INDIAN BANK Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) This writ petition is a fight between two Nationalised Banks, namely Indian Bank and Punjab National Bank, in the matter relating to applicability of Section 78 of the Transfer of Property Act.

(2.) The secured property in question was mortgaged by the undisputed owner with the Indian Bank on 10.5.1989, the petitioner in the present writ petition, by depositing certified copies of the title deeds. The very same owner of the property subsequently created another equitable mortgage over the very same property by depositing the original title deeds with Punjab National Bank, on 10.6.1989. Two banks had separately filed independent suits, which were transferred to the Debt Recovery Tribunals as per The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and two separate orders were passed in their favour. When the Punjab National Bank took steps to put the property for sale, objection was raised by Indian Bank. The Debt Recovery Officer faced with the conundrum directed that the matter should be placed before the Presiding Officer of the Debt Recovery Tribunal. The contention of the Indian Bank before the Tribunal was to the effect that it was admittedly the prior mortgagee and, since at the time of creation of the equitable mortgage the owner had informed that the original title deeds such as sale deed and the Will were lost and untraceable, the certified copies of the sale deed and the Will were deposited and subsequently the Bank also obtained an affidavit from the owner on 28.7.1989, wherein it had been indicated that the original title deeds were lost.

(3.) The contention of the Punjab National Bank was to the effect that the Indian Bank had acted negligently in accepting the certified copies of the sale deed and the Will for creation of the equitable mortgage without proper verification and because of such negligence, the owner of the property, who was in possession of the original sale deed and the original Will, created another equitable mortgage subsequently by deposit of such original documents.