# Shri Sukhan v. Brij Veer Singh

- **Citation:** (2016) 5 ILRA 604
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-05-19
- **Bench:** Harsh Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/shri-sukhan-v-brij-veer-singh-43885
- **Pages:** 9

## Headnote

V. Sahai, B. Dayal

The present appeal has been filed by defendants/appellants against the judgment and decree dated
10.7.1981 passed by Civil Judge, Muzaffarnagar in Civil Appeal No.314 of 1979 (Brijveer Singh and another vs.
Sukhan and another) arising out of Civil Suit No.375 of 1977 decreed by Munsiff, Muzaffarnagar.
In view of the discussions made above with reference to para 7 of impugned judgement reproduced
above, I find that the defendant/appellants are neither aggrieved with the dismissal of first Civil Appeal
no.314 of 1979 Brijveer Singh and others vs. Sukhan and another nor are aggrieved with enhancement of
amount to be paid by plaintiffs-respondents to defendants-appellants on redemption of mortgage, in
accordance with prayer made by them in their first Civil Appeal No.330 of 1979 Sukhan and another vs.
Brijveer Singh and others. I am also of the considered view that though the defendants/appellant are not
aggrieved with the impugned judgement, and decree yet the appeal has been filed by them not only to harm
and harass the plaintiffs-respondents and to deprive them from taking fruits of decree, filing of which has also
caused sheer wastage of valuable time of courts wherein several important matters are pending for
consideration. Moreover, there is no substantial questions of law worth consideration and involved in this
second appeal, the appeal is liable to be dismissed with special costs.

Held: Para-

Case Law discussed:
Sukhan and another vs. Brijveer Singh and others

## Text

604 INDIAN LAW REPORTS ALLAHABAD SERIES
40. Accordingly, both the writ petitions are allowed. The impugned judgment and order
dated 27.6.2011 passed by the Tribunal is hereby set-aside. Consequent to follow.

41.There is no order as to costs.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.05.2016

BEFORE

THE HON'BLE HARSH KUMAR, J.

Second Appeal No.- 1841 Of 1981

Shri Sukhan ...Appellant
Versus
Brij Veer Singh ...Respondent

Counsel for the Appellant:
H.S. Nigam, Arjun Singhal

Counsel for the Respondent:
V. Sahai, B. Dayal

The present appeal has been filed by defendants/appellants against the judgment and decree dated
10.7.1981 passed by Civil Judge, Muzaffarnagar in Civil Appeal No.314 of 1979 (Brijveer Singh and another vs.
Sukhan and another) arising out of Civil Suit No.375 of 1977 decreed by Munsiff, Muzaffarnagar.
In view of the discussions made above with reference to para 7 of impugned judgement reproduced
above, I find that the defendant/appellants are neither aggrieved with the dismissal of first Civil Appeal
no.314 of 1979 Brijveer Singh and others vs. Sukhan and another nor are aggrieved with enhancement of
amount to be paid by plaintiffs-respondents to defendants-appellants on redemption of mortgage, in
accordance with prayer made by them in their first Civil Appeal No.330 of 1979 Sukhan and another vs.
Brijveer Singh and others. I am also of the considered view that though the defendants/appellant are not
aggrieved with the impugned judgement, and decree yet the appeal has been filed by them not only to harm
and harass the plaintiffs-respondents and to deprive them from taking fruits of decree, filing of which has also
caused sheer wastage of valuable time of courts wherein several important matters are pending for
consideration. Moreover, there is no substantial questions of law worth consideration and involved in this
second appeal, the appeal is liable to be dismissed with special costs.

Held: Para-

Case Law discussed:
Sukhan and another vs. Brijveer Singh and others

(Delivered by Hon'ble Harsh Kumar, J.)
5 All. Shri Sukhan Vs Brij Veer Singh

605
1. The present appeal has been filed by defendants/appellants against the judgment and
decree dated 10.7.1981 passed by Civil Judge, Muzaffarnagar in Civil Appeal No.314 of 1979
(Brijveer Singh and another vs. Sukhan and another) arising out of Civil Suit No.375 of 1977
decreed by Munsiff, Muzaffarnagar.

2. The brief facts relating to the appeal are that the plaintiffs/respondents filed Civil Suit
No.375 of 1977 in the Court of Munsif, Muzaffarnagar for a decree for redemption of mortgage in
respect of the property in suit as well as for delivery of possession over the property in dispute to
the plaintiffs after payment of amount involved, against the defendants, with the allegation that the
property in suit was mortgaged by Ram Chandra, the father of plaintiff nos.1 to 3 and 5 to 7 and
husband of plaintiff no.4 on 20.2.1947 through registered deed of mortgage for securing the
payment of money of Rs.150/- advanced by way of loan; that as per terms of mortgage deed the
plaintiffs being heirs of Ram Chandra deceased are entitled to get redemption of property in suit on
payment of money advanced as well as on payment of the cost of constructions which were
permitted to be raised by the defendants, mortgagees in respect with which it was agreed that at the
time of redemption the cost of constructions will be payable by the plaintiffs, the mortgagors to
defendants, the mortgagees.

3. The defendant filed written statement with specific averments that Ram Chandra
executed a registered mortgage deed for a sum of Rs.150/- advanced to him, on 20.2.1947 in which
mortgagees/ defendants were given the right for raising constructions; that the defendants had filed
a Civil Suit No.501 of 1975 for permanent prohibitory injunction over the property in suit but it
was wrong to say that in that suit he made a statement on oath that he is absolute owner of the
property mortgaged and rather he claimed the ownership of the constructions only which were
raised by him over the property in suit; that the plaintiffs did not offer or tender any amount under
the terms for redemption of mortgage deed, hence they have no cause of action for the suit; that the
defendants never objected for the redemption of mortgaged property and have always been ready
and willing to redeem the mortgage on payment of Rs.50,000/- costs of constructions and Rs.150/-
the money advanced in accordance with the terms of mortgage deed.

4. On parties' pleadings, the trial Court framed as many as five issues and after recording
the evidence of both parties and hearing the arguments, decreed the suit of plaintiffs for redemption
of mortgage property on payment of Rs.13,101/- (towards costs of construction and money
advanced) by the plaintiffs to the defendants.

5. Feeling aggrieved with the amount assessed to be paid on redemption being excessive,
the plaintiffs filed Civil Appeal No.314 of 1979 on the ground that the trial Court has fixed the
amount excessively and that since the defendants have violated the terms of mortgage deed, the
plaintiffs are not liable to pay any amount beyond Rs.150/-. On the other hand, the defendants
though were not aggrieved with the decree of redemption passed by trial Court yet they also
preferred Civil Appeal No.330 of 1979 against the impugned decree only on the limited ground that
the quantum of amount has been under assessed, towards of costs of constructions, for redemption
606 INDIAN LAW REPORTS ALLAHABAD SERIES
of mortgaged property with a prayer that the cost of constructions over disputed property must have
been valued by the Court at Rs.15,000/-

6. Both the appeals were decided together by the impugned judgment and decree passed by
the Civil Judge, Muzaffarnagar on 10.7.1981 refusing to decrease the amount for redemption
assessed by trial court and holding the plaintiffs entitled to redemption of the disputed property on
payment of total Rs.15,150/-, as against Rs.13,101/- as assessed by trial Court. Consequently the
appeal no.330 of 1979 filed by defendants for enhancing the amount from Rs.13,101/- to
Rs.15,000/- was virtually allowed and the Civil Appeal No.314 of 1979 filed by the plaintiffs for
reducing the amount of Rs.13,101/- was virtually dismissed.

7. Now the defendants have preferred the present second appeal only against the judgment
and decree passed in Ist Civil Appeal No.314 of 1979 by Civil Judge, Muzffarnagar on 10.7.1981
and no appeal has been filed by them against the judgment and decree passed in Ist Civil Appeal
No.330 of 1979 (which was filed by them defendants). The plaintiffs/respondents have filed cross
objections with a prayer that the impugned decree be modified and the suit for redemption of
mortgaged property be decreed on payment of Rs.150/- only.

8. Heard Shri Arjun Singhal, learned counsel for the appellant and Sri V Sahai, learned
counsel for the plaintiffs/respondents on the Second Appeal No1841 of 1981 as well as cross
objections filed by plaintiffs-respondents.

9. Learned counsel for the appellant submits that Civil Suit No.375 of 1977 filed by the
respondents was wrongly decreed by the trial Court and the appeal filed by the defendant as well as
the plaintiffs-respondents were wrongly decided by the First Appellate Court confirming the part of
the decree passed by the trial Court. The appeal was admitted on 4.9.1981 on following two
substantial questions of law :-

(1) Whether the cost of constructions has to be determined with reference to the
date of suit or to the point of time when final decree is being prepared?

(2) Whether the price of Malba (debries) has been fixed arbitrarily by the First
Appellate Court?

10. The learned counsel for appellants did not advance arguments on any of the two
substantial questions of law framed at the time of admission of the second appeal, and submitted
that the court can frame some additional substantial questions of law, involved in the second appeal
at the time of final hearing, has to dispose off the appeal on such substantial questions of law which
are found to be involved, leaving the questions previously framed. He submitted that since the
mortgage deed in question dated 20.2.1947 is not in accordance with the provisions of Section 58
of Transfer of Property Act it amounts to a sale deed and the substantial questions of law actually
involved in the Second Appeal are
5 All. Shri Sukhan Vs Brij Veer Singh

607
(1) whether the impugned mortgage deed is a mortgage deed or is to be treated as
sale deed? And
(2) Whether the suit of plaintiffs is barred by time?

(3) Whether suit of plaintiffs is barred by provisions of Sections 58 and 83 of
Transfer of Property Act?

11. He argued that the period of limitation for filing suit for redemption of mortgage is 30
years from the date of execution of mortgage deed as prescribed under Article 61 of Limitation Act
and the suit filed in 1977 after the period of 40 years from the date of execution of mortgage deed
is barred by time; that the learned courts below have incorrectly decided the issue of limitation in
favour of plaintiffs/respondents; that there were two reports of valuers on record alongwith another
report of Advocate Commissioner but the learned Courts below acted wrongly in relying on the
valuation report of architect produced on behalf of plaintiffs-respondents and discarding the
valuation report filed on behalf of the defendant on the ground that the valuation report of valuation
filed by the architect of appellant was by a duly qualified architect holding degree, while that of the
defendant was by only a diploma holder; that the suit is also barred by provisions of Section 83 of
Transfer of Property Act as the plaintiffs have not deposited the amount due to redemption of
mortgage; that the Courts below have wrongly misread the evidence on record and discarded the
evidence of defendant; that the findings recorded at by Courts below are perverse and are liable to
be set aside.

12. Per contra learned counsel for plaintiffs/respondents submits that the fact that the
impugned deed is a registered mortgage deed has not been disputed, rather has been admitted by
defendants, in their pleadings mentioned in the written statement; that the contention that impugned
deed amounts to a sale deed has neither been raised before the Courts below at any stage nor even
in the grounds of appeal and such an absurd plea may not be permitted to be raised at the stage of
final arguments in second appeal claiming it to be a substantial question of law, which is not at all
involved in the appeal; that the issue of limitation has been decided by Courts below in favour of
the plaintiffs and in fact the above issue was never pressed before the Courts below; that it is wrong
to say that the suit is barred by time because of having been filed after more than 30 years from the
date of execution of mortgage deed; that the cause of action for filing the suit arose in 1975 and the
suit was well within time; that Article 61 of the Limitation Act provides that the limitation, for
filing suit by a mortgagor to redeem or recover possession of immovable property mortgaged will
be 30 years, which shall commence from the date "when the right to redeem or to recover
possession accrues"; that the evidence on record with regard to costs of constructions over the
property has been correctly analysed by the Courts below and the learned Courts below have not
committed any mistake in analysing and assessing the evidence and relying on the valuation report
submitted on behalf of the plaintiffs; that the report of valuation submitted on behalf of the
plaintiffs has been prepared by duly qualified architect and has been duly proved by his statement
on oath of Shiv Kumar Mittal as P.W.-2; that it is wrong to say that the findings of Courts below
with regard to valuation of the property are arbitrary or suffer from any manifest error or
perversity; that it is wrong to say that the suit of plaintiffs was barred by provisions of Section 58 or
608 INDIAN LAW REPORTS ALLAHABAD SERIES
83 of the Transfer of Property Act; that the appeal has been admitted on two questions framed at
the time of admission of appeal regarding the point of time on which the assessment of the costs of
constructions and price Malba (debries) is to be made, but the defendants/appellants have neither
pressed nor addressed the court on above points rather have raised several new substantial
questions of law which are not at all involved in the above second appeal; that on the point of
limitation, issue no.4 was framed by the trial Court which was not pressed by the defendants before
the trial Court or in the first appeal and the appellants have no right to raise it for the first time in
second appeal; that it is wrong to say that the suit is barred by time; that the suit is well within time
from the date when cause of action for filing suit arose in 1975; that the defendant/appellants have
admitted the execution of mortgage deed and have neither pleaded nor can claim at the stage of
second appeal that the above deed of mortgage amounts to a sale deed; that in this appeal no
substantial question of law is involved and the questions so framed or raised on behalf of the
defendants/ appellants are not at all involved in the appeal; that the substantial questions of law
framed earlier are actually the factual issues which have been pressed as substantial questions of
law and so have not been pressed by and on behalf of the appellants; that the appeal has been filed
on false and baseless ground to harm and harass the plaintiffs-respondents and is liable to be
dismissed with costs.

13. Upon hearing the parties' counsel and perusal of record, I find that the arguments
advanced by and on behalf of the appellants, have been advanced without considering that the
matter is under consideration at the stage of second appeal and which substantial questions of law
were framed at the time of admission of appeal, rather the second appeal has been argued as if it the
arguments are being advanced before the trial Court. The learned counsel for appellants has also
not taken care to go through the pleadings of defendants-appellants in their written statement, a few
paragraphs of which are being reproduced as under :-

^^3- ;g fd okn i= dh /kkjk uEcj 3 Â1⁄4vÂ1⁄2 esa fnukad 20&2&1947 dks fookfnr lEifRr dk
mRrjnkrk izfroknhx.k ds uke cU/kd ukek fy[kk tkuk jftLVjh gksuk Lohdkj gSA**

^^6- ;g fd okn i= dh /kkjk uEcj 3 Â1⁄4nÂ1⁄2 esa 150 :i;k ds fy;s cU/kdukek fy[kuk Lohdkj gSA**

^^11- ;g fd okn i= dh /kkjk uEcj 5 esa ;g Lohdkj gS fd cU/kdukes ds vuqlkj izfroknhx.k dks
lEifRr fookfnr esa rkehjkr djus ds iw.kZ vf/kdkj fn;s FksA**

^^30- ;g fd izfroknhx.k us cU/kd lEifRr dks NqM+kus ds fy;s dHkh ,rjkt ugha fd;k cfYd jguukes
dh 'kjrksa ds eqrkfcd viuh ipkl gtkj :i;s dh ykxr o Ms<+ lkS :i;k tjs leu o lwn vkfn tks fu;ekuqlkj ckftc
gks izkIr djds lEifRr dks eqDr djus ds fy;s gj oDr rS;kj o bPNqd gSA**

14. From the above pleadings of defendants/appellants, it is clear that in view of the
admission of execution of mortgage deed and in absence of any whisper in the pleadings to the
effect that the disputed mortgage deed amounts to a sale deed, as well as in absence of any such
ground even in memorandum of this second appeal, the arguments as advanced on behalf of
appellants in this regard, as against their own pleadings of defendants/appellants, are frivolous and
vexatious and have been made only to be rejected.
5 All. Shri Sukhan Vs Brij Veer Singh

609
15. As far as the arguments with regard to suit being barred by time, it is pertinent to
mention that there is clear case of plaintiffs, that cause of action for filing suit arose in 1975. In
disposal of issued no.4 the trial Court Munsiff, Muzffarnagar has specifically mentioned that
defendant's counsel did not advance any arguments on this issue of limitation and did not even
press the issue. Though the point of limitation can be raised at any stage and if the suit is barred by
time no relief can be granted to the plaintiffs, but the arguments of learned counsel for the
appellants that the period of limitation was 30 years from the date of execution of mortgage deed
i.e., 20.2.1947 and expired on 19.2.1977 is again baseless, wrong and incorrect. Undisputedly,
Article 61 of Limitation Act, 1963 prescribes that suit by a mortgagor to redeem or recover
possession of immovable property mortgaged, may be filed within a period of 30 years, from the
date when the right to redeem or recover possession accrues. From above provision it is crystal
clear that period of limitation of 30 years shall commence from the date when right to redeem or
recover possession accrues or cause of action to file suit arises and not from the date of execution
of mortgage deed.

16. The arguments of learned counsel for appellants that the above date will be the date of
execution of mortgage deed is absolutely wrong and wholly misconceived because had it been the
intention of legislature, there could not have been any shy to the legislature, to mention words
"from the date of execution of mortgage deed" in place of words "from the date when the right to
redeem or recover possession accrues".

17. It has been stated in the plaint that in 1975 the defendant-appellant filed Civil Suit
No.501 of 1975 in respect of the property in suit (which fact has been admitted in written
statement), after which the plaintiffs-respondents served the defendant with notice to redeem the
property on 11.5.1977 and the cause of action for the suit arose on 11.5.1977. In view of the above
facts the suit is well within the time and may not be considered to be barred by time. It is
noteworthy that in the mortgage deed no period for redemption of mortgage was fixed and so it was
at the will of mortgagor. Otherwise also admittedly the defendants/ appellants filed injunction suit
in respect of mortgaged property in 1975 after which compelled the plaintiffs-respondents to take a
decision of seeking their right of redemption of the mortgaged property.

18. In the case of Valliama Champaka Pillai vs. Sivathanu Pillai and others reported in
AIR 1979 SC 1937, relied by the learned counsel for appellants, the part of mortgage had been
redeemed by co-mortgagors between the years 1913-1918 and the suit filed by co-mortgagors in
the year 1946 after a period of 28 years for redemption of remaining part as well as after more than
12 years from the expiry of the then prescribed period of 50 years, held to be barred by time. The
facts of the above case have no relevance or similarity with the facts of this case and are neither
applicable to this case nor help the appellants.

19. Before proceeding further, para 7 of the impugned judgement passed by the first
Appellate Court is being reproduced as under :-
610 INDIAN LAW REPORTS ALLAHABAD SERIES

"7. Feeling aggrieved, the plaintiffs have filed C.A. No.314 of 1979 alleging that
learned trial Court has fixed the amount quite excessively because plaintiffs are not liable to pay
any amount as defendants violated the terms of mortgage. The defendants have also preferred C.A.
No.330/79 challenging the findings of the learned trial court and asserted that disputed property
must have been valued by the Court at Rs.15000/-."

20. It is noteworthy that against the judgement and decree passed by trial Court Munsif,
Muzaffarnagar, the first appeals were filed by both the parties on a limited question of quantum
of amount to be paid on redemption. This amount was assessed at Rs.13,101/- by the trial Court
and while Civil Appeal No.314 of 1979 was filed by plaintiffs for reducing the amount, the Civil
Appeal No.330 of 1979 was filed by defendants for enhancing the amount to Rs.15,000/-. Since
the amount was enhanced, as per prayer made in Civil Appeal No.330 of 1979 filed by
defendants/appellants, they may not be held to be aggrieved by the decree passed in Civil Appeal
no.330 of 1979 and since the above amount was not reduced, as per prayer made by plaintiffsrespondents in Civil Appeal No.314 of 1979, so also the defendants/ appellants may not be
considered to be aggrieved by non-reducing of the amount payable on redemption.

21. The fact that a Kotha over the property in suit was demolished by defendants and
new constructions were raised by them in the year 1969 and 1974 is not disputed between the
parties. It is also not disputed that the report with regard to valuation of constructions raised by
defendants/appellants over the mortgaged property, given by duly qualified architect possessing a
degree from the great Roorkee University has been relied by both the Courts below and non
acceptance of the report of non-qualified Advocate Commissioner, or less qualified diploma
holder, the concurrent findings of fact with regard to costs of construction as well as malba
(debries) of Kotha, categorically discussed in para 11 of the impugned judgement of first
Appellate Court, may not be considered to be wrong, illegal or arbitrary and such concurrent
findings of fact may not be interfered with in second appeal.

22. As far as the first substantial question of law framed at the time of admitting appeal,
on which though no arguments were advanced on behalf of appellants, I am of the considered
view that in para 12 of the impugned judgement of First Appellate Court, it has been rightly held
that basis for assessment of value of improvements etc. The year of redemption must be the date
of filing of the suit and must be taken that of 1977 when suit was instituted.

23. The learned counsel for plaintiffs-respondents argued in support of his cross
objections that since the defendants-appellants violated the terms and conditions of mortgage
deed and filed Civil Suit No.501 of 1975 for injunction over the mortgaged property, the
plaintiffs-respondents are not obliged to make payment of costs of the constructions raised by
defendants-appellants and are entitled to get the redemption of property in suit in their favour on
payment of Rs.150/- only, (the money originally advanced). I find no substance or force in the
arguments so advanced on behalf of respondents/cross objectors as there is no such term
mentioned in the mortgage deed which, exonerates the plaintiffs-respondents from making
payment of costs of construction, as per terms of deed. The argument that the first Appellate
5 All. Shri Sukhan Vs Brij Veer Singh

611
Court has wrongly and arbitrarily enhanced the valuation of above costs of construction is also
made to be rejected.

24. I am of the considered view that the learned First Appellate Court has not committed
any mistake in arriving at the valuation of costs of constructions payable at the time of
redemption and, raising the amount from Rs.13,101/- to Rs.16,500/- and after deducting the
amount of malba (debries) Rs.1,500/-, in fixing it at Rs.15,150/-

25. On the IIIrd question of law raised by appellants at the time of final hearing, I find
that since the impugned deed of mortgage has been executed for the purpose of securing the
payment of money Rs.150/- advanced and specifically provides for redemption, it does not
come within the definition of sale under section 54 of Transfer of Property Act. Consequently,
the Learned counsel for the defendants-appellants has failed to show as to how the impugned
mortgaged deed is hit by provisions of section 58 of Transfer of Property Act and amounts to a
sale deed.

26. Section 83 Transfer of Property Act gives an option to the mortgagor to deposit the
amount payable on redemption of mortgage and does not bar the institution of suit, for non
deposit of such amount. The deposit of amount payable on redemption has not been made a
pre-requisite condition to enabling the mortgagor to file the suit and I find that it will not be
correct to say that due to non deposit of amount in the account of mortgagee, the suit for
redemption of mortgaged property was barred by provisions of section 83 of the Transfer of
Property Act.

27. In view of above, I find that the the arguments of learned counsel for the
defendants/appellants on question no.3 regarding bar by provisions of sections 58 & 83 of
Transfer of Property Act, also have no force and the question so raised is decided in negative.

28. In view of the discussions made above with reference to para 7 of impugned
judgement reproduced above, I find that the defendant/appellants are neither aggrieved with the
dismissal of first Civil Appeal no.314 of 1979 Brijveer Singh and others vs. Sukhan and
another nor are aggrieved with enhancement of amount to be paid by plaintiffs-respondents to
defendants-appellants on redemption of mortgage, in accordance with prayer made by them in
their first Civil Appeal No.330 of 1979 Sukhan and another vs. Brijveer Singh and others. I
am also of the considered view that though the defendants/appellant are not aggrieved with the
impugned judgement, and decree yet the appeal has been filed by them not only to harm and
harass the plaintiffs-respondents and to deprive them from taking fruits of decree, filing of
which has also caused sheer wastage of valuable time of courts wherein several important
matters are pending for consideration. Moreover, there is no substantial questions of law worth
consideration and involved in this second appeal, the appeal is liable to be dismissed with
special costs.
612 INDIAN LAW REPORTS ALLAHABAD SERIES
29. The appeal is accordingly dismissed with costs throughout and special cost of
Rs.2,000/-. The cross objections filed by plaintiffs-respondents are also dismissed.

30. Interim order, if any, stands discharged.
----------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.5.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE SHAMSHER BAHADUR SINGH, J.

Writ C No.- 2029 Of 2002

Punjab National Bank ...Petitioner
Versus
State Of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Ramesh Singh, R.K. Pal

Counsel for the Respondents:
C.S.C., Ashok Mehta, Mukhtar Alam, S. Nandan, U.N. Sharma

 Punjab National Bank (hereinafter referred to as 'Bank') is a body corporate constituted under Banking
Companies (Acquisition and Transfer of Undertakings), 1970. It advanced certain credit facilities to one M/s
Luxmi Industrial & Trading Company Limited (hereinafter referred to as 'respondent-4') which included Cash
Credit Limit upto Rs.10 lacs; Cash Credit Hypothecation Limit upto Rs. 4 lacs and documentary D.D. Limit upto
Rs.5 lacs. Limit of aforesaid facilities subsequently was extended from time to time. Two Directors of
respondent-4, including its Managing Director executed guarantee deed to secure repayment of amount of
aforesaid credit facilities in case there is any default on the part of respondent-4. There was default on the
part of respondent-4 in repayment of dues, hence Bank filed Suit No.20 of 1983 for recovery of
Rs.57,27,575.44/- with pendente lite interest.

Court clarified that aforesaid doctrine is applicable in respect to tax money but in respect of other debts
if they are contracted by the citizens in relation to commercial activities, the position would be different. Here
we are not concerned with the question of conferring any priority right or first charge to the dues sought to
be recovered by respondents-2 and 3 from immovable property of respondent-4 but we are examining the
claim of first charge or lien raised by petitioner Bank. Since it has failed to place any material document on
record to show that it has first charge or lien over disputed property, we are clear, in our view, that challenge
to auction proceeding adopted by respondent-3 in respect of immovable property of respondent-4, has no
legal obstruction or infirmity in law, so as to warrant interference in this writ petition.
The writ petition, therefore, lacks merit. Dismissed.

Held: Para-

Case Law discussed: