JUDGMENT :

SANJAY KAROL, J.

1. Leave Granted.

The instant appeals present a classic case where the borrowers have persistently failed to regularize their account and discharge their liabilities despite being granted multiple opportunities. Their continued defaults ultimately led the Financial Corporation to exercise its statutory power under Section 29 of the State Financial Corporations Act, 1951¹[‘SFC Act’ for short.] and auction the mortgaged property to recover its dues. We are called upon to decide whether, in such circumstances, the concurrent findings recorded by the Courts below setting aside the auction sale, by way of a civil suit, can be sustained in law.

2. The present appeals arise out of the impugned judgment and order dated 18.03.2025 passed by the High Court of Judicature at Patna in First Appeal No.268 of 1999 and First Appeal No.272 of 1999, whereby the High Court dismissed both the First Appeals and affirmed the judgment and decree dated 19.05.1999 passed by the Court of 5th Subordinate Judge, Begusarai²[Hereinafter referred to as the ‘Trial Court’.] in Title Suit No.39/96.

FACTUAL MATRIX

3. The facts, shorn of unnecessary details, giving rise to the present appeal are as follows:

3.1. Ranjeet Motel & Ors. (Original Plaintiffs) ³[Hereinafter referred to as the ‘borrowers’.], for the purpose of setting up an industrial unit approached Bihar State Financial Corporation (Original Defendant No.1) ⁴[‘BSFC’ for short.] for a loan of Rs.15 Lakhs. BSFC initially sanctioned an amount of Rs.8.50 Lakhs on 29.05.1982, followed by an additional loan of Rs.3.15 Lakhs on 12.07.1984, against which the borrowers deposited the original title deeds of land and building and created an equitable mortgage over them. Upon default in repayment by the borrowers, BSFC issued a notice dated 24.11.1988 under Section 29 of SFC Act.

3.2. Aggrieved thereby, the borrowers filed a writ petition bearing number CWJC No.6104 of 1990 before the High Court also assailing the notification issued by BSFC for sale of the mortgaged property. The High Court, vide order dated 06.11.1990, disposed of the said writ petition by fixing a repayment schedule requiring the borrowers to repay their dues in several instalments, beginning from 31.12.1990 and ending on 31.10.1991. The Court also reserved the liberty for BSFC to sell the mortgaged assets in the event of default. Relevant part of the order reads as under:

“According to the petitioner, the total dues up to 31st August, 1990 including interest was Rs. 12, 86,770.52p. (Twelve lakhs eighty-six thousand seven hundred seventy and fifty-two pase).

Mr. Siyaram Shahi, learned counsel for the petitioner informed that pursuant to the aforesaid order dated 17.09.1990. Rs. 3,00000/-( three lacs) was deposited on 31st October,1990,

Mr. Shanker Prasad who was appeared for the respondent - Corporation urged that the petitioner should be directed to clear 50 per cent of the due with interest as it stood on 31st August, 1990 by and of this year.

Taking all the facts and circumstances of the case into consideration, we direct the petitioner to deposit Rs, 1,50,000/- (One lacs fifty thousand ) on or before 31st December ,1990, yet another amount of Rs. 1,50,000/- (One lac fifty thousand ) on or before 31st January, 1991. An Amount of Rs. 2,00000/- (two lacs) should be deposit on or before 31st March, 1991. We further direct the petitioner to deposit an amount of Rs. 2,00,000/- (two lacs ) on or before 30th May1991, yet another amount of Rs.2,00000/- (two lacs ) on or before 31st July,1991 and whatever may be the balance amount including the interest which the petitioner is liable to deposit in terms of the agreement by 31st October 1991 shall be deposited on or before 31st October 1991. If there is any default on the part of the petitioner in depositing any one of the installments, as indicated above, it will be open the respondent's corporation to proceed with the sale of the properties mortgaged and to execute document in fav