(Per : HONOURABLE MR.JUSTICE JAYANT PATEL)

As both the appeals arise from the common judgment, they are being considered simultaneously.

Both the appeals are directed against the judgment and decree passed by the 3rd Additional Senior Civil Judge, Ahmedabad (Rural) (hereinafter referred to as “lower court”) in Special Civil Suit No.220/03, whereby it has been declared that the transaction of sale by the original defendants no.2 and 3 for sale of the property to defendant no.1 is unauthorised, illegal, fraudulent and malafide and it has been further declared that the transaction of sale of land at Sanand bearing Block No.104, 105 (a) and 105 (b) with the shed vide two sale deeds is also declared illegal, fraudulent and malafide and irregular.

The lower court has further granted permanent injunction restraining the defendant no.2, its directors, officers and its employees to utilise and/or sell and/or create any license or transfer or create any encumbrance over the property and has further restrained them from interfering to the utilisation of all the movable properties by plaintiff, its Directors and/or the employees. By the very decree, the lower court has also directed defendant no.2, its directors, officers and managers from making any recovery from plaintiff or its guarantors without following any due process of law and has further restrained defendant no.2 from taking any action based on the documents executed by the Company or guarantors by bypassing the process of the Court.

We may for the sake of convenience, refer the parties herein as per the status before the lower court and/or in the present appeal.

The short facts of the case appear to be that the original plaintiff filed Special Civil Suit No.220/03 before the lower court on 26.08.2003 contending inter alia that the loan was sanctioned in favour of the plaintiff for Rs.4,40,47,000/- at different stages and at the time when the loan was sanctioned, the valuation report of the property was submitted of Rs.3,17,90,000/- made in the year 1999 and thereafter, there was additional construction made of the sheds and investment was made and keeping in view the said aspects, the loan was sanctioned. As per the plaintiff, on account of the earthquake on 26.01.2001, the business was adversely affected and as a result thereof, the plaintiff could not pay the installment of the term loan and plaintiff had requested for extension of time and re-schedulement of the installment, but the Bank and its officers in March 2002 unauthorisedly applied seal over the factory premises and as per the plaintiff, the Bank could not have done so without due process of the Court. It was averred by the plaintiff that as per the notice issued by the Bank on 27.10.2001, the overdue amount in the loan account of the plaintiff was of Rs.2,43,50,912.48 and the Bank had called upon the said amount to be paid within 8 days to the plaintiff. Thereafter, under the guise that the payment was not made, it had applied seal and closed the running unit of the factory of the plaintiff which resulted into huge responsibility of 300 employees upon the plaintiff. The plaintiff had averred in the plaint that the officers of the Bank at the time of grant of loan had got documents executed of Power of Attorney dated 19.01.2001 in favour of the Bank and also the equitable mortgage and as per the plaintiff, the Bank could not have taken over possession of the property without due process of law and it was the case of the plaintiff that some of the plant and machineries for which the possession was taken over by the Bank was hypothecated to Navnirman Cooperative Bank Ltd. and the plaintiff had requested the officers of the Bank to release the same, but such properties were also not realised. It was averred by the plaintiff that the property of the plaintiff worth Rs.6.5 crore has been sold away fraudulently by the Bank with the malafide purpose and while undertaking the said course, the advertisement was given on