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SUPREME COURT OF INDIA
J.B. PARDIWALA, MANOJ MISRA, JJ.
Celir LLP – Appellant
Versus
Mr. Sumati Prasad Bafna & Ors. – Respondents
Contempt Petition (C) Nos. 158-159 of 2024 In Civil Appeal Nos. 5542-5543 of 2023 with M.A. NOS. 600-601 of 2024 In Civil Appeal Nos. 5542-5543 of 2023
Decided on : 13-12-2024
JUDGMENT :
J.B. PARDIWALA, J.:
For the convenience of exposition, this judgment is divided into the following parts: -
| INDEX | |||
| A. | FACTUAL MATRIX | ||
| i. | Facts leading upto the Decision of this Court in Civil Appeal Nos. 5542- 5543 of 2023 | ||
| ii. | Developments during the pendency of Civil Appeal Nos. 5542-5543 of 2023 | ||
| iii. | Subsequent Developments and the Acts alleged to be in contempt thereof. | ||
| B. | SUBMISSIONS OF THE PARTIES | ||
| i. | Submissions of the Successful Auction Purchaser/the petitioner. | ||
| ii. | Submissions of the Borrower/the respondent no. 1 | ||
| iii. | Submissions of the Subsequent Transferee/respondent nos. 2 & 4 | ||
| iv. | Submissions of the Bank/the respondent no. 3. | ||
| C. | ISSUES FOR DETERMINATION | ||
| D. | ANALYSIS | ||
| i. | Concept of Abuse of Process of Court and Collateral challenge to judgments that have attained finality | ||
| a. | The Decision of this Court in Celir LLP v. Bafna Motors & Ors. (2023 INSC 838) and the Scope of challenge before it | ||
| b. | The ‘Henderson’ Principle as a corollary of Constructive Res- Judicata. | ||
| ii. | Applicability of Lis Pendens in the absence of any registration as required under the State Amendment to Section 52 of the TPA | ||
| iii. | Whether any contempt is said to have been committed by the respondents herein? | ||
| iv. | Circumstances when a sale of property by auction or other means under the SARFAESI Act may be set-aside after its confirmation. | ||
| E. | FINAL ORDER | ||
1. Since the issues raised in both the captioned petitions are same and the parties are also the same, they were taken up for hearing analogously and are being disposed of by this common judgment and order.
2. The present petitions have been filed under Section 2(B) of the Contempt of Court Act, 1971 (for short, the “Act, 1971”) read with Article(s) 129 and 142(2) of the Constitution respectively seeking to initiate contempt proceedings against the respondents/alleged contemnors for wilful disobedience of the final judgment and order dated 21.09.2023 passed by this Court in Civil Appeal Nos. 5542-5543 of 2023 respectively captioned as ‘Celir LLP v. Bafna Motors (Mumbai)’.
3. For the sake of convenience, we clarify that the petitioner herein is the successful auction purchaser, the respondent no. 1, Mr. Sumati Prasad Bafna is the original borrower (hereinafter referred to as the ‘Original Borrower’), the respondent no. 4 ‘Greenscape IT Park LLP’ and its director, Mr. Jayesh A. Vavia i.e., the respondent no. 2 herein are the subsequent transferee/third- party purchaser (hereinafter referred to as the ‘Subsequent Transferee’) and the respondent no. 3, ‘Union Bank of India’ is the secured creditor/bank (hereinafter referred to as the ‘Bank’).
A. FACTUAL MATRIX
i. Facts leading upto the Decision of this Court in Civil Appeal Nos. 5542- 5543 of 2023.
4. The Original Borrower herein had availed credit facility from the Bank. Accordingly, the Bank on 03.07.2017 sanctioned Lease Rental Discounting (for short, ‘the LRD’) credit facility to the tune of Rs. 100 crore in favour of the Borrowers. The Bank vide its letter dated 02.01.2020 further sanctioned an additional amount of Rs. 6.77 Crore towards the said LRD term loan.
5. Against the aforesaid term loan, a simple mortgage was created over a parcel of land admeasuring 16200 sq. metres having buildings and ancillary structures on it at plot Nos. D-105, D 110 and D-111 respectively situated at the Trans Thane Creek Industrial Area MIDC Village Shirwane, Thane, Belapur Road, Nerul, Navi Mumbai, Thane, Maharashtra (hereinafter referred to as the “Secured Asset”) belonging to the Borrower vide a Mortgage Deed dated 28.01.2020 in lieu of the sanctioned credit.
6. The Borrower defaulted in repayment of the said loan amount and accordingly on 31.03.2021 the Borrower’s LRD Term Loan Account was declared as a Non-Performing Asset (NPA).
7. The Bank on 07.06.2021 issued a demand notice under Section 13 sub- section (2) of the
The right of redemption under the SARFAESI Act extinguishes upon the publication of the auction notice, and auction proceedings cannot be challenged post-confirmation unless fraud or collusion is pro....
Mandatory compliance with procedural requirements under the SARFAESI Act is essential; failure to adhere prejudices borrowers' rights and invalidates auction proceedings.
Point of Law - Rule 15 of Schedule II Part I of the Income Tax Act, 1961, in the first place it will have to be stated that a reading of the said Rule does not in any way conflict with either Section....
Order of the Tribunal it is not discernible as to whether any application for condonation of delay was filed or how the Tribunal dealt with the belated approach of the borrowers.
The mortgagor's right of redemption under the amended Section 13(8) of the SARFAESI Act is extinguished upon publication of the auction notice.
(1) Auction sale of secured asset – Unless and until a clear 30 days' notice is given to borrower, no sale or transfer can be resorted to by a secured creditor. Secured creditor cannot effect sale or....
The main legal point established in the judgment is the interpretation of Rule 9(4) and 9(5) of the Security Interest (Enforcement) Rules, 2002, highlighting the requirement for the purchaser to pay ....
The borrower's right of redemption is extinguished upon the publication of the auction notice, allowing the auction purchaser to claim possession.
The Court ruled that the definition of 'alienate' does not include 'mortgage', thus determining no contempt occurred.
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