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TMI Blog2020 (8) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by the learned Principal Subordinate Judge in raising the attachment to enable the bank to proceed against the property is perfectly in order. However, the order of attachment will hold good as it is valid otherwise and it is enforceable subject to the mortgage rights of the bank to proceed against the property for recovery of its dues - The order of attachment cannot affect the bank or the auction purchaser to get absolute title after the sale at the instance of the bank is confirmed. Petition dismissed. - C.R.P.(MD)Nos.881 to 884 of 2015 - - - Dated:- 24-8-2020 - THE HON'BLE MR.JUSTICE S.S.SUNDAR For the Petitioner : Mr.M.Rajaraman For the Respondent : Mr.V.Meenakshisundaram, Mr.S.Srinivasaraghavan COMMON ORDER All the above Civil Revision Petitions have been filed by the plaintiff in the suit in O.S.No.85 of 1979 on the file of the Principal Sub Court, Madurai. 2.The revision petitioner filed a suit in O.S.No.85 of 1979 before the Principal Sub Court, Madurai and obtained a decree for recovery of a sum of ₹ 1,75,806/- with interest at 20% from the date of plaint. The said suit was decreed as prayed for by a judgment and decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.P.(MD) No.884 of 2015 is a nationalised bank which granted credit facilities to M/s.Rukmani Mills in the year 1980. It is admitted by the second respondent in C.R.P. (MD)No.884 of 2015, namely, M/s.Rukmini Mills, that they created equitable mortgage on 18.08.1980 over the petition mentioned property by way of deposit of title deeds with the bank. The equitable mortgage appears to have been extended for additional credit facilities granted to M/s.Rukmani Mills from time to time. Since the mill has committed default in repaying the loan amount, it is stated by the bank that they initiated legal proceedings under SARFAESI Act against M/s.Rukmani Mills and took possession of the entire mill which is the subject matter of execution proceedings in E.P.No.121 of 1986 on 15.10.2008. The bank has also filed original application in O.A.No.11 of 2008 before the Debt Recovery Tribunal and it is pending. The movable properties like machineries and other hypothecated goods were sold on 23.12.2010 for a sum of ₹ 1.05 Crores. It is stated that M/s.Rukmani Mills has to pay still a sum of ₹ 45.43 Crores as on 31.03.2012. It is further stated that the bank was constrained to bring the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat SARFAESI proceedings initiated by the bank are subsequent to the attachment made by the Court in the execution proceedings and that therefore, the attachment will prevail over the mortgage. The learned Counsel appearing for the petitioner in the alternative submitted that the provisions of Order 21, Rule 58(3)(c) of Code of Civil Procedure protects the rights of the decree-holder to continue the attachment subject to the mortgage, charge or interest in favour of any third party who has secured the property by way of a prior mortgage. The learned Counsel appearing for the petitioner submitted that the bank has given certain particulars about the credit facilities in an earlier application in E.A.No. 833 of 2006 and that it is seen that the credit facilities were availed only on 26.03.1992. It was therefore submitted by the learned Counsel appearing for the petitioner that the mortgage was not created in the year 1980 as alleged in the execution application in E.A.No.372 of 2012. It was also submitted by the learned Counsel appearing for the petitioner that the Executing Court failed to consider that no document was produced by the bank to show that equitable mortgage was on 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strict and another] reported in CDJ 2020 MHC 2555 wherein it has been held as follows: 8.Section 64(1) renders only the private sale void as against all claims enforceable under the attachment if such transfer is after attachment. The right of a mortgagee who secured the property prior to attachment has an indefeasible right to proceed against the property. Further Order 38 Rule 10 C.P.C, protects the rights of prior mortgagee by saying that such attachment shall not affect the rights, existing prior to the attachment of persons not parties to suit. As per Section 64(2) of Civil Procedure Code, an order of attachment has no legal implication to affect the right of secured creditor to proceed against the property or to recover the money which is due to him based on the mortgage created by the borrower in favour of the first respondent bank. In this case, it is admitted that the bank has got the first charge in view of the mortgage and it is not in dispute that the proceedings for recovery of money had already been initiated by resorting to the provisions of Security Interest (Enforcement) Rules 2002. In such circumstances by virtue of Section 64 of Civil Procedure Code and Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R.P.(MD)Nos.881 of 2015 is partly allowed. It is declared that the order of attachment in E.P.No.121 of 1986 is subject to the equitable mortgage in favour of the first respondent bank. It is further clarified that the revision petitioner being a money decree-holder is entitled to proceed only against the remaining asset or balance of sale proceeds which are available after adjusting the dues towards the loan account of the first respondent bank in C.R.P.(MD)No.884 of 2015. However, the lower Court dismissed the execution petition in E.P.No.121 of 1986. Since the revision petitioner's right against the remaining sale proceeds is preserved in this proceedings, the lower Court ought to have stayed the proceedings in E.P. No.121 of 1986 instead of dismissing E.P.No.121 of 1986. C.R.P.(MD)No.881 of 2015 is therefore partly allowed and the order dismissing E.P.No.121 of 1986 is set aside. The execution petition in E.P.No.121 of 1986 stands stayed till the first respondent in C.R.P.(MD) No.884 of 2015 realises its dues out of the properties mortgaged with the bank. It is open to the revision petitioner to proceed against the remaining sale proceeds after adjustment of dues to the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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