A private assignee of a mortgage, such as the second defendant, cannot exercise the power of sale under the SARFAESI Act unless he is a "secured creditor" as defined under the Act.

P.K. Misra, J.

I have gone through the judgment so meticulously prepared by my learned Brother Kannan, J and I agree with the same. However, I would like to supplement (not supplant) by observing as follows :-

There is no dispute about the right of the Bank to recover the amount borrowed from such Bank along with interest as per the transaction. There is also no dispute that the Bank has right to sell the property concerned, namely, the Theatre complex. The Company and its shareholders, who have been impleaded as interveners, unanimously agree that one time settlement with the Bank is beneficial for the Company and its shareholders. However, either individually or collectively they are not in a position to arrange for the huge fund required to complete the one time settlement. In other words, even though all of them are impugning the transactions with fourth and fifth defendants by the second defendant, they have unanimously submitted that one time settlement should not be allowed to fall-through. They are also not in a position to repay the amount received from fourth and fifth defendants. Senior Counsel appearing for the Bank has unequivocally stated that if the Bank is forced to wait indefinitely, it will not be in a position to honour the one time settlement and it will be forced to pursue its statutory remedy by completing the proceedings under the SARFAESI Act and realize the amount due to it along with the normal rate of interest by selling the property in question. Senior counsels appearing for fourth and fifth defendants have also submitted that in case they are not able to enjoy the benefit of the transactions for which they had advanced huge amount, they would be forced to pursue their right by availing legal remedy for refund of the amount paid by them with interest.

In such a scenario, not only the benefit of the one time settlement would not be available to the Company and its shareholders, but also the Company would be embroiled in further litigations and the ultimate result would either be same or even more disastrous. In order to avoid such disastrous consequence, the Board of Directors of the Company, which is the plaintiff in one of the cases, has passed a resolution subject, of course, to the approval of the appropriate authorities so that the Theatre complex can be sold off and the amount payable either to the bank or the fourth and the fifth defendants, as the case may be, can be repaid. The overwhelming majority of the shareholders through their Counsels have also submitted that the best possible solution would be to sell-off the property so that the surplus amount can be distributed among all the shareholders after meeting all the liabilities. The only objection has emanated from some of the shareholders, who represent comparatively much less shares. As a matter of fact, the Senior Counsels, representing such shareholders who are far less in number, have only suggested that any alternative property should be sold and not the Theatre complex. Of course, Defendant No.2 has raised vehement objection to such proposals and suggestions by raising various technical objections.

Even though prima facie conclusion of the learned single Judge raises doubt regarding the bona fide of the conduct of Defendant No.2, the fact remains that the amount received from Defendant No.4 and Defendant No.5 have been utilized to make the one time settlement possible. In other words, the company and all the shareholders are the beneficiaries. The Defendant Nos.4 and 5, instead of pursuing their appeals, are prepared to take return of the amount with reasonable interest. The Company and the overwhelming majority of shareholders have suggested that the Theatre complex can be auctioned so that the Defendant Nos.4 and 5 can be repaid and the surplus amount can be distributed. In such a scenario, instead of wading through the maze of legal hurdles and technicalities, the best possible and equitable solution would be to auctio