A.K.SIKRI, K.S.GUPTA
PUNJAB NATIONAL BANK – Appellant
Versus
PUNJAB NATIONAL BANK – Respondent
Based on the provided legal document, the key points are as follows:
The case involves objections filed against the attachment of property in execution of a decree, where the objectors claim that the property has been previously sold and is exempt from attachment (!) .
The property in question was leased on a perpetual basis and the objectors allege that they entered into an agreement to purchase the property prior to the attachment, thus creating a right or interest in the property that should take precedence over the attachment (!) .
The decree holder contends that the judgment debtor created an equitable mortgage by deposit of title deed in favor of the bank before the objectors' agreement to sell, and that the mortgage was legally valid and prior in time (!) (!) .
The court notes that the suit for recovery of money was based on a loan agreement, but the evidence also established that an equitable mortgage was created by the judgment debtor in favor of the bank prior to the agreement with the objectors (!) (!) .
The court emphasizes that an equitable mortgage by deposit of title deed is akin to any other mortgage, conferring a transfer of interest in the property to the mortgagee, and that subsequent purchasers or interest holders cannot claim priority over such a mortgage if it was created earlier (!) .
The court dismisses the objections, confirming that the attachment of the property is valid because the equitable mortgage was created prior to the agreement to sell, and the objectors' rights do not supersede the bank’s mortgage interest (!) (!) .
It is also clarified that the exemption of the property from attachment under Section 60 of the Civil Procedure Code is not applicable to the objectors, as they are not the judgment debtors (!) .
The decision reinforces that the creation of an equitable mortgage by deposit of title deed is legally recognized and that such a mortgage takes precedence over subsequent agreements or claims, provided it was created prior to such claims (!) .
The court dismisses the execution appeal, affirming the validity of the attachment and the mortgage, and upholds the bank’s rights over the property (!) .
In summary, the key legal principle established is that an equitable mortgage created by deposit of title deed prior to any subsequent sale agreement or interest claim will prevail over such later interests, and the attachment of the property in execution proceedings remains valid.
( 1 ) AGAINST the attachment of property No. D-112, Malviya Nagar Extension, New Delhi in execution of the decree in Suit No-1179/83 - Punjab National Bank Vs. M/s. Orkids and Others, Smt. Bimla Devi, Sh. Vijay Gupta and Dr. Ajit Gupta have jointly filed these objections under Order XXI Rule 58 read with Section 151 Civil Procedure Code. In short it is alleged that on or about 9th May, 1989 the objectors were informed by their neighbours of the affixation of prohibitory order in the form prescribed under Order XXI Rule 54 Civil Procedure Code dated 30th March, 1989 issued by this Court, on the outer gate of property No. D-112, Malviya Nagar Extension. In terms of this order, said property has been attached. It is stated that the plot of land underneath the said property was demised on perpetual lease basis by Delhi Development Authority to Major H. S. Barar and a perpetual lease deed was executed on 19th December, 1972 and was registered with the office of Sub-Registrar as document No. 28) Additional Book No. 1, Vol. No-3044 at pages 97 to 102 on 2nd January, 1973. Under an agreement to sell executed in between Major H. S. Barar and the objectors on 12th August, 19
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