BANK OF BARODA versus M/S KARWA TRADING COMPANY & ANR. on 10 February 2022

1100

SUPREME COURT REPORTS

[2022] 1 S.C.R.

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BANK OF BARODA

v.

M/S KARWA TRADING COMPANY & ANR.

(Civil Appeal No. 363 of 2022)

BFEBRUARY 10, 2022

[M. R. SHAH AND SANJIV KHANNA, JJ.]

Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002 – ss.13(2), 13(4), 14and 17 – Security Interest (Enforcement) Rules, 2002 – r.8 r/w r.9 –CAppellant (bank) granted term loan of Rs.100 lakhs and cash creditlimit of Rs.95 lakhs to respondent (borrower) against security oftwo mortgaged properties – Borrower failed to repay the loan asper terms & conditions of the agreement – The account of theborrower became NPA on 31.10.2012 – Notice u/s.13(2) ofDSARFAESI Act served upon the borrower on 07.01.2013 demandingsum of Rs.1,85,37,218.80/- – Bank took symbolic possession of theimmovable property / residential house and issued notice u/s. 13(4)of SARFAESI Act on 22.08.2013 – The bank issued sale notice bypublic auction of the residential property on 16.12.2013 – Reserveprice fixed was Rs.48.65 lakhs – Date of auction notified wasE20.01.2014 – Borrower challenged the auction by filing applicationu/s 17 of the SARFAESI Act before DRT – DRT passed interim orderdirecting release / handover of possession of the mortgaged propertyto the borrower on deposit of Rs.48.65 lakhs – Bank filed appealbefore DRAT which was dismissed – Single Judge of High Court setFaside the orders passed by DRT & DRAT on ground that the orderswere in contravention of s.13(8) of SARFAESI Act – Division Benchset aside the order of Single Judge and directed the bank to releasethe secured property (residential house) on the borrower depositinga further sum of Rs.17 lakhs to the bank and handover possessionalong with title deeds to the borrower – Propriety – Held: Not properG–The bank/secured creditor could be restrained from selling themortgaged property/secured property if the borrower depositedentire dues that was Rs.1,85,37,218.80/- as on 07.01.2013 with thesecured creditor – DRT in its order which as such was an interimrelief order pending appeal u/s.17 of the SARFAESI Act was notHjustified in directing to release the mortgaged property and handover the possession along with the original title deeds to theborrower on payment of Rs.48.65 lakhs only which was the baseprice/ reserve price, which the Division Bench of the High Courtincreased to Rs.65.65 lakhs on the ground that the highest bidreceived was Rs.71 lakhs – Unless and until the borrower was readyto deposit /pay the entire amount payable together with all costsand expenses with the secured creditor, the borrower could not bedischarged from the entire liability outstanding – It will be open forthe appellant to proceed with the auction proceedings of themortgaged properties – At the same time, DRT to decide and disposeof the application filed by the borrower u/s 17 of the SARFAESI Actin accordance with law.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD:1. The bank had already initiated the proceedingsunder Section 13 of the SARFAESI Act and even the possessionof the mortgaged property was taken over by the bank underSection 14 of the SARFAESI Act and thereafter the mortgagedproperty was put to sale by a public auction and at that stage theborrower wanted to stall the auction proceedings and restrainthe secured creditor/ bank from selling the property. In such asituation the bank/secured creditor can be restrained from sellingthe mortgaged property/secured property where the borrowerdeposits entire dues that was Rs.1,85,37,218.80/- as on 1807.01.2013 with the secured creditor. Therefore, the DRT in itsorder dated 17.01.2014 which as such was an interim relief orderpending the appeal under Section 17 of the SARFAESI Act wasnot justified in directing to release the mortgaged property andhandover the possession along with the original title deeds tothe borrower on payment of Rs.48.65 lakhs only which was thebase price/ reserve price, which the Division Bench of the HighCourt has increased to Rs.65.65 lakhs on the ground that thehighest bid received was Rs.71 lakhs (which was not materializedas the highest bidder did not come forward). Unless and until theborrower was ready to deposit/pay the entire amount payabletogether with all costs and expenses with the secured creditor,the borrower cannot be discharged from the entire liabilityoutstanding. Therefore, as such no order could have been passed ABC

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Aeither by the DRT and/or by the Division Bench of the High Courtto discharge the borrower from the entire liability outstandingand to discharge the mortgaged property and handover thepossession along with original title deeds to the borrower. Assuch the Single Judge rightly set aside the orders passed by theDRT as well as by the DRAT considering Section 13(8) of theBSARFAESI Act. The Single Judge was right in setting aside theorder passed by the DRT confirmed by the DRAT. The DivisionBench of the High Court has erred in interfering with the orderpassed by the Single Judge and has erred in directing to releasethe mortgaged property/ secured property and handoverCthe possession along with the original title deeds to the borroweron payment of a total sum of Rs.65.65 lakhs only. [Para 7.1][1110-G-H; 1111-A-F]

2. However, at the same time the order dated 17.01.2014passed by the DRT was an interim relief order in SA No.9/2014Dand therefore even if the interim relief order is set aside by thisCourt the appeal/application will have to be decided and disposedof on merits and on whatever grounds which may be available tothe borrower. However, at the same time the bank cannot berestrained from selling the mortgaged property by holding thepublic auction and realise the amount and recover the outstandingEdues, unless the borrower deposits/pays the entire amount dueand payable along with the costs incurred by the secured creditoras per Section 13(f) of the SARFAESI Act. [Para 7.2][1111-F-H]

3. It will be open for the appellant – Bank to proceed furtherwith the auction proceedings of the mortgaged property in auctionFi.e. residential house by inviting the bids afresh and whateverthe amount is already paid by the borrower, may be in pursuanceto the interim relief order passed by the DRT and/or theimpugned judgment and order passed by the Division Bench ofthe High Court, the same may be adjusted against the dues/totalGliability of the borrower. At the same time DRT to decide anddispose of SA No.09/2014 filed by the borrower under Section 17of the SARFAESI Act in accordance with law and on its own meritsand on the whatever grounds which may be available to theborrower. [Para 8][1112-B-D]

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4. On public auction being finalized and the mortgagedproperty being sold by the bank the borrower has to handoverthe peaceful and vacant possession of the property to the bankand/or the auction purchaser. However, in the meantime theoriginal title deeds of the mortgaged property be retained by thebank. Till the time the borrower remains in possession of themortgaged property as per the present order and till themortgaged property is sold in a public auction, the borrower shallnot transfer and/or alienate the mortgaged property in any mannerwhatsoever including the possession. [Para 8][1112-E-G]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 363 of2022.

From the Judgment and Order dated 20.09.2017 of the High Courtof Judicature for Rajasthan Bench at Jaipur in D.B. Special Appeal WritNo.349 of 2017.

Ms. Praveena Gautam, Pawan Shukla, Aman S. Sharma, AmanRastogi, Advs. for the Appellant.

Mrs. Christi Jain, Puneet Jain, Harsh Jain, Ms. Yashika Sharma,Umang Mehta, Harsh Verdhan Sharma, Neeraj Kumar, Ms. PratibhaJain, Advs. for the Respondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 20.09.2017 passed by the Division Bench of the HighCourt of Judicature for Rajasthan Bench at Jaipur in D.B. Special AppealWrit No.349 of 2017, by which the Division Bench of the High Courthas allowed the said intra-court appeal and has quashed and set asidethe judgment and order dated 12.01.2017 passed by the learned SingleJudge and has directed that if the respondent - borrower deposits afurther sum of Rs.17 lakhs to the bank, the bank shall release the propertyand handover possession along with the title deeds of the residential/housing property in question to the borrower and by which the DivisionBench of the High Court has further directed that the SA No.9/2014filed by the borrower before the learned Debt Recovery Tribunal (DRT)

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Ais restored to its original number to be heard on merits, the appellantherein - Bank of Baroda – financial institution – secured creditor haspreferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under: - 2.1 That the appellant herein – bank granted term loan of Rs.100Blakhs and cash credit limit of Rs.95 lakhs to the respondent – borrower(hereinafter referred to as the borrower) against the security of twomortgaged properties namely (i) industrial plot situated at Chittor Road,Bundi measuring 500 Sq.Mtrs. and (ii) a residential/housing propertysituated at 1-Ja-27, Vikas Nagar, Bundi measuring 198 Sq.Mtrs. ThatCthe borrower failed to repay the term loan as per the terms and conditionsof the agreement. The account of the borrower became NPA on31.10.2012. A notice under Section 13(2) of the Securitisation andReconstruction of Financial Assets and Enforcement of Security InterestAct, 2002 (hereinafter referred to as the SARFAESI Act, 2002) dated07.01.2013 was served upon the borrower demanding a sum ofDRs.1,85,37,218.80/- The bank took symbolic possession of the immovableproperty/residential house and also issued a notice under Section 13(4)of the SARFAESI Act, 2002 on 22.08.2013. An application was movedunder Section 14 of the SARFAESI Act, 2002 which came to be allowedon 08.11.2013 and with the police assistance the bank took possessionEof the residential house, which was one of the mortgaged properties ofthe borrower, on 25.11.2013.

2.2 That thereafter the bank issued a sale notice by public auctionof the residential property dated 16.12.2013. The reserve price fixedwas Rs.48.65 lakhs for sale of the said secured asset in terms of theFprocedure prescribed under Rule 8 read with Rule 9 of the SecurityInterest (Enforcement) Rules, 2002. The date of auction notified was20.01.2014. The borrower challenged the auction of the bank by filingSecuritisation Application (SA) No.09/2014 under Section 17 of theSARFAESI Act, 2002 before the DRT, Jaipur. An interim order waspassed by the DRT that if the borrower deposits Rs.20 lakhs onG20.01.2014 by 12.00 noon, the bank shall accept the bids but not finalizethe bids/confirm the sale of the secured asset and if the borrower commitsdefault in payment of balance amount of Rs.28.65 lakhs, the restraintorder shall stand vacated automatically. The DRT also observed that ifthe borrower deposits Rs.48.65 lakhs with the bank on or beforeH27.01.2014, the bank shall deliver the possession of the secured asset along with the original title deeds of the property in question. It is not indispute that the borrower deposited Rs.48.65 lakhs with the bank.

2.3 That the aforesaid interim order passed by the DRT came tobe challenged by the bank in appeal before the DRAT (Debt RecoveryAppellate Tribunal). It was the case on behalf of the appellant - bankthat in public auction the bank had received bids up to Rs.71 lakhs andthe amount of debt due against the borrower at that point of time wasabove Rs.2 crores and if at all the borrower is interested or keen toredeem the mortgaged property, he could do so by discharging the entireliability and not by making payment of Rs.48.65 lakhs, as ordered by theDRT. It was also the case on behalf of the appellant – bank that orderpassed by the DRT dated 17.01.2014 was in violation of Section 13(8)of the SARFAESI Act, 2002. However, it was submitted on behalf ofthe bank that the bank may not find any difficulty in releasing the subjectproperty provided the borrower is ready to pay a sum of Rs.71 lakhswhich is the highest bid available with the bank. It was submitted thateven this amount would not ultimately go to discharge the entire liabilityoutstanding against the borrower but still if the borrower deposits Rs.71lakhs, the bank may not find difficulty to release the subject property inquestion.

2.4 The DRAT dismissed the appeal by observing that as thereserve price was Rs.48.65 lakhs which the borrower deposited and thebank had received the bids ranging from Rs. 61.50 lakhs to Rs.71 lakhsand the alleged bidders failed to deposit the earnest money and whenthe borrower is ready to purchase the said property for Rs.71 lakhs nofault can be found with the order passed by DRT. The order passed bythe DRAT dismissing the appeal preferred by the bank was the subjectmatter of challenge before the learned Single Judge. The learned SingleJudge set aside both the orders of DRT and DRAT vide its judgment andorder dated 12.01.2017 primarily for the reason that the said orders werein contravention of Section 13(8) of the SARFAESI Act, 2002. Thejudgment and order passed by the learned Single Judge was challengedbefore the Division Bench of the High Court by the borrower by way ofpresent intra-court appeal. By the impugned judgment and order, theDivision Bench of the High Court has allowed the said appeal and hasquashed and set aside the judgment and order passed by the learnedSingle Judge and has directed the bank to release the secured property(residential house) on the borrower depositing a further sum of Rs.17

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Alakhs to the bank and handover the possession along with the title deedsto the borrower.

2.5 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the Division Bench of the High Court, the bank –financial institution – secured creditor preferred the present appeal.B

3. Ms. Praveena Gautam learned counsel appearing on behalf ofthe appellant – bank has vehemently submitted that in the facts andcircumstances of the case the Division Bench of the High Court hascommitted a grave error in directing the bank to release the propertyand handover the possession along with the title deeds of the residential/Chousing property in question to the borrower on making a further paymentof Rs.17 lakhs only.

3.1 It is vehemently submitted by learned counsel appearing onbehalf of the appellant – bank that even as observed by the DivisionBench of the High Court the borrower did not come forward to redeemDthe property but to release the property in favour of the purchaser onpayment of the reserve price of the mortgaged property in terms of theauction notice. It is submitted that therefore when the dues were ofRs.1,85,37,218.80/- at the time when the notice dated 07.01.2013 underSection 13(2) of the SARFAESI Act, 2002 was issued and served uponEthe borrower, on payment of a sum of Rs.71 lakhs only the borrowercannot be discharged from his liability to pay the entire dues.

3.2 It is further submitted by learned counsel appearing on behalfof the appellant – bank that what was understood and agreed by thebank was that on payment of Rs.71 lakhs which was the highest bidFreceived, the borrower may be handed over the possession. It is submittedthat however, it was specifically made clear that on payment of Rs.71lakhs the said amount would not ultimately discharge the entire liabilityoutstanding against the borrower. It is submitted that aforesaid has beenmisinterpreted and/or misconstrued by the Division Bench of the HighCourt and it is understood that on deposit of Rs.71 lakhs the bank agreedGthat the borrower be discharged from his entire liability outstanding againsthim.

3.3 It is further submitted that the Division Bench of the HighCourt has also not property appreciated that the offer of Rs.71 lakhs inthe auction was received in the year 2013/2014 and thereafter theH

valuation has increased. It is submitted that even the outstanding dueshave also gone up which was Rs.1,85,37,218.80/- as on 07.01.2013. It issubmitted that therefore the Division Bench of the High Court hasmaterially erred in treating and/or considering Rs.71 lakhs as sale/purchase price and/or the value of the residential property. It is submittedthat therefore when the Division Bench of the High Court passed thejudgment and order if the property could have been auctioned it wouldhave fetched much more price than Rs.71 lakhs. It is submitted that ondeposit of Rs.71 lakhs only the borrower cannot be discharged from hisentire liability. It is submitted that the impugned judgment and order passedby the Division Bench of the High Court is just contrary to Sub-section(8) of Section 13 of the SARFAESI Act, 2002. It is submitted that as perSub-section (8) of Section 13 of the SARFAESI Act, 2002 only on deposit/payment of entire payment of dues of the secured creditor together withall costs, charges and expenses incurred by secured creditor to the securedcreditor, at any time before the date of publication of notice for publicauction or inviting quotations or tender from public, the secured assetshall not be sold by the secured creditor. It is submitted that in the presentcase the amount due was much more than Rs.71 lakhs. It is submittedthat therefore the impugned judgment and order passed by the DivisionBench of the High Court directing to release the secured property juston payment of a total sum of Rs.65.65 lakhs is just contrary to Sub-section (8) of Section 13 of the SARFAESI Act, 2002.

3.4 It is further submitted by learned counsel appearing on behalfof the appellant – bank that when the subject property was mortgagedto the bank in the housing loan account borrowed by the borrower andwithout satisfying the entire outstanding dues the mortgaged propertycannot be discharged.

3.5 It is further submitted by learned counsel appearing on behalfof the appellant – bank that the Division Bench of the High Court hasfailed to appreciate the reserve price of Rs.48.65 lakhs was based onthe valuation carried out by the valuer of the bank and the process of theauction of the subject property was through public auction in which anactual market price could have been fetched. There could not have beenany directions for redemption of the secured subject property on makingpayment of the reserve price or having paid the average of the twohighest bid to the borrowers unless the entire dues including the costsand expenses are paid.

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A3.6 It is further submitted by learned counsel appearing on behalfof the appellant – bank that the Division Bench of the High Court hasnot properly appreciated the fact that the initial order passed by theDRT which was the subject matter before the DRAT challenged by thebank by which the DRT directed to release/handover the possession ofthe mortgaged property to the borrower on deposit of Rs.48.65 lakhsBwhich was the reserve price, was an interim order. Therefore, the DivisionBench of the High Court ought not to have passed the final orderdischarging the borrower from his entire liability just on payment ofRs.65.65 lakhs.

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3.7 Making the above submissions it is prayed to allow the presentCappeal.

4. The present appeal is vehemently opposed by Mrs. Christi Jainlearned counsel appearing on behalf of the respondents – borrowers.

4.1 It is vehemently submitted by learned counsel appearing onDbehalf of the borrower that as the highest bid received by the bank in thepublic auction was Rs.71 lakhs which the borrower agreed to deposit/pay and even earlier the borrower deposited a sum of Rs.48.65 lakhs asper the order passed by the DRT dated 17.01.2014, thereafter when theDivision Bench of the High Court has directed the bank to release theresidential property on deposit of a further sum of Rs.17 lakhs (totalEmaking it Rs.65.65 lakhs) and thereafter has directed to handover theoriginal title deeds to the borrower, the impugned judgment and orderpassed by the High Court is equitable order which does not warrant anyinterference by this Court in exercise of powers conferred under Article136 of the Constitution of India.F

4.2 It is submitted that even the learned counsel appearing onbehalf of the appellant – bank agreed that on payment of a total sum ofRs.65.65 lakhs the property in question may be released. It is submittedthat therefore the Division Bench of the High Court has not committedany error which warrants interference of this Court in exercise of powersconferred under Article 136 of the Constitution of India.G

5. We have heard the learned counsel appearing on behalf of therespective parties at length.

6. At the outset, it is required to be noted that by the impugnedjudgment and order the Division Bench of the High Court has directedHthe bank – secured creditor to release the secured property and handover the possession along with original title deeds of the residential/housingproperty in question to the borrower on payment of a total sum of Rs.65.65lakhs. Thus, by the impugned judgment and order the Division Bench ofthe High Court has released the secured property/mortgaged propertyon payment of a total sum of Rs.65.65 lakhs against the total dues whichas such as on 07.01.2013 was Rs.1,85,37,218.80/-.

6.1 From the impugned judgment and order passed by the HighCourt it appears that the Division Bench of the High Court has treatedand/or considered the market value of the mortgaged property at Rs.71lakhs. The DRT when initially granted the interim relief in favour of theborrower which was the subject matter before the DRAT and the learnedSingle Judge and thereafter before the Division Bench of the High Court,directed to handover the possession of the mortgaged property to theborrower on payment of Rs.48.65 lakhs which was the reserve price/base price. The possession was taken over by the bank under theprovisions of the SARFAESI Act and after following the proceedings asrequired under Section 13 of the SARFAESI Act, the mortgaged propertywas put to auction and at that stage the borrower preferred an appeal/application before the DRT under Section 17 of the SARFAESI Act andas such the said appeal can be said to be technically pending as theorder dated 17.01.2014 passed by the DRT was an interim order. Whenthe auction proceedings were initiated under Section 13 of the SARFAESIAct and after the bank took over the possession under Section 14 of theSARFAESI Act as per Sub-section (8) of Section 13 of the SARFAESIAct the secured asset shall not be sold and/or transferred by the securedcreditor, where the amount dues of the secured creditor together with allcosts, charges and expenses incurred by him is tendered by the borroweror debtor to the secured creditor at any time before the date of publicationof notice for public auction or inviting quotations or tender from public orprivate treaty for transfer by way of lease assignment or sale of thesecured assets. In the present case though as on 07.01.2013 the dueswere Rs. Rs.1,85,37,218.80/- and without the secured property was soldin a public auction the Division Bench of the High Court has directed torelease the mortgaged property and handover the possession along withoriginal title deeds to the borrower on the borrower depositing/paying atotal sum of Rs.65.65 lakhs only. At this stage, it is required to be notedthat Rs.65.65 lakhs was not the amount realized by selling the mortgagedproperty in a public auction. It was only a highest bid received and beforeany further auction proceedings were conducted, the DRT passed an A

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Ainterim order directing to handover the possession and handover theoriginal title deeds on payment of Rs.48.65 lakhs which was the baseprice, which was the subject matter before the DRAT and before thelearned Single Judge. Therefore, the borrower did not deposit and wasnot ready to deposit the entire amount of dues with secured creditorwith all costs, charges and expenses incurred by the secured creditor.BTherefore, it was open for the secured creditor to sell the mortgagedproperty which was put as a security and realize the amount by selling itin a public auction. At this stage, it is required to be noted that even asper the Division Bench of the High Court the borrower made an offer todeposit/pay Rs.71 lakhs as a purchaser and not by way of redeemingCthe mortgaged property. Therefore, the impugned judgment and orderpassed by the Division Bench of the High Court directing to release themortgaged property/secured property and to handover the possessionas well as the original title deeds to the borrower on payment of a totalsum of Rs.65.65 lakhs only is contrary to Sub-section (8) of Section 13of the SARFAESI Act.D

7. Even otherwise on making the payment i.e. Rs.65.65 lakhsagainst the total dues Rs.1,85,37,218.80/- as on 07.01.2013 the entireliability outstanding against the borrower cannot be said to have beendischarged. Even if the mortgaged property would have been sold in apublic auction say for an amount of Rs.71 lakhs and the bank has realizedERs.71 lakhs by selling the mortgaged property, in that case also the liabilityof the borrower to pay the balance amount would still continue. By sellingthe mortgaged property/secured property it cannot be said that theborrower is discharged from the entire liability outstanding against him.The liability of the borrower with respect to the balance outstandingFdues would still be continued. Therefore, the Division Bench of the HighCourt has erred in directing to release the mortgaged property/securedproperty and to handover the possession along with the original title deedsto the borrower on payment of a total sum of Rs.65.65 lakhs only.

7. 1 At the cost of repetition it is observed that as such the bankGhad already initiated the proceedings under Section 13 of the SARFAESIAct and even the possession of the mortgaged property was taken overby the bank under Section 14 of the SARFAESI Act and thereafter themortgaged property was put to sale by a public auction and at that stagethe borrower wanted to stall the auction proceedings and restrain thesecured creditor/bank from selling the property. In such a situation theH

bank/secured creditor can be restrained from selling the mortgagedproperty/secured property where the borrower deposits entire dues thatwas Rs.1,85,37,218.80/- as on 07.01.2013 with the secured creditor.Therefore, the DRT in its order dated 17.01.2014 which as such was aninterim relief order pending the appeal under Section 17 of the SARFAESIAct was not justified in directing to release the mortgaged property andhandover the possession along with the original title deeds to theborrower on payment of Rs.48.65 lakhs only which was the base price/reserve price, which the Division Bench of the High Court hasincreased to Rs.65.65 lakhs on the ground that the highest bid receivedwas Rs.71 lakhs (which was not materialized as the highest bidder didnot come forward). Unless and until the borrower was ready to deposit/pay the entire amount payable together with all costs and expenseswith the secured creditor, the borrower cannot be discharged from theentire liability outstanding. Therefore, as such no order could havebeen passed either by the DRT and/or by the Division Bench of theHigh Court to discharge the borrower from the entire liability outstandingand to discharge the mortgaged property and handover the possessionalong with original title deeds to the borrower. As such the learnedSingle Judge rightly set aside the orders passed by the DRT as well asby the DRAT considering Section 13(8) of the SARFAESI Act. Thelearned Single Judge was right in setting aside the order passed by theDRT confirmed by the DRAT. The Division Bench of the High Courthas erred in interfering with the order passed by the learned SingleJudge and has erred in directing to release the mortgaged property/secured property and handover the possession along with the originaltitle deeds to the borrower on payment of a total sum of Rs.65.65lakhs only.

7.2 However, at the same time the order dated 17.01.2014 passedby the DRT was an interim relief order in SA No.9/2014 and thereforeeven if the interim relief order is set aside by this Court the appeal/application will have to be decided and disposed of on merits and onwhatever grounds which may be available to the borrower. However, atthe same time the bank cannot be restrained from selling the mortgagedproperty by holding the public auction and realise the amount and recoverthe outstanding dues, unless the borrower deposits/pays the entire amountdue and payable along with the costs incurred by the secured creditor asper Section 13(f) of the SARFAESI Act.

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A8. In view of the above and for the reasons stated above thepresent appeal succeeds. The impugned judgment and order dated20.09.2017 passed by the Division Bench of the High Court in DBSAWNo.349/2017 is hereby quashed and set aside and the order passed bythe learned Single Judge quashing and setting aside the order passed bythe DRT dated 17.01.2014 confirmed by the DRAT is hereby restored.B

It will be open for the appellant – bank to proceed further with theauction proceedings of the mortgaged property in auction i.e. residentialhouse by inviting the bids afresh and whatever the amount is alreadypaid by the borrower, may be in pursuance to the interim relief orderCpassed by the DRT and/or the impugned judgment and order passed bythe Division Bench of the High Court, the same may be adjusted againstthe dues/total liability of the borrower. At the same time DRT to decideand dispose of SA No.09/2014 filed by the borrower under Section 17 ofthe SARFAESI Act in accordance with law and on its own merits andon the whatever grounds which may be available to the borrower. It isDalso observed and directed that in case pursuance to the orders passedby the DRT and the Division Bench of the High Court if the borrower isput into possession, considering the fact that the mortgaged property is aresidential property, till the auction is finalized and the mortgaged propertyis sold in a public auction, the possession of the borrower may not beEdisturbed. However, it is directed that on public auction being finalizedand the mortgaged property is sold by the bank the borrower has tohandover the peaceful and vacant possession of the property to the bankand/or the auction purchaser. However, in the meantime the original titledeeds of the mortgaged property be retained by the bank. In the meantime,and till the borrower remains in possession of the mortgaged property asFper the present order and till the mortgaged property is sold in a publicauction, the borrower shall not transfer and/or alienate the mortgagedproperty in any manner whatsoever including the possession. The presentappeal is allowed with the above further observations and directionsaccordingly. In the facts and circumstances of the case there shall be noGorder as to costs.

Bibhuti Bhushan Bose

(Assisted by : Neha Sharma, LCRA)

Appeal allowed.

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