{"id":233205,"date":"2011-05-10T00:00:00","date_gmt":"2011-05-09T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-l-k-trust-vs-edc-ltd-ors-on-10-may-2011"},"modified":"2016-11-10T21:14:31","modified_gmt":"2016-11-10T15:44:31","slug":"ms-l-k-trust-vs-edc-ltd-ors-on-10-may-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-l-k-trust-vs-edc-ltd-ors-on-10-may-2011","title":{"rendered":"M\/S.L.K.Trust vs Edc Ltd. & Ors on 10 May, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S.L.K.Trust vs Edc Ltd. & Ors on 10 May, 2011<\/div>\n
Bench: J.M. Panchal, Cyriac Joseph<\/div>\n
                                                                               Reportable\n\n\n\n               THE SUPREME COURT OF INDIA\n\n\n               CIVIL APPELLATE JURISDICTION\n\n\n         CIVIL APPEAL NOS. 4214-4215   OF 2011\n\n(Arising out of S.L.P. (C) Nos. 10334-10335 OF 2008)\n\n\n\n\nM\/s. L.K.Trust                                            ... Petitioner(s)\n\n                                Versus\n\n\nEDC Ltd. & Ors.                                                                  ... \n\nRespondent(s)\n\n\n\n\n                                 WITH\n\n\n        CONTEMPT PETITION (C) NO. 165 OF 2008\n\n\n                                       IN\n\n\n      SPECIAL LEAVE PETITION (C) NO. 4957 OF 2006\n\n\n\n\n\n                          J U D G M E N T\n<\/pre>\n
J.M. Panchal, J.\n<\/p>\n
1.      Leave is granted in each Special Leave Petition.\n<\/p>\n
2.      The   appeal   arising   from   Special   Leave   Petition   (C) <\/p>\n
        No.   10334   of   2008   is   directed   against   order   dated <\/p>\n
                                                                 2<\/span><\/p>\n
April 07, 2008 passed by the High Court of Bombay <\/p>\n
at   Goa   in   Misc.   Civil   Application   No.   165   of   2008 <\/p>\n
which was filed in Writ Petition No. 601 of 2006 by <\/p>\n
which   it   is   clarified   that   the   order   of   status   quo <\/p>\n
passed   by   the   High   Court   vide   order   dated <\/p>\n
December   18,   2006   shall   not   come   in   the   way   of <\/p>\n
EDC   Ltd.,   i.e.,   the   respondent   no.   1   Company <\/p>\n
herein   and   the   State   Bank   of   India,   i.e.,   the <\/p>\n
respondent No. 2 herein in considering the proposal <\/p>\n
of the respondent no. 3 Company who is mortgagor <\/p>\n
and the petitioner in Writ Petition No. 601 of 2006.\n<\/p>\n
The appeal arising from SLP (C) No. 10335 of 2008 <\/p>\n
is directed against order dated April 9, 2008 passed <\/p>\n
by the Division Bench of the High Court of Bombay <\/p>\n
at Goa in Writ Petition No. 601 of 2006 by which the <\/p>\n
resolution passed by the respondent no. 1 EDC Ltd.\n<\/p>\n
on April 8, 2008 had resolved to accept the proposal <\/p>\n
of respondent no. 3 the Falcon Retreat Pvt. Ltd. for <\/p>\n
redemption   of   mortgage   and   affidavit   tendered   by <\/p>\n
the State Bank of India, i.e., the respondent No. 2, <\/p>\n
                                                                        3<\/span><\/p>\n
      stating   that   the   State   Bank   of   India   has   accepted <\/p>\n
      the   proposal   of   M\/s.   Falcon   Retreat   Pvt.   Ltd.   for <\/p>\n
      redemption   of   mortgage   on   payment   of   Rs.12.87 <\/p>\n
      crores to EDC Ltd. and Rs.9.18 Crores to the State <\/p>\n
      Bank   of   India,   are   noticed   and   in   view   of   the   said <\/p>\n
      resolution as well as the affidavit of the State Bank <\/p>\n
      of India, the respondent no. 3, who was the original <\/p>\n
      petitioner, is granted leave to withdraw the petition.\n<\/p>\n
3.    This   Court   proposes   to   refer   to   certain   relevant <\/p>\n
      facts, which are as under:\n<\/p>\n
      The  respondent no. 1,  i.e., EDC  Ltd.  is a Company <\/p>\n
registered   under   the   Indian   Companies   Act,   1956.\n<\/p>\n
Earlier   it   was   known   as   the   Economic   Development <\/p>\n
Corporation   of   Goa.     It   is   an   investment   company   in <\/p>\n
which the State of Goa holds majority shares.   The main <\/p>\n
objects   of   the   respondent   no.   1   Company,   as   per   its <\/p>\n
Memorandum   of   Association,   amongst   others,   are <\/p>\n
providing   financial   assistance   to   the   industrial <\/p>\n
enterprises   and   enterprises   carrying   on   other   economic <\/p>\n
                                                                    4<\/span><\/p>\n
activities   whether   for   starting,   running,   expanding, <\/p>\n
modernizing   etc.   and   to   aid,   assist,   initiate,   promote, <\/p>\n
expedite and accelerate the economic development of the <\/p>\n
State   in   various   spheres.     The   respondent   no.   3   is   a <\/p>\n
Private   Limited   Company.     It  is   also   incorporated   under <\/p>\n
the   provisions   of   the   Companies   Act,   1956.     The <\/p>\n
respondent   No.   3   company   is   engaged   inter   alia   in   the <\/p>\n
business of development\/operation of hotel and tourism.\n<\/p>\n
During   the   years   1994   to   1999,   the   respondent   no.   3 <\/p>\n
proposed   to   develop   and   to   start   hotel   project   in   the <\/p>\n
property   admeasuring   approximately   28000   sq.   mtrs.   of <\/p>\n
Survey     Nos.   142\/1   and   142\/1   of   Revenue   Village <\/p>\n
Arpora,   in   Taluka   Bardez.            For   the   purpose   of <\/p>\n
implementing the said hotel project, the respondent no. 1 <\/p>\n
company   i.e.   EDC   Ltd.   granted   term   loan   of   Rs.7.00 <\/p>\n
crores to respondent No. 3 against mortgage of aforesaid <\/p>\n
hotel   property   vide   agreement   dated   February   8,   1999.\n<\/p>\n
Respondent No. 2 has also granted a loan of Rs. 5 crores <\/p>\n
to  the  respondent  No.  3 against  pari  pasu charge  of  the <\/p>\n
hotel property.\n<\/p>\n
                                                                       5<\/span><\/p>\n
4.    The   record   indicates   that   about   80   per   cent   of   the <\/p>\n
      project   was   completed   by   the   middle   of   the   year <\/p>\n
      2001   but   subsequently   because   of  global   recession <\/p>\n
      in   the   tourism   and   real   estate   business,   the <\/p>\n
      development of the project was severely affected and <\/p>\n
      project   implementation  was  halted.     In view  of  this <\/p>\n
      hurdle,   the   repayment   of   the   loan   amount   became <\/p>\n
      difficult   resulting  in   arrears   of   installments   of   loan <\/p>\n
      with mounting interest liability.\n<\/p>\n
5.    When   the   respondent   no.   3   was   not   able   to   repay <\/p>\n
the loan amount, the respondent no. 1 company initiated <\/p>\n
coercive   action   for   the   recovery   of   loan   amount   and <\/p>\n
attached   the   property   of     respondent   no.   3   company   on <\/p>\n
July   15,   2003   under   Section   29   of   State   Finance <\/p>\n
Corporation Act, 1951.  On the request of the respondent <\/p>\n
No. 3 that it would be able to sustain the adverse market <\/p>\n
conditions and convert the project into profitable venture <\/p>\n
provided   some   time   was   granted,   the   property   attached <\/p>\n
was released and, therefore, the respondent no. 1 handed <\/p>\n
                                                                       6<\/span><\/p>\n
over the possession of the property to the respondent no.\n<\/p>\n
3   on   certain   conditions   stipulated   in   agreement   dated <\/p>\n
August   19,   2003,   but   subsequently   in   the   month   of <\/p>\n
October,   2003   the   respondent   No.   1   again   attached   the <\/p>\n
property.   The respondent no. 3 challenged the action of <\/p>\n
the respondent no. 1 in attaching the property by way of <\/p>\n
filing Writ Petition No. 608 of 2003 before the High Court.\n<\/p>\n
The said petition was, however, withdrawn subsequently.\n<\/p>\n
6.    The offer made by the respondent No. 3 for financial <\/p>\n
restructuring and\/or one time settlement by payment of <\/p>\n
Rs.12.00 crores was rejected by the respondent No. 1 and <\/p>\n
the respondent No. 2.   Pursuant thereto, the respondent <\/p>\n
no. 1 made several attempts between 2004 to 2005 to sell <\/p>\n
the   attached   property,   which   was   mortgaged   by   way   of <\/p>\n
public   auction,   but   in   none   of   the   public   auctions,   it <\/p>\n
received offers equivalent to market value of the property.\n<\/p>\n
Thereafter,   by   private   negotiation   the   respondent   No.   1 <\/p>\n
had   accepted   the   proposal   of   appellant   trust   to   sell   the <\/p>\n
property in question for a sum of Rs.12.99 crores.\n<\/p>\n
                                                                      7<\/span><\/p>\n
7.    The   respondent   no.   3   thereafter   received   a   letter <\/p>\n
dated December 5, 2005 on December 13, 2005 from the <\/p>\n
respondent   no.   1  whereby   the   respondent   no.   1  notified <\/p>\n
that it had received an offer of Rs.12.99 crores from the <\/p>\n
appellant and was inclined to accept the said offer and in <\/p>\n
case the respondent no. 3 had any party with better offer, <\/p>\n
the   same   should   be   sent   to   respondent   no.   1   within   3 <\/p>\n
days   from   the   date   of   the   letter,   failing   which   the <\/p>\n
respondent   no.   1   would   proceed   further   in   the   matter <\/p>\n
without   prejudice   to   the   rights   of   the   respondent   no.   1 <\/p>\n
company   to   recover   the   balance   outstanding   dues   from <\/p>\n
the   respondent   no.   3.     On   the   same   date   i.e.   on <\/p>\n
December 5, 2005 EDC Board while accepting the offer of <\/p>\n
the   present   appellant   trust,   the   respondent   No.   1   had <\/p>\n
also passed a resolution that only 3 days notice be given <\/p>\n
in future to borrowers to bring in matching offers in case <\/p>\n
of private auctions. The offer received by the respondent <\/p>\n
no.   1   from   the   appellant   was   subject   matter   of   Writ <\/p>\n
Petition   No.   19   of   2006   filed   by   the   respondent   no.   3 <\/p>\n
before the High Court.   The ground raised in the petition <\/p>\n
                                                                       8<\/span><\/p>\n
was that the offer made by the respondent no. 3 through <\/p>\n
third party i.e. Condor Polymeric for Rs. 14 crores made <\/p>\n
on   January   18,   2006   was   not   being   considered   by   the <\/p>\n
respondent   no.  1  despite   the   said   offer   being   the   higher <\/p>\n
offer than made by the appellant trust.   The respondent <\/p>\n
no.   3   had   prayed   for   a   writ   of   mandamus   directing   the <\/p>\n
respondent no. 1 to consider and accept the proposal of <\/p>\n
the   respondent   no.   3   communicated   vide   a   letter   dated <\/p>\n
18.01.2006   and   restrain   the   respondent   no.   1   from <\/p>\n
proceeding to sell the property attached to the appellant.\n<\/p>\n
8.    While the said petition was pending before the High <\/p>\n
Court,   the   appellant   had   filed   an   application   for <\/p>\n
intervention   and   impleadment   in   the   petition   on   the <\/p>\n
ground that the  property  in issue was already agreed to <\/p>\n
be   sold   to   the   appellant   trust   by   the   respondent   no.   1 <\/p>\n
and   part   payment   towards   it   was   already   made.     Upon <\/p>\n
hearing   the   parties   the   High   Court   had   directed   the <\/p>\n
impleadment   of   appellant,   i.e.,   L.K.   Trust   as   the <\/p>\n
respondent no. 3 in the Writ Petition pending before it.\n<\/p>\n
                                                                        9<\/span><\/p>\n
      At   the   hearing   of   the   said   petition,   the   High   Court <\/p>\n
questioned respondent no. 1 as to whether there was an <\/p>\n
agreement   to   sell   the   property   to   the   appellant.     The <\/p>\n
stand taken by the respondent no. 1 was that there was a <\/p>\n
concluded contract with the appellant.  In support of the <\/p>\n
said   stand,   the   respondent   no.   1   had   relied   upon   the <\/p>\n
resolution   dated   December   5,   2005   of   the   Board   of <\/p>\n
Directors   indicating   that   the   Board   of   Directors   had <\/p>\n
accepted   the   offer   of   the   appellant   and   acceptance   was <\/p>\n
communicated   to   the   appellant   on   December   12,   2005.\n<\/p>\n
However, the respondent no. 1 did not bring to the notice <\/p>\n
of the Court the fact that 3 days time was granted to the <\/p>\n
respondent no. 3 to bring better offer and before expiry of <\/p>\n
the   said   period   resolution   was   passed   by   the   Board   of <\/p>\n
Directors of respondent no. 1 company.   The respondent <\/p>\n
no.   1   company   also   concealed   the   fact   that   on   January <\/p>\n
18,   2006   Condor   Polymeric   has   made   offer   of   Rs.   14 <\/p>\n
crores   to   the   Board   of   Directors   of   respondent   no.   1 <\/p>\n
company.     The   High   Court,   therefore,   relying   upon   the <\/p>\n
stand taken by the respondent No. 1, held that there was <\/p>\n
                                                                       1<\/span><\/p>\n
a  concluded  contract  between  the  respondent   no. 1  and <\/p>\n
the   appellant   and   in   view   of   the   said   conclusion <\/p>\n
dismissed the petition filed by the respondent no. 3 vide <\/p>\n
judgment   and   order   dated   February   22,   2006.     Feeling <\/p>\n
aggrieved, the respondent no. 3 approached this Court by <\/p>\n
filing   Special   Leave   Petition   on   March   27,   2006   which <\/p>\n
was ultimately dismissed on August 24, 2006.   Thus the <\/p>\n
higher offer made by the respondent no. 3 through third <\/p>\n
party which was subject matter of Writ Petition No. 19 of <\/p>\n
2006 was not accepted when petition for special leave to <\/p>\n
appeal   was   dismissed   on   August   24,   2006.     During   the <\/p>\n
pendency   of   Writ   Petition   No.   19   of   2006,   filed   by   the <\/p>\n
respondent No. 3 herein, the appellant trust, on February <\/p>\n
13,   2006   issued   cheques   to   the   respondent   No.   1, <\/p>\n
purporting to be in full payment of Rs.12,99,00,000\/- as <\/p>\n
per   the   terms   and   conditions   of   sale.     After   the   High <\/p>\n
Court dismissed Writ Petition No. 19 of 2006 on February <\/p>\n
22,   2006,   R.C.   Mirchandani   and   others,   who   are   unit <\/p>\n
holders in the hotel project of the respondent No. 3, filed <\/p>\n
Writ   Petition   No.   124   of   2006   challenging   the   action   of <\/p>\n
                                                                      1<\/span><\/p>\n
the   respondent   No.   1   in   selling   the   property   to   the <\/p>\n
appellant-trust.     Those   petitioners   (Mirchandani   and <\/p>\n
others) offered to pay higher amount than offered by the <\/p>\n
appellant-trust  in Writ  Petition  No.  19 of 2006,  i.e.,  Rs..\n<\/p>\n
15   crores,   which   was   conveyed   to   the   respondent   No.   1 <\/p>\n
by letter dated January 3, 2006.   The respondent Nos. 3 <\/p>\n
and   4   herein   were   impleaded   as   the   respondent   Nos.   4 <\/p>\n
and 5 in Writ Petition No. 124 of 2006.\n<\/p>\n
9.    The Board of Directors of the respondent No. 1 was <\/p>\n
informed that offer of Rs. 14 crores was made by Condor <\/p>\n
Polymeric   to   sabotage   the   offer   made   by   the   appellant-\n<\/p>\n
trust.     The   record   indicates   that   the   Board   of   Directors <\/p>\n
was  not  informed   that  the   appellant-trust  had  defaulted <\/p>\n
in   making   the   balance   payment   as   per   the   terms   of <\/p>\n
acceptance   dated   December   12,   2005   by   January   12, <\/p>\n
2006.        Because   of   this   concealment   and   wrong <\/p>\n
representation regarding Condor Polymeric, the Board of <\/p>\n
Directors of the respondent No. 1 in its meeting held on <\/p>\n
January 18, 2006 rejected the offer of Rs. 14 crores made <\/p>\n
                                                                       1<\/span><\/p>\n
by   the   respondent   No.   3   through   Condor   Polymeric.     In <\/p>\n
the   meeting   held   on   April   10,   2006,   the   Board   of <\/p>\n
Directors of the respondent No. 1 was informed that the <\/p>\n
cheques   issued   by   the   appellant-trust,   which   were <\/p>\n
delivered during the pendency of the Writ Petition No. 19 <\/p>\n
of 2006, were subsequently deposited by the respondent <\/p>\n
No. 1 for realization but the same were dishonoured.  The <\/p>\n
Board   of   Directors   noted   this   default   and   resolved   to <\/p>\n
accept the higher bid of Rs. 14 crores offered by Condor <\/p>\n
Polymeric,   brought   by   the   respondent   No.   3.     This <\/p>\n
decision   of   Board   of   Directors   of   the   respondent   No.   1 <\/p>\n
was   not   brought   to   the   notice   of   this   Court   during   the <\/p>\n
course   of   hearing   of   Special   Leave   Petition   on   April   12, <\/p>\n
2006, but an affidavit was filed stating as to why the offer <\/p>\n
of the respondent No. 3 was not acceptable.\n<\/p>\n
      The respondent no. 3 was of the view that its right <\/p>\n
of   redemption   of   the   mortgaged   property   under   Section <\/p>\n
60 of the Transfer of Property Act (`T.P. Act’ for short) was <\/p>\n
not   defeated   by   mere   agreement   to   sell   the   property <\/p>\n
                                                                      1<\/span><\/p>\n
between   the   respondent   no.   1   and   the   appellant   nor   by <\/p>\n
the Judgment of the High Court which was confirmed by <\/p>\n
the Supreme Court because the said question was never <\/p>\n
raised   before   the   Court   and   was,   therefore,   not <\/p>\n
considered.     According   to   the   respondent   no.   3   such   a <\/p>\n
right   in   law   was   recognized   in   Clause   16   of   terms   and <\/p>\n
conditions   of  tender   document   entered  into  between  the <\/p>\n
appellant   and   the   respondent   no.   1.     Thereafter,   by <\/p>\n
addressing   a   letter   dated   August   25,   2006   to   the <\/p>\n
respondent No. 1, the respondent no. 3 exercised its right <\/p>\n
of   redemption   and   requested   the   respondent   no.   1   to <\/p>\n
confirm the exact amount due from the respondent no. 3 <\/p>\n
payable to the respondent Nos. 1 and 2.   Meanwhile, the <\/p>\n
respondent   No.   3   enclosed   banker’s   cheque   of   Rs.   25 <\/p>\n
lakhs stating that the balance amount which was due on <\/p>\n
the date of attachment of the mortgaged assets would be <\/p>\n
paid in full on settlement of the amount.  The respondent <\/p>\n
no. 3 addressed another letter dated September 27, 2006 <\/p>\n
requesting   the   respondent   no.   1   to   issue   the   letter   of <\/p>\n
acceptance as it had received information that the Board <\/p>\n
                                                                      1<\/span><\/p>\n
of   Directors   of   the   respondent   no.   1   company   had <\/p>\n
acknowledged the equity of redemption.   The respondent <\/p>\n
no.   3,   by   subsequent   letter   dated   September   29,   2006, <\/p>\n
made   a   fair   estimate   of   outstandings,   on   the   basis   of <\/p>\n
outstanding   amount   quoted   by   respondent   no.   1   before <\/p>\n
the   Supreme   Court   on   April   12,   2006   in   Special   Leave <\/p>\n
Petition No. 4957 of 2006 read with resolution passed by <\/p>\n
the Board of Directors in its meeting held on August 27, <\/p>\n
2004 wherein it was recorded that the interest would not <\/p>\n
be   levied   on   the   dues   if   the   property   was   attached   or <\/p>\n
taken   possession   of,   from   the   date   of   taking   such <\/p>\n
possession   read  with   Loan   Settlement   Scheme   approved <\/p>\n
by Government of Goa as proposed by the respondent no.\n<\/p>\n
1   company   in  line   with   RBI   Guidelines,   and   sent   to   the <\/p>\n
respondent   no.   1   an   amount   of   Rs.9,25,00,000\/-   by <\/p>\n
cheque, in addition to earlier payment of Rs.25,00,000\/-\n<\/p>\n
which   was   made   on   August   25,   2006.     The   respondent <\/p>\n
no.   3   also   sent   an   amount   of   Rs.5,90,00,000\/-   to   the <\/p>\n
respondent no. 2 by a cheque.  The respondent no. 1 vide <\/p>\n
its   letter   dated   September   27,   2006   purportedly,   in <\/p>\n
                                                                        1<\/span><\/p>\n
response   to   the   letter   dated   August   25,   2006   of   the <\/p>\n
respondent no. 3, informed the respondent no. 3 that, for <\/p>\n
the purpose of redemption of the mortgaged property, the <\/p>\n
outstanding   dues   were   Rs.19,22,922.12.                     It   was <\/p>\n
mentioned   in   letter   dated   September   27,   2006   by   the <\/p>\n
respondent No. 1 that it was in the process of proceeding <\/p>\n
further   with   the   transaction   entered   into   with   the <\/p>\n
appellant-trust   as   the   appellant-trust   had   forwarded <\/p>\n
balance consideration to the respondent no. 1 subject to <\/p>\n
the   decision   of   the   Supreme   Court   dated   August   24, <\/p>\n
2006.     By   subsequent   letter   dated   09.10.2006   the <\/p>\n
respondent no. 1 company had acknowledged the right of <\/p>\n
the respondent no. 3 of redemption of mortgage but had <\/p>\n
stated   that   it   was   in   the   process   of   implementing   the <\/p>\n
Supreme Court order and therefore no further concession <\/p>\n
for   extension   of   time   to   exercise   the   right   of   redemption <\/p>\n
could be considered in the case of the respondent no. 3.\n<\/p>\n
As   mentioned   above,   the   respondent   no.   3   had   sent   an <\/p>\n
amount   of   Rs.9,72,00,690\/-   to   the   respondent   no.   1   on <\/p>\n
August   24,   2006   and   vide   letters   dated   September   27, <\/p>\n
                                                                        1<\/span><\/p>\n
2006   and   October   9,   2006   the   respondent   No.   1   had <\/p>\n
clearly   accepted   and   acknowledged   the   right   of   the <\/p>\n
respondent   no.   3   to   redeem   the   mortgaged   property   on <\/p>\n
the payment of liabilities due.   Meanwhile, the appellant <\/p>\n
trust received a letter from the President of Goa Chamber <\/p>\n
of Commerce, who was also Vice Chairman of respondent <\/p>\n
no.   1   company   stating   that   the   respondent   no.   1   at   its <\/p>\n
Board   Meeting   held   on   October   19,   2006   had <\/p>\n
acknowledged legal and inherent right of respondent no.\n<\/p>\n
3  to  redeem the   mortgaged   property   and  that  in  light  of <\/p>\n
one   time   settlement   policy   of   the   Government   of   Goa, <\/p>\n
which also had the effect of redemption of the mortgage, <\/p>\n
the   case   of   the   respondent   no.   3   was   referred   to   the <\/p>\n
Office of Advocate General whose opinion would be tabled <\/p>\n
before   Board   of   Directors   of   respondent   no.   1   company <\/p>\n
again   for   a   decision.     The   record   further   indicates   that <\/p>\n
the   respondent   no.   3   had,   for   exercising   the   right   of <\/p>\n
redemption,   shown   willingness   to   pay   an   amount   of   Rs.\n<\/p>\n
18.40   crores   to   the   respondent   nos.   1   and   2   and   also <\/p>\n
agreed   to   pay   Rs.   11.50   crores   towards   the   liabilities   of <\/p>\n
                                                                        1<\/span><\/p>\n
unit   holders   and   Court   creditors   etc.     Meanwhile,   SBI <\/p>\n
filed   an   affidavit   on   November   21,   2006   in   Writ   Petition <\/p>\n
No. 124 of 2006 that they  were willing to accept  offer of <\/p>\n
Rs.18.40   crores   offered   to   EDC   Ltd.   and   State   Bank   of <\/p>\n
India   by   the   respondent   no.   3.     By   its   letter   dated <\/p>\n
November 23, 2006, the respondent no. 3 again asserted <\/p>\n
its   right   of   redemption   and   informed   that   its   financial <\/p>\n
supporters   i.e.   M\/s.   R   N   R   Hotels   Pvt.   Ltd.   had   already <\/p>\n
deposited   Rs.25   lakhs   with   the   respondent   no.1.     The <\/p>\n
respondent no. 3 to show its bonafide, offered to deposit <\/p>\n
Rs.18.15   crores   on   or   before   December   8,   2006   in   the <\/p>\n
Commercial Branch of the State Bank of India which was <\/p>\n
permitted   by   the   High   Court   on   November   28,   2006   in <\/p>\n
Writ Petition No. 124 of 2006.\n<\/p>\n
10.    The   opinion   of   Advocate   General   of   Goa   dated <\/p>\n
22.11.2006   mentioned   that   there   was   a   concluded <\/p>\n
contract between the respondent no. 1 and the appellant-\n<\/p>\n
trust and the right of the respondent no. 3 of redemption <\/p>\n
stood   extinguished   by   its   conduct   as   envisaged   under <\/p>\n
                                                                    1<\/span><\/p>\n
Section 60 of the Transfer of Property Act, 1882.   Acting <\/p>\n
upon   the   said   opinion   Board   of   Directors   of   respondent <\/p>\n
no.1   passed   a   resolution   dated   November   24,   2006 <\/p>\n
deciding   that   the   respondent   no.   1   would   conclude   the <\/p>\n
sale   transaction   with   the   appellant-trust   and   go   ahead <\/p>\n
with the conveyance and delivery of possession in favour <\/p>\n
of the appellant-trust.   Thereupon, the respondent no. 3 <\/p>\n
filed   W.P.   No.   601   of   2006   before   the   High   Court   of <\/p>\n
Bombay at Goa praying for writ of mandamus against the <\/p>\n
respondent   nos.   1   and   2  inter   alia  directing   them   to <\/p>\n
permit   the   respondent   No.   3   to   exercise   the   rights   of <\/p>\n
redemption  of mortgaged  property  by  accepting  the offer <\/p>\n
of Rs.18.40 crores towards full and final settlement of the <\/p>\n
liability  of the  respondent  No. 3 towards the  respondent <\/p>\n
Nos. 1 and 2 to exercise the reconveyance and release the <\/p>\n
documents   of   title   deposited   with   the   respondent   No.   1 <\/p>\n
and   further   prayed   that   pending   hearing   and   final <\/p>\n
disposal   of   the   petition   the   respondent   No.   1   to   be <\/p>\n
restrained   from   proceeding   to   finalize   the   sale   of   the <\/p>\n
mortgaged property in favour of the appellant-trust.  Vide <\/p>\n
                                                                           1<\/span><\/p>\n
order   dated   December   18,   2006,   High   Court   of   Bombay <\/p>\n
at   Goa,   while   tagging   Writ   Petition   (C)   No.   601   of   2006 <\/p>\n
with   Writ   Petition   (C)   No.   124   of   2006,   directed   the <\/p>\n
parties   to   maintain   status   quo   and   to   list   the   matter   in <\/p>\n
the   second   week   after   vacation,   for   final   disposal   at   the <\/p>\n
stage   of   admission.     Thereafter,   on   February   19,   2008, <\/p>\n
the respondent no. 3 made representation to respondent <\/p>\n
no.   1   to   permit   it   to   exercise   its   right   of   redemption   of <\/p>\n
mortgage   on   payment   of   Rs.12.99   crores   to   the <\/p>\n
respondent   no.   1  and   Rs.   9   crores   to   respondent   no.   2, <\/p>\n
i.e.,   the   State   Bank   of   India.     The   respondent   no.   1 <\/p>\n
considered  the   representation   of  respondent   no.   3  in   its <\/p>\n
309th  Board   Meeting   and   passed   a   resolution   dated <\/p>\n
February   20,   2008   to   the   effect   that   the   offer   of   the <\/p>\n
respondent no. 3 to redeem the mortgage was favourably <\/p>\n
accepted   provisionally,   subject   to   the   approval   of   the <\/p>\n
High Court in Writ Petitions No. 601 of 2006 and 124 of <\/p>\n
2006 pending before the High Court.\n<\/p>\n
                                                                        2<\/span><\/p>\n
11.    Thereafter,   respondent   no.   1   preferred   Misc.   Civil <\/p>\n
Application   No.   165   of   2008   in   Writ   Petition   No.   601   of <\/p>\n
2006 on February 22, 2008  inter alia  praying therein for <\/p>\n
appropriate   orders   directing   approval   of   the   Board <\/p>\n
resolution   dated   February   20,   2008   which   in   turn <\/p>\n
resolved   to   accept   the   offer   of   the   respondent   no.   3 <\/p>\n
seeking   redemption   of   mortgage   in   terms   mentioned <\/p>\n
therein.     The   appellant-trust   filed   its   reply   to   the   said <\/p>\n
application   on   March   8,   2008   and   opposed   the   grant   of <\/p>\n
prayers made therein.   The High Court by the impugned <\/p>\n
order   dated   April   7,   2008   held   that   the   order   of   status <\/p>\n
quo passed by the High Court shall not come in the way <\/p>\n
of respondent nos. 1 and 2 in considering the proposal of <\/p>\n
respondent   no.   3.     Thereafter,   the   respondent   no.   1 <\/p>\n
passed a resolution on April 8, 2008, accepting the offer <\/p>\n
of   the   respondent   no.   3   to   redeem   the   mortgage.     On <\/p>\n
April   9,   2008,   the   High   Court   took   the   resolution   dated <\/p>\n
08.04.2008 passed by the respondent no. 1 as well as the <\/p>\n
affidavit   tendered   by   the   State   Bank   of   India,   i.e.,   the <\/p>\n
respondent   No.   2,   stating   that   the   State   Bank   of   India <\/p>\n
                                                                          2<\/span><\/p>\n
has   accepted   the   proposal   of   M\/s.   Falcon   Retreat   Pvt.\n<\/p>\n
Ltd. (the respondent No. 3) for redemption of mortgage on <\/p>\n
payment   of   Rs.12.87   crores   to   EDC   Ltd.   and   Rs.9.18 <\/p>\n
crores   to   the   State   Bank   of   India,   on   the   record   of   the <\/p>\n
Writ   Petition   No.   601   of   2006   and   permitted   the <\/p>\n
respondent No. 3 to withdraw the Writ Petition.  The High <\/p>\n
Court by an order dated April 9, 2008, also dismissed the <\/p>\n
Writ   Petition   No.   124   of   2006   preferred   by   Mirchandani <\/p>\n
as infructuous.  The above two orders dated April 7, 2008 <\/p>\n
passed in Misc. Civil Application No. 165 of 2008 in Writ <\/p>\n
Petition   No.   601   of   2006   and   April   9,   2008   in   Writ <\/p>\n
Petition   No.   601   of   2006   have   given   rise   to   the   instant <\/p>\n
appeals.\n<\/p>\n
12.    The learned counsel for the respondent Nos. 3 and 4 <\/p>\n
had   spelt   out   a   preliminary   objection   as   to   the <\/p>\n
maintainability   of   the   Special   Leave   Petition   against   the <\/p>\n
order   dated   April   7,   2008   passed   in   M.C.A.   No.165   of <\/p>\n
2008 which was filed in Writ Petition (C) No. 601 of 2006 <\/p>\n
by   which   the   status-quo   order   granted   earlier   was <\/p>\n
                                                                      2<\/span><\/p>\n
modified as well as special leave petition filed against the <\/p>\n
order dated April 9, 2008 passed in Writ Petition (C) No. <\/p>\n
601   of   2006   permitting   the   Respondent   No.   3   who   was <\/p>\n
original   Petitioner   therein   to   withdraw   the   Writ   Petition.\n<\/p>\n
According to the learned counsel for the respondent Nos.\n<\/p>\n
3   and   4,   those   two   orders   could   not   have   been   made <\/p>\n
subject matter of challenge in petitions filed under Article <\/p>\n
136  of the  Constitution and, therefore,  the same  should <\/p>\n
be dismissed.  Elaborating the said preliminary objection, <\/p>\n
it   was   argued   that   the   impugned   order   permitting <\/p>\n
respondent No. 3 to withdraw the Writ Petition cannot be <\/p>\n
construed   as   giving   rise   to   any   grievance   to   any   person <\/p>\n
as it has not decided or adjudicated any lis or right and <\/p>\n
has   not   granted   any   relief   whatsoever,   much   less,   the <\/p>\n
reliefs   prayed   for   by   the   respondent   No.3   in   the   writ <\/p>\n
petition and, therefore, the Special Leave Petition should <\/p>\n
not be entertained at all.  What was claimed was that the <\/p>\n
learned counsel for the appellant could not point out that <\/p>\n
any of the rights of the appellant were infringed or sought <\/p>\n
to   be   affected   when   permission   to   withdraw   the   petition <\/p>\n
                                                                       2<\/span><\/p>\n
was   granted   to   the   respondent   No.   3  nor   could   cite   any <\/p>\n
case law to demonstrate that order permitting withdrawal <\/p>\n
of   Writ   Petition   can   be   challenged   under   Article   136   of <\/p>\n
the Constitution and, therefore, the special leave petition <\/p>\n
should be dismissed at the threshold.\n<\/p>\n
13.    As against this the learned counsel for the appellant <\/p>\n
submitted   that   the   circumstances,   namely,   (a)   the   facts <\/p>\n
leading to judgment dated August 24, 2006 rendered by <\/p>\n
this Court in Special Leave Petition (C) No. 4957 of 2006, <\/p>\n
(b)  the  action of statutory corporation, i.e., EDC Limited <\/p>\n
(the respondent No. 1), in first seeking clarification of the <\/p>\n
order   granting   status   quo   dated   December   18,   2006 <\/p>\n
pursuant   to   its   Resolution   dated   February   20,   2008,   (c) <\/p>\n
passing the Resolution on April 8, 2008 for accepting the <\/p>\n
proposal   of   the   respondent   No.   3   for   redemption   of <\/p>\n
mortgage,   (d)   producing   the   said   resolution   before   the <\/p>\n
Court on April 9, 2008 and (e) helping the respondent No. <\/p>\n
3   to   withdraw   the   Writ   Petition,   indicate   acts   which   are <\/p>\n
pulpably   and   manifestly   contrary   to   judgment   of   this <\/p>\n
                                                                       2<\/span><\/p>\n
Court reflecting grossest abuse of the process of law and, <\/p>\n
therefore,   petitions   filed   by   the   appellant   under   Article <\/p>\n
136   of   the   Constitution   are   maintainable.     According   to <\/p>\n
the   learned   counsel   for   the   appellant,   the   impugned <\/p>\n
orders   passed   by   the   High   Court   though   appear   to   be <\/p>\n
innocuous,   have   the   propensity   to   cause   grave   and <\/p>\n
irreparable   injury   to   the   appellant   and   as   the   orders <\/p>\n
impugned   are   a   direct   affront   to   the   directions   of   this <\/p>\n
Court   which   were   binding   upon   the   High   Court   as   also <\/p>\n
upon the respondent No. 1 and the Respondent No. 3 by <\/p>\n
virtue   of   Article   141   read   with   Article   144   of   the <\/p>\n
Constitution,   the   petitions   filed   by   the   appellant   should <\/p>\n
be   entertained.     The   learned   counsel   for   the   appellant <\/p>\n
asserted that by allowing its process to be abused in the <\/p>\n
manner   that   has   been   done   by   the   respondent   No.   3   in <\/p>\n
connivance   with   the   respondent   No.   1   and   the <\/p>\n
respondent   No.   2,   the   High   Court   has   lent   its   hands   to <\/p>\n
such   unscrupulous   parties   to   defeat   and   destroy   the <\/p>\n
efficacy   of   the   judgment   of   this   Court.     Therefore, <\/p>\n
although   the   appellant   may   have   an   alternative   remedy <\/p>\n
                                                                       2<\/span><\/p>\n
to   assail   those   actions   by   a   separate   writ   petition,   the <\/p>\n
filing   of   the   petitions   under   Article   136   of   the <\/p>\n
Constitution   was   the   first   and   proper   remedy,   because <\/p>\n
the   question   involved   is   about   the   binding   nature   of <\/p>\n
judgment of this Court and, therefore, it would be wrong <\/p>\n
to   non-suit   the   appellant   at   the   threshold.     The   learned <\/p>\n
counsel   for   the   appellant   emphasized   that   the <\/p>\n
nationalized bank like the State Bank of India to help an <\/p>\n
unscrupulous defaulter like the respondent No. 3 and to <\/p>\n
defeat the crystallized rights of the appellant which were <\/p>\n
accepted   and   judicially   acknowledged   by   this   Court   has <\/p>\n
caused   injury   to   the   appellant   and   in   order   to   avoid <\/p>\n
multiplicity   of   proceedings,   also   the   present   petitions <\/p>\n
should be entertained.   In support of these submissions <\/p>\n
the   learned   counsel   for   the   appellant   placed  reliance   on <\/p>\n
Executive     Officer,     Arthanareswarar     Temple  Vs.  R.\n<\/p>\n
Sathyamoorthy, (1999) 3 SCC 115 and                  R.   Rathinavel <\/p>\n
Chettiar Vs. V. Sivaraman,<\/a> (1999) 4 SCC 89.\n<\/p>\n
                                                                       2<\/span><\/p>\n
14.    After taking into consideration the facts of the case <\/p>\n
and  the  points raised  at the  Bar  by  the  learned   counsel <\/p>\n
for   the   parties,   this   Court   is   of   the   opinion   that   the <\/p>\n
petitions   filed   under   Article   136   of   the   Constitution <\/p>\n
should   not   be   rejected   on   the   ground   of   availability   of <\/p>\n
alternative   remedy   nor   it   should   be   rejected   on   the <\/p>\n
ground   that   the   special   leave   petition   is   filed   against <\/p>\n
order permitting withdrawal  of  writ  petition.   Right from <\/p>\n
the beginning, the case of the appellant is that there was <\/p>\n
a   concluded   contract   between   the   appellant   and   the <\/p>\n
respondent   No.   1   and,   therefore,   the   respondent   No.   1 <\/p>\n
could not have accepted proposal of the respondent No. 3 <\/p>\n
to  redeem  the   mortgage  executed   by  the  respondent   No. <\/p>\n
3.  This was the issue which was raised by the appellant <\/p>\n
in   Writ   Petition   No.   601   of   2006.     Without   adjudicating <\/p>\n
the   said   claim   the   High   Court   has   permitted   the <\/p>\n
respondent   no.   3   to   withdraw   the   petition   filed   by   the <\/p>\n
respondent   No.   3.     Further   it   is   also   the   case   of   the <\/p>\n
appellant   that   in   view   of   decision   of   this   Court   dated <\/p>\n
August 24, 2006 rendered in Special Leave Petition (Civil) <\/p>\n
                                                                      2<\/span><\/p>\n
No.4957   of   2006,   the   rights   of   the   parties   were <\/p>\n
crystallized   and,   therefore,   permission   to   withdraw   the <\/p>\n
petition unconditionally should not have been granted to <\/p>\n
respondent No. 3.   In Writ Petition No. 601 of 2006 filed <\/p>\n
by   the   respondent   No.   3   and   another   against   EDC <\/p>\n
Limited,   i.e.,   respondent   No.   1   herein   and   others,   the <\/p>\n
prayer   was   to   issue   a   Writ   of   Mandamus   directing <\/p>\n
respondent   No.1   to   permit   the   respondent   Nos.   3  and   4 <\/p>\n
herein   to   exercise   the   right   of   redemption   of   mortgaged <\/p>\n
property   by   accepting   the   offer   of   Rs.   18.40   crores <\/p>\n
towards the full and final settlement of the liability of the <\/p>\n
respondent   No.3   towards   the   respondent   Nos.   1   and   2 <\/p>\n
and to direct the respondent Nos. 1 and 2 to execute the <\/p>\n
reconveyance   and   release   the   documents   of   title <\/p>\n
deposited   with   the   respondent   No.1.     The   interim   relief <\/p>\n
which   was   claimed   by   the   said   respondent   No.   3   in   the <\/p>\n
writ   petition   was  to  restrain  the  respondent  No.1   herein <\/p>\n
from   proceeding   to   finalize   the   sale   of   the   mortgaged <\/p>\n
property   in   favour   of   the   present   appellant.     The   record <\/p>\n
shows   that   by   an   order   dated   December   18,   2006   the <\/p>\n
                                                                        2<\/span><\/p>\n
High   Court   had   directed   the   parties  to   maintain   status-\n<\/p>\n
quo.   By the impugned order dated April 7, 2008 passed <\/p>\n
in M.C.A. No. 165 of 2008 filed in Writ Petition No. 601 of <\/p>\n
2006, the High Court has modified the same.  There is no <\/p>\n
manner   of   doubt   that   this   modification   of   interim   relief <\/p>\n
would   have   certainly   adversely   affected   the   claim   of   the <\/p>\n
appellant that in view of concluded contract between the <\/p>\n
appellant and the respondent No. 1, the respondent No. 1 <\/p>\n
could   not   have   been   permitted   to   consider   the   claim   of <\/p>\n
the   respondent   No.   3   for   redemption   of   the   mortgaged <\/p>\n
property   and,   therefore,   Special   Leave   Petition   under <\/p>\n
Article   136   of   the   Constitution   would   certainly   be <\/p>\n
maintainable   against   that   order.     Having   regard   to   the <\/p>\n
facts   and  circumstances  of  the  case   this  Court   is  of  the <\/p>\n
opinion   that   it   would   not   serve   purpose   of   any   party   to <\/p>\n
dismiss the petitions on the basis preliminary objections <\/p>\n
raised   on   behalf   of   the   respondent   Nos.   3   and   4   and, <\/p>\n
therefore, this Court has decided to entertain the Special <\/p>\n
Leave   Petitions   and   to   adjudicate   the   claims   raised <\/p>\n
therein on merits.\n<\/p>\n
                                                                       2<\/span><\/p>\n
15.    The   first   contention   advanced   on   behalf   of   the <\/p>\n
appellant   that   Falcon   Retreat   Pvt.   Ltd.,   i.e.,   respondent <\/p>\n
No.3, EDC Ltd., i.e., respondent No.1 and the State Bank <\/p>\n
of   India,   i.e.,   respondent   No.   2,   are   all   precluded   by <\/p>\n
principles   of   res   judicata   and   principles   of   constructive <\/p>\n
res judicata, from re-opening the matter to overcome the <\/p>\n
sale of the mortgaged property in favour of the appellant-\n<\/p>\n
trust   under   a   concluded   contract,   as   affirmed   by   this <\/p>\n
Court vide Judgment dated August 24, 2006 rendered in <\/p>\n
Special   Leave   Petition   (Civil)   No.   4957   of   2006   and, <\/p>\n
therefore, the impugned orders are liable to be set aside <\/p>\n
has  no substance.     It may be  mentioned  that  in Special <\/p>\n
Leave   Petition   (Civil)   No.   4957   of   2006   what   was <\/p>\n
impugned   by   the   respondent   No.3   and   another   was <\/p>\n
judgment and order dated February 2, 2006 rendered by <\/p>\n
the   High   Court   of   Bombay   at   Goa   in   Civil   Writ   Petition <\/p>\n
No.19 of 2006, whereby the writ filed by respondent No.3 <\/p>\n
praying   that   its   proposal   contained   in   letter   dated <\/p>\n
January   18,   2006   be   considered   and   the   respondent <\/p>\n
No.1,   herein,   be   restrained   from   selling   the   assets   in <\/p>\n
                                                                      3<\/span><\/p>\n
question   to   the   appellant   was   dismissed.     It   was   not <\/p>\n
disputed that respondent No.3 had committed defaults in <\/p>\n
payment of dues of the respondent No.1 and therefore an <\/p>\n
action was taken under Section 29 of the State Financial <\/p>\n
Corporation   Act,   1951.     The   property   in   question   was <\/p>\n
attached   and   possession   was   taken   over   by   respondent <\/p>\n
No.1.     The   Judgment   rendered   in   the   said   case   further <\/p>\n
makes   it   evident   that   the   respondent   No.1   had   made <\/p>\n
efforts  to   put  the   property  to   sale  by   auction,  but  seven <\/p>\n
such   attempts   had   failed   either   on   account   of   non-\n<\/p>\n
availability   of  purchaser   or  on  account  of  postponement <\/p>\n
of the auction on the request of the respondent No.3 and, <\/p>\n
thereafter, on November 23, 2005 the appellant, i.e., L.K.\n<\/p>\n
Trust   had   made   an   offer   of   Rs.   12.99   crores   for   the <\/p>\n
property   in   question,   which   offer   was   considered   by   the <\/p>\n
Board   of   Directors   of   the   respondent   No.1   Company   on <\/p>\n
December 5, 2005 and the Board had resolved to accept <\/p>\n
the offer on certain conditions.  The judgment in the said <\/p>\n
case further shows that the respondent No.3 herein was <\/p>\n
informed   of   the   private   offer   made   by   the   appellant   and <\/p>\n
                                                                          3<\/span><\/p>\n
was   called   upon   to   get   a   better   offer,   if   possible,   within <\/p>\n
three   days,   but   the   letter   of   the   respondent   No.1   dated <\/p>\n
December 5, 2005 to this effect was perhaps received late <\/p>\n
by the respondent No.3, i.e., on December 13, 2005 and, <\/p>\n
therefore,   the   prayer   made   by   the   respondent   No.3 <\/p>\n
seeking twelve months time to arrange a better buyer was <\/p>\n
not accepted by the respondent No.1.   It is evident from <\/p>\n
the judgment that on December 12, 2005 the offer of the <\/p>\n
appellant was accepted by respondent No.1 and the same <\/p>\n
was   communicated   to   the   appellant   incorporating   the <\/p>\n
relevant   conditions   for   the   sale   and   on   December   29, <\/p>\n
2005   the   respondent   No.1   had   informed  the   respondent <\/p>\n
No.3   about   the   same  to  which  the   respondent   No.3   had <\/p>\n
objected   by   saying   that   the   price   was   ridiculously   low.\n<\/p>\n
On   January   23,   2006,   the   respondent   No.3   herein   had <\/p>\n
filed   Civil   Writ   Petition   No.   19   of   2006   before   the   High <\/p>\n
Court claiming the relief which is referred to earlier.  The <\/p>\n
High Court had dismissed the Writ Petition holding that <\/p>\n
the   respondent   No.1   had   already   entered   into   an <\/p>\n
agreement with the appellant for the sale of the assets for <\/p>\n
                                                                              3<\/span><\/p>\n
a   sum   of   Rs.   12.99   crores   and,   therefore,   there   was   no <\/p>\n
question of the same being cancelled or set aside since it <\/p>\n
represented   a   concluded   contract   between   the   parties.\n<\/p>\n
This   Court   after   hearing   the   learned   counsel   for   the <\/p>\n
parties   expressed   the   view   that   at   the   instance   of   the <\/p>\n
respondent No.3 herein the court should not interfere in <\/p>\n
the   exercise   of   its   discretion   under   Article   136   of   the <\/p>\n
Constitution   because   an   offer   had   been   made   by   the <\/p>\n
appellant   herein   and   accepted   by   the   respondent   No.1.\n<\/p>\n
Though   it   was   pointed   out   on   behalf   of   the   respondent <\/p>\n
No.3   to   the   Court   that   the   cheques   which   had   been <\/p>\n
issued   by   the   appellant   to   the   respondent   No.1   had   not <\/p>\n
been   honoured   by   the   Bank,   but   this   Court   had <\/p>\n
expressed   the   view   that   even   if   that   be   so,   it   was   for <\/p>\n
respondent No.1 to consider what action it should take in <\/p>\n
such   an   event,   and   ultimately   if   the   respondent   No.1 <\/p>\n
finds   that   the   appellant   is   not   in   a   position   to   fulfill   its <\/p>\n
commitment   and   pay   the   price   offered   within   the   time <\/p>\n
granted   by   the   respondent   No.1,   it   was   open   to   the <\/p>\n
respondent No. 1 to proceed to consider other options.  In <\/p>\n
                                                                       3<\/span><\/p>\n
the   said   matter,   this  Court   expressed   an  opinion  that  it <\/p>\n
was expected of the respondent No.1 to act fairly and in <\/p>\n
accordance   with   law   but   as   long   as   it   acts   within   the <\/p>\n
parameters   of   law   and   its   actions   were   not   found   to   be <\/p>\n
arbitrary   or   unreasonable,   it   was   entitled   to   take   a <\/p>\n
decision which was in its interest.  While disposing of the <\/p>\n
Special   Leave   Petition,   it   was   observed   in   the   judgment <\/p>\n
that   if   the   appellant   made   the   payment   as   promised <\/p>\n
within such time as might be granted by respondent No.1 <\/p>\n
and fulfilled the conditions of sale, that might be the end <\/p>\n
of the matter, but if it failed to do so it was always open <\/p>\n
to   the   respondent   No.1   to   take   necessary   steps   to <\/p>\n
safeguard   its   interests,   which   included   inter   alia   the <\/p>\n
consideration   of   other   offers   made   by   the   other   parties.\n<\/p>\n
After   making   above   stated   observations,   this   Court   had <\/p>\n
dismissed   the   special   leave   petition.     If   this   Court   had <\/p>\n
intended   that   on   mere   payment   by   the   appellant   of   the <\/p>\n
amounts, the first respondent had nothing further to do <\/p>\n
except   to   convey   the   property   to   the   appellant,   it   would <\/p>\n
have   so   directed.     However,   this   Court   had   carefully <\/p>\n
                                                                        3<\/span><\/p>\n
avoided passing any such mandatory order and used the <\/p>\n
word   `may’   and   left   the   matter   to   the   discretion   of   the <\/p>\n
respondent No. 1 to take a decision in what it considered <\/p>\n
to be in its best interest as a public corporation.  Further, <\/p>\n
while deciding the said Special Leave Petition, this Court <\/p>\n
was   never   called   upon   to   consider   and   in   fact   did   not <\/p>\n
consider the effect of Clause 16 of the General Terms and <\/p>\n
Conditions,   which   were   expressly   accepted   by   the <\/p>\n
appellant.     This   becomes   evident   if   one   looks   at   the <\/p>\n
resolution   dated   December   5,   2005   passed   by   the <\/p>\n
respondent   No.   1   read   with   the   Agenda   Note.     As   per <\/p>\n
Clause   16   of   General   Terms   and   Conditions   the <\/p>\n
respondent No. 1 was to execute transfer documents only <\/p>\n
after   entire   offered   amount   was   received.     Further   the <\/p>\n
transfer documents were only to be as per the draft to be <\/p>\n
prepared by the respondent No. 1 and the appellant was <\/p>\n
required to execute transfer documents within thirty days <\/p>\n
of   communication   from   the   respondent   No.   1   asking   for <\/p>\n
such   execution.     By   the   said   Clause,   the   appellant   was <\/p>\n
informed   that   the   equity   of   redemption   was   existing   in <\/p>\n
                                                                        3<\/span><\/p>\n
favour   of   the   respondent   No.   3   and   the   same   would   be <\/p>\n
extinguished   only   on   execution   of   Deed   of   Conveyance.\n<\/p>\n
The appellant having  accepted Clause 16  of  the  General <\/p>\n
Terms   and   Conditions   is   not   justified   at   all   to   contend <\/p>\n
that the sale of mortgaged property had concluded in its <\/p>\n
favour and that the respondent No. 3 had lost its right to <\/p>\n
redeem the mortgaged property.\n<\/p>\n
16.    A   fair   and   reasonable   reading   of   the   judgment <\/p>\n
delivered   by   this   Court   on   August   24,   2006   in   Special <\/p>\n
Leave   Petition   (Civil)   No.4957   of   2006   makes   it   evident <\/p>\n
that in fact this Court  did not record  any finding  that a <\/p>\n
concluded contract had come into existence between the <\/p>\n
present appellant and the respondent No. 1 herein.  This <\/p>\n
Court noticed that on December 12, 2005 the offer made <\/p>\n
by   the   appellant   was   accepted   by   the   respondent   No.1 <\/p>\n
herein and the same was communicated to the appellant <\/p>\n
incorporating   the   relevant   conditions   for   the   sale.     It   is <\/p>\n
nobody’s   case   that   those   conditions,   which   were <\/p>\n
stipulated,   were  complied   with   by   the   appellant  nor   any <\/p>\n
                                                                        3<\/span><\/p>\n
such   finding   was   recorded   by   this   Court.     What   is <\/p>\n
relevant   to   notice   is   that   in   the   operative   part   of   the <\/p>\n
judgment,   this   Court   observed   that   if   the   respondent <\/p>\n
No.3   herein,   i.e.,   the   appellant   makes   the   payment   as <\/p>\n
promised   within   such   time   as   might   be   granted   by <\/p>\n
respondent   No.1   and   fulfills   the   conditions   of   sale,   that <\/p>\n
might be the end of the matter which means that at the <\/p>\n
time   when   the   judgment   was   delivered,   this   Court <\/p>\n
proceeded   on   the   footing   that   there   was   no   concluded <\/p>\n
contract between the appellant and the respondent No. 1.\n<\/p>\n
Further what is relevant to notice is that it was stipulated <\/p>\n
by this  Court  that if  the  appellant  failed  to do so it was <\/p>\n
always   open   to   the   Respondent   No.1   to   take   necessary <\/p>\n
steps to safeguard the interests which included inter alia <\/p>\n
the   consideration   of   other   offers   made   by   the   other <\/p>\n
parties.  Such weighty observations would not have been <\/p>\n
made by this Court if this Court, in the said matter, had <\/p>\n
come   to   the   conclusion   that   there   was   a   concluded <\/p>\n
contract   of   sale   between   the   appellant   and   the <\/p>\n
respondent No. 1.\n<\/p>\n
                                                                       3<\/span><\/p>\n
17.    A   reasonable   reading   of   the   judgment   delivered   by <\/p>\n
this   Court   mentioned   above,   makes   it   more   than   clear <\/p>\n
that   this   Court   had   never   recorded   any   finding   to   the <\/p>\n
effect that sale of the property mortgaged by respondent <\/p>\n
No.3   herein   was   concluded   between   the   appellant   and <\/p>\n
the respondent No.1 herein and the Court was essentially <\/p>\n
concerned with exercise of discretion under Article 136 of <\/p>\n
the   Constitution.     Further   the   question   whether   the <\/p>\n
respondent   No.3   herein   had   subsisting   right   to   redeem <\/p>\n
the property was never gone into by the Court in the said <\/p>\n
special   leave   petition   because   it   was   never   raised   either <\/p>\n
before   the   High   Court   or   before   this   Court   in   the   said <\/p>\n
matter.   Thus this Court does not find any merits in the <\/p>\n
first   contention   and,   therefore,   the   same   is   hereby <\/p>\n
rejected.\n<\/p>\n
18.    As this Court has come to the conclusion that there <\/p>\n
was   no   concluded   contract   of   sale   of   the   mortgaged <\/p>\n
property   in   favour   the   appellant   of   by   the   respondent <\/p>\n
No.1,   the   question   arises   as   to   whether   the   right   to <\/p>\n
                                                                      3<\/span><\/p>\n
redeem   the   mortgaged   property   conferred   by   Section   60 <\/p>\n
of  the  Transfer   of  Property   Act  upon the   mortgager,   i.e., <\/p>\n
respondent No.3 can be exercised or not.  It is argued on <\/p>\n
behalf   of   the   appellant   that   both   the   High   Court   of <\/p>\n
Bombay   as   well   as   this   Court   in   the   previous   round   of <\/p>\n
litigation   had   found   that   upon   continued  default   on   the <\/p>\n
part of respondent No.3 in making payment of amount of <\/p>\n
loan,   its   properties   mortgaged   with   respondent   No.1, <\/p>\n
were   attached   and   possession   thereof   was   taken   over <\/p>\n
legally   in   an   action   under   Section   29   of   the   State <\/p>\n
Financial Corporation Act, 1951, and, therefore, the right <\/p>\n
to   redeem   the   mortgaged   property   available   to   the <\/p>\n
respondent   No.3   was   clearly   lost.     The   learned   counsel <\/p>\n
for the appellant contended that the respondent No.3 had <\/p>\n
never   sought   to   exercise   its   right   to   redeem   the <\/p>\n
mortgaged property before action under Section 29 of the <\/p>\n
State Financial Corporation Act, 1951 was taken or even <\/p>\n
thereafter till it lost upto this Court on August 24, 2006 <\/p>\n
when   Special   Leave  Petition   (Civil)   No.4957   of  2006   was <\/p>\n
dismissed and, therefore the exercise of right to redeem, <\/p>\n
                                                                        3<\/span><\/p>\n
which stood extinguished, was not only malafide but also <\/p>\n
to   defeat   the   judgment   of   this   Court.     According   to   the <\/p>\n
learned   counsel   for   the   appellant,   the   first   proviso   to <\/p>\n
Section   60   of   the   Transfer   of   Property   Act   1882   applies <\/p>\n
with   great   vigour   to   the   facts   of   the   case,   clearly <\/p>\n
disentitling the respondent No.1 to apply for redemption <\/p>\n
of mortgaged properties on August 25, 2006 or thereafter <\/p>\n
and   said   right   of   redemption   stood   foreclosed,   both   by <\/p>\n
the   acts   of   the   parties   and   by   a   decree   of   the   Court.\n<\/p>\n
What   was   stressed   was   that   non-execution   of <\/p>\n
Conveyance Deed by the respondent No.1 in favour of the <\/p>\n
appellant was illegal and thus, the respondent No.1 was <\/p>\n
estopped from taking advantage of its own wrong.  It was <\/p>\n
stressed that, in fact, no right to redeem the property was <\/p>\n
available to the Respondent No.3.\n<\/p>\n
19.    As against this it was argued by the learned counsel <\/p>\n
for the other side that in Writ Petition No.19 of 2006 from <\/p>\n
which   Special   Leave   Petition   (Civil)   No.4957   of   2006 <\/p>\n
arose,   the   issue   of  right   of  redemption   was   never  raised <\/p>\n
                                                                        4<\/span><\/p>\n
nor discussed nor gone into and, therefore, it is wrong to <\/p>\n
contend that the right of the respondent No. 3 to redeem <\/p>\n
the disputed properties stood extinguished.  According to <\/p>\n
the   learned   counsel   for   the   respondent   Nos.3   and   4   the <\/p>\n
Special Leave Petition (Civil) No. 4957 of 2006 filed by the <\/p>\n
Respondent   No.3   against   the   order   of   High   Court   dated <\/p>\n
February 22, 2006 was dismissed with observation :-\n<\/p>\n
      “leaving   the   decision   to   the   discretion   of   EDC <\/p>\n
      to   act   within   parameters   of   law   in   the   best <\/p>\n
      interest   of   EDC,   in   a   non-arbitrary   and   fair <\/p>\n
      manner”.\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
There   was   not   even   a   whisper   in   the   said   order <\/p>\n
prohibiting   either   exercise   of   Right   of   Redemption   by <\/p>\n
Respondent No.3 or consideration thereof by Respondent <\/p>\n
No.1   in   terms   of   Section   60   of   the   Transfer   of   Property <\/p>\n
Act   and   therefore   the   superior   right   to   redeem   the <\/p>\n
mortgaged  property  recognized   in  catena  of  the  reported <\/p>\n
decisions   of   this   Court   was   rightly   considered   by   the <\/p>\n
respondent   No.1.     The  learned  counsel   for   the  appellant <\/p>\n
had placed reliance on decision in  Mohanlal Goenka  vs. <\/p>\n
                                                                        4<\/span><\/p>\n
Benoy Krishna Mukherjee and others  (1953) SCR 377, <\/p>\n
to contend that right not agitated despite being available <\/p>\n
in earlier proceedings cannot be permitted to be raised in <\/p>\n
subsequent  proceedings.    In  reply to this, it was argued <\/p>\n
on  behalf  of  Respondent   Nos.3   and   4  that  the   ratio   laid <\/p>\n
down in the said judgment would not apply to the facts of <\/p>\n
present   case   in   as   much   as   in   the   earlier   Writ   Petition <\/p>\n
No.19   of   2006,   the   issue   of   Right   of   Redemption   could <\/p>\n
not   have   been   agitated   because   it   was   neither   available <\/p>\n
nor raised nor adjudicated and hence the said right was <\/p>\n
not   extinguished.           The   learned   counsel   for   the <\/p>\n
Respondent Nos. 3 and 4 had explained that the principle <\/p>\n
of   law   stated   in  Mohanlal   Goenka’s  case   (supra)   would <\/p>\n
apply only if issue in both the proceedings were the same <\/p>\n
and adjudicated in both the proceedings giving rise to the <\/p>\n
grievance of res judicata.\n<\/p>\n
20.    On   behalf   of   the   respondent   No.1,   its   learned <\/p>\n
counsel had placed reliance on  Narandas Karsandas  Vs. <\/p>\n
S.A. Kamtam, (1977) 3 SCC 247 to plead that in India it <\/p>\n
                                                                           4<\/span><\/p>\n
is only on execution of the conveyance and registration of <\/p>\n
transfer   of   the   mortgagor’s   interest   by   registered <\/p>\n
instrument that the mortgagor’s  right of redemption will <\/p>\n
be   extinguished   and   an   agreement   to   sell,   does   not,   of <\/p>\n
itself, create any interest in, or charge on the property, as <\/p>\n
a   result   of   which   there   is   no   equity   or   right   in   property <\/p>\n
created   in   favour   of   the   purchaser   by   the   contract <\/p>\n
between   the   mortgagee   and   the   proposed   purchaser.\n<\/p>\n
What was asserted on behalf of the respondent No.1 was <\/p>\n
that   the   mortgagor’s   right   to   redeem   will   survive   until <\/p>\n
there has been completion of sale by the mortgagee by a <\/p>\n
registered   deed   and   until   the   sale   is   complete   by <\/p>\n
registration,   the   mortgagor   does   not   lose   his   right   of <\/p>\n
redemption just because the property was put to auction <\/p>\n
or proposed sale by private negotiation was in pipe line.\n<\/p>\n
21.    On analysis of arguments advanced at the Bar, this <\/p>\n
Court finds that the proposition that in India it is only on <\/p>\n
execution   of   conveyance   and   the   registration   of   transfer <\/p>\n
of the mortgagor’s interest by registered instrument that <\/p>\n
                                                                       4<\/span><\/p>\n
the  mortgagor’s   right   of redemption  stands  extinguished <\/p>\n
is well settled.  Further it is not the case of the appellant <\/p>\n
that   a   registered   Sale   Deed   had   been   executed   between <\/p>\n
the appellant-trust and the respondent No. 1 pursuant to <\/p>\n
the   Resolution   passed   by   the   respondent   No.   1   and, <\/p>\n
therefore,   in   terms   of   Section   54   of   the   Transfer   of <\/p>\n
Property   Act   1882   no   title   relating   to   the   disputed <\/p>\n
property had passed to the appellant at all.\n<\/p>\n
22.    What   is   ruled   in  Narandas   Karsandas   (Supra)  is <\/p>\n
that   in   India,   there   is   no   equity   or   right   in   property <\/p>\n
created   in   favour   of   the   purchaser   by   the   contract <\/p>\n
between the mortgagee and the proposed purchaser and <\/p>\n
in view of the fact that only on execution of conveyance, <\/p>\n
ownership passes from one party to another, it cannot be <\/p>\n
held that the mortgagor lost the right of redemption just <\/p>\n
because   the   property   was   put   to   auction.     In   this   case, <\/p>\n
the   respondent   Housing   Society,   the   mortgagor,   had <\/p>\n
taken   loan   from   the   co-respondent   Finance   Society   and <\/p>\n
mortgaged the property to it under an English mortgage.\n<\/p>\n
                                                                          4<\/span><\/p>\n
On   default,   the   mortgagee   exercised   its   right   under   the <\/p>\n
mortgage   to   sell   the   property   without   intervention   of <\/p>\n
Court and after notice, put the property to sale by public <\/p>\n
auction.  The appellant auction purchaser paid the sums <\/p>\n
due.     Before   the   sale   was   completed   by   registration   etc. <\/p>\n
the mortgagor sought to exercise his right of redemption <\/p>\n
by tendering the amount due.   The appellant had based <\/p>\n
his   case   on   the   plea   that   in   such   a   situation   the <\/p>\n
mortgagee   acts   as   agent   of   the   mortgagor   and   hence <\/p>\n
binds him.  Rejecting the appeal, this Court has held that <\/p>\n
the right of redemption which is embodied in Section 60 <\/p>\n
of   the   Transfer   of   Property   Act   is   available   to   the <\/p>\n
mortgagor   unless   it  has been extinguished  by  the   act  of <\/p>\n
parties   or   by   decree   of   a   court.     What   is   held   by   this <\/p>\n
Court   is   that,   in   India   it   is   only   on   execution   of   the <\/p>\n
conveyance and registration of transfer of the mortgagor’s <\/p>\n
interest   by   registered   instrument   that   the   mortgagor’s <\/p>\n
right   of   redemption   will   be   extinguished   but   the <\/p>\n
conferment   of   power   to   sell   the   mortgaged   property <\/p>\n
without intervention of the Court, in a mortgage deed, in <\/p>\n
                                                                       4<\/span><\/p>\n
itself,   will   not   deprive   the   mortgagor   of   his   right   of <\/p>\n
redemption.     This   Court   in   the   said   case   further <\/p>\n
explained   that   the   extinction   of   the   right   of   redemption <\/p>\n
has to be subsequent to the deed conferring such power <\/p>\n
and   the   right   to   redemption   is   not   extinguished   at   the <\/p>\n
expiry of the period.   This Court emphasized in the said <\/p>\n
decision that the equity of redemption is not extinguished <\/p>\n
by   mere   contract   for   sale.     The   decision   rendered   by <\/p>\n
Three   Judge   Bench   has   been   followed   in   case   of  Gajraj <\/p>\n
Jain  vs.  State   of   Bihar   and   others<\/a>  (2004)   7   SCC   151.\n<\/p>\n
Dealing with a case of sale under Section 29 of the State <\/p>\n
Financial   Corporation   Act,   it   is   held   therein   that   the <\/p>\n
action of the State Financial Corporation in handing over <\/p>\n
the  estates  to  the   respondent   No.   4  therein   under  down <\/p>\n
payment of Rs.28.85 lakhs, did not prevent the appellant <\/p>\n
from   exercising   the   right   of   redemption.     The   pertinent <\/p>\n
observations   made   by   this   Court   in   para   15   of   the <\/p>\n
reported decision are as follows: –\n<\/p>\n
      “Under   Section   60   of   the   T.P.   Act,   equity   of <\/p>\n
      redemption  existed   in  favour  of  the  Company. <\/p>\n
                                                                          4<\/span><\/p>\n
       A   mere   agreement   of   sale   of   assets   cannot <\/p>\n
       extinguish   the   equity  of  redemption,  it  is  only <\/p>\n
       on   execution   of   conveyance   that   the <\/p>\n
       mortgagor’s   right   of   redemption   will   be <\/p>\n
       extinguished.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
Applying the principles of law laid down by this Court in <\/p>\n
the   abovementioned   two   decisions,   to   the   facts   of   the <\/p>\n
present   case   it   will   have   to   be   held   that   no   transfer   of <\/p>\n
mortgaged   property   had   taken   place   in   favour   of   the <\/p>\n
appellant   and,   therefore,   the   statutory   right   of <\/p>\n
redemption  available   to   the   respondent   No.   3   was   never <\/p>\n
lost.  The record of the case indicates that the matter had <\/p>\n
rested   at   the   level   of   passing   some   resolution   by   the <\/p>\n
respondent No. 1 Company in favour of the appellant and <\/p>\n
nothing   more   than   that.     If   the   appellant   was   keen   to <\/p>\n
complete   its   title   over   the   suit   properties,   nothing <\/p>\n
prevented   it   from   instituting   appropriate   proceedings   to <\/p>\n
compel the respondent No. 1 to execute a sale deed in its <\/p>\n
favour   and   getting   it   registered,   but   admittedly   no   such <\/p>\n
step   was   taken   by   the   appellant.     The   decision   cited   at <\/p>\n
the   Bar   by   the   learned   counsel   for   the   appellant   to <\/p>\n
                                                                       4<\/span><\/p>\n
contend   that   the   respondent   No.   3   is   precluded   from <\/p>\n
asserting its rights of redemption as it was not claimed in <\/p>\n
the   earlier   proceedings,   would   not   apply   to   the   facts   of <\/p>\n
this   case   for   the   relevant   reasons   pointed   out   by   the <\/p>\n
learned counsel for the respondent Nos. 3 and 4 and also <\/p>\n
because   vide   letters   dated   October   9,   2006   and <\/p>\n
September   27,   2006,   the   respondent   No.   1   had   already <\/p>\n
accepted   and   acknowledged   the   right   of   the   respondent <\/p>\n
No. 3 to redeem the mortgaged property on the payment <\/p>\n
of   amount   due.           Further   by   filing   affidavit,   the <\/p>\n
respondent   No.   2,   i.e.,   the   State   Bank   of   India,   had <\/p>\n
declared   that   it   had   accepted   the   proposal   of   the <\/p>\n
respondent No. 3 for redemption of mortgage on payment <\/p>\n
of   Rs.12.87   crores   to   the   respondent   No.   1   and   Rs.9.18 <\/p>\n
crores to the State Bank of India.   However, after receipt <\/p>\n
of   the   opinion   of   the   learned   Advocate   General,   the <\/p>\n
respondent   No.   1   had   drastically   changed   its   stand <\/p>\n
without   considering   the   subsisting   right   of   the <\/p>\n
respondent No. 3 to redeem the mortgaged property and <\/p>\n
was   inclined   to   proceed   with   completion   of   sale <\/p>\n
                                                                         4<\/span><\/p>\n
transaction   in   favour   of   the   appellant.     It   was   at   that <\/p>\n
stage that the respondent  No.  3  had to file Writ Petition <\/p>\n
No.   601   of   2006   asserting   its   right   to   redeem   the <\/p>\n
mortgaged   property.              The   issues   in   the   earlier <\/p>\n
proceedings were quite different from those raised in Writ <\/p>\n
Petition No. 601 of 2006.   In fact, no relief is granted to <\/p>\n
the   respondent   No.   3   in   Writ   Petition   No.   601   of   2006 <\/p>\n
and, therefore, the ratio laid down in Mohanlal Goenka’s <\/p>\n
case   (supra)   would   not   apply   to   the   facts   of   the   instant <\/p>\n
case.\n<\/p>\n
23.      The   mortgagor   under   Indian   law   is   the   owner   who <\/p>\n
had parted with some rights of ownership and the right of <\/p>\n
redemption   is   the   right   which   he   exercises   by   virtue   of <\/p>\n
his   residuary   ownership   to   resume   what   he   has   parted <\/p>\n
with.     In   India   this   right   of   redemption,   however,   is <\/p>\n
statutory one.   A right of redemption  is  an  incident of  a <\/p>\n
subsisting   mortgage   and   subsists   so   long   as   the <\/p>\n
mortgage itself subsists.  The judicial trend indicates that <\/p>\n
dismissal   of   an   earlier   suit   for   redemption   whether   as <\/p>\n
                                                                        4<\/span><\/p>\n
abated or as withdrawn or in default would not debar the <\/p>\n
mortgagor   from   filing   a   second   suit   for   redemption   so <\/p>\n
long   as   the   mortgage   subsists.     This   right   cannot   be <\/p>\n
extinguished except by the act of parties or by decree of a <\/p>\n
court.     As   explained   by   this   Court   in  Jaya   Singh   D.\n<\/p>\n
Mhoprekar   and   another  vs.  Krishna   Balaji   Patil   and <\/p>\n
another (1985) 4 SCC 162, the right of redemption under <\/p>\n
a   mortgage   deed   can   come   to   an   end   only   in   a   manner <\/p>\n
known to law.  Such extinguishment of the right can take <\/p>\n
place by contract between the parties, by a merger or by <\/p>\n
statutory   provision   which   debars   the   mortgager   from <\/p>\n
redeeming   the   mortgage.     The   mortgagor’s   right   of <\/p>\n
redemption is exercised by the payment or tender to the <\/p>\n
mortgagee at the  proper time and  at the proper place of <\/p>\n
the mortgage money.   When it is extinguished by the act <\/p>\n
of  parties,   the  act  must   take   the   shape   and  observe  the <\/p>\n
formalities which the law prescribes.  A mortgage being a <\/p>\n
security   for   the   debt,   the   right   of   redemption   continues <\/p>\n
although   the   mortgagor   fails   to   pay   the   debt   at   the   due <\/p>\n
date.  Any provision inserted to prevent, evade or hamper <\/p>\n
                                                                          5<\/span><\/p>\n
redemption   is   void.     Having   regard   to   the   facts   of   the <\/p>\n
instant case, it is difficult to hold that the respondent No. <\/p>\n
3 had lost its right to redeem the mortgaged property or <\/p>\n
that by the acts of the appellant and the respondent No. <\/p>\n
1,   the   right   of   the   respondent   No.   3   to   redeem   the <\/p>\n
property was extinguished.\n<\/p>\n
24.    Applying   the   principles   of   law   laid   down   by   this <\/p>\n
Court  in the above quoted decisions  this Court is  of the <\/p>\n
opinion   that   no   sale   worth   the   name   of   the   mortgaged <\/p>\n
property   had   taken   place   in   favour   of   the   appellant <\/p>\n
because there is no agreement of sale on the record of the <\/p>\n
case nor the facts indicate that the same was registered.\n<\/p>\n
Having   regard   to   the   decision   of   this   Court   mentioned <\/p>\n
above,   it   will   have   to   be   held   that   right   to   redeem   the <\/p>\n
mortgage property which was available to the respondent <\/p>\n
No.3   had   never   extinguished   at   all   and,   therefore,   the <\/p>\n
acceptance   of   proposal   of   the   respondent   No.   3   by   the <\/p>\n
respondent   No.   1   to   permit   it   to   redeem   the   property <\/p>\n
                                                                          5<\/span><\/p>\n
dated   April   8,   2008   cannot   be   said   to   be   illegal   in   any <\/p>\n
manner.\n<\/p>\n
25.    Further the contention raised by the appellant that <\/p>\n
reliance   placed   on   Clause   16   of   the   General   Terms   and <\/p>\n
Conditions   by   the   learned   counsel   for   the   Respondent <\/p>\n
No.1 is misconceived and untenable in view of decision of <\/p>\n
this   Court   in   earlier   round   of   litigation,   has   no <\/p>\n
substance.     This   Court   while   delivering   judgment   dated <\/p>\n
August 24, 2006 in Special Leave Petition (Civil) No. 4957 <\/p>\n
of 2006 was not called upon and in fact did not consider <\/p>\n
the   effect   of   Clause   16   of   the   General   Terms   and <\/p>\n
Conditions.     The   record   shows   that   Clause   16   of   the <\/p>\n
General Terms and Conditions was expressly accepted by <\/p>\n
the   appellant.     The   Resolution   dated   December   5,   2005 <\/p>\n
read with the Agenda Note records that the Appellant had <\/p>\n
agreed   to   follow   the   General   Terms   of   Auction.     The <\/p>\n
                                                                           5<\/span><\/p>\n
General Terms of Auction as contained in para 16 are as <\/p>\n
follows:-\n<\/p>\n
       “16.  The   EDC   Ltd.   will   execute   transfer <\/p>\n
       documents   only   after   entire   accepted   offer <\/p>\n
       amount   is   received.     The   transfer   documents <\/p>\n
       will be only as per the draft prepared by EDC <\/p>\n
       Ltd.        The   successful   tenderers   shall <\/p>\n
       necessarily execute transfer documents within <\/p>\n
       30 days from the date of communication from <\/p>\n
       the EDC Ltd. requesting for such execution.  It <\/p>\n
       is   brought   to   the   notice   of   the   Successful <\/p>\n
       tenderer   that   in   case   of   failure   to   execute   the <\/p>\n
       Deed   of   Assignment   and   Sale,   the   Equity   of <\/p>\n
       redemption   exists   in   favour   of   the   original <\/p>\n
       mortgagor,   and   the   same   will   be   extinguished <\/p>\n
       only   on   execution   of   Deed   of   Conveyance, <\/p>\n
       which the successful tenderer may please take <\/p>\n
       note of.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
26.    The record of the case shows that the actions of the <\/p>\n
Corporation that is respondent No.1 have been entirely in <\/p>\n
accordance and consistent with the provisions of Clause <\/p>\n
16 of the General Terms and Conditions.   It is important <\/p>\n
to remember that when the appellant-trust wrote a letter <\/p>\n
dated August 24, 2006 to the respondent No.1 and asked <\/p>\n
for possession of the property and to complete other legal <\/p>\n
formalities,   the   Corporation   had   informed   the   appellant <\/p>\n
                                                                     5<\/span><\/p>\n
by   its   letter   dated   September   27,   2006   making   it   clear <\/p>\n
that   the   Corporation   was   in   the   process   of   proceeding <\/p>\n
further   with   the   sale   transaction.     The   record   would <\/p>\n
indicate   that   the   respondent   No.1   had   always   acted <\/p>\n
consistently with Clause 16.  On September 28, 2006 the <\/p>\n
respondent   No.1   had   informed   the   appellant   that   the <\/p>\n
borrower   company   had   approached   it   for   redemption   of <\/p>\n
the mortgage.   This was the information supplied by the <\/p>\n
respondent No.1 in terms of Clause 16 of the Terms and <\/p>\n
Conditions.   On October 9, 2006 the Corporation that is <\/p>\n
respondent No.1 had informed the respondent No. 3 that <\/p>\n
they were in the process of implementing the judgment of <\/p>\n
this   Court   in   Special   Leave   Petition   (Civil)   No.4957   of <\/p>\n
2006   dated   August   24,   2006   and,   therefore,   all   legal <\/p>\n
formalities were required to be completed with respect to <\/p>\n
the   transfer   of   the   property   in   its   name   in   accordance <\/p>\n
with   the   law.     The   resolution   dated   November   24,   2006 <\/p>\n
on   which   the   learned   counsel   for   the   appellant   had <\/p>\n
placed   reliance   makes   it   clear   that   the   transactions <\/p>\n
would   have   to   be   concluded   by   execution   of   the <\/p>\n
                                                                      5<\/span><\/p>\n
conveyance   and   delivery   of   possession   in   favour   of   the <\/p>\n
appellant.     It   is   not   in   dispute   that   this   had   never <\/p>\n
happened.     The   record   does   not   indicate   that   the <\/p>\n
appellant   had   filed   any   proceedings   either   to   obtain <\/p>\n
specific performance of the agreement to sell entered into <\/p>\n
between   it   and   the   respondent   No.   1   nor   the   appellant <\/p>\n
had initiated any proceedings for obtaining possession of <\/p>\n
the property in question.  If in fact the contract had been <\/p>\n
concluded   between   the   parties   as   is   claimed   by   the <\/p>\n
appellant   the   appellant   would   not   have   failed   to   obtain <\/p>\n
possession   of   the   property   after   execution   of   registered <\/p>\n
deed in its favour.   These facts, thus, indicate that there <\/p>\n
was no concluded contract between the appellant and the <\/p>\n
Respondent No.1.\n<\/p>\n
27.    This Court cannot ignore the fact that on September <\/p>\n
27, 2006 the respondent No. 3 had deposited cheques of <\/p>\n
Rs.9.25   crores   in   favour   of   the   first   respondent   and <\/p>\n
Rs.5.90   crores   in   favour   of   the   respondent   No.   2.     The <\/p>\n
bonafide of the first respondent can be seen from the fact <\/p>\n
                                                                     5<\/span><\/p>\n
that these  cheques were not immediately  encashed,  and <\/p>\n
as on January 2007, the total amount lying with the first <\/p>\n
respondent   and   the   respondent   No.   2   paid   by   the <\/p>\n
respondent   No.3   was   Rs.24.15   crores   as   against   the <\/p>\n
redemption   amount   of   Rs.18.40   crores.                 As   the <\/p>\n
respondent   No.3   had   made   payment   to   redeem   the <\/p>\n
property which was accepted by respondent No.1 and as <\/p>\n
respondent   No.1   had   agreed   to   permit   the   respondent <\/p>\n
No.3   to   redeem   the   property   in   question,   a   prayer   was <\/p>\n
made   to   permit   respondent   No.3   to   withdraw   Writ <\/p>\n
Petition   No.   601   of   2006   which   can   neither   be   regarded <\/p>\n
as arbitrary nor as illegal nor contrary to the decision of <\/p>\n
this   Court   dated   August   24,   2006   rendered   in   Special <\/p>\n
Leave   Petition   (Civil)   4957   of   2006.     Similarly,   as   the <\/p>\n
grievance   of   the   respondent   No.3   did   not   survive,   the <\/p>\n
modification of the order of status quo granted earlier at <\/p>\n
the instance of the respondent No. 3 who was petitioner <\/p>\n
in the writ petition,  also cannot be held to be bad in law <\/p>\n
because   if   the   status   quo   order   had   not   been   modified <\/p>\n
the respondent No.1 would not have been in a position to <\/p>\n
                                                                     5<\/span><\/p>\n
accept the offer of respondent No.3 to permit it to redeem <\/p>\n
the   property   which   would   have   been   in   derogation   of <\/p>\n
right   of  the   respondent   No.  3  to  redeem the   property   as <\/p>\n
recognized by Section 60 of the Transfer Property Act.\n<\/p>\n
28.    On over all view of the matter, this Court finds that <\/p>\n
there is no substance in the challenge to the two orders <\/p>\n
dated April 7, 2008 modifying the order of status quo and <\/p>\n
order dated April 9, 2008 permitting the Respondent No.3 <\/p>\n
to   withdraw   Writ   Petition   No.   601   of   2006   warranting <\/p>\n
inference   of   this   Court   in   appeals   arising   by   grant   of <\/p>\n
special   leave  filed   under   Article   136  of  the  Constitution.\n<\/p>\n
Therefore,   the   two   appeals   which   are   directed   against <\/p>\n
orders dated April 7, 2008 and April 9, 2008 respectively <\/p>\n
have no substance and are liable to be dismissed.\n<\/p>\n
29.    The   Court,   further,   finds   that   the   appellant-trust <\/p>\n
has   filed   Contempt   Petition   under   Article   129   of   the <\/p>\n
Constitution   read   with   Order   XLVII   of   Supreme   Court <\/p>\n
Rules   1966   and   Rule-3(C)   and   Section   2(b)   read   with <\/p>\n
                                                                      5<\/span><\/p>\n
Section   12  of  the   Contempt   of  Courts   Act,  1971   against <\/p>\n
the   respondents   for   willfully   disobeying   and   acting <\/p>\n
against   the   order   passed   by   this   Court   on   August   24, <\/p>\n
2006   in   Special   Leave   Petition   (Civil)   No.4957   of   2006.\n<\/p>\n
The   contention   raised   by   the   appellant   is   that   the <\/p>\n
respondents   have   deliberately   and   willfully   violated   the <\/p>\n
order   passed   by   this   Court   on   August   24,   2006   by <\/p>\n
passing resolutions dated February 20, 2008 and April 8, <\/p>\n
2008 passed by the Board of Directors of the respondent <\/p>\n
No.1   and,   therefore,   appropriate   action   should   be <\/p>\n
initiated   against   the   respondents.     On   behalf   of   the <\/p>\n
respondent   Nos.   3   and   4   it   was   contended   that   the <\/p>\n
Contempt Petition is not maintainable in as much as this <\/p>\n
Court   had   not   passed   any   direction   or   order   that   was <\/p>\n
needed   to   be   carried   out   by   the   respondents   and, <\/p>\n
therefore, the question of violation of order of this Court <\/p>\n
does  not  arise   at  all.     It  was  pointed  out   by   the  learned <\/p>\n
counsel   for   the   respondent   Nos.   3   and   4   that   some <\/p>\n
observations   made   by   this   court   here   and   there   while <\/p>\n
dismissing   the   Special   Leave   Petition   cannot   be <\/p>\n
                                                                        5<\/span><\/p>\n
construed   as   direction   of   the   Court   at   all.     It   was <\/p>\n
explained by the learned counsel for the respondent Nos.\n<\/p>\n
3 and 4 that this Court had neither modified the order of <\/p>\n
the   High   Court   dated   February   22,   2006   nor   had   given <\/p>\n
any direction to any of the  parties to carry out its  order <\/p>\n
or the order of the High Court but the Court had simply <\/p>\n
upheld the dismissal order passed by the High Court by <\/p>\n
dismissing Special Leave Petition.   What was pointed out <\/p>\n
by   the   learned  counsel   for   the   respondent   Nos.   3  and   4 <\/p>\n
was   that   contempt   under   the   Contempt   of   Courts   Act <\/p>\n
necessarily presupposes a clear and willful violation of a <\/p>\n
direction or order of the court or an undertaking given to <\/p>\n
a court and as those elements  are missing so far as the <\/p>\n
facts   of   the   present   case   are   concerned   the   Contempt <\/p>\n
Petition filed by the Petitioner should be dismissed.\n<\/p>\n
30.    On   consideration   of   rival   submissions   advanced   at <\/p>\n
the   Bar   this   Court   is   of   the   view   that   as   was   rightly <\/p>\n
pointed   out   by   the   learned   counsel   for   the   respondents <\/p>\n
the   exercise   of   right   of   redemption   in   accordance   with <\/p>\n
                                                                         5<\/span><\/p>\n
Section  60  of the  Transfer of Property Act was neither  a <\/p>\n
subject matter of Writ Petition No. 19 of 2006 nor it was <\/p>\n
subject matter of Special Leave Petition (Civil) No.4957 of <\/p>\n
2006   which   is   clear   from   the   enumeration   of   the   main <\/p>\n
points by the High Court in Writ Petition No. 19 of 2006, <\/p>\n
which was whether there was a concluded contract.  This <\/p>\n
Court had never prohibited the respondent Nos. 3 and 4 <\/p>\n
from   exercising   right   of   redemption   nor   restrained   the <\/p>\n
respondent   No.1   from   considering   the   proposal   of   the <\/p>\n
Respondent   No.3   to   permit   it   to   redeem   the   disputed <\/p>\n
property   and   had   in   fact   expressed   strongly   that   the <\/p>\n
respondent No. 1 should take that action which is in its <\/p>\n
best interest.\n<\/p>\n
31.    Under the circumstances the passing of resolutions <\/p>\n
by the respondent No.1 company can hardly be regarded <\/p>\n
as   breach   of   direction   given   by   this   Court.     No   case   is <\/p>\n
made   out   by   the   petitioner   either   to   exercise   powers <\/p>\n
under Section 12 of the Contempt of Courts Act 1971 nor <\/p>\n
any case is made out to set aside the resolutions passed <\/p>\n
                                                               6<\/span><\/p>\n
by   the   Board   of   Directors   of   the   respondent   No.1 <\/p>\n
company.     The   prayers   made   in   the   Contempt   Petition <\/p>\n
therefore, cannot be granted.\n<\/p>\n
32.    For the foregoing reasons the appeals as well as the <\/p>\n
Contempt Petition fail and are dismissed.   Having regard <\/p>\n
to the peculiar facts of the case the parties are ordered to <\/p>\n
bear their own costs.\n<\/p>\n
                                   ………………………………J.\n<\/p>\n
                                    (J.M. PANCHAL)<\/p>\n
                                   ……………………………….J.\n<\/p>\n
                                    (CYRIAC JOSEPH)<\/p>\n
NEW DELHI <\/p>\n
May 10, 2011.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S.L.K.Trust vs Edc Ltd. & Ors on 10 May, 2011 Bench: J.M. Panchal, Cyriac Joseph Reportable THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 4214-4215 OF 2011 (Arising out of S.L.P. (C) Nos. 10334-10335 OF 2008) M\/s. L.K.Trust … Petitioner(s) Versus EDC Ltd. & Ors. … Respondent(s) WITH […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-233205","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S.L.K.Trust vs Edc Ltd. & Ors on 10 May, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-l-k-trust-vs-edc-ltd-ors-on-10-may-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S.L.K.Trust vs Edc Ltd. & Ors on 10 May, 2011 - 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