P.K. Jagdev v Indian Bank and Ushashree

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE GOPINATH P.** **TUESDAY, THE 19[TH] DAY OF MARCH 2024 / 29TH PHALGUNA, 1945** ## **WP(C) NO. 749 OF 2021** ## **PETITIONER/S:** **P.K.JAGDEV, AGED 54 YEARS, S/O.KAYATH PREMDEV, SUNDARA BHAVAN, ASRAMAM, KOLLAM-691 002.** **BY ADVS. K.N.SIVASANKARAN SUNIL SHANKER** ## **RESPONDENT/S:** |**1**|**INDIAN BANK,**| |---|---| ||**HAVING ITS HEAD OFFICE AT NO.31, RAJAJI SALAI,**| ||**CHENNAI-600 001, AND BRANCHES ALL OVER INDIA AND**| ||**KOLLAM BRANCH AT MAIN ROAD, KOLLAM, KERALA-691 001,**| ||**REPRESENTED BY ITS MANAGER.**| |**2**|**USHASHREE,**| ||**"SAI CASHEW", PRASANTHI CASHEW COMPANY, KOCHALUMOODU,**| ||**KOLLAM-691 001.**| **BY ADVS. N.D.PREMACHANDRAN D.AJITHKUMAR** ## **OTHER PRESENT:** **SRI. S EASWARAN (SC)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P (C) No.749/2021 -2- **==> picture [32 x 11] intentionally omitted <==** ## **J U D G M E N T** The petitioner has approached this court challenging Ext.P3 order of the Debts Recovery Tribunal, Ernakulam, on T.S.A No.47/2016 arising out of S.A No.271/2008 filed before the Debts Recovery Tribunal, Chennai and also Exhibit P5 is the order of the Debts Recovery Appellate Tribunal on R.A (SA) 182/2018 dismissing the appeal filed by the petitioner against Ext.P3 order. **The facts which are to be noticed for the adjudication of the issues arising for consideration may be briefly noticed:-** 2. The petitioner is the grandson of the late N. Sundareswaran who was the Managing Partner of a registered partnership firm - namely M/s N.Sundareswaran (hereinafter referred to as ‘the firm’). The firm was engaged in the business of processing and exporting cashews and was enjoying credit facilities from the Indian Bank through its Kollam branch. Though the business of the partnership firm continued fairly successfully till the year 1980-81, it appears that the business of the firm ran into rough weather, leading to the mounting of liabilities with the Indian Bank. Considering the long banking relationship with the firm, the Indian Bank extended a _'revival and rehabilitation package'_ to the firm. Even thereafter, the firm's business did not pick up, and finally, the bank decided to initiate proceedings for W.P (C) No.749/2021 -3- recovery of the amounts due to it. The bank filed an original application under the provisions of the Recovery of Debts and Bankruptcy Act, 1993 (In short 'the 1993 Act) before the Debts Recovery Tribunal at Chennai, which is now transferred and pending before the Debts Recovery Tribunal-II, Ernakulam, as TA 1/2005. It may be noted here that the petitioner, the grandson of the late N. Sundareswaran and the son of one of the partners of the firm (Smt. Vijayalakshmi) is not a party in the proceedings under the 1993 Act. The bank also initiated proceedings under the SARFAESI Act, leading to the issuance of a sale notice published on 14-06-2008, which is on record as Annexure-II, along with Ext.P1 Securitisation Application filed before the Tribunal. In terms of that notice, a sum of Rs. 112,04,05,628.14 (Rupees One hundred and twelve crores, four lakhs five thousand six hundred and twenty eight and fourteen paise) was due as of 31.07.2007. The properties mentioned in that notice were sold on 24-07-2008. According to the petitioner, the entire extent of the property was purchased by the 2[nd] respondent for Rs.4,45,50,000/-. 3. A parcel of the property having an extent of 16 ares and 18.8 Sq. Mtr in Sy No.9658 of Kollam Village (forming part of the properties sold) was settled on the petitioner and his sister through a settlement deed dated 20-121979 executed by his mother - Smt. Vijayalakshmi. The petitioner also claims W.P (C) No.749/2021 -4- that under a Will executed by late N. Sundareswaran, the petitioner became entitled to some further extent of property belonging to late N. Sundareswaran. It is the case of the petitioner that there is no valid mortgage in respect of the property settled in favour of the petitioner and his sister by their mother - Vijayalakshmi as only an attested copy of the document executed on 12-12-1969 had been deposited to create the mortgage. It is the case of the petitioner that there was no notice of the sale to the petitioner. It is the case of the petitioner that when the bank extended the renewal and rehabilitation package in the year 1991, it ought to have been aware of the settlement deed executed in the year 1979 and, therefore, the petitioner was also entitled to put on notice regarding the sale. It is the case of the petitioner that there was no proper valuation of the properties brought to sale through Annexure-II notice in Ext.P.1 before the sale was conducted. Certain discrepancies in the extent mentioned in the valuation report, which is on record along with the written statement filed by the bank before the Tribunal, are referred to demonstrate that the sale was conducted without proper valuation. It is also the case of the petitioner that the 2[nd] respondent deposited 25% of the purchase price on 24-07-2008, and the balance 75% was deposited only on 29-09-2008 and beyond the time permitted by the SARFAESI Act and the Rules framed thereunder. The petitioner seeks to W.P (C) No.749/2021 -5- impugn the sale and have the sale set aside on the aforesaid grounds. 4. Shri. Sunil Shanker, the learned counsel appearing for the petitioner, would vehemently contend that a reading of Ext.P3 order of the Debts Recovery Tribunal and Ext.P5 order of the Debts Recovery Appellate Tribunal would indicate that the contentions raised by the petitioner were never considered properly by the Tribunal or by the Appellate Tribunal. It is submitted that a reading of the grounds raised before the Debts Recovery Tribunal in Ext.P1 securitisation application would indicate that the petitioner had taken up a contention that the failure to notice the settlement deed executed on 20-12-1979 and the failure to issue a notice to the petitioner who was the beneficiary of the said settlement deed vitiates the proceedings. It is submitted that the property which was settled in favour of the petitioner is covered by the document mentioned in Annexure-B4 of Ext.P2 written statement filed by the Bank in the Securitisation Application. It is pointed out that Annexure-B4 itself states that only an attested copy of the sale deed, namely Sale Deed No.3884, had been produced to create a mortgage. Since the Tribunal and the Appellate Tribunal proceeded on the basis that the originals of the documents had been produced for creating the mortgage, the entire sale proceedings were vitiated. It is submitted that even though it is not disputed that a mortgage can be created with certified copies of documents, W.P (C) No.749/2021 -6- the circumstances under which the certified copies are accepted in lieu of the originals must be specifically stated. It is submitted that though the petitioner took up a specific contention before the Appellate Tribunal that the mortgage could not have been created with attested copies and without the circumstances for accepting such attested copies being mentioned, the Appellate Tribunal brushed aside this contention and proceeded on the basis that the original documents had been deposited to create a mortgage. It is submitted that the valuation report produced along with the written statement indicates that, though a total extent of 320 cents was brought to sale, the valuation was only in respect of a smaller extent of the property, namely 291.97 cents. It is submitted that this one fact is sufficient to indicate that the valuation of the properties was not proper. It is submitted that there is no explanation forthcoming from the bank as to why it waited till 18-092008 to confirm the sale in favour of the 2[nd] respondent. It is submitted that the fact that the bank did not confirm the sale conducted on 24-07-2008 till 18-09-2009 is indicative of the fact that there was some collusion between the bank and the 2[nd] respondent in the matter of the sale. In other words, it is pointed out that the act of the bank in confirming the sale only on 18-092008 gave the 2[nd] respondent 15 days further from 18-09-2008 to deposit the balance of the sale consideration. It is submitted that this fact also vitiates the W.P (C) No.749/2021 -7- sale. Finally, it is submitted that the order of the Appellate Tribunal indicates that none of the contentions have been considered by the Appellate Tribunal. Therefore, he prays that this court must set aside the order of the Appellate Tribunal and remand the matter for consideration by the Appellate Tribunal afresh. 5. Shri. S. Easwaran, the learned Counsel appearing for the respondent bank, vehemently contends that the petitioner has no _locus standi_ to challenge the sale proceedings conducted by the bank. It is submitted that the petitioner claims to be the grandson of the late N. Sundareswaran who, was the managing partner of a partnership firm, M/s. N. Sundareswaran. It is submitted that the petitioner claims that in terms of a Will executed by late N. Sundareswaran, the petitioner, acquired an interest in some immovable property owned by N. Sundareswaran, which was mortgaged in favour of the bank. It is submitted that the petitioner also claims a right of management of the partnership on account of certain stipulations in the Will executed by late N. Sundareswaran. It is submitted that under Section 29 of the _**Partnership Act, 1932,**_ the petitioner cannot claim any right in the partnership either to represent it or prosecute any claim of the partnership and the only right that he may acquire under the assignment of the interest of late N. Sundareswaran is that he will be entitled W.P (C) No.749/2021 -8- to the profits due to late N. Sundareswaran. It is submitted that no other right flows to the petitioner. It is submitted that even in respect of the property stated to have been obtained by the petitioner under the settlement deed of 1979, it is the admitted case, even going by the pleadings of the petitioner in the Securitisation Application, that the said property was also the subject matter of mortgage to the bank. It is submitted that in such circumstances, any right obtained by the petitioner under the settlement deed of 1979 was subject to the rights of the bank and the mortgage created in favour of the bank. It is submitted that the contention that the mortgage created based on certified copies is irregular was taken up for the first time only in the appeal filed before the Debts Recovery Appellate Tribunal. It is submitted that in such circumstances, the petitioner was not entitled to any notice in the proceedings initiated by the bank under the provisions of the SARFAESI Act. It is submitted that the mother of the petitioner, who is the 4[th] defendant in T.A.No.1 of 2005 before the Debts Recovery Tribunal, remains _ex parte_ and has never taken up a contention that the property, which was settled in favour of the petitioner and his sister, was not the subject matter of the mortgage. It is submitted with reference to the judgment of this Court in _**Indian Bank v. Bombay Hardwares And Sanitary Stores**_ [2001 KHC 706] that an equitable mortgage can be created by depositing a certified copy of the W.P (C) No.749/2021 -9- document when the original document is lost or is not forthcoming. It is submitted with reference to the judgment of this Court in _**Kerala State**_ _**Financial Enterprises Limited v. Meenachil Co-operative Agricultural & Rural Development Bank Limited**_ [2004 (3) KLT 369] that the transfer or settlement of mortgaged property by the mortgagor without the junction of the mortgagee will not affect the rights of the mortgagee. It is submitted that it is evident from the pleadings of the 2[nd] respondent that shortly after filing Ext.P1 securitisation application, the petitioner proceeded to file a suit before the Munsiff Court, Kollam, praying for a permanent prohibitory injunction, restraining the defendants therein, namely the auction purchaser and the Bank from damaging or removing or alienating certain movable properties including machinery, raw materials etc, which is described as Schedule A to the plaint and for a declaration that proceedings against the property obtained by the petitioner in terms of the Settlement Deed of 1979 (plaint B Schedule in the suit) is null and void. It is submitted that there is considerable contradiction in the stand taken by the petitioner before the Debts Recovery Tribunal in Ext.P1 Securitisation Application and the stand taken in the suit filed before the Munsiff Court, Kollam. It is submitted that while in Ext.P1 Securitisation Application, it is the specific case of the petitioner that the property, which was the subject W.P (C) No.749/2021 -10- matter of the settlement deed, is also mortgaged to the Bank, the petitioner, in the suit filed before the Munsiff Court, Kollam proceeds on the basis that the said property is not the subject matter of any mortgage. It is submitted that the valuation report refers to a lesser extent of the property only because out of the total extent of 320 cents, which was mortgaged to the Bank, certain properties were not available to be proceeded against, on account of encroachment by certain individuals and a temple. It is submitted that owing to the difference in the extent of land that was brought to sale and the extent that was handed over to the 2[nd] respondent, W.P.(C)No.41671 of 2022 filed by the 2[nd] respondent against the Bank is pending consideration of this Court. It is submitted that in such circumstances, nothing turns on the fact that only a lesser extent of property is mentioned in the valuation report. It is submitted that, at any rate, the petitioner has no case that the property obtained by him under the Settlement Deed of 1979 does not form part of the property, which was the subject matter of valuation, in terms of the valuation report. It is submitted that nothing turns on the fact that the balance of the sale consideration was deposited by the 2[nd] respondent only on 29-09-2008. It is submitted that the sale was conducted on 24-07-2008, and 25% of the purchase price was deposited by the 2[nd] respondent on 24-07-2008. It is submitted that in terms of the provisions contained in the SARFAESI Act and W.P (C) No.749/2021 -11- the Rules framed thereunder, the balance 75% of the sale consideration has to be deposited within 15 days of confirmation of the sale. It is submitted that the confirmation of sale in this case was only on 18-09-2008 and since the balance of the sale consideration was deposited by the 2[nd] respondent on 2909-2008, the sale is not vitiated on account of any delay on the part of the 2[nd] respondent in depositing the balance sale consideration. It is submitted that the delay in confirming the sale was on account of the fact that W.P(C)No.21989 of 2008, filed by one of the partners of the partnership firm in question, impugning the sale, was pending before this Court. 6. Adv. N.D. Premachandran, the learned counsel appearing for the 2[nd] respondent would reiterate the contentions taken by the learned counsel appearing for the 1[st] respondent Bank. He also submits that though the extent of property notified in the sale was 320 cents, the actual extent available was only 291.97 cents and certain property was not available on account of encroachment etc. It is submitted that there was a reduction in the extent of the property also on account of the sale of a small extent of property by late N.Sundareswaran in favour of a third party. It is submitted that on account of the reduction in the extent of land, approximately Rs.31 lakhs is to be refunded by the Bank, and it is the case of the 2[nd] respondent that the said amount is to be repaid to the 2[nd] respondent. W.P (C) No.749/2021 -12- 7. Having heard the learned counsel appearing for the petitioner, the learned counsel appearing for the 1[st] respondent Bank and the learned counsel appearing for the 2[nd] respondent, I am of the view that the petitioner cannot be granted any relief in this writ petition. The learned counsel for the petitioner may be right in contending that the Appellate Tribunal has not considered the contentions raised in detail. However if this Court were to independently consider all the contentions taken by the petitioner, and if this court concludes that no grounds are made out for the grant of reliefs sought in the writ petition, the mere fact that the Appellate Tribunal has not appropriately considered the matter does not entitle the petitioner to claim that the order of the Appellate Tribunal is to be set aside. The contentions taken by the petitioner before this Court are the very same contentions taken by the petitioner before the Appellate Tribunal; those contentions, I will demonstrate, do not entitle the petitioner to any relief against the 1[st] respondent Bank. Since this court is proceeding to consider all those contentions on merits, it is not necessary to set aside the order of the Appellate Tribunal and remit the matter for fresh consideration of the Appellate Tribunal on the ground that the Appellate Tribunal has not properly considered the contentions raised by the petitioner before it. W.P (C) No.749/2021 -13- 8. The contention taken by the learned counsel for the 1[st] respondent Bank that the petitioner has no legal right to challenge the proceedings initiated by the Bank against the properties in question is only to be accepted. The petitioner is not a partner of the firm in question. He states that he is the grandson of the late N. Sundareswaran, who was the Managing Partner of the firm. He also states that he has obtained certain properties belonging to late N.Sundareswaran, under a will executed by late N.Sundareswaran. It is also stated that he is entitled to manage the affairs of the firm on account of stipulations contained in the will of late N.Sundareswaran. These facts by themselves do not permit the petitioner to contend that the action initiated by the Bank under the provisions of the SARFAESI Act against the mortgaged properties is to be set aside at his instance. Paragraph 11 of Ext.P.1 Securitisation Application filed before the Debts Recovery Tribunal, by the petitioner reads thus:- _“11. It is submitted that deceased N. Sundareswaran, the grandfather of applicant, executed a Will No.25/2001 dated 2.10.2001, registered in the Sub Registry Office, Kollam bequeathing a piece of immovable property to the applicant and also conferred the right of management of the business concerns of the Partnership firm. The property bequeathed to the applicant along with other properties were also pledged with the 1st defendant Bank. A true copy of said Will No.25/2001 is produced herewith and marked as ” Annexure-3._ W.P (C) No.749/2021 -14- It is thus clear that the petitioner traces his right to challenge the proceedings to the rights obtained by him under a registered will dated 2-1-2001 executed by the late N. Sundareswaran. Section 29 of the Indian Partnership Act, 1932 provides thus:- ## _“_ _**29. Rights of transferee or a partner’s interest.—**_ - _(1) A transfer by a partner of his interest in the firm, either absolute or by mortgage, or by the creation by him of a change on such interest, does not entitle the transferee, during the continuance of the firm, to interfere in the conduct of the business, or to require accounts, or to inspect the books of the firm, but entitles the transferee only to receive the share of profits of the transferring partner, and the transferee shall accept the account of profits agreed to by the partners._ - _(2)If the firm is dissolved or if the transferring partner ceases to be a partner, the transferee is entitled as against the remaining partners to receive the share of the assets of the firm to which the transferring partner is entitled, and, for the purpose of ascertaining that share, to an account as from the date of the dissolution.”_ The petitioner cannot, therefore, be heard to contend that he has the _locus standi_ to challenge the measures taken under the SARFAESI Act before the Tribunal. Though the learned counsel for the petitioner attempted to substantiate his right by reference to the provisions of Section 17 of the SARFAESI Act, I am of the view that nothing turns on the use of the words “ _Any person (including borrower) aggrieved….”_ in Section 17 of the SARFAESI Act. The provision as it stood at the relevant time reads as W.P (C) No.749/2021 -15- ## follows:- _“Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may prefer an appeal to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken”_ There is nothing in Section 17 to suggest that the words “ _Any person (including borrower) aggrieved….”_ must be stretched beyond reasonable limits to hold that a person who has no interest in the partnership or over the property (except to the extent of rights obtained under the settlement deed executed by the petitioner’s mother in the year 1979) can challenge the action taken by the bank under the provisions of the SARFAESI Act on the strength of a will executed by his late grandfather. The right of the petitioner to approach the Debts Recovery Tribunal will have to be limited, at best, to the property obtained by him jointly with his sister under the settlement deed executed by his mother (Smt.Vijayalakshmi) in the year 1979. Therefore, I hold that while the petitioner has no _locus standi_ to question the proceedings initiated by the Bank under the SARFAESI Act against the properties mortgaged to the Bank and in respect of action initiated against the properties of the firm and/ or Partners of the firm, I hold that the petitioner is entitled to challenge the sale to the extent of the rights obtained by him under the W.P (C) No.749/2021 -16- Settlement Deed of 1979. 9. The 1[st] contention taken in respect of the property obtained by the petitioner under the Settlement Deed of 1979 is that Annexure - B4 document produced along with Ext.P2 written statement filed by the Bank in the securitization application indicates that only the certified copies of the document by which the mother of the petitioner obtained the property has been deposited to create the mortgage. The learned counsel for the petitioner does not dispute the legal position that certified copies of documents can also be used to create a valid mortgage. His only contention is that the circumstances under which the certified copies of the document were accepted instead of the original document must be noticed. It is also his case that the Bank had taken up the contention before the Tribunal and before the Debts Recovery Tribunal that the originals of the documents had been deposited by the mother of the petitioner. It was submitted that this fact is disproved by Annexure - B4 document produced along with the written statement of the Bank before the Tribunal. This contention of the learned counsel for the petitioner cannot be accepted. It is seen from the pleadings in Ext.P1 securitization application that the petitioner’s averment in paragraphs 12 & 13 of Ext.P1 securitization application reads thus:- W.P (C) No.749/2021 -17- _“12. It is further submitted a Settlement Deed dated 20.12.1979 was executed by Smt.Vijayalakshmi, the mother applicant, in favour of the applicant and his sister Rashmi, whereby an extent of 40 cents equivalent to 16 Ares and 18.8.Sq.Metres in Survey No.9658 in Kollam Village was settled in the name of applicant. The said property is also included in the entire properties sought to be sold as per Annexure-2 Notification and the same was also pledged with the 1[st] defendant Bank. The true copy of said Settlement Deed is produced herewith and marked as Annexure-4._ _13. It is submitted that in view of Paragraphs 11 and 12 hereinabove the applicant is interested person having vested right over some of the properties described in Annexure-2 Notification and as such the applicant is an affected party to such proceedings initiated by the 1[st] defendant Bank. Therefore Annexure-2 Notification and consequent sale dated 24.7.2008 are illegal and unsustainable under law so far as this applicant is concerned.”_ It is true that thereafter the petitioner has taken up a contention that the properties were not subject matter of any valid mortgage. It must be noted that the petitioner is not a third party or a stranger and is a member of the family of the late N.Sundareswaran. Having taken up a contention in the securitization application that the property obtained by the petitioner in terms of the Settlement Deed executed in 1979 was the subject matter of mortgage, the petitioner cannot later turn around and take up a contention that there was no valid mortgage because only a certified copy of the document was deposited to create the mortgage. The petitioner is estopped from taking such contention on account of the pleadings in the Securitisation W.P (C) No.749/2021 -18- Application which, have been extracted above. the petitioner cannot at different points in time take different contentions, which are mutually contradictory and opposed to each other. The judgment of this Court in _**Bombay Hardwares And Sanitary Stores (supra)**_ holds that an equitable mortgage can be created by depositing a certified copy of the document when the original document is lost or is not forthcoming. The mortgage was created in the year 1969. There has been no dispute that Vijayalakshmi had mortgaged the property with the bank. At this distance of time, it would not be fair or proper to call upon the Bank to explain why the certified copy was accepted in place of the original. Therefore, I have no hesitation in holding that the contention now taken by the petitioner that there was no proper mortgage created in respect of the properties obtained by the petitioner under the Deed of Settlement executed by his mother in 1979 is only to be rejected. 10. The next contention of the petitioner is that he was entitled to notice before the property, which was the subject matter of the 1979 Settlement Deed was brought to sale. I have already held that there was a valid mortgage in respect of the property covered by the settlement deed which in turn relates to the property covered by document No.3884 of 1969 dated 12-12-1969, which is referred to in B4 document produced along with W.P (C) No.749/2021 -19- Ext.P2 written statement of the bank before the Tribunal. I have already held that there was a valid mortgage created in respect of the property covered by sale deed No. 3884 of 1969 dated 12-12-1969 by rejecting the contention of the petitioner that there was no proper mortgage as only an attested copy of the document was deposited before the Bank. When the petitioner has obtained the property subject to the mortgage, the petitioner cannot be heard to contend that he was entitled to notice before the Bank proceeds against the property in question. No provision of law or binding precedent has been referred to to support this contention. In _**Kerala State Financial Enterprises Limited (supra)**_ this court held:- _“16. It is beyond dispute that mortgages by deposit of title deeds is a valid procedure, accepted under the Transfer of Property Act, for creating an encumbrance. Under S.58(a) of the Act, a mortgage is a transfer of interest in specific immovable property. This may be for the purpose of securing the payment of money advanced or to be advanced by way of a loan. It includes an existing or future debt over the performance of an engagement which may give right to pecuniary liability. ………………The law recognizes a mortgage by deposit of title deeds. When a person delivers to the creditor or the agent, document or title to immovable property with intend to create a security thereon, the transaction is a mortgage by deposit of title deeds (S.58(f) of the Transfer of Property Act). The petitioner claims that a mortgage deed as envisaged under S.2(17) of the Indian Stamps Act is in existence. A mortgager therefore is disabled from further encumbering the properties in any case without the junction of mortgagee. It can well be presumed that a liability is automatically attached to the property and it is a burden imposed upon the land and the interest in the land, by the owner of the land._ W.P (C) No.749/2021 -20- _17. Advertence may also be made to the dictionary meaning of the term ‘mortgage’, see Black’s Law Dictionary, 7th Edition, by Bryan A.Garner. It is described as a conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment of performance according to the stipulated terms. It is also “a lien against property that is granted to secure an obligation (such as a debt) and that is extinguished upon payment or performance according to stipulated terms._ _**Thus, the mortgage presupposes a (notional) conveyance of title as such, though on limited terms and the mortgager may continue the occupation of the property** ._ _18. While dealing with creation of encumbrances, which did not amount to sale, as pointed out by Leonard A.Jones in “A treatise on the Law or Mortgages”, the chief distinction between a mortgage and a pledge_ _**is that by a mortgage the general title is transferred to the mortgagee, subject to be re-vested by performance of the condition** ; while by a pledge the pledgor retains the general title in himself, and parts with the possession for a special purpose._ _**It can therefore be stated that by a mortgage, the title is presumed as transferred** ; by a pledge, the possession alone is parted with. Therefore, if this Court does not step in, that may result in an illegality being perpetuated.”_ ## **(Emphasis is mine)** Thus on the authority of the aforesaid judgment, it will have to be held that the document executed by the mother of the petitioner in 1979 settling property covered by document No.3884 of 1969 dated 12-12-1969 in favour of the petitioner and his sister was at the very least irregular as it affected the title, right and interest of the bank over the said property. Therefore, it will have to be held that the petitioner has not validly obtained any right over the W.P (C) No.749/2021 -21- property covered by the settlement deed executed by his mother in the year 1979 as it is clear that the property which was settled was subject matter of a valid mortgage on the date of execution of the settlement deed. The petitioner cannot therefore obtain any benefit out of the settlement deed executed by his mother in 1979 and it was open to the bank to have ignored any such transaction and to proceed on the basis that there was no such transaction. 11. Coming to the contention of the learned counsel for the petitioner that there was no proper valuation, it is seen that the said contention is on the basis that only a lesser extent of land than what was brought to sale has been mentioned in the valuation report. The submissions of the learned counsel for the Bank and the learned counsel appearing for the 2[nd] respondent indicate that there are some portions of the property which had been lost or were otherwise unavailable to be proceeded against on account of encroachment etc. The extent of the property possession of which was handed over to the 2[nd] respondent on completion of sale proceedings is only 291.97 cents. It is seen from the report of valuation produced along with the written statement filed by the respondent Bank before the Tribunal that the said valuation report pertains to the exact extent of 291.97 cents. Therefore the contention of the learned counsel for the petitioner that the valuation is suspect cannot be accepted. W.P (C) No.749/2021 -22- 12. Coming to the contention of the learned counsel for the petitioner that there was a delay in depositing the balance sale consideration by the 2[nd] respondent, it is not disputed that the sale was held on 24.07.2008. It is also not disputed that 25% of the sale consideration was deposited by the 2[nd] respondent on 24.07.2008 itself. The Bank had confirmed the sale only on 18.09.2008. The delay in confirmation of the sale is stated to be because one of the partners of the firm had filed W.P (C) No.21989 of 2008, which was pending before this Court. Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 (as it stood before amendment) reads as follows:- _“The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.”_ It is clear from the provisions of Rule 9 (4) of the Security Interest (Enforcement) Rules that the 2[nd] respondent had 15 days from the date of confirmation of sale to deposit the balance sale consideration. In the absence of any provision requiring the Bank to confirm the sale within a specified period, it can only be held that such confirmation needs to take place within a reasonable time. In the facts of this case, the sale was held on 24-07-2008 and the confirmation of the sale was on 18.09.2008. It cannot be said that W.P (C) No.749/2021 -23- there was any unreasonable delay on the part of the Bank in confirming the sale in favour of the 2[nd] respondent. In that view of the matter, the deposit of balance sale consideration by the 2[nd] respondent on 29-09-2008 is in accordance with Rule 9(4) of the Security Interest (Enforcement) Rules and the same does not vitiate the sale in any manner. No other point has been raised. The writ petition fails and it is accordingly dismissed. Sd/- **GOPINATH P. JUDGE** AMG/DK -24- W.P (C) No.749/2021 ## **APPENDIX OF WP(C) 749/2021** ## **PETITIONER'S EXHIBITS** **EXHIBIT P1 TRUE COPY OF TSA NO. 47/2016 (SA NO. 271/2008) EXHIBIT P2 TRUE COPY OF WRITTEN STATEMENT. EXHIBIT P3 TRUE COPY OF ORDER IN TSA NO. 47/2016 (SA NO. 271/2008) EXHIBIT P4 TRUE COPY OF THE APPEAL RA (SA) 182/2018 EXHIBIT P5 TRUE COPY OF THE ORDER OF THE DEBT RECOVERY TRIBUNAL IN RA (SA) 182/2018** ## **RESPONDENT'S EXHIBITS** **Exhibit R2(a) TRUE COPY OF THE JUDGMENT DATED 1.12.2010 IN OS NO.610/2009 OF PRINCIPAL MUNSIFFS COURT, KOLLAM Exhibit R2(b) TRUE COPY OF THE PLAINT IN OS NO.610 OF 2009 DATED 21/08/2009 OF MUNSIFFS COURT, KOLLAM**