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TMI Blog2024 (12) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... ........................................... 20 i. Submissions of the Successful Auction Purchaser / the petitioner. .... 20 ii. Submissions of the Borrower / the respondent no. 1........................... 28 iii. Submissions of the Subsequent Transferee / respondent nos. 2 & 4. . 38 iv. Submissions of the Bank / the respondent no. 3. ................................. 45 C. ISSUES FOR DETERMINATION ......................................................... 49 D. ANALYSIS ............................................................................................... 50 i. Concept of Abuse of Process of Court and Collateral challenge to judgments that have attained finality. ................................................. 50 a. The Decision of this Court in Celir LLP v. Bafna Motors & Ors. (2023 INSC 838) and the Scope of challenge before it................................................................... 77 b. The 'Henderson' Principle as a corollary of Constructive Res- Judicata. ............ 83 ii. Applicability of Lis Pendens in the absence of any registration as required under the State Amendment to Section 52 of the TPA. ..... 104 iii. Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creek Industrial Area MIDC Village Shirwane, Thane, Belapur Road, Nerul, Navi Mumbai, Thane, Maharashtra (hereinafter referred to as the "Secured Asset") belonging to the Borrower vide a Mortgage Deed dated 28.01.2020 in lieu of the sanctioned credit. 6. The Borrower defaulted in repayment of the said loan amount and accordingly on 31.03.2021 the Borrower's LRD Term Loan Account was declared as a Non-Performing Asset (NPA). 7. The Bank on 07.06.2021 issued a demand notice under Section 13 subsection (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short, the 'SARFAESI Act') for repayment of the principal amount along with interest, cost, charges, etc. As of 30.04.23, an aggregate sum of Rs. 123.83 crore was due and payable by the borrowers to the Bank. 8. Owing to the failure of the Borrower & the guarantor in repaying the outstanding amount referred to above, the Bank proceeded to take measures for possession of the Secured Asset under the SARAFESI Act. The Bank on 04.02.2022 issued a possession notice under Section 13(4) read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 (for short, the "SA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is" condition. xxx xxx xxx 29. The sale is subject to outcome of S.A No. 46/2022 pending before DRT, Mumbai." 13. The Borrower herein on 26.06.2023 preferred two applications before the DRT being I.A. No. 2253 of 2023 and I.A. No. 2254 of 2023 in S.A. No. 46 of 2022, respectively inter-alia seeking to amend amending its pleadings for the purpose of challenging the 9th auction proceedings and for seeking stay of the said auction in the meantime, respectively. 14. Pursuant to the 9th notice of sale, the auction proceedings were conducted on 27.06.2023. The petitioner herein participated in the same and submitted its bid of Rs. 105.05 crore, along with a deposit of Rs. 10.5 crore as earnest money. 15. In the said 9th auction conducted by the Bank, the petitioner herein was declared as the highest bidder. The Bank on 30.06.2023 vide its email sent a "Sale Confirmation Letter" to the petitioner, declaring him as the highest bidder / H1 in the auction of the secured asset and called upon the petitioner. to deposit 25% of the bid amount by 01.07.2023 and the balance amount on or before 15.07.2023. 16. On 01.07.2023, the petitioner as per the terms and conditions of the aucti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 pending before the Hon'ble DRT I, Mumbai and after examining the legality, validity and propriety thereof, be pleased to allow the Petitioners to redeem the mortgage as per schedule provided in the Interim Application No. 2339 of 2023 filed before the Hon DRT I, Mumbai or within such reasonable period as this Hon'ble Court may deem fit and proper; (b) That this Hon'ble Court be pleased to direct the Respondent to issue "No Dues Certificate" and release All piece and parcel of leasehold land to the extent of 16200 sq. mtrs various buildings and ancillary structures at amalgamated plot no. D-105, D-110 and D-111, Trans Thane Creek Industrial Area, MIDC, Village Shirwane, Thane- Belapur Road, Navi Mumbai, Dist- Thane, Maharashtra, 400706, after getting the entire redemption amount; (c) In the alternate, that this Hon'ble Court be pleased to direct the Respondent not to take any further steps for issuance of the sale Certificate by confirming the sale until the hearing and final disposal of the Securitization Application No. 46 of 2022 pending before the Hon'ble DRT I, Mumbai;" (Emphasis supplied) 20. Interestingly, the Borrower herein never challenged the legality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertinent to note that there was a caveat at the end of the Borrower herein, and thus the Borrower was fully aware of the aforesaid Special Leave Petition pending before this Court. 25. On 25.08.2023, the aforesaid special leave petitions were taken up for hearing by this Court for the first time and the Borrower herein was also present during the hearing through his counsel. However, since the judgment and order dated 17.08.2023 passed by the High Court was not made available, this Court vide its order dated 25.08.2023 adjourned the matter to 01.09.2023. It is material to note that there was no interim stay or status quo operating between the parties. 26. On 26.08.2023, the judgment and order dated 17.08.2023 passed by the High Court was uploaded and made available to the parties, and the Borrower pursuant to the said order of the High Court transferred a sum of Rs. 104 crore to the Bank for redeeming its mortgage. 27. The Bank on 28.08.2023 issued a 'No Dues Certificate' to the Borrower, and a Release Deed was executed between the parties for discharge of the mortgage over the Secured Asset, upon which the original title deeds and related documents were returned to the Borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.09.2023, the petitioner herein paid the remaining amount of Rs. 23.95 crore in terms of the aforesaid judgment of this Court whereupon Sale Certificate for the Secure Asset came to be issued by the Bank. 32. It is alleged that the Bank on the very same day addressed one letter to the Borrower requesting for the cancellation of the Release Deed dated 28.08.2023 and for returning the original title deeds to the Secured Asset in order to refund the amount paid towards redemption of the mortgage. However, the Borrower on the other hand disputed the receipt of the aforesaid letter. Nevertheless, the Bank on 18.10.2023 addressed one another letter calling upon the Borrower to execute a Deed of Cancellation of the aforesaid Release Deed and to handover the original title documents of the Secured Asset. 33. Thereafter, the petitioner herein sent several reminders to the Bank inter-alia to handover the physical possession of the Secured Asset along with its original title deeds. The Bank in response reiterated from time to time that it was actively taking steps for the purchase of complying with the directions passed by this Court in its judgment dated 21.09.2023 in Civil Appeal Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Act, which was still pending and that until appropriate orders were passed, it was not possible to handover the physical possession of the Secured Asset. 36. On the other hand, the Subsequent Transferee upon receipt of the aforesaid legal notice, instituted a suit being the Special Civil Suit No. 5 of 2024 against the petitioner inter-alia seeking a declaration that (a) they are the owners and title-holder of the Secured Asset; (b) the Assignment Agreement dated 28.08.2023 is legal and valid and (c) they are entitled to the physical possession of the Secured Asset. It has been alleged that the Subsequent Transferee was constrained to prefer the above suit, as the petitioner herein had attempted to take forceful possession of the Secured Asset. The Bank on 16.01.2024 filed an application in the aforesaid suit for rejection of plaint under Order VII, Rule 11 of Code of Civil Procedure, 1908 (for short, the "CPC"). 37. The District Magistrate vide its order dated 02.02.2024 in S.A. No. 787 of 2023 allowed the Banks' application under Section 14 of the SARFAESI and the Tehsildar, Thane was appointed to take physical possession of the Secured Asset and the document relating thereto. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in Civil Appeal Nos. 5542-5543 of 2023 wherein the said amount was ordered to be refunded in clear terms. 42. On 01.03.2024, the present contempt petition came to be filed before this Court seeking initiation of contempt proceedings against the respondents for wilful disobedience of this Court's order in Civil Appeal Nos. 5542-5543 of 2023 and further praying for i) handing over of the physical possession and original title deeds to the Secured Asset, ii) annulment of the Release Deed, the No Dues Certificate and the Deed of Assignment in favour of the Subsequent Proceedings and iii) the quashing of all proceedings pending in respect of the Secured Asset before the DRT, DRAT and the suit proceedings of the Subsequent Transferee. 43. It further emerges from the materials on record that in the suit proceedings the Civil Court, Belapur vide its order dated 05.03.2024 rejected the Bank's application under Order VII, Rule 11 of the CPC and further extended the status quo granted earlier. 44. In the wake of such developments, the Bank on 12.03.2024 filed a miscellaneous application before this Court being M.A. No. 600 of 2024 in Civil Appeal Nos. 5542-5543 of 2023 seeki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured asset. 49. It was further submitted that the Borrower and the Subsequent Transferee have not only refused to hand over the possession and original title deeds to the Secured Asset in complete defiance of the decision in the Main Appeals but have also resorted to frivolous and malicious proceedings before various forums to undermine and circumvent the decision of this Court. It was highlighted that inasmuch as three different proceedings have been instituted by the respondents for seeking prayers which are in teeth of the decision of this Court in the Main Appeals. The details are as under: - i. Securitization Application No. 46 of 2022 along with I.A. Nos.3199 of 2023 & 3220 of 2023 before the DRT-I, Mumbai. ii. Securitization Application No. 53 of 2024 along with I.A. No. 456 of 2024 before the DRAT, Mumbai iii. Special Civil Suit No. 5 of 2024 before the Civil Court, Belapur. 50. It was submitted that the above acts of abject refusal to comply with the directions passed in the Main Appeals and the act of initiation of proceedings in different forums with prayers contrary to the decision of this Court by the respondents, constitutes contempt in itself. 51. It was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led I.A. No. 3220 of 2023 in S.A. No. 46 of 2022 to amend the securitization application for inter-alia challenging the issuance of sale certificate by the Bank as directed by this Court on the ground that such issuance is contrary to the provisions of the SARFAESI Act, as the property no longer vested with the Bank in view of the No Dues Certificate and the Release Deed that was executed during the pendency of the Main Appeal, and that the Bank deliberately suppressed this fact from this Court. (v) On 05.01.2023, the Subsequent Transferee filed Special Civil Suit No. 5 of 2024 inter-alia for seeking a declaration that it is the rightful owner of the property, as the Sale Certificate issued to the petitioner does not confer ownership right and title in respect of the property by contending that this Court in its decision in the Main Appeals did not declare either directly or indirectly that the sale transaction in its favour is void or not binding. It has further contended in its plaint that the interpretation of this Court as to the right of redemption of the Borrower in the Main Appeals cannot be applied post-exfacto to the sale executed in its favour so as to declare the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions prior to the auction in which the petitioner emerged as the successful bidder, the same only required a 15-days' statutory notice period. As the notice of sale for the 9th auction was published on 12.06.2023 and the ultimate auction held on 30.06.2023, the statutory 15-day time period was duly maintained. Thus the 9th auction was in due compliance of the statutory requirements and constituted a valid sale. 56. Reliance was also placed on the decision of this Court in Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. & Ors, reported in (2008) 9 SCC 299 to canvass that a sale by way of public auction cannot be set aside until there is any material irregularity and/or illegality committed in holding the auction or if such sale was vitiated by any fraud or collusion. 57. It was further submitted on behalf of the petitioner that at no point before the DRT or DRAT did the Borrower contend that there was any material irregularity or fraud in connection with the 9th auction that was conducted by the Bank or the sale of the Secured Asset arising therefrom. Even in the Main Appeals before this Court, it was never the case of the Borrower that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 that was pending before the DRT. 61. He further submitted that since the terms of the auction more particularly clause 29 therein specifically stipulated that the auction is subject to the outcome of the proceedings in S.A. No. 46 of 2022 pending before the DRT, this Court rightly never decided the validity of the auction proceedings and left it for the DRT to decide. 62. It was submitted that in the Main Appeals, this Court held that writ jurisdiction ought not to have been invoked by the Borrower having already availed the statutory remedy and rightly did not decide the issue of validity of the auction conducted by the Bank as such remedy was available to the Borrower to avail in the S.A. No. 46 of 2022 pending before the DRT. 63. It was also submitted that the issues involved in the S.A. No. 46 of 2022 as to the validity of the measures taken by the Bank under the SARFAESI Act, is still pending and to this date no court or judicial authority has examined the same, and any interference with the said proceedings would render the Borrower remediless and infringe its rights under Article 21 and 300A of the Constitution. It was further submitted that this Court ought not to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, in its written submissions had only prayed that the Bank be directed to issue a Sale Certificate and carry all other necessary acts under the SARFAESI Act. Even this Court in the Main Appeals only directed the issuance of the Sale Certificate and not the delivery of physical possession of the Secured Asset. 68. He also submitted that where an auction is conducted on symbolic possession, the correct approach for obtaining physical possession of the secured asset is to initiate proceedings before the District Magistrate in terms of Section 14 of the SARFAESI Act. In this regard, reliance was placed on the decision of this Court in ITC Ltd. v. Blue Coast Hotels Limited & Ors. reported in (2018) 15 SCC 99. 69. He further submitted that in the present case the Bank had rightly filed an application under Section 14 of the SARFAESI Act for seeking physical possession and had even obtained a favourable order on 02.02.2024. Since, any order passed under Section 14 of the SARFAESI Act is challengeable before the DRT and appealable before the DRAT, the Borrower herein was well within its rights to challenge the order dated 02.02.2024 before the DRT by way of S.A. No. 53 of 2024 which ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by it would be forfeited, & the entire dues would not have paid the Borrower would have not only lost the amount already paid by it but would have also been in contempt of the order passed by the High Court. 73. Thus, in order to comply with the High Court's order to its letter and spirit, the Subsequent Transferee paid the remaining dues to the Bank on behalf of the Borrower and thereafter the Secured Asset was transferred to it. He further submitted that, since during the pendency of the Main Appeals, there was no prohibitory order or stay by this Court, the transferring of ownership by way of the Assignment Agreement does not amount to contempt. In this regard, reliance has been placed on the decision of this Court in Collector of Customs, Bombay v. Kirshna Sales (P) Ltd. reported in (1994) Supp 3 SCC 73 that merely filing an appeal does not amount to a stay of the order and the decision in Patel Rajnikant Dhulabhai & Anr. v. Patel Chandrakant Dhulabhai & Ors. reported in (2008) 14 SCC 561 that without a prohibitory order, there can be no contempt of court. 74. He further submitted that this Court in its decision in the Main Appeals held that a notice of auction can be pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l pending. When the 9th auction came to be conducted, the Borrowers filed an interlocutory application in the aforesaid securitization application for seeking redemption of mortgage, wherein orders were reserved. Against the aforesaid, the Borrower filed a writ petition before the High Court for seeking redemption of mortgage which was allowed. The same came to be challenged before this Court in the Main Appeals, wherein only the right of redemption in terms of Section 13 sub-section (8) of the SARFAESI Act was decided. Thus, the very proceedings before this Court in the Main Appeals emanated from an interlocutory stage and all other issues except the right of redemption continued to survive in the S.A. No. 46 of 2022. As a fortiorari, it was submitted that if the Borrower had not filed the writ petition which culminated into the proceedings before this Court in the Main Appeals, then the petitioner would have never claimed that DRT cannot examine the validity of the auction. Thus, it was submitted that this Court never intended to take away the aforesaid right of the Borrower to contest S.A. No.46 of 2022 before the DRT. 79. He further submitted that this Court whilst directing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase of the said property by it was completed and duly registered with the knowledge and cooperation of the Bank before the decision of this Court in the Main Appeals, they are neither in breach or violation of this Court's decision and as such the present contempt proceedings deserves to be dismissed qua the Respondent. It was further submitted that the title to the Secured Asset in favour of the Subsequent Transferee was never questioned or challenged before any forum or impeached in any manner known to law even after the decision of this Court in the Main Appeals. 83. He further submitted that when the Subsequent Transferee tendered the entire consideration for the Secured Asset, there was admittedly neither any lis pendens in respect of the property registered as per due diligence conducted on its behalf nor had the petitioner acquired any rights to the said property. He submitted that as per the State amendment to Section 52 of the Transfer of Property Act, 1882 (for short, the "TPA") lis pendens will not apply if a notice is not registered. He submitted that the consequence of this omission in registration would be that lis pendens will not apply. 84. Since, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a clear title. Since it is the Subsequent Transferee who undertook the necessary steps to redeem the second charge, it is said to have acquired a clear title both in law and in equity. 87. It was submitted that the Subsequent Transferee was constrained to prefer the Special Civil Suit No. 5 of 2023 as the petitioner herein had attempted to take forceful possession of the Secured Asset. It was further submitted that the said suit had to be filed to protect its right and prevent its dispossession without following the due process of law. However, in terms of the undertaking given to this Court during the course of proceedings on 18.10.2024, it was submitted that the Subsequent Transferee has instructed its counsel to unconditionally withdraw the aforesaid suit. 88. He further submitted that the petitioner and the Bank are seeking to expand the scope of the present proceedings by claiming physical possession as a relief in the present contempt matter, when in fact such relief was never prayed in the Main Appeal. As the substantive relief seeking physical possession of the Secured Asset was not sought in the Main Appeals, the said relief cannot be obtained in the present contempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought not to be permitted to extend the scope of the matter to overcome these proceedings pending in the DRT. 94. He submitted that it is the bona fide understanding of the Subsequent Transferee that the auction by which the petitioner claims its rights is illegal, having regard to the law laid down by this Court in the Main Appeals. He argued that the auction was bad in law as the Bank has violated mandatory statutory requirements for the auction process, more particularly the mandatory 30-days period required to be maintained between the notice to the borrower and the sale notice in terms of Rule 8(6) and 9(1) of the SARFAESI Rules. In the present case both the aforesaid notices were issued on the same date i.e., 12.06.2023 thereby rendering the auction null and void. Thus, the petitioner at based could be said to have acquired only inchoate rights to the Secured Asset subject to the terms of the auction and the validity of the auction proceedings. 95. In light of the above, he submitted that it is the Bonafide understanding of the Subsequent Transferee that the Borrower's right of redemption stood revived in view of the illegality of the auction proceedings and thus, authenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon payment of an additional amount of Rs. 23.5 crore by it. 101. He submitted that the implied effect of this decision is that the Release Deed executed by the Bank and the Assignment Agreement executed by the Borrower had to be cancelled and the original title deeds to the Secured Asset were to be returned to the bank so that they may be handed over to the petitioner. 102. He submitted that the Bank in compliance of this Court's decision in the Main Appeals, issued the Sale Certificate for the Secured Asset to the petitioner and on the same day addressed a letter to the Joint Sub-Registrar, Thane, requesting it to take immediate steps for cancellation of the aforesaid Release Deed. The Bank also addressed a letter to the Borrower requesting it to take steps for cancellation of the aforesaid deed and provide the title document to the said property along with the bank details to refund its money. 103. The Bank on 06.10.2023 further took steps and got the Sale Certificate issued in favour of the petitioner registered before the Joint Sub-Registrar, Thane- 8 vide Registration No. 22540 of 2023. 104. He submitted that the Bank further addressed another letter to the Borrower requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transferee as null and void and further direct the Borrower to return the original title documents of the subject property to the along with the details for initiating refund of its money paid towards redemption of mortgage, and to direct the District Magistrate Thane to immediately take possession of the secured asset and handover the same to the Bank. C. ISSUES FOR DETERMINATION 109. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the following questions fall for our consideration: - I. Whether any act of contempt could be said to have been committed by the respondent nos. 1 to 4 respectively of the judgment and order dated 21.09.2023 passed by this Court in Civil Appeal Nos. 5542-5543 of 2023? In other words, whether the respondents herein in light of the aforesaid decision of this Court were duty bound to cancel the Release Deed dated 28.08.2023 and hand over the physical possession along with the original title deeds of the Secured Asset to the petitioner herein? II. Whether, the proceedings arising out of S.A. No. 46 of 2022 could have continued after this Court's judgment and order dated 21.09.2023 directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion proceeding under sale notice dated 25th March, 2022, the Respondent failed to give a clear 30 (thirty) days of notice. Likewise, in the 2nd auction proceeding under sale notice dated 30th April 2022, the Respondent failed to give a clear 15 (fifteen) days of notice. Additionally, there were several glaring defects and illegalities in both the sale notices. Therefore, the sale notices dated 25th March 2022 and 30th April, 2022 cannot be treated and terms as lawful sale notices. The Respondent suo-moto cannot be considered to have conducted the 1st or 2nd auction and failed. According to the Applicants, the Respondent never conducted the 1st and / or 2nd lawful auction/s process as per law. Therefor, the Respondent is duty bound to give a clear 30 (thirty) days gap as the 1st auction notice was never conducted nor termed as lawful. Thus, the impugned Auction Sale Notice dated 12th June 2023 has failed. xxx xxx xxx G-(v) That, the sale notice dated 12th June 2023 is bad in law and not issued in accordance with the provisions of SARFAESI Act and rules thereunder. More particularly, the impugned Sale Notice is perverse for the following reasons; a. There is no 30/15 days ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the DRT along with a further direction that the Borrower be given the liberty to tender the remaining amount and redeem the mortgage i.e., prayers 11(c) and 11(b) respectively. At the cost of repetition, the relevant prayers sought by the Borrower in the writ petition before the High Court are reproduced hereunder: - "11. THE PETITIONERS, THEREFORE, PRAY : (a) That this Hon'ble Court be pleased to issue Writ of Certiorari or Writ in the nature of Certiorari or any other appropriate Writ, calling upon the papers and proceedings of the Securitization Application No. 46 of 2022 pending before the Hon'ble DRT I, Mumbai and after examining the legality, validity and propriety thereof, be pleased to allow the Petitioners to redeem the mortgage as per schedule provided in the Interim Application No. 2339 of 2023 filed before the Hon DRT I, Mumbai or within such reasonable period as this Hon'ble Court may deem fit and proper; (b) That this Hon'ble Court be pleased to direct the Respondent to issue "No Dues Certificate" and release All piece and parcel of leasehold land to the extent of 16200 sq. mtrs various buildings and ancillary structures at amalgamated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph 4.28 has stated that the aforesaid auction notice was issued on 12.06.2023 scheduling the auction for 30.06.2023, yet there is nothing to indicate that the Borrower had assailed the said notice on the ground of want of a 30 / 15 days period of notice in terms of Rule 8 and 9 of the SARFAESI Rules. (ii) In the very next paragraph i.e., at paragraph 4.29, although the Borrower has stated that the sale process is absolutely erroneous, yet it has not laid any specific challenge to the 9th auction notice dated 12.06.2023. Thus, far from a mere bald assertion that the sale process is erroneous, no specific plea as regards the absence of a 30 / 15 days gap between the sale notice and auction was taken, which the Borrower now seeks to espouse in the present contempt petition. (iii) Pertinently, in the grounds, the Borrower has left no stone unturned for challenging the demand notice, the possession notice, the first sale notice, the valuation of the Secured Asset by the Bank etc. Yet again, the plea which the Borrower seeks to take in the present contempt petition is conspicuously absent. The ground taken by the Borrower at paragraph 'x' again at best can be construed as seeking to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to state exact outstanding as on the date of sale notice for which the property is getting sold. The amount of dues mentioned in the purported auction* notice is uncertain and vague. In these peculiar circumstances it is more than enough to prove that there is basic and patent illegality in the. entire E-auction proceeding; t. that, as per the mandate of Rule 8(6)(f), mandates of the secured creditor/authorized officer to disclose the encumbrances known to the Respondent. Herein, admittedly the Secured creditor was fully aware about the encumbrances of Rs.2,08,40;362/- (Rupees* Two Crores Eight Lakhs Forty Thousand Three Hundred and Sixty- Two Only) OR Rs.2,53,40,362/- (Rupees Two Crores Fifty-Three Lakhs Forty Thousand Three Hundred and Sixty-Two Only). towards property tax bill which was found pasted by the Respondent during their site visit as, duly recorded in a Bank's letter dated 14th January 2022. 0nce, again, Petitioner vide letter dated 17th January 2022 confirmed that the property tax dues are pending and Corporation has pasted the notice for an encumbrance of Rs. 2,53,40,362/- (Rupees Two Crores Fifty- Three Lakhs Forty Thousand Three Hundred and Sixty Two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner. The relevant observations read as under: - "5. Today, Mr. Shinde, the learned Advocate appearing for the Respondent Bank, on instructions, has stated that if the Petitioners are willing to pay the entire amount of Rs. 129 crores on or before 31st August 2023 and subject to them paying over to the Bank a sum of Rs. 25 crores today [by Demand Drafts], they have no difficulty in allowing the Petitioners to redeem the mortgage. The further condition that Mr. Shinde put forth for accepting this offer was that the Securitization Application filed before the DRT would stand dismissed on the passing of this order, and if the payment is not made by 31st August 2023, possession of the secured asset would be handed over by the Petitioners to the Auction Purchaser on 5th September 2023. 6. Mr. Khandeparkar, on taking instructions, has fairly stated that in the event the entire amount of Rs. 129 crores is not paid by the Petitioners on or before 31st August 2023, then the Petitioners shall voluntarily hand over vacant, peaceful, and quiet possession of the secured asset to the Auction Purchaser on or before 5th September 2023." ( Emphasis supplied ) (ii) Secondly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to an end on the passing of this order. In other words, on the passing of this order itself, the entire challenge laid by the Petitioners to the actions of the Bank [under the provisions of the SARFAESI Act, 2002] comes to an end. Therefore, even if the Petitioners default in making payment by 31st August 2023, no challenge can be laid to the sale of the secured asset to the Auction Purchaser. Further, as per the statement of Mr. Khandeparkar, in the event the Petitioners fail to pay the entire dues of Rs.129 crores to the Respondent Bank by 31st August 2023, vacant, quiet, and peaceful possession of the secured asset would be handed over by the Petitioners to the Auction Purchaser and the Bank would then issue a sale certificate in favour of the Auction Purchaser. When one looks at all these facts, we find that the arrangement referred to above is in the interest of all, including the Auction Purchaser. We say this because, by 31st August 2023, the Auction Purchaser will either get the secured asset free from litigation or will get a refund of the entire amount paid by it to the Respondent Bank for agreeing to purchase the secured asset." ( Emphasis supplied ) (iii) Lastly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . What can be discerned from the above is that although the Borrower in its writ petition had initially prayed for adjudication of the S.A. No. 46 of 2022 either by the High Court itself or in the alternative by the DRT subject to the auction proceedings being stayed, yet during the hearing it had effectively waived of its right to pursue the said securitization application and to challenge the actions taken by the Bank under the SARFAESI Act including the 9th auction notice. Similarly, although the High Court permitted the Borrower to redeem the mortgage yet its right to challenge the validity of the sale had been foreclosed by the High Court irrespective of whether the Borrower is able to actually tender the dues for redemption or not. Moreover, the proceedings under the said S.A. No. 46 of 2022 did not merely come to an end as a consequence of the impugned order of the High Court but rather due to the unconditional undertaking of the Borrower to withdraw the same within a period of 1-week, independent to the exercise of its right of redemption. Thus, effectively the Borrower at that stage had waived its right to pursue the S.A. No. 46 of 2022 on its own accord, and at no point o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt portion of the petitioner's written submissions are reproduced hereunder: - "5.6 Knowing that the Supreme Court may consider the legality of what was being attempted, the Borrowers and the Bank have precipitated matters with the intention of letting events overtake this Hon'ble Court's scrutiny. Not only has the Bank accepted payment of Rs. 129 crore but it has also hastily proceeded to sign and register the mortgage cancellation documents and issue a no-dues certificate. 5.7 No regard has been shown for this Hon'ble Court considering the matter. One can understand that the Borrowers would pay the Rs. 129 crores by 31.08.2023. However, the haste with which steps have been taken thereafter is for everyone to see. The petitioner has obviously refused refund of its money, pending the decision of this Hon'ble Court. 5.8 However, considering the illegality which the Impugned Judgment has permitted and that steps have been taken to implement the Impugned Judgment during the pendency of this SLP, the Petitioner respectfully submits that to do complete justice, this Hon'ble Court must not only set aside the Impugned Judgment but must also order that: i) All steps taken pursua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Borrower is being reproduced hereunder: - "WRITTEN SUBMISSIONS ON BEHALF OF RESPONDENT NO. 1 1. The present Special Leave Petition arises out of the impugned order dated 17.08.2023 (uploaded on 26.8.2023) in Writ Petition No. 9523 of 2023 along with Interim Application Stamp No. 21706 of 2023 before the Hon'ble High Court of Judicature at Bombay. 2. Vide the impugned order, the Hon'ble High Court has allowed the original Petitioners i.e. Respondent No.1 herein, to exercise their right of redemption upon property being Plot No. D-105, D-110 and D-111, Trans Thane Creek Industrial Area, MIDC Village Shirwane, Thane, Belapur Road, Nerul, Navi Mumbai, Thane, Maharashtra 400906 (for short "the secured asset"), prior to the issue of the Sale Certificate, in lieu of repayment of the Entire Mortgage Amount on Ledger Balance (Principal+Interest+Penal Interest+ Overdue Charges + Costs) of the Secured Creditor i.e. Respondent No. 3, Union Bank of India. 3. Through the said Writ Petition, the Hon'ble High Court rightly, in the peculiar facts and circumstances (as noted in para 11 of the impugned order) exercised its in extraordinary jurisdiction under Article 226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant to note that before the Mumbai Debt Recovery Tribunal-I (the Respondent No. 1 had carried a draft for Rs. 10 crores and also expressed it willingness to make the balance payment by 31.8.2023 See para 4.31 of Writ Petition at pg. 133 of the SLP (as has been eventually directed by the High Court in the impugned order). Since Respondent No.1, the borrower, has a subsisting right of redemption till a sale certificate is issued (as detailed hereinbelow), it was constrained to approach the High Court by way of a writ petition, as there was a genuine apprehension that the right of redemption would be extinguished pending the hearing and final disposal of the Interim Application in the Secutitization Application No. 46/2022. Subsequent events have rendered the SLP infructuous: 7. The present SLP, at the time of its filing, has been rendered infructuous due to the following events. 8. That after the impugned order was dictated in open court on 17.8.2023 and subsequently uploaded on the website of Hon'ble Bombay High Court on 26.8.2023, the following developments have taken place: a. The Respondent No.1 and Respondent no.2 transferred an amount of Rs. 104 Crores to the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security interest Act,2002 (SARFAESI Act): 12. During the arguments on 01.9.2023, the main issue of contention that arose was till what stage does the right of redemption survive, more so, in the light of the 2016 Amendment which amended Section 13(8) of the SARFAESI Act, 2002. 13. It is stated by the Respondents that the right of redemption is nowhere mentioned in the SARFAESI Act, and one has to refer to Section 60 of the Transfer of Property Act, 1882, which has been interpreted to reserve the right of Mortgagor to redeem the property fill the stage of the same being conveyed / transferred to a third party. 14. This interpretation has been upheld in the landmark case of Nardas Karsondas V/s S.A. Kamtam and Anr [Annexure R-2] (1977) 3 SCC 247 where it has been held that: "34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by of parties. The combined effect of Section 54 of the Transfer of Property Act and Section 17 of the Indian Registration Act is that a contract for sale in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the property and does not speak in express terms about the equity of redemption available to the Mortgagor (at para 13). It was further held that the danger of interpreting Section 13(8) as though it relates to the right of redemption, is that if payments are not made as per Section 13 (8), the right of redemption may get lost even before the sale is be complete in all respects and that holding that the right of redemption would extinguished at the stage of issue of notice under Rule 9(1) would be tantamount to annulling the relevant provision of the Transfer of Property Act, 1862 which do not stand expressly excluded insofar as the question of redemption is concerned (para 14). The said judgment was challenged before this Hon'ble Court vide SLP (Civil) Diary No. 28967/2019 and the same came to be dismissed, hence, confirming the said judgment. 17. The view expressed in Concern Readymix (supra) was echoed by a Division Bench of the High Court of Punjab and Haryana in the case of M/s Pal Alloys & Metal India Private Limited and others V/s Allahabad Bank and Ors.CWP No. 6402 0GBP2019 (O & M) dated 23.12.2021 [Annexure R-5] wherein the Hon'ble High Court, inter alia, considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accordingly in favour of the Petitioners and against the Respondents." 20. The said judgment also considered and distinguished the judgment of this Hon'ble Court in Shakeena and Anr. V/s Bank of India and Ors. (2021) SCC 761 [Annexure R-6] holding that that the said case did not consider the concept of redemption u/s 60 of the Transfer of Property Act, 1882. It is submitted that the observations in para 30 of Shakeena are in the nature of obiter dicta as in the said case the auction had concluded prior to the amendment of Section 13(8) and in any event the sale certificate had already been issued. Thus, the question of interpretation of Section 13(8) was not directly in issue. Effect of amendment to S. 13(8) of the SARFAESI Act, 2002 21. It was vehemently argued by the Petitioners that the amended provisions of Section 13(8) of the SARFESI Act, 2002 puts a positive restriction upon the Mortgagor to restrict its right of redemption until the date of publication of the notice. 22. A perusal of the Report The report of Joint Committee on the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 [Annexure R-7], mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings, the Borrower on its own volition moved the High Court by way of its Writ Petition No. 9523 of 2023, wherein the Borrower sought to subsume the entire issue emanating from the S.A. No. 46 of 2022 in the writ petition before the High Court and as a primary relief prayed that either the High Court should decide the same and thereafter allow it to redeem the mortgage or in the alternative the DRT be directed to ultimately decide the issue and then permit it to redeem the mortgage. (iii) Thereafter, in the proceedings before the High Court, the Borrower voluntarily abandoned its aforesaid prayers and waived the right to pursue the S.A. No. 46 of 2022 before the DRT, irrespective of whether it was able to redeem the mortgage or not. In view of the above, the High Court by its impugned order permitted the Borrower to redeem the mortgage and directed that within a period of 1-week the S.A. No. 46 of 2022 be withdrawn and further clarified that even if the Borrower failed to withdraw the same, the said application would stand dismissed in light of its order and the Borrower would no longer be permitted to litigate any further in respect of the Secured Asset. (iv) When t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46 of 2022 be preserved, or that the sale certificate be made subject to the outcome of the said application. a. The Decision of this Court in Celir LLP v. Bafna Motors & Ors. (2023 INSC 838) and the Scope of challenge before it. 122. It would now be apposite to understand what was the nature and scope of challenge before this Court in the Main Appeals, and what was ultimately decided in it. As discussed earlier, the Borrower had preferred a writ petition wherein it had sought to subsume the issue arising out of S.A. No. 46 of 2022 pending before the DRT, particularly the challenge to the actions of the Bank under the SARFAESI Act. The writ petition was not a separate remedy distinct from the securitization application pending before the DRT, as the prayers made therein indicate that it was not merely for seeking redemption of mortgage. 123. We say so, because it is not the case that the remedy for redeeming mortgage could not have been a part of the S.A. No. 46 of 2022 nor can it be said that such a remedy was wholly alien to the provisions of the SARFAESI Act, and could not have been granted by the DRT at all. 124. It is no longer res integra that Section 17 of the SARFAESI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Borrower to bring within the fold of its case all issues and grounds in respect of the 9th auction proceedings in the proceedings arising from the writ petition, by virtue of the Doctrine of Election. 128. Once, the Borrower had elected to move the High Court for the very same cause of action and underlying prayers, the moment the same was entertained by the High Court, which it did, the Borrower was precluded from pursuing its remedies before the DRT by way of S.A. No. 46 of 2024, and was duty bound to now espouse it only in the writ proceedings, as otherwise it would tantamount to having a second bite at the cherry and relitigating what it has already litigated. 129. Thus, when the impugned order of the High Court was challenged before this Court in the Main Appeals, the scope of proceedings before us also entailed the issue of validity of the Bank's actions under the SARFAESI Act. As discussed by us in the foregoing paragraphs of this judgment, that the Borrower for reasons best known to it, never agitated the validity of the proceedings under the SARFAESI Act including the legality of the 9th auction notice. Not once did the Borrower submit either in the course of its ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit, the Bank shall issue the sale certificate in accordance with Rule 9(6) of the Rules of 2002. 109. The pending applications if any shall stand disposed of." 133. It is material to note that even in the review petition preferred by the Borrower including the application for additional grounds of review therein, the contention of the Borrower in the present contempt petition as to the illegality of the SARFAESI proceedings including the 9th auction or the contravention of the 30 / 15 days statutory period, does not figure. In fact, the Borrower in the review petition did not even lay any challenge to the direction of this Court to issue the sale certificate in the Main Appeals. No averment at all was made in countenance of the S.A. No. 46 of 2022, or as regards the measures of the Bank under the SARFAESI Act, the 9th auction notice issued in lieu thereof, or the approval of the sale of the Secured Asset by issuance of the sale certificate in its respect. The said review petition was ultimately dismissed by this Court vide its order dated 18.07.2024. 134. Thus, the Borrower having admittedly failed to even remotely indicate the aforesaid issues to this Court let alone co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. [...] " ( Emphasis supplied ) 137. The above proposition of law came to be known as the 'Henderson Principle' and underwent significant evolution, adapting to changing judicial landscapes and procedural requirements. The House of Lords in Johnson v. Gore Wood & Co reported in [2002] 2 AC 1, upon examining the 'Henderson Principle' authoritatively approved it with the following observations: - (i) Lord Bingham of Cornhill integrated the principle with the broader doctrine of abuse of process and held that the bringing of a claim or the raising of a defence in later proceedings which ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (ii) Lord Millett construing the Principle held that it does not belong to the doctrine of res-judicata in the strict sense but rather was analogous to the doctrine, as it goes a step further to encompass even those proceedings that either culminated into a settlement or issues which had never been adjudicated previously in order to protect the process of the court from abuse and the defendant from oppression. The relevant observations read as under: - "As the passages which I have emphasised indicate, Sir James Wigram V-C did not consider that he was laying down a new principle, but rather that he was explaining the true extent of the existing plea of res judicata. Thus he was careful to limit what he was saying to cases which had proceeded to judgment, and not, as in the present case, to an out of court settlement. Later decisions have doubted the correctness of treating the principle as an application of the doctrine of res judicata, while describing it as an extension of the doctrine or analogous to it ... But these various defences [res judicata, issue or cause of action estoppel] are all designed to serve the same purpose : to bring finality to litigation and avoid the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent litigation points which could and should have been raised before. There was nothing controversial or new about this notion when it was expressed by Lord Kilbrandon in the Yat Tung case [1975] AC 581. The point has been taken up in a large number of subsequent decisions, but for present purposes it is enough to refer to the most important of them, Johnson v Gore-Wood & Co [2002] 2 AC 1, in which the House of Lords considered their effect. This appeal arose out of an application to strike out proceedings on the ground that the plaintiffs claim should have been made in an earlier action on the same subject matter brought by a company under his control. Lord Bingham of Cornhill took up the earlier suggestion of Lord Hailsham of St Marylebone LC in Vervaeke (formerly Messina) v Smith [1983] 1 AC 145, 157 that the principle in Henderson v Henderson was "both a rule of public policy and an application of the law of res judicata". He expressed his own view of the relationship between the two at p. 31 as follows: "Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2 SCC 806 as the underlying principle for res-judicata and constructive res-judicata for assuring finality to litigation. The relevant observations read as under: - "3. The principle of estoppel per rem judicatam is a rule of evidence. As has been stated in Marginson v. Blackburn Borough Council [(1939) 2 KB 426 at p. 437], it may be said to be "the broader rule of evidence which prohibits the reassertion of a cause of action". This doctrine is based on two theories: (i) the finality and conclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be protected from multiplication of litigation. It therefore serves not only a public but also a private purpose by obstructing the reopening of matters which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief on the same cause of action, for otherwise the spirit of contentiousness may give rise to conflicting judgments of equal authority, lead to multiplicity of actions and bring the administration of justice into disrepute. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by a party in a proceeding between him and his opponent, he would not be permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action; but basically, even this view is founded on the same considerations of public policy, because if the doctrine of constructive res judicata is not applied to writ proceedings, it would be open to the party to take one proceeding after another and urge new grounds every time; and that plainly is inconsistent with considerations of public policy [...]" ( Emphasis supplied ) 143.In Shankara Coop. Housing Society Ltd. v. M. Prabhakar, reported in (2011) 5 SCC 607, this Court held that the ground of non-compliance of statutory provision which was very much available to the parties to raise but did not raise it as one of the grounds, cannot be raised later on and would be hit by the principles analogous to constructive res judicata. The relevant observations read as under : - "89. In the present case, it is admitted fact that when the contesting respondents filed WP No. 1051 of 1966, the ground of non-compliance with statutory provision was very much available to them, but for the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial process is not confined to specific procedure rules, but rather aligned to a broader purport of giving quietus to litigation and finality to judicial decisions. The essence of this rule is that litigation must be conducted in good faith, and parties should not engage in procedural tactics that fragment disputes, prolong litigation, or undermine the outcomes of such litigation. It is not a rigid rule but rather a flexible principle to prevent oppressive, unfair, or detrimental litigation. 147. We are conscious of the fact, that ordinarily this principle has been applied to instances where a particular plea or ground was not raised at any stage of the proceedings, but were later sought to be raised. However, it must be borne in mind that construing this rule in a hyper-technical manner or through any strait-jacket formula will amount to taking a reductive view of this broad and comprehensive principle. 148. Although in the present case, the Borrower had raised the issue of the validity of the measures taken by the Bank under the SARFAESI Act and the legality of the 9th auction conducted it in the earlier stages albeit in a different proceeding, yet its conduct of having conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands that courts maintain the finality and integrity of their decisions, preventing repeated challenges to settled matters. Once a matter has been adjudicated, it should not be revisited unless exceptional circumstances warrant such reconsideration. Repeated litigation of the same issue not only wastes judicial resources but also subjects the opposing party to unnecessary expense and harassment. judicial processes are not merely technical mechanisms but are rooted in principles of equity and justice. 153. Both logic and principle support the approach that the judicial determination of an entire cause of action is in fact the determination of every issue which is fundamental to establishing the entire cause of action. Thus, the assertion that the determination is only on one of the issues is flawed as it is nothing but an indirect way of asserting that the whole judgment is flawed and thereby relitigating the entire cause of action once more. The effect of a judicial determination on an entire cause of action is as if the court had made declarations on each issue fundamental to the ultimate decision. 154. In the present case, the very issue of the validity of the measures taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above position was reiterated in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna13 by a three-Judge Bench of this Court, of which one of us (D.Y. Chandrachud, J.) was a part. Indu Malhotra, J., speaking for the Bench invoked the doctrine of election, which provides that when two remedies are available for the same relief, the party at whose disposal such remedies are available, can make the choice to elect either of the remedies as long as the ambit and scope of the two remedies is not essentially different. These observations were made in the context of an allottee of an apartment having the choice of initiating proceedings under the 1986 Act or the RERA." ( Emphasis supplied ) (iii) Furthermore, by virtue of the Doctrine of Election, the Borrower cannot be permitted to pursue two inconsistent remedies, once the Borrower had availed the remedy to redeem its mortgage and pay the dues sought to be recovered by way of the SARFAESI proceedings initiated by the Bank and having failed in doing so, it now cannot be permitted to challenge those very SARFAESI proceedings. A litigant cannot approbate or reprobate at the same time. Election is the obligation imposed upon a party by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s nothing but an after-thought which the Borrower now seeks to espouse having lost in the Main Appeals and as such the said contention deserves to be rejected. (v) Even though the petitioner had specifically prayed for the issuance of the Sale Certificate to the Secured Asset, not once did the Borrower dispute the same or assert that such certificate would be contingent to on the outcome of the DRT proceedings. The Borrower neither in the Main Appeals nor in the review thereto raised the issue of validity of the 9th auction notice or brought to the notice of this court the terms of the auction, more particularly that such auction was subject to the outcome of the S.A. No. 46 of 2022. Having admittedly failed to do so, the espousal of the aforesaid contention by the Borrower now is nothing but an abuse of process and an attempt to indirectly circumvent the decision of this Court in the Main Appeals and collaterally challenge the determination of rights therein. (vi) Furthermore, the direction of this Court in the Main Appeals for issuance of Sale Certificate conferred absolute ownership to the petitioner to the Secured Asset, in view of the fact that : - a. The impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing should be changed. A pending suit. As soon as proceedings are commenced to recover or charge some specific property [Ex parte Thornton (1867)2 Ch.p.178] there is "lis pendens" - a pending suit, the consequence of which is that until the litigation is at an end neither litigant can deal with the property to the prejudice of the other." 156. As per the Doctrine of lis pendens, nothing new can be introduced during the pendency of a petition and if at all anything new is introduced, the same would also be subject to the final outcome of the petition, which would decide the rights and obligations of the parties. 157. The doctrine of lis pendens is duly recognized in Section 52 of the TPA which states that during the pendency in any court of any suit in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings. The explanation to the provision states that for the purposes of the Section, the pendency of a suit or proceedings shall be deemed to commence from the date of the presentation of the plaint or institution of the proceeding in a Court, and shall co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the latter is bound by the result of the proceedings even if he did not have notice of the suit or proceeding. 160. In the landmark decision of the English Court of Chancery in Bellamy v. Sabine reported in (157) 1 De G&J 566, Lord Turner underscored and explained the rationale of the principle underlying lis pendens and observed that if any alienation or material change to the subject matter during the pendency of a proceeding were permitted to prevail, it would defeat the very course of such proceedings before the courts. The relevant observations read as under: - "It is, as I think, a doctrine common to the courts both of Law and Equity and rests, as I apprehend, upon this foundation that it would plainly be impossible that any action or suit could be brought to a successful termination, if alienations pendente lite were permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendants alienating before the judgment or decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same course of proceedings." ( Emphasis supplied ) 161. In Jayaram Mudaliar v. Ayyaswami reported in AIR 1973 SC 569 this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decree just as much as he was a party to the suit. The principle of lis pendens embodied in Section 52 of the TP Act being a principle of public policy, no question of good faith or bona fide arises. The principle underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court." ( Emphasis supplied ) 164. In another decision of this Court in Guruswamy Nadar v. P. Lakshmi Ammal reported in (2008) 5 SCC 796 it was held that the principle of lis pendens incorporated in Section 52 of the TPA will apply irrespective of whether the subsequent purchaser had bought the property, which is a subject matter of a pending proceeding, in good faith or not. The relevant observations read as under: - "9. Section 19 of the Specific Relief Act clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secured Asset. It is also not in dispute that on 28.08.2023 the Borrower pursuant to the aforesaid order of the High Court redeemed the mortgage and transferred the said property to the Subsequent Transferee herein on the very same day by executing the aforesaid Assignment Agreement. It is also undisputed that the transfer of the Secured Asset in favour of the Subsequent Transferee was effected by the Borrower on the strength of its right of redemption pursuant to the High Court's impugned order dated 17.08.2023. Thus, admittedly, when the mortgage was redeemed and the Secured Asset was transferred to the Subsequent Transferee by way of the Assignment Agreement dated 28.08.2023, Special Leave Petition Nos. 19523-19524 of 2023 challenging the exercise of such right of redemption was already filed and pending before this Court. 167. In M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy & Ors. reported in 2024 INSC 861 this Court held that doctrine of lis pendens kicks in the moment a proceeding is instituted / filed irrespective of whether such filing is still defective or notice is yet to be issued by the court. It further held that any transfer made during the pendenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of India excluding the State of Jammu and Kashmir established beyond such limits by the Central Government, of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, if a notice of the pendency of such suit or proceeding is registered under Section 18 of the Indian Registration Act, 1908, the property after the notice is so registered cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose. (2) Every notice of pendency of a suit or proceeding referred to in sub-section (1) shall contain the following particular, namely: (a) the name and address of the owner of immovable property or other person whose right to the immovable property is in question; (b) the description of the immovable property the right to which is in question; (c) the Court in which the suit or proceeding is pending; (d) the nature and title of the suit or proceeding; and (e) the date on which the suit or proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to later face the adverse consequence of losing their rights by a mechanical application of lis pendens. 172. This additional requirement of registration of notice of pendency is for the benefit of the party claiming any right in such subject-matter property and also for the benefit of any third-party interested in such subject-matter property by enabling the former to claim the benefit of lis pendens as an absolute right after having duly taken steps towards ensuring that the public is well-aware of the impeding litigation in respect of such property by registering a notice of pendency and to enable the latter to ascertain the veracity of title of such property by exercise of its due diligence. Although, the said provision is for the benefit of the third-party, yet such subsequent purchasers cannot as a matter of absolute right claim any title to such property solely on the ground of want of any notice of pendency being registered. To hold otherwise would undermine the object and purpose of the doctrine of lis pendens which is based on the principle of equity, good conscience, and public policy and discourage any thwarting or frustration of rights of the parties so litigating b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter property after an exercise of a reasonable degree of care and caution and that it was otherwise unaware of the pendency of proceedings, the courts would be circumspect to displace the rights of such bona-fide third-party by a mechanical application of the doctrine of lis pendens. Even otherwise, in view of the peculiar facts of this case, more particularly the fact that the petitioner could not have registered the same being only an auction purchaser and that it was the duty of the Bank to register the notice of pendency which we are inclined to believe was not reasonably possible in view of the haste that was shown by the Borrower and the Subsequent Transferee in redeeming the mortgage and thereafter immediately transferring the Secured Asset, we are of the opinion that the non-registration of notice of pendency is not fatal to the application of the doctrine of lis pendens in the present case. 175. During the course of hearing of the present case, we had inquired from the Subsequent Transferee whether it was aware of the pendency of the Main Appeals before this Court at the time of execution of the Assignment Agreement dated 28.08.2023 and at what point of time did the Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while supplementing the judgment authored by M.Y. Eqbal, J., observed as under: - "53. There is, therefore, little room for any doubt that the transfer of the suit property pendente lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent court, we do not see any reason why the breach of any such injunction should render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it but the sale by itself may remain valid as between the parties to the transaction subject only to any directions which the competent court may issue in the suit against the vendor." ( Emphasis supplied ) 179. The decision in Thomson Press (supra) referred to above has been relied upon in T. Ravi (supra) for the proposition that the effect of Section 52 of the Act 1882 is not to render transfers effected during the pendency of a suit by a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing the law forbids, or with the specific intent to fail to do something the law requires to be done; that is to say, with bad purpose either to disobey or to disregard the law. It is a word of many meanings, with its construction often influenced by its context. In civil actions, the word (willfully) often denotes an act which is intentional, or knowing, or voluntary, as distinguished from accidental. But when used in a criminal context it generally means an act done with a bad purpose; without justifiable excuse; stubbornly, obstinately, perversely." 184. In Ashok Paper Kamgar Union v. Dharam Godha and Ors. reported in (2003) 11 SCC 1, the expression 'wilful disobedience' in the context of Section 2(b) of the Act, 1971 was read to mean an act or omission done voluntarily and intentionally with the specific intent to do something, which the law forbids or with the specific intention to fail to do something which the law requires to be done. Wilfulness signifies deliberate action done with evil intent and bad motive and purpose. It should not be an act, which requires and is dependent upon, either wholly or partly, any act or omission by a third party for compliance. 185. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r his wilful disobedience/contumacious conduct or obstruction to the majesty of law, for the reason that respect and authority commanded by the courts of law are the greatest guarantee to an ordinary citizen that his rights shall be protected and the entire democratic fabric of the society will crumble down if the respect of the judiciary is undermined. Undoubtedly, the contempt jurisdiction is a powerful weapon in the hands of the courts of law but that by itself operates as a string of caution and unless, thus, otherwise satisfied beyond reasonable doubt, it would neither be fair nor reasonable for the law courts to exercise jurisdiction under the Act. The proceedings are quasicriminal in nature, and therefore, standard of proof required in these proceedings is beyond all reasonable doubt. It would rather be hazardous to impose sentence for contempt on the authorities in exercise of the contempt jurisdiction on mere probabilities. [...]" ( Emphasis supplied ) 189. In Murray & Co. v. Ashok Kr. Newatia & Anr. reported in (2000) 2 SCC 367 this Court held that the purpose of contempt jurisdiction is to uphold the majesty and dignity of the courts of law since the image of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, the judge and the hangman" and it is so because the court is not adjudicating upon any claim between litigating parties. This jurisdiction is not exercised to protect the dignity of an individual judge but to protect the administration of justice from being maligned. In the general interest of the community it is imperative that the authority of courts should not be imperilled and there should be no unjustifiable interference in the administration of justice. It is a matter between the court and the contemner and third parties cannot intervene. It is exercised in a summary manner in aid of the administration of justice, the majesty of law and the dignity of the courts. No such act can be permitted which may have the tendency to shake the public confidence in the fairness and impartiality of the administration of justice." ( Emphasis supplied ) 191. In Reliance Petrochemicals Ltd. v. Proprietors of Indian Express Newspapers, Bombay Pvt. Ltd. & Ors. reported in (1988) 4 SCC 592 it was observed that the process of due course of administration of justice must remain unimpaired. Public interest demands that there should be no interference with judicial process and the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied ) 193. The Borrower and the Subsequent Transferee / the alleged contemnors herein placing reliance on the decision of this Court in Patel Rajnikant (supra) have contended that in the absence of any disobedience or wilful breach of a prohibitory order no contempt could be said to have been committed. It has been further canvased that this Court in the Main Appeals never issued any specific direction either to the Borrower or the Subsequent Transferee, & therefore no contempt could be said to have been committed. 194. In Patel Rajnikant (supra) this Court upon examining Section 2(b) of the Act, 1971 held that to hold a person guilty of having committed contempt, there must be a judgment, order, direction etc. by a court, there must be disobedience of such judgment, order, direction etc and that such disobedience must be willful. The relevant provisions read as under: - "58. The provisions of the Contempt of Courts Act, 1971 have also been invoked. Section 2 of the Act is a definition clause. Clause (a) enacts that contempt of court means "civil contempt or criminal contempt". Clause (b) defines "civil contempt" thus: "2. (b) 'civil contempt' means wilful disobedience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n individuals or entities challenge the authority of courts through wilful disobedience or obstructive behaviour, they undermine the rule of law and create the risk of anarchy. Contempt serves as a mechanism to protect the integrity of the courts, ensuring that they remain a symbol of fairness, impartiality, and accountability. 198. When judicial orders are openly flouted or court proceedings are disrespected, it sends a signal that the rule of law is ineffective, leading to a loss of trust in the system. Judicial decisions must remain unimpaired, free from external pressures, manipulation, or circumvention. Acts that attempt to mislead the court, obstruct its functioning or frustrate its decisions distort the process of justice and would amount to contempt. 199. The contempt jurisdiction of this court cannot be construed by any formulaic or rigid approach. Merely because there is no prohibitory order or no specific direction issued the same would not mean that the parties cannot be held guilty of contempt. The Contempt jurisdiction of the court extends beyond the mere direct disobedience of explicit orders or prohibitory directions issued by the court. Even in the absence of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner not dealt with by the court passing the judgment or order. The relevant observations read as under: - "The contempt jurisdiction should be confined to the question whether there has been any deliberate disobedience of the order of the court and if the conduct of the party who is alleged to have committed such disobedience is contumacious. The court exercising contempt jurisdiction is not entitled to enter into questions which have not been dealt with and decided in the judgment or order... The court has to consider the direction issued in the judgment or order and not to consider the question as to what the judgment or order should have contained. At the cost of repetition, be it stated here that the court exercising contempt jurisdiction is primarily concerned with the question of contumacious conduct of the party, which is alleged to have committed deliberate default in complying with the directions in the judgment or order. If the judgment or order does not contain any specific direction regarding a matter or if there is any ambiguity in the directions issued therein then it will be better to direct the parties to approach the court which disposed of the matter for clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset to the Bank for the purpose of handing the same over to the petitioner. (iv) Having set aside the impugned order passed by the High Court in toto rendered any and all acts done pursuant thereto as null and void, and the Borrower and the Subsequent Transferee herein were required to get the Release Deed and the Assignment Agreement dated 28.08.2023 cancelled. (v) Having expressly directed the issuance of the Sale Certificate it necessarily excluded all other inconsistent and contrary rights and reliefs including the right to pursue the DRT proceedings in view of the maxim Expressio Unius Est Exclusio Alterius. 205. Where a decision is rendered and the impugned order is set-aside, it behoves any logic that an express direction to act must be given in respect of every aspect of the decision. The parties are duty bound to act in accordance with common sense. It is axiomatic that a party should obey both the letter and the spirit of a court order, and it is neither open for the parties to adopt a myopic and blinkered view of such decision nor any such interpretation or view that sub-serves their own interests. It is ultimately the purpose for which the order was granted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner. (i) First, both the Borrower and the Subsequent Transferee addressed a letter to the MIDC in whose industrial area the Secured Asset was situated asking them not to entertain any request from the Bank or the petitioner regarding the transfer of the leasehold rights of the Secured Asset in favour of the petitioner. (ii) Secondly, the Subsequent Transferee vide its letter dated 05.10.2023 even asked the Sub-Registrar Office, Nerul Thane not to entertain any request of the petitioner regarding the transfer of the Secured Asset. (iii) The self-serving stance of the Borrower to initially contend that it no longer had any role or authority over the secured asset in view of its transfer and thus, cannot handover the physical possession and the original title deeds to the same, yet in the same breath filing an application seeking stay of the notice for obtaining physical possession of the Secured Asset. (iv) The police complaint lodged by the Subsequent Transferee against the Bank by distorting the decision of this Court in the Main Appeals and to thwart the attempts for its implementation. (v) The patently false contention of the Subsequent Transferee that it insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in (2007) 5 SCC 745 this Court whilst dealing with a plea to set-aside the sale of the property therein by way of public auction by the official receiver, it was held that when the sale is confirmed by the court, the sale becomes absolute and therefrom the title vests in the auction purchaser. The relevant observations read as under: - "12. [...] When a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well settled that when an auction-purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorised by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be complete. xxx xxx xxx 29. [...] It may be mentioned that auctions are of two types - (1) where the auction is not subject to subsequent confirmation, and (2) where the auction is subject to subsequent confirmation by some authority after the auction is held. 30. In the first case mentioned above, i.e. where the auction is not subject to confirmation by any authority, the auction is complete on the fall of the hammer, and certain rights accrue in favour of the auction-purchaser. However, where the auction is subject to subsequent confirmation by some authority (under a statute or terms of the auction) the auction is not complete and no rights accrue until the sale is confirmed by the said authority. Once, however, the sale is confirmed by that authority, certain rights accrue in favour of the auction-purchaser, and these rights cannot be extinguished except in exceptional cases such as fraud." ( Emphasis supplied ) 214. In Ram Kishun & Ors. v. State of Uttar Pradesh & Ors. reported in (2012) 11 SCC 511 this Court although held that where public money is to be recovered such recovery should be done expeditiously, yet the same must be done strictly in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in mind the domino effect such an order would have. The relevant observations read as under: - "36.14. This Court must underscore the well settled legal position that once an auction is confirmed, it ought to be interfered with on fairly limited grounds. (Refer: Valji Khimji and Co. v. Hindustan Nitro Product (Gujarat) Ltd. (Official Liquidator) MANU/SC/3408/2008 : 2008:INSC:925 : (2008) 9 SCC 299 and Celir LLP v. Bafna Motors (Mumbai) Private Limited and Ors. MANU/SC/1042/2023 : 2023:INSC:838 : (2024) 2 SCC 1). Repeated interferences in public auction also results in causing uncertainty and frustrates the very purpose of holding auctions. (Refer : K. Kumara Gupta v. Sri Markendaya and Sri Omkareswara Swamy Temple and Ors. MANU/SC/0213/2022 : 2022:INSC:207 : (2022) 5 SCC 710). Unless there are some serious flaws in the conduct of the auction as for example perpetration of a fraud/collusion, grave irregularities that go to the root of such an auction, courts must ordinarily refrain from setting them aside keeping in mind the domino effect such an order would have. Given the facts noted above, we shall refrain from cancelling the sale or declaring the Sale Deed as void. Instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ularity or deviation from a rule which does not have any fundamental procedural error does not take away the foundation of authority for such proceeding. In such cases, courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity. 219. In the present lis, apart from the want of statutory notice period, no other challenge has been laid to the 9th auction proceedings on the ground of it being either collusive, fraudulent or vitiated by inadequate pricing or underbidding, thus, the auction cannot be said to suffer from any fundamental procedural error, and as such does not warrant the interference of this Court, particularly when the plea sought to be raised to challenge the same could have been raised earlier. 220. The aforesaid may be looked at from one another angle. Even if the 9th auction were to be held illegal and bad in law by virtue of the aforesaid S.A. No. 46 of 2022, it would not mean that the auction purchaser would by virtue of such finding lose all its rights to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s done in violation of its orders but also the power to take restitutive measures at any stage of the proceedings. The relevant observations read as under: - "... As held by this Court in Delhi Development Authority v. Skipper Construction Co. (P) Ltd. and another, and going a step further, the Court has a duty to issue appropriate directions for remedying or rectifying the things done in violation of the orders. In that regard, the Court may even take restitutive measures at any stage of the proceedings. [...]" ( Emphasis supplied ) 222. Similarly, a Three-Judge Bench of this Court in the case of State Bank of India & Ors. v. Dr. Vijay Mallya reported in 2022 SCC Online SC 826, in clear terms said that apart from punishing the contemnor for his contumacious conduct, the majesty of law may demand that appropriate directions be issued by the Court so that any advantage secured as a result of such contumacious conduct is completely nullified. The approach may require the Court to issue directions either for reversal of the transactions in question by declaring said transactions to be void or passing appropriate directions to the concerned authorities to see that the contumacio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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