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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. Chandurkar, Rajesh S. Patil, JJ.
Asset Reconstruction Company (India) Limited – Appellant
Versus
Punjab National Bank – Respondent
JUDGMENT :
RAJESH S. PATIL, J.
1. The petitioner seeks to challenge the judgment and order dated 6th November 2019 passed by the Debts Recovery Appellate Tribunal (for short ‘DRAT’), which has quashed and set aside the judgment and order passed by the Debts Recovery Tribunal (for short DRT) dated 9th January 2012.
FACTS
2. The petitioner – Asset Reconstruction Company (India) Limited (for short ‘ARCL’) claims to be the securitisation and reconstruction company under the Companies Act 1956, and also a financial institution under Section 2(h) (ia) of the Recovery of Debts and Bankruptcy Act 1993 (for short ‘RDDB Act’). ARCL claims to have power to recover dues from the borrower pursuant to Assignment Deed executed by the State Bank of India (for short ‘SBI’), dated 30th March 2005. It is further case of ARCL that the erstwhile assignor, SBI had granted various credit facilities to the borrower M/s. Aggarwal Silk & Synthetics Pvt. Ltd., to which Mr. Rameshchandra Aggarwal and Ms.Shashi Aggarwal executed a personal guarantee. Mr. Rameshchandra Aggarwal mortgaged his immovable property being land admeasuring Survey No. 44, Hissa No. 5/1, land admeasuring 31 gunthas and Survey No.44, Hissa N
Negligence in securing original title deeds can result in loss of priority for mortgage claims, emphasizing the need for due diligence by lenders.
The main legal point established in the judgment is the interpretation and application of the requisites for a valid mortgage by deposit of title deeds under Section 58(f) of the Transfer of Property....
Equitable mortgage can exist without a formal deed if intention and conduct indicate binding security rights.
Redemption of mortgage - Evidence led by applicant during trial is inconsistent with pleadings and documents stated to have been deposited with plaintiff / appellant for creation of equitable mortgag....
(1) For every fact which is pleaded, there has to be evidence, either oral or documentary, to substantiate the same.(2) Justice on merits is to be preferred as against what scuttles a decision on mer....
The main legal point established in the judgment is that a memorandum of deposit of title deeds may not require registration if it is meant to record a concluded transaction and does not create an in....
A bank cannot assert a general lien over title deeds related to a home loan to secure unrelated debts; repayment of the home loan extinguishes the lien.
A mortgage created in violation of the terms of a prior mortgage is voidable, and the first charge holder's rights must be protected against subsequent encumbrances.
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