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DRT ought to have allowed application of bank, for return of original title documents, in view of auction: SC

The SC on April 24, 2020 {Tripower Enterprises (Private) Limited v State Bank of India & Ors.} held that guarantor has raised the issue regarding the validity of subject mortgage in different   proceedings   unsuccessfully.  It was held that the concerned forum / Court unambiguously rejected the same. It was held, more importantly, that 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. It was held that the guarantor cannot be allowed to approbate and reprobate from the commitment made in successive proceedings before the DRT and the High Court.

It was further held by the SC Bench, comprising of Justice A.M. Khanwilkar &  Justice Ajay Rastogi, that the guarantor cannot be allowed to raise   the   same   plea   repeatedly   on   every   occasion / in   every proceeding.    It was held that notably,   the   auction   sale   stands   concluded   and followed by issuance of sale certificate in favour of the appellant. Resultantly, it was held that 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.

The  appeal before the SC arose   from   the   judgment   and   order dated   6.9.2019   passed   by   the   High   Court   of   Judicature   at Madras  in Writ   Petition, whereby the High Court reversed the order dated 29.3.2019 passed by the Debts Recovery Appellate Tribunal at Chennai allowing the application filed by the respondent No. 1, ­ State Bank of India before the Debts Recovery Tribunal at Madurai, directing return of original documents – Exhibits A110 to   A114   deposited   by   the   Bank   before   the   DRT  in   O.A.   No. 11/2008.

In the present appeal, it was considered by the SC, i.e. 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.

The SC held that it has no hesitation in reversing the decision of the High Court and held that it ought not to have entertained the writ petition filed by the guarantor. The direction for return of original documents by DRAT was reaffirmed by the SC.

Accordingly, the appeal was allowed by the SC, by setting aside the judgment of the HC and affirming the judgment of the DRAT with modifications.

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