. The original documents were marked as
   Exs.A110 to A114 in O.A.No.11 of 2008. The Debts Recovery                F
   Tribunal, while disposing of the application, observed that the
   Original Application has reached the stage of inquiry and therefore,
   the Tribunal was of the view that the issue as to whether there
   was valid creation of equitable mortgage over the Schedule ‘B’
   property mentioned in the O.A.No.11 of 2008 has to be decided            G
   only in the Original Application, along with the issue as to whether
   the 1st respondent-Bank is entitled for recovery of the amount
   with future interest.
   14. That apart, when the documents were marked as Exs.A110
   to A114 before the Debts Recovery Tribunal the documents cannot          H
636             SUPREME COURT REPORTS                            [2020] 7 S.C.R.


A           be allowed to be returned even before the disposal of the Original
            Application. The Debt Recovery Appellate Tribunal without
            considering the case of the parties had set aside the order of the
            Debts Recovery Tribunal finding that the sale made in favour of
            the auction purchaser has become final. When the core issue is
            with regard to creation of mortgage, the same can be decided
B
            only in the Original Application, the order passed by the Debt
            Recovery Appellate Tribunal without considering the same cannot
            stand. If the Debts Recovery Tribunal, after trial, ultimately comes
            to the conclusion that there was no valid mortgage in respect of
            the Schedule ‘B’ property mentioned in O.A.No.11 of 2008, in
C           that case, it would further complicate the dispute. The Appellate
            Tribunal, instead of setting aside the order passed by the Debts
            Recovery Tribunal, should have directed the Debts Recovery
            Tribunal to dispose of the appeal, within a time frame and further
            directed the Debts Recovery Tribunal to consider the application
            in I.A.No.995 of 2017 along with the Original Application.
D
            15. In these circumstances, we are of the considered view that in
            the interest of justice, the Debts Recovery Tribunal should retain
            the documents marked as Exs.A110 to A114 till the disposal of
            O.A.No.11 of 2008 and a direction can be given to the Debts
            Recovery Tribunal to dispose of the Original Application within a
E           time frame.”
             The High Court, however, after setting aside the order of DRAT
      at Chennai, directed remand of I.A. No. 995/2017 in O.A. No. 11/2008
      to the DRT at Madurai for deciding the same afresh and to dispose of
      the main matter bearing O.A. No. 11/2008 together, on merits and in
F     accordance with law within four months from the date of receipt of the
      said order.
            6. Feeling aggrieved, the appellant being the auction purchaser,
      has assailed the aforesaid decision of the High Court in the present
      appeal by way of special leave. The Bank has supported the stand of
G     the appellant. The thrust of the argument of the appellant is that it having
      purchased the property in a public auction conducted by the Bank
      andupon complying with necessary formalities and further, having
      received the sale certificate in that regard, in law, was entitled to get the
      original title documents in respect of the stated properties, which were
H     lying with the DRT in O.A. No. 11/2008. According to the appellant, the
      M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                          637
     STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

guarantor had filed writ petition before the High Court challenging the       A
direction issued by the DRAT vide order dated 29.3.2019 for return of
original documents despite in the past it had unsuccessfully challenged
the notice for taking possessionof the stated properties. Another petition
filed by the guarantor for issue of restraint order against the Bank to
desist from proceeding with the public auction, was also rejected.
                                                                              B
Similarly, the guarantor had unsuccessfully challenged the auction
concluded in favour of the appellant. In all these proceedings, the very
contention about the mortgage in question being invalid and created by
incompetent persons was raised and negatived. According to the appellant,
the guarantor on affidavit had admitted the factum of mortgage in question
created in favour of the Bank, and one of its Directors had also offered      C
to pay the outstanding dues of Rs.350.12 lakhs, if some more time for
payment was granted. Considering all these aspects, contends the
appellant, the High Court should not have shown any indulgence to the
guarantor and the writ petition filed by it ought to have been rejected.
Further, the High Court misdirected itself by taking into account matters
                                                                              D
disregarding the consistent opinion recorded against the guarantor by
the DRT and the DRAT and in certain proceedings, by the High Court
and even this Court.
       7. The guarantor, on the other hand, would urge that it had not
taken any loan from the Bank. The borrower had been borrowing money
from the bank against the security by deposit of title deeds and equitable    E
mortgage created on 12.4.1984. However, the Bank extended further
loans to the borrower in 1990 and 1992, to which the guarantor was not
a party. As a matter of fact, the equitable mortgage was not created by
the authorised person of the guarantor nor it was party to the extensions
of mortgage. In the proceedings before the DRT, it has been observed in       F
order dated 9.6.2015 that the documents for extension of the alleged
mortgage dated 12.4.1984, were signed by Mr. S. Balasubramaniam
(personal guarantor/respondent No. 4). It is asserted that he was never
a Director of the respondent No. 2 company/guarantor and was a
stranger to it. It is urged that the jurisdiction of DRT under the 2002 Act
is only supervisory over the actions initiated by the Bank under Section      G
13 of that Act. It cannot decide the substantial issues and disputes
regarding the genuineness or validity of the mortgage itself. Reliance is
placed on Transcore vs. Union of India & Anr.1, Authorised Officer,

1
    (2008) 1 SCC 125 (paragraph 30)                                           H
638             SUPREME COURT REPORTS                            [2020] 7 S.C.R.


A     Indian Overseas Bank & Anr. Vs. Ashok Saw Mill 2, Standard
      Chartered Bank vs. Dharminder Bhohi & Ors.3, Axis Bank vs. SBS
      Organics Private Limited & Anr. 4, M.D. Frozen Foods Exports
      Private Limited & Ors. vs. Hero Fincorp Limited5 and Shakeena &
      Anr. vs. Bank of India & Ors.6. It is then urged that the principle of res
      judicata will have no application to the opinion already recorded by the
B
      DRT or DRAT and at the same time, the guarantor cannot be denuded
      from pursuing the objection regarding validity of the mortgage in
      appropriate proceedings including in pending O.A. The guarantor has
      pointed out the similarities and dissimilarities in the 2002 Act, the Transfer
      of Property Act, 1882 and the Code of Civil Procedure, 1908 to contend
C     that the remedy under Section 13(4) of the 2002 Act is only an enabling
      provision, pending final adjudication of liability. It is urged that at least
      the cases wherein the validity of mortgage is put in issue or the factum
      of existence of mortgage itself is in dispute, will have to be dealt with in
      a different manner than a case where the factum of existence of mortgage
      is admitted. The DRT can only examine the issues regarding procedural
D
      irregularities committed by the Bank and not decide the disputed question
      about the existence or validity of the mortgage itself, unlike in proceedings
      under the Recovery of Debts and Bankruptcy Act, 1993 (for short, “the
      1993 Act”). Reliance is placed on E. Subbulakshmi vs. State of Tamil
      Nadu through Secretary to Government & Ors.7 and M.D. Frozen
E     Foods Exports Private Limited (supra). It is then urged that there is
      no warranty of title in a Court auction, much less in a public auction,
      wherein the doctrine of caveat emptor applies. Reliance is placed on
      The Ahmedabad Municipal Corporation of the City of Ahmedabad
      vs. Haji Abdulgafur Haji Hussenbhai8 to buttress the argument that it
      is imperative for the purchaser to ascertain and satisfy himself about the
F
      title of the property. It is then urged that the order passed by the DRT
      which was subject matter of challenge before the High Court was only
      an interlocutory order, for which reason this Court should be loath to
      interfere, especially when the High Court has only remanded the matter
      with direction to expeditiously dispose of the main proceedings pending
G     2
         (2009) 8 SCC 366 (paragraph 37)
      3
         (2013) 15 SCC 341 (paragraph 36)
      4
         (2016) 12 SCC 18 (paragraph 12)
      5
         (2017) 16 SCC 741 (paragraphs 27 and 33)
      6
         2019 SCC OnLine SC 1059 (paragraph 21)
      7
         (2017) 1 SCC 757
      8
H       (1971) 1 SCC 757 (paragraph 3)
   M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                               639
  STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

before the DRT since 2008. No prejudice would be caused to the appellant,       A
especially when the question regarding the validity of the mortgage of
title in respect of the stated properties itself would be decided in the
original proceedings, namely, O.A. No. 11/2008.
       8. The respondent No. 11 (A.R. Sridharan) has more or less raised
the same objection, but additionally urged that the material facts were         B
not brought to the notice of the DRT, namely, that the ancestors of
respondent Nos. 11(A.R. Sridharan) and 12 (A.R. Kannan) were the
owners and in possession of land to the extent of 1.80 acres at
Adampakkam Village at old Survey, which was known as Paimash No.
722/4. The factum of ownership of the respondent Nos. 11 and 12 has
been decided in O.A. Suit No. 186/1976, filed by their father and after         C
his demise, the same was pursued by them. The suit was decreed in
their favour in respect of 1.80 acres land at Paimash No. 722/4 and
which decree had attained finality by dismissal of special leave petition
by this Court on 11.5.1992 in view of the concurrent decisions of the trial
Court dated 16.2.1990, of the first appellate Court dated 3.1.1992 and of       D
the High Court in Second Appeal dated 6.4.1992. Besides the civil
proceedings which have attained finality, reliance is also placed on criminal
proceedings making reference to the stated property (Paimash No.
722/4). Notwithstanding this position, it is urged by the respondent
No. 11 (A.R. Sridharan) that the sale certificate issued by the Bank
refers to land admeasuring 1.80 acres bearing Paimash No. 722/4, which          E
cannot be countenanced. He stoutly urged that land bearing Paimash
No. 722/4 admeasuring 1.80 acres was not and could not have been
made the subject matter of mortgage in favour of the Bank, as the
guarantor had no title whatsoever qua that property when mortgage
was created by it. Thus, besides praying for dismissal of the appeal, he        F
has prayed that it be clarified that the mortgage and the sale certificate
could not have and had not included the property bearing Paimash
No. 722/4 admeasuring 1.80 acres, and for directing that all proceedings
conducted in whichever Court/forum must proceed on the basis that
sale certificate issued by the Bank is subject to the decree in favour of
the respondent No. 11 dated 16.2.1990 in O.S. No. 186/1976.                     G

       9. We have heard Mr. Vinay Prabhakar Navare, learned senior
counsel for the appellant, Mr. Tushar Mehta, learned Solicitor General
for the respondent No. 1 (the Bank), Mr. V. Giri, learned senior counsel
for the respondent No. 2 (the guarantor) and Mr. Gopal
Sankaranarayanan, learned senior counsel for the respondent No. 11.             H
640             SUPREME COURT REPORTS                           [2020] 7 S.C.R.


A            10. Considering the fact that the guarantor had filed writ petition
      before the High Court assailing the order passed by the DRAT, dated
      29.3.2019, allowing the application filed by the Bank for return of original
      documents, we must first address the argument of the appellant (auction
      purchaser) that the guarantor cannot be allowed to approbate and
      reprobate and moreso, in view of the unambiguous affidavit admitting
B
      the mortgage and offer given by its Director to pay the outstanding dues
      of the Bank in the earlier proceedings including the findings recorded by
      the DRT/DRAT against it in relation to the plea of validity of the mortgage
      in question.
             11. For that, we may first refer to the decision of the DRT, in
C     earliest point of time, on the petition moved by the guarantor being
      S.A. No. 225/2008 challenging the possession notice dated 15.10.2008
      issued by the Bank under Section 13(4) of the 2002 Act. In these
      proceedings, the guarantor had specifically urged that the person who
      created equitable mortgage in respect of subject property, was not an
D     authorised person of the guarantor. This issue was considered by the
      DRT in its final order dated 10.2.2011 in the following manner: -
            “(i) The Applicant is a Private Limited Company registered under
            the Company Act under the name and style of Associated Trading
            Corporation Pvt. Ltd. having the identification (SIN) No.
E           U51909IN194) PTC000011. The Respondent 2 is the borrower
            company, who has availed various credit facilities from the 1 st
            Respondent (Respondent Bank) to meet the business requirements
            since 1954. Therefore, it is clear that the Applicant is a Private
            Ltd. Company, a legal person in the eye of law, has filed the present
            Application challenging the Possession Notice dated 15.10.2008
F           issued u/s 13(4) of the SARFAESI Act, 2002 and prayed for other
            reliefs as aggrieved person through the Authorised Signatory
            Mr. Tamilselvam…..
            (ii) While negotiating the aspect of creating of financial asset, it is
            seen from the records submitted by the Respondent Bank that
G           the Applicant Company has joined the loan transaction with
            respondent 1 and 2 as guarantor and offered the schedule
            mentioned property as collateral security to the advance granted
            to M/s. Rukmani Mills Limited on 12.4.1984. Mr.
            M. Shanmugam, the then Director of the Applicant Company
H           has created unregistered equitable mortgage in favour of
 M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                           641
STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

   the Respondent Bank, by deposit of title deeds relating to             A
   the Applicant Company for the due repayment and discharge
   of liability and indebtedness of M/s. Rukmani Mills Ltd. to
   the Respondent Bank in respect of credit facilities extended
   by the bank to the M/s. Rukmani Mills Ltd. for 350.12 lakhs
   inclusive of all interest discount, commission, charges and cost
                                                                          B
   and expenses payable to and incurred by the bank in relation to
   and for all other indebtedness and liabilities of the Company, viz
   M/s. Rukmani Mills Ltd. The executants of the mortgage also
   acknowledged the maximum indebtedness to be secured
   by the said mortgage created as aforesaid on 12.04.1984
   was for, the purpose of Section 79 of the TE Act, 1882, but            C
   for no other purpose and without prejudice to fill liability to
   the Bank under the said mortgage fixed at 350.12 lakhs
   and the said charges created in favour of the Respondent
   Bank on 12.04.1984 still continues and not satisfied so far.
   Therefore, taking into consideration of the documents submitted
                                                                          D
   by the Respondent Bank, I am of the considered view that the
   aforesaid financial asset has been created in favour of the
   Respondent Bank. The Respondent Bank in the course of proving
   their claim on the mortgage has produced additional documents,
   Form-8 dated 26.04.1984 and other documents dated 07.03.1985,
   04.03.1985, 29.04.1988 and 27.09.1988 along with random of             E
   Balance Sheets, with Director’s Report and Auditors. Report
   periodically filed before ROC from the year 1985 to 1996. But it
   is pertinent to note that Mr. Balasubramanian and
   Mr. Kumarappan, who have signed these documents as Directors,
   no proof is submitted that they are the Directors as per the records
                                                                          F
   of ROC. However, the Ld. Counsel for the Respondent
   Bank would argue that the Balance sheets have been
   periodically filed by the company with ROC have been
   signed by Mr. Balasubramanian and Mr. Kumarappan and
   the same have been accepted by the ROC and kept in the
   records. (Relevant documents produced by the Respondent                G
   Bank. Therefore, it is claimed by the Ld. Counsel for the
   Respondent Bank that the periodical balance sheets filed by the
   Company up to 1996 prove that they are the people who are in
   charge, of the affairs of the Company and secured loans and the
   financial facilities, availed from the respondent Bank since the
                                                                          H
642            SUPREME COURT REPORTS                          [2020] 7 S.C.R.


A           same are reflected in the Balance Sheets and the same would
            amount to acknowledgment of debts. Therefore, the Bank is
            entitled to enforce the securities, of mortgaged properties
            for the recovery of the outstanding dues. Hence, I am of the
            considered view that the Respondent Bank has the right to initiate
            action/measures under the SARFAESI Act, 2002. Accordingly,
B
            the demand notice dated 13.05.2008 u/s 13(2) of the Act has been
            issued to the borrower/guarantors. Hence, the Question No. 2 is
            answered in favour of the Respondent Bank.”
                                                           (emphasis supplied)
C            The DRT clearly opined that the Bank had initiated measures
      under the 2002 Act by issuing a demand notice dated 13.5.2008 under
      Section 13(2) followed by possession notice dated 15.10.2008 under
      Section 13(4) of that Act. It also opined that all parties involved in the
      mortgage transactions were trying to supress or avoid giving material
      facts and information and have not approached the DRT with clean
D     hands. What is significant to notice is the fact recorded by the DRT in
      this very order in the following words: -
            “(iii)………..
            On behalf of the Applicant Company, Mr. S. Thiagarajan
E           one of the Directors of the Applicant company has filed an
            Affidavit on 27.01.2011 stating that the Applicant company
            is willing to pay a sum of Rs.350.12 lacs within the time
            frame fixed by the Tribunal (Minimum 6 months is required)
            subject to the Respondent Bank releasing the charge on
            the property of the Applicant Company in order to give
F           quietus to the matter. In my considered view this aspect is to
            be settled among the parties and the designated court DRT under
            the Act does not have scope to enter into the question of settlement
            as the SARFAESI Act, 2002 specifies that the DRT has to come
            to the conclusion as to whether any violation has been committed
G           by the respondent Bank while negotiating the measures taken by
            them under the SARFAESI Act, 2002. However, it is left open to
            the Applicant to take up the matter with Respondent Bank as still
            the Applicant has the scope to redeem the property by invoking
            the Section 13(8) of the SARFAESI Act, 2002. Hence, the
            Applicant is advised accordingly.”
H
                                                           (emphasis supplied)
   M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                                643
  STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

       The guarantor (the applicant therein) had not disputed the                A
correctness of the aforementioned finding of fact recorded by the DRT.
Mr. M. Shanmugham (respondent No. 7’s deceased father), Mr.
S. Balasubramaniam (respondent No. 4), Mr. S. Kumarappan (respondent
No. 5) and Mr. S. Thiagarajan (respondent No. 8) were the Directors of
the guarantor company. One of them – Mr. S. Thiagarajan (respondent
                                                                                 B
No. 8) had even filed affidavit before the DRT on 27.1.2011 stating that
the guarantor company was willing to pay the sum of Rs.350.12 lakhs
within the time frame fixed by the DRT to be minimum six months.
These facts clearly belie the claim of the guarantor. The guarantor cannot
be permitted to resile from the admission of its liability. Similarly, the
guarantor had filed a detailed counter affidavit in Writ Petition No.            C
710/1997, admitting the mortgage of the property with the Bank, but had
alleged fraud and fabrication of documents by the respondent No. 11
(A.R. Sridharan). That, however, cannot come to the aid of the guarantor
who had otherwise admitted its liability and the mortgage in question, in
particular.
                                                                                 D
        12. As aforesaid, the finding/opinion recorded by the DRT vide
order dated 10.2.2011 has attained finality with the dismissal of the appeal
(filed by the guarantor)before the DRAT on 8.2.2013 albeit on the ground
of failure to comply with the pre-deposit condition. The guarantor cannot
be allowed to approbate and reprobate from the commitment made in
successive proceedings before the DRT and the High Court, as referred            E
hitherto.
       13. Notably, even in the subsequent proceedings before the
DRT-III at Chennai, bearing S.I.A. SR No. 581/2015 in S.A. No.
356/2014 filed by the guarantor, for grant of injunction to restrain the
Bank from bringing the scheduled property to sale till the disposal of           F
S.A. No. 356/2014, the guarantor raised the same issue about the validity
of the subject mortgage. That was answered against the guarantor by
the DRT vide order dated 2.2.2015, in the following words: -
      “8. During the course of the submissions, the Ld. Counsel for the
      Petitioner/Applicant harped upon the second prayer in the SA at            G
      page 13 of his typed set of papers, wherein it is prayed “To restrain
      the first respondent from taking any action in respect of the
      schedule mentioned property under the provisions of the
      SARFAESI Act since no security interest has been validly created”,
      and therefore as that point is not adjudicated or fell for consideration   H
644      SUPREME COURT REPORTS                            [2020] 7 S.C.R.


A     before this tribunal, his cause survives and that the present sale
      notice is only an off shoot of it and further that his SA is still
      pending enquiry, he need not file a fresh SA and can continue the
      proceedings through this IA.
      9. From a plain reading of the above it is distinctly evident that the
B     said statement can only be a ground for agitating the sale notice
      and not any relief, although it is mentioned in the prayer column.
      As it is only a ground for agitating the sale notice which has become
      infructuous for want of bidders and a fresh sale notice has been
      issued, the cause of auction initiated in SA 356/2014 ceased and
      is no longer surviving. Whereas the Ld. Counsel is of the firm
C     opinion that owing to the ground which he had put up at Para 2 of
      in the relief column that there is no valid security interest that is
      created he says the lis survives, which this Tribunal is not able to
      concede to and feel that this application is not maintainable at this
      stage, however, not averting to earlier litigation of the finding of
D     the Hon’ble DRT, Madurai holding that a valid mortgage has indeed
      been created by the petitioner/applicant vide its order dated
      10.2.2011 passed in SA No. 225/2008, which was carried in appeal
      but was not prosecuted owing to non payment of the ordered pre-
      deposit and wherein also the Hon’ble DRAT vide its order dated
      28.1.2013 had upheld the findings of the Hon’ble DRT, Madurai
E     and insisted for a pre-deposit of 50% of the amount demanded,
      which was not complied upon and hence the appeal failed.
      10. This concludes that the mortgage in favour of the
      respondent bank is held to be valid and this Tribunal while
      examining the present application has only felt that the
F     petitioner is running litigation and thwarting the lawful
      demands of the bank by taking advantage of its own latches,
      which were also dealt in detail by the Hon’ble DRT, Madurai.
      The contention of the petitioner that no valid security
      interest is created and that the Memorandum of Association
G     and the Articles of Association of the Private Limited
      Company are not empowering the mortgagors is also
      discussed by the Ld. Presiding Officer, DRT, Madurai
      taking into the consideration the concept of Doctrine of
      Indoor Management. However the Ld. Counsel did not inform
      this Tribunal or submitted any of these issues at the time of hearing
H
   M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                             645
  STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

      but had only submitted that no valid mortgage is created and that       A
      the land values had raised meteorically.”
                                                      (emphasis supplied)
       Even this decision has become final and must operate against the
guarantor. The guarantor filed yet another application being I.A.
No. 23/2018 in O.A. No. 11/2008 for impleadment of the appellant herein       B
as the twelfth (12th) defendant in O.A. No. 11/2008, raising the same
plea of validity of mortgage in question. That has been noted and negatived
in paragraph 8 of the order of the DRT at Madurai, dated 15.2.2019 in
the following words: -
      “8. The petitioner company filed SA No. 225/2008 challenging            C
      the possession notice dated 15.10.08 issued by the R-bank. One
      of the contentions raised by the petitioner company is that there is
      no valid creation of mortgage over the properties, which are the
      subject matter of OA ‘B’ Schedule. This Tribunal passed order in
      above SA on 10.02.11 by holding that there are no violations of         D
      provisions of the SARFAESI Act 2002 in respect of issuance of
      the possession notice. A finding has been given in the above said
      order that valid security interest has been created over the above
      said properties. Admittedly, it cannot be disputed that the appeal
      preferred by the petitioner company against the above order of
      this Tribunal before the Hon’ble DRAT, Chennai was dismissed            E
      for non compliance of the conditional order passed by the Hon’ble
      DRAT, to satisfy the 2nd proviso u/s 18 of the SARFAESI Act
      2002. Therefore, the order of this Tribunal passed in SA No. 225/
      2008 still holds good.”
        The guarantor continued to raise the same plea in the application     F
being M.A. No. 92/2017 in SASR No. 4969/2017 filed before the DRT-
III at Chennai, challenging the auction sale notice dated 9.2.2017, sale
held on 28.2.2017 and consequential sale certificate issued to the
appellant herein on 29.4.2017. That application was, however, rejected
vide order dated 6.5.2019 on the ground of proceedings being barred by        G
limitation.
      14. Suffice it to observe that the guarantor has successively raised
the issue regarding the validity of subject mortgage in different
proceedings unsuccessfully. As aforestated, the concerned forum/Court
unambiguously rejected the same. More importantly, the guarantor
                                                                              H
646             SUPREME COURT REPORTS                           [2020] 7 S.C.R.


A     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
B     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.
             15. Thus understood, the High Court should have been loath in
C     entertaining the writ petition filed by the guarantor, raising the same plea
      ad nauseam. The reason weighed with the High Court, in our opinion, is
      flimsy and untenable. That cannot be countenanced at the instance of
      the guarantor. The inevitable effect of entertaining the stated plea of
      guarantor will entail encouraging vexatious plea and procrastination of
      the concluded auction sale by delaying handing over of title documents
D
      to the highest bidder, in whose favour sale certificate has already been
      issued. It is a different matter that the direction for handing over of
      original documents would ostensibly appear to be in reference to an
      interim application in the pending O.A., but that course is inevitable in
      the fact situation of the present case.
E            16. The next question is: whether despite the decree of a Court of
      competent jurisdiction in favour of respondent No. 11 (A.R. Sridharan)
      concerning land bearing Paimash No. 722/4 admeasuring 1.80 acres,
      can the documents pertaining to that land be still made over to the
      appellant/auction purchaser, merely because sale certificate has been
F     issued by the Bank in that regard? 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 extent of land
      referred to in the decree dated 16.2.1990 passed by the Court of District
      Munsiff, Chengalpattu in O.S. No. 186/1976 in favour of the respondent
      No. 11 (A.R. Sridharan), despite the issuance of sale certificate, the title
G     document in respect of old Paimash No. 722/4 ought not to be released
      until the final decision in O.A. No. 11/2008. We say so because the
      decree passed by the Court of competent jurisdiction, which had attained
      finality with the dismissal of the special leave petition by this Court on
      11.5.1992 cannot be disregarded. The fact that other proceedings,
      including aboutthe title in respect of land admeasuring 1.80 acres bearing
H     Paimash No. 722/4 are pending between the parties, cannot be the basis
   M/S. TRIPOWER ENTERPRISES (PRIVATE) LIMITED v.                              647
  STATE BANK OF INDIA & ORS. [A. M. KHANWILKAR, J.]

to overlook the claim of the respondent No. 11 (A.R. Sridharan) until a        A
Court of competent jurisdiction declares that the respondent No. 11 (A.R.
Sridharan) had no subsisting right, title or interest in that property.
        17. Reverting to the argument canvassed before us by the learned
counsel for the contesting respondents that the appeal by the appellant
ought not to be entertained, in our opinion, the same deserves to be           B
rejected. We say so because the appellant is the auction purchaser and
sale certificate has also been issued in its favour by the Bank. As a
consequence thereof, the appellant is entitled to receive the title
documents in respect of the properties referred to in the sale certificate.
The fact that the Bank did not challenge the impugned decision of the
High Court, cannot undermine the direct interest of the appellant in getting   C
the relief which was claimed by the Bank to fulfil its obligation of handing
over the original documents to the auction purchaser. Admittedly, the
appellant is party to the O.A., as well as, in the application filed by the
Bank for return of documents. The Bank has supported the stand taken
by the appellant. We find no infirmity in the appellant having approached
                                                                               D
this Court instead of the Bank, the applicant before the DRT. Even the
appellant could have itself approached the DRT for this very relief. Taking
any view of the matter, the objection under consideration is of no avail to
the contesting respondents.
       18. It was faintly urged by the contesting respondents that the
Bank had filed the application in question for return of original documents,   E
on 11.11.2016, even before the auction sale in which the appellant turned
out to be the highest bidder was conducted on 28.2.2017,or the sale
certificate issued on 29.4.2017. This argument, in our opinion, is an
argument of desperation. The same overlooks the factual matrix and the
background in which the subject application was moved by the Bank on           F
11.11.2016. By that time, the Bank had already commenced the auction
sale process. It is a different matter that the auction process had to be
repeated as no fair offer was forthcoming. In other words, the subject
application was filed by the Bank in anticipation that the auction would
be concluded and by the time the application was decided, the sale
certificate in favour of the highest bidder would have been issued. There      G
is nothing wrong in Bank moving such application before the conclusion
of the auction process and issuance of a sale certificate, in anticipation.
No provision has been brought to our notice, which prohibits such a
course to be adopted by the Bank. Accordingly, even this objection of
the respondents is rejected.
                                                                               H
648                SUPREME COURT REPORTS                         [2020] 7 S.C.R.


A            19. Both sides have invited our attention to the decisions of this
      Court on the proposition whether the DRT is competent to answer the
      question regarding validity of the subject mortgage and also res judicata.
      We do not wish to dilate on the said decisions as the factum of validity of
      mortgage need not detain us, in the facts of the present case. Similarly,
      the issue of res judicata will be of no avail in light of the unambiguous
B
      stand taken by and on behalf of the guarantor, acknowledging the mortgage
      in question and also offering to pay all the outstanding dues of the Bank.
      Further, the O.A. is still pending before the DRT, in which both the
      parties would be free to urge all contentions, as may be permissible in
      law. The DRT may consider those contentions appropriately. In the present
C     appeal, we must confine our consideration as to whether the DRT ought
      to have allowed the application filed by the Bank for return of original
      documents in view of peculiar indisputable facts of this case. For the
      reasons already recorded, we have no hesitation in reversing the decision
      of the High Court and hold that it ought not to have entertained the writ
      petition filed by the guarantor.
D
              20. Although we are inclined to reverse the impugned decision of
      the High Court, however, for the nature of controversy brought before
      us, it may be appropriate to modify the operative order of the DRAT to
      the effect that the application filed by the Bank being I.A. No. 995/2017
      in O.A. No. 11/2008 is partly allowed by ordering return of the original
E     documents, except in respect of the land bearing Paimash No. 722/4
      admeasuring 1.80 acres being subject matter of decree in O.S. No.
      186/1976. This arrangement will meet the ends of justice in the facts of
      the present case.
             21. We make it clear that the parties are free to raise all contentions
F     available to them on facts and in law before the DRT in the pending
      O.A. No. 11/2008, which need to be decided on their own merits in
      accordance with law. In other words, the DRT will be free to pass
      appropriate directions in respect of the stated documents including in
      respect of the title documents made over to the appellant herein in terms
G     of this order, if necessary.
             22. Accordingly, we partly allow this appeal in the above terms
      with no order as to costs. Pending interlocutory applications, if any, shall
      also stand disposed of.

H     Ankit Gyan                                                Appeal partly allowed.