CANARA BANK Vs. BOMBAY ALLOYS AND CASTINGS

JUDGEMENT

(1.) THIS Chamber Summons has been taken out by the applicant who has sought to purchase the suit property initially mortgaged by the Defendant in the suit in favour of the Plaintiff Bank and later purchased by one K. D. Shah at an auction held by the Bombay Municipal corporation (BMC ). The Applicant has applied for condonation of delay in depositing Rs. 2. 75 Crores in the office of the Commissioner for taking accounts and for the court to confirm the sale in favour of the Applicant or its nominee.

(2.) THE property has had a chequered history. The defendants mortgaged their property (suit property) which is open land at Bhandup in favour of the Plaintiff - Bank. The Plaintiff sued on the mortgage in 1974. The defendants and the Plaintiffs entered into a consent decree. The Plaintiffs sought to sell the mortgaged property in the execution of the said decree. There is also another mortgage of the said property in favour of the Plaintiff which is the subject matter of any suit in the D. R. T. Court.

(3.) AFTER the mortgage was executed, the Defendants defaulted in payment of charges and taxes of the B. M. C. The B. M. C. sold the property to the HUF of Mahendra Popat shah (Shah) who purchased the property at the auction and was issued the Certificate of Sale under the public auction. He was declared the purchaser of the said property for a price of Rs. 6. 12 lakhs. He made payment of price on 7. 12. 1984 and became owner of the property with effect from 8. 12. 1984. The Certificate of Sale was issued in his favour on 2. 4. 1985. He is deemed to have knowledge of the 2 mortgages already created by the Defendant in favour of the Plaintiff. He is taken to have purchased the said property subject to the encumbrances thereupon being the said mortgages. The Certificate of Sale does not specify that the property has been sold subject to encumbrances, though in law it is so.