IMPORTANT POINT
Mortgaged property can be redeemed by tendering all dues, costs, charges and expenses before the date fixed for sale or transfer.

JUDGMENT

Dr. D.Y. CHANDRACHUD, J

1. The appellant was a guarantor to a loan sanctioned for educational purposes to one Jitendra Kumar. Under the letter of sanction dated 20 June 2009, there was a ‘repayment holiday’ of 24 months (comprised of a grace period of 12 months and an additional 12 months) or six months after the borrower obtained a job, whichever was earlier. Repayment was to commence from 20 June 2011. In order to secure the liability, the appellant created an equitable mortgage in respect of an immovable property bearing Khasra Nos.185, 186 and 188, Central Doon, Dehradun. At the request of the appellant, the period prescribed for repayment was extended by two periods each of six months (29 June 2011 to 20 December 2011 and again upto 30 June 2012). The loan was not repaid. The account was classified as a non-performing asset on 3 September 2013. Corporation bank (the second respondent) which had disbursed the loan initiated proceedings by issuing a recall notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) on 12 September 2013. Neither was a representation made nor was any money deposited. The bank took symbolic possession on 14 February 2015. The property was put to e-auction on 30 March 2015. No bid was received. A second e-auction was scheduled on 30 January 2016. After the bank received one bid in response to the auction, the appellant initially proposed to deposit the amount of Rs 2,00,000 as against the dues of Rs.36 lakhs. This was not acceptable. The proceedings before the DRT were listed on 1 February 2016 during the course of which the appellant stated that he would move a redemption application within three days. The proceedings were adjourned to 4 February 2016. No stay was granted on the confirmation of the sale. The sale was confirmed on 2 February 2016. The appellant moved a redemption proposal on 3 February 2016. During the pendency of the proceedings before the DRT, the appellant filed a writ petition before the Allahabad High Court (Writ (C ) 10877 of 2016). The following order was passed on 15 March 2016 by a Division Bench of the Allahabad High Court:

“Learned counsel for the petitioner upon instructions states that the petitioner is ready and wiling to deposit the entire loan amount within a month. He further submits that on or before 28.3.2016 the petitioner will deposit Rs. 7,00,000/- and the remaining amount as may be intimated by the Bank would be deposited on or before 30.4.2016 Put up this case as a fresh case on 28.3.2016. By the said date the petitioner will fill a supplementary affidavit annexing proof of receipt of deposit of Rs. 7,00,000/- with the respondent Bank.

The execution of the sale deed will remain stayed till 28.3.2016”

From the record it is not in dispute that the appellant paid the amount of Rs 7,00,000 by demand drafts of the State Bank of India. However, on 28 March 2016 the attention of the court was drawn to the fact that the appellant had already initiated proceedings before the DRT. The objection raised by the bank to the maintainability of the writ petition being noted, the appellant sought leave to withdraw the writ petition and to pursue the proceedings initiated by him before the DRT. Hence, on 28 March 2016, the following order was passed:

“Sri Shashi Dhar Sahai, learned counsel for the respondent-Bank on the basis of instructions has brought to our notice that petitioner who is a guarantor to the loan has already initiated proceedings before the Debt Recovery Tribunal, Lucknow for the same relief which is being claimed in the writ petition and same cause of action. An application for temporary relief has also been moved before the Debt Recovery Tribunal, Lucknow, which is pending.

Learned counsel for the petitioner when confronted with the aforesaid facts sought leave of the Court to permit withdrawal of the writ petition with the liberty to pursue before the D