9911796707
TMI Blog1993 (7) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... ing prayers : "( a )this court do direct the Court Receiver, High Court, Bombay, not to put up for sale, the immovable properties of the first defendant company till ( i )the investigation into the quantum of and responsibility for the damage done to the immovable properties of first defendant company is ascertained and the quantum of and responsibility for loss of properties of the first defendant company is ascertained as also the cause and quantum of responsibility for the loss due to the sale of movable properties of the first defendant company at a gross undervalue is ascertained ; and ( ii )determination of liability of the first defendant company to the plaintiff in view of the written statement of defendant No. 5 ; ( b )in the alternative, this court do appoint an approved valuer to assess the present market value of the immovable properties of the first defendant company and consequently revise upwards the minimum bid of Rs. 4 crores as this Hon'ble court may deem fit." In order to appreciate the contentions of the appellant, it is necessary to state the facts. On November 2, 1983, the Bank of India, respondent No. 1, to this appeal, filed a suit to recover from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es being sold by private treaty and submitted that the properties should be sold by public auction. From April, 1990, to April, 1991, several meetings were held before the court receiver in respect of the proposed sale, inter alia , of immovable properties at which the official liquidator as well as the appellant were also present. Nobody opposed the sale of the immovable properties in question. Thereafter, four infructuous sales took place between October, 1990, and July, 1992. The appellant took out a Notice of Motion No. 1416 of 1992 some time prior to July, 1992, praying that pending the hearing and final disposal of this suit, the court receiver and the plaintiffs be restrained from advertising the auction sale or proceeding with the auction sale of the immovable property known as Jasmine Mills premises situated at Mahim which was to be sold by auction on July 7, 1992. There was a further prayer that the court receiver should be directed to invite offers for giving the premises or any part thereof on leave and licence basis. This notice of motion was dismissed by a learned single judge of this court by his order dated July 6, 1992. The learned single judge in the order has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a report dated July 13, 1992, in connection with a sale which was held with a reserved bid of Rs. 4 crores as fixed by this court. The court receiver had received only one offer of Rs. 4,05,00,000. The offerer also deposited Rs. 10 lakhs. The court receiver had submitted the report and sought directions whether he should accept this offer. When this report came up for consideration before the learned single judge of this court on August 5, 1992, the present appellant appeared and asked for a month's time to produce a substantially higher offer. Ultimately, the learned judge observed that he was inclined to postpone the confirmation of sale on the following undertaking given by the present appellant : He would agree to pay the difference between the interest, given on a fixed deposit for a term of 45 days by a nationalised bank, and 18 per cent. per annum on the amount of Rs. 10 lakhs deposited by the offerer and on his undertaking to pay security charges for a period of 45 days at the rate of Rs. 21,000 per month. This was in view of the statement made before the learned judge by the present appellant that if he were given six weeks' time, he would obtain a valuation of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n statement of the appellant. Since the learned judge was not inclined to postpone the sale beyond four weeks, he has disposed of the notice of motion. In view of the grievance of the appellant that he was not heard on the motion, we have now heard him at length. There is no prayer in the notice of motion for setting aside the order of August 13, 1984, granting to the court receiver a power to sell the mortgaged property. At the hearing of the appeal, however, learned counsel for the appellant has only challenged the validity of the order of August 13, 1984. No arguments were advanced at all in connection with either of the two prayers in the motion. As is set out earlier, although the appellant agreed before the learned single judge at the time of the order of August 5, 1992, that within six weeks he would obtain a fresh valuation, he has not done so. Nor has he procured any offer higher than Rs. 4,05,00,000. The arguments advanced before us were only in connection with the original order of August 13, 1984, under which the court receiver was given power to sell, inter alia , the immovable property in question. It is submitted by Mr. M.S. Singhvi, learned counsel for the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts as it may be considered appropriate in connection with this with the first respondent bank. An individual shareholder cannot be considered as a mortgagor at all ; nor is an individual shareholder entitled to redeem a mortgage created by the private limited company in favour of a third party. He has no claim to the equity of redemption of such mortgage. As a shareholder, therefore, the appellant cannot be heard in a mortgage suit. It is next contended by the appellant that he is also a guarantor of the debt incurred by the second respondent company. As such guarantor, the appellant is undoubtedly entitled to be subrogated to the rights of the mortgagee if he discharges the mortgage debt. In the present case, the question of subrogation does not arise because the guarantor has not discharged the mortgage debt of the principal debtor, nor has he even offered to do so. In fact it is stated very frankly by learned counsel for the appellant that he is not in a position to do so. The question, therefore, of the appellant being entitled to the security created in favour of the mortgagee by stepping into the shoes of the mortgagee does not arise. In connection with the locus standi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it." These observations of the Supreme Court have been cited with approval by the Patna High Court in the case of Rabindra Narain v. Nirmala, AIR 1978 Patna 162. In that case, the Patna High Court considered a case where, in a mortgage suit, a preliminary decree had been passed in terms of a compromise. The mortgagor failed to pay the instalments as per the terms of the compromise. A final decree was passed in this mortgage suit without a fresh preliminary decree. The court said that the consent decree was not covered by Order 34, rule 4 and it was. not necessary to have a fresh preliminary decree. It held that the final decree could not be considered as a nullity. A Division Bench of our High Court (P.D. Desai C.J. and S.H. Kapadia J.) in Appeal No. 622 of 1992 decided on October 20, 1992, has also relied upon the judgment of the Supreme Court in the case of Hira Lal Patni v. Kali Nath, AIR 1962 SC 199. It has also said, "it is a settled principle of law that the validity of a decree can be challenged in execution proceedings only on the ground that the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintenance of such property. It is in these circumstances that the official liquidator did not contest the notice of motion of the mortgagee for appointment of a court receiver with power of sale. In fact all the advocates for the respondents were absent at the time when the order of August 13, 1984, was passed. Even thereafter, the official liquidator at no stage, has raised any objection to the property being sold by the court receiver. The mortgagor has, therefore, clearly acquiesced in the sale of the said property. This cannot be considered in any manner as contrary to the provisions of section 60 of the Transfer of Property Act or Order 34 of the Civil Procedure Code, 1908. Neither of these provisions prevent any of the parties including the mortgagor from giving up his right to redeem the property. In the case of Keshavrao v. Nanabhai, AIR 1929 PC 61, in a mortgage suit a foreclosure decree in the English form was passed to the effect that if the mortgagor failed to pay within six months the mortgage amount, he will stand absolutely debarred and foreclosed from exercising his equity of redemption. Not being in a position to find the necessary funds the mortgagor gave up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The Division Bench under its order dated March 16, 1993, while admitting the present appeal has observed that it was admitting the appeal, not because it was satisfied about the contentions of the appellant, but only because a complaint was made that the trial judge disposed of the motion at an ad interim stage, in spite of the objection of the appellant. The only ground that we find in the memo of appeal in this connection is ground ( b ) which is to the effect that the learned judge ought not to have disposed of the notice of motion without granting the reliefs as prayed for in the notice of motion. In any case even otherwise we do not find any merit in the various contentions which are raised by the appellant before us. We have heard the appellant at length because of the grievance that they have not been heard in the notice of motion. In view of the above, there is no merit in the notice of motion particularly when the appellant has not pressed any of the reliefs asked for in the motion, but has only addressed us on the validity of the order passed on August 13, 1984. The appeal is, therefore, dismissed with costs. The appellant applies that the advertisement should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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