INDIAN BANK Vs. NALLAM VEERA SWAMY

JUDGEMENT

(1.) This second appeal is preferred by Indian Bank, the decree holder, aggrieved by the Judgment and Decree passed by the Principal District Judge, Eluru, West Godavari District on 26.02.2007 passed in A.S. No. 133 of 2005, reversing the order and judgment passed by the learned Senior Civil Judge, Kovvur, West Godavari on 09.08.2000 in E.A. No. 441 of 1998 in E.P. No. 71 of 1997 in O.S. No. 102 of 1991.

(2.) The case of the appellant-bank is that, respondents 3 to 10 have obtained on 10.07.1982 a loan from the appellant-bank by creating an equitable mortgage in respect of several of their properties by depositing its title deed. As they have failed to discharge the loan, the appellant-bank instituted suit O.S. No. 102 of 1991 on 12.08.1991, wherein a preliminary decree was passed on 23.11.1992 granting time for redemption and the final decree for foreclosure was also passed therein on 23.11.1995. In execution thereof, E.P. No. 71 of 1997 has been moved. At that stage, the first respondent in this second appeal filed on 06.08.1998 E.A. No. 441 of 1998 in E.P. No. 71 of 1997, under Rule 58 of Order XXI, Section 47 read with Section 151 C.P.C., setting up a claim over the immovable property in question, described in Item 2 of the E.P. Schedule, on the basis of a registered sale deed dated 22.04.1991. This claim is resisted by the appellant - Bank on the ground that the sale deed has been collusively brought into existence subsequent to the mortgage of the petition scheduled property to the bank on 10.07.1982 and it is a clear case where the principal borrowers have colluded with the claim petitioner and got the petition filed for avoiding payment of decretal amount. It is not in dispute that the first respondent-claim petitioner has purchased Item 2 of the EP scheduled property by way of a registered sale deed executed by the ninth respondent herein on 22.04.1991.

(3.) The learned Senior Civil Judge had come to the conclusion that since item 2 of EP schedule property has already been mortgaged to the bank earlier in point of time than the sale was effected in favour of the claimant, the decree holder bank is, therefore, entitled to bring the petition schedule property for sale and hence the claimant has no right to object to the same. It is this order dismissing the claim petition E.A. No. 441 of 1998 which is appealed against in AS No. 131 of 2005 before the Principal District Judge at Eluru. It was contended on behalf of the first respondent-claimant herein that the appellant-bank has failed to implead the claim petitioner also as a party to the suit O.S. No. 102 of 1991 and since the claim petitioner has got a right to redeem the mortgage, the decree passed in O.S. No. 102 of 1991 does not bind him. Based upon the decision rendered by this Court in Areti Maramma Vs. State Bank of India, Secunderabad, 2002 3 ALT 424, the learned Principal District Judge allowed the appeal and set-aside the order passed in E.A. No. 441 of 1998 in E.P. No. 71 of 1997 in O.S. No. 102 of 1991. Challenging the correctness of this order, the present second appeal has been preferred.