(A) SARFAESI Act - Section 13(2) - Recovery of dues - Attachment of third-party property - Diversion of funds - Interim relief - Modification of order - A property owned by a third party that has not been mortgaged to the creditor cannot be attached for the recovery of dues from the primary borrowers, even if it is alleged that the borrowers diverted credit facilities to repay loans related to said property. (Paras 12 and 13)

Facts of the case:
The appellant bank granted credit facilities to a partnership firm, secured by a mortgage of a factory site. The borrowers allegedly diverted funds from the cash credit account to a housing loan account with another bank to develop a residential property owned by a third party. The DRT initially restrained the alienation of both the mortgaged factory site and the third party's residential property. The third-party owner sought a recall of the order regarding their property, asserting they were neither a borrower, guarantor, nor mortgagor for the appellant. The DRT modified the order to release the third-party property from the restraint.

Findings of Court:
The third-party owner is the actual owner and never mortgaged the property to the appellant. No charge was created in favor of the appellant over the subject property. The diversion of funds by the borrowers to satisfy another loan does not create a liability or a legal basis for the attachment of a third party's property.

Issues: Whether a property owned by a third party, which was not mortgaged to the creditor, can be attached based on allegations that the borrowers diverted loan funds to facilitate payments related to that property.

Ratio Decidendi: Attachment of a third party's property is not legally permissible if that party is not a borrower or guarantor and the property was not offered as security, regardless of whether the borrowers utilized diverted funds to benefit the property or its loans.

Result: Appeal dismissed.