Celir LLP v. Mr. Sumati Prasad Bafna & Ors.

(Contempt Petition (C) No(s). 158-159 of 2024) In (Civil Appeal No(s). 5542-5543 of 2023)

1. 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; whether the respondents in light of the aforesaid decision of this Court were duty bound to cancel the Release Deed dated 28.08.2023 (executed for discharge of mortgage over the Secured Asset) and hand over physical possession along with original title deeds of the Secured Asset to the petitioner.

2. Whether, proceedings arising out of Securitization Application being S.A. No. 46 of 2022 preferred by the Borrower u/s.17 of SARFAESI Act before DRT [assailing demand notice issued by the Bank for repayment of principal amount and further notice of the Bank classifying the Borrower’s account as NPA and taking symbolic possession of the Secured Asset] could have continued after this Court’s judgment and order dated 21.09.2023; whether the petitioner by virtue of the Sale Certificate dated 27.09.2023 (issued by the Bank for

*Author

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the Secured Asset) can be said to have acquired a clear title to the said property; and

3. Whether the transfer of the Secured Asset in favour of the Subsequent Transferee by way of Assignment Agreement dated 28.08.2023 was hit by lis pendens; whether the absence of any registration in accordance with Section 52 of the Transfer of Property Act, 1882 as amended by the State of Maharashtra rendered the lis pendens inapplicable.

2. Mere conduct of parties aimed at frustrating the court proceedings or circumventing its decisions, even without an explicit prohibitory order, constitutes contempt – Such actions interfere with the administration of justice, undermine the respect and authority of the judiciary, and threaten the rule of law – However, at the same time, the power of contempt ought to be exercised sparingly and with caution and care – It operates with a string of caution and unless otherwise satisfied beyond doubt, it would neither be fair nor reasonable for the courts to resort to such powers – The standard of proof required before a person is held guilty of committing contempt of court must be beyond all reasonable doubt – The courts while exercising its contempt jurisdiction must remain circumspect, more particularly, where there exists a possibility of the order being amenable to more than one interpretation. [Paras 201, 202 and 203] 3.1. On facts, it is true that this Court in its decision rendered in the Main Appeals had not issued any specific direction either

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to the Borrower or the Subsequent Transferee as regards the handing over of physical possession and the original title deed to the Secured Asset, or the proceedings pending before the DRT in S.A. No. 46 of 2022 – However, the same would not mean that the decision of this Court in the Main Appeal was bereft of any direction as to the outcome of its findings – This Court in the operative portion of the Main Appeals stated in unequivocal terms that the confirmation of the sale by Bank under Rule 9(2) of the SARFAESI Rules had vested the petitioner herein with a right to obtain the certificate of sale of the Secured Asset – It further held categorically that the Borrower herein could not have redeemed the mortgage upon publication of the 9th auction notice – Furthermore, this Court explicitly directed the Bank to not only issue the Sale Certificate to the petitioner herein in accordance with Rule 9(6) of the SARFAESI Rules but also directed the refund of the amount of Rs. 129 crore paid by the Borrower – Moreover, the impugned order of the High Court had been set-aside by this Court in toto. [Para 204] 3.2. 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 – If at all the parties are in doubts over the judgment and order of a court, the correct approach is to prefer a miscellaneous application for seeking clarification rather than proceeding to presume a self- serving interpretation of the decision. [Paras 205, 206] 3.3. On facts, both the Borrower and the Subsequent Transferee made several attempts to prevent the effective implementation of the judgement and order dated 21.09.2023 passed by this Court and thereby thwart the attempts of the Bank to hand over the physical possession and the original title deeds of the Secured Asset to the petitioner – Both the Borrower and the Subsequent Transferee committed contempt of this Court’s judgment and order dated 21.09.2023 in the Main Appeals – The acts of the contemnors are nothing more than a gamble on their part to circumvent and undermine the findings and directions passed by this Court in the Main Appeals – Similarly, the lame excuses offered by them for explaining their conduct are also nothing more than a calculated attempt in the hope that they would get away with legitimizing the illegal Assignment Agreement even after the decision of this Court, and is equally contemptuous – However, on an overall conspectus

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of the facts of the present case, while the initial acts of the Borrower and the Subsequent Transferee are in violation of this Court’s judgment and order dated 21.09.2023, yet the efforts on their part to take steps and make amends by withdrawing the Special Civil Suit No. 5 of 2024 along with their belated unconditional undertaking to comply with any further order that this Court may deem fit and proper to pass, demonstrates their effort and willingness to purge themselves of their contemptuous conducts – Thus, this Court is inclined to provide one last opportunity to the Borrower herein and the Subsequent Transferee to abide by the judgment and order dated 21.09.2023 passed by this Court and further comply with the directions issued in the present contempt petition, and thus, deem it fit not to hold them guilty of contempt for the present moment. [Paras 207, 208, 209]

Contempt of Court – Principles governing the Rule of law must be extended to the party against whom contempt proceedings have been initiated. [Para 187]

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litigation should not be re-litigated in subsequent proceedings – The extended form of res-judicata more popularly known as ‘Constructive Res Judicata’ contained in Section 11, Explanation VII of the CPC originates from this principle. [Para 135] 2.1. ‘Henderson Principle’ is a core component of the broader doctrine of abuse of process, aimed at enthusing in the parties a sense of sanctity towards judicial adjudications and determinations – It ensures that litigants are not subjected to repetitive and vexatious legal challenges – At its core, the principle stipulates that all claims and issues that could and should have been raised in an earlier proceeding are barred from being raised in subsequent litigation, except in exceptional circumstances – This rule not only supports the finality of judgments but also underscores the ideals of judicial propriety and fairness. [Para 144] 2.2. There are, four situations where in second proceedings between the same parties doctrine res judicata as a corollary of the principle of abuse of process may be invoked: (i) cause of action estoppel, where the entirety of a decided cause of action is sought to be re-litigated; (ii) issue estoppel or, “decided issue estoppel,” where an issue is sought to be re-litigated which has been raised and decided as a fundamental step in arriving at the earlier judicial decision; (iii) extended or constructive res judicata i.e., “unraised issue estoppel,” where an issue is sought to be litigated which could, and should, have been raised in a previous action but was not raised; (iv) a further extension of the aforesaid to points not raised in relation to an issue in the earlier decision, as opposed to issues not raised in relation to the decision itself. [Para 145] 2.3. As part of the broader rule against abuse of process, the Henderson principle is rooted in the idea of preventing the judicial process from being exploited in any manner that tends to undermine its integrity – This idea of preventing abuse of judicial 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. [Para 146]

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3. 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 by it in the earlier stages albeit in a different proceeding, yet its conduct of having conveniently abandoned the same in a different proceeding elected by it for the same cause of action and then later re-agitating it in the pretence that the two proceedings were distinct, is nothing but a textbook case of abuse of process of law. [Para 148]

4. Piecemeal litigation where issues are deliberately fragmented across separate proceedings to gain an unfair advantage is in itself a facet of abuse of process of law and would also fall foul of this principle – Merely because one proceeding initiated by a party differs in some aspects from another proceeding or happens to be before a different forum, will not make the subsequent proceeding distinct in nature from the former, if the underlying subject matter or the seminal issues involved remains substantially similar to each other or connected to the earlier subject matter by a certain degree, then such proceeding would tantamount to ‘re-litigating’ and the Henderson Principle would be applicable – Where a party deliberately withholds certain claims or issues in one proceeding with the intention to raise them in a subsequent litigation disguised as a distinct or separate remedy or proceeding from the initial one, such subsequent litigation will also fall foul of this principle – Similarly, where a plea or issue was raised in earlier proceedings but later abandoned it is deemed waived and cannot be re-litigated in subsequent – Parties must litigate diligently and in good faith, presenting their entire case at the earliest opportunity. [Paras 149, 150, 151]

5. The Henderson principle operates on the broader contours of judicial propriety and fairness, ensuring that the judicial system remains an instrument of justice rather than a platform for procedural manipulation – 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 – 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. [Paras 152, 153]

Doctrines / Principles – Doctrine of lis pendens – Doctrine of Pari Delicto – Property situated in Maharashtra – Applicability of lis pendens in absence of any registration as required under

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1.3. The vital essence of this additional duty imposed upon the party claiming a right to a property which is a subject matter of a pending proceeding, is only to aid a third-party to exercise its due diligence and obviate the possibility of any dishonesty, misrepresentation or fraud by a party in order to gain an undue advantage or benefit despite the pendency of proceedings – However, if the absence of notice registration were to render the doctrine entirely inapplicable, it would lead to exploitation of procedural gaps by parties who deliberately delay or avoid registering such notices to defeat substantive rights of the parties and undermine the very sanctity of judicial proceedings – Such an interpretation would lead to a very chilling effect whereby, third parties despite being expected to verify the title and status of the property would simply abdicate their duty to conduct thorough due diligence in transactions involving immovable properties or that despite being fully aware of the pendency of such proceedings would be able to deviously claim absolute rights to such property or worse, mischievously execute back-dated agreements in collusion with a party to a lis prior to registration of such notice of pendency to circumventing the very proceedings and render them infructuous. [Para 173]

2. Even in the absence of a registered notice of pendency in terms of the amended Section 52 of TPA the said provision will not be rendered ipso-facto inapplicable, at best it would preclude the party seeking benefit of this doctrine to claim it as a matter of right, but by no stretch would it mean that the third-party conversely would be able to as matter of absolute right claim inapplicability of this doctrine – It would be the discretion of the courts to see keeping in mind the peculiar facts of the case to ascertain whether such doctrine ought to be applied or not – Where the courts are satisfied that the third-party had genuinely purchased the subject-matter 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 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, the non-registration of notice of pendency is

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not fatal to the application of the doctrine of lis pendens in the present case. [Para 174]

3. In the present case, it is not as if the Subsequent Transferee was not aware of what was happening however, when things went wrong, they now cry foul of not being impleaded as parties and heard by this Court in the Main Appeals – Even otherwise, assuming that the petitioner and the Bank herein deliberately chose not to implead the Subsequent Transferee herein in order to mislead this Court in the Main Appeals, the same is immaterial as the Subsequent Transferee too failed to implead itself despite being aware of the pendency of the proceedings before this Court – If at all they were so concerned about the transfer of the Secured Asset in their favour, either they ought to have themselves attempted to implead itself before this Court or requested the Borrower to do the same – In view of the Doctrine of Pari Delicto i.e.., ‘in equal fault, the law aids neither party’, the Subsequent Transferee cannot seek any benefit from the fault of the petitioner or the Bank when it is itself equally at fault – In view of the aforesaid, the execution of the Assignment Agreement dated 28.08.2023 and the transfer of the Secured Asset in pursuance thereto in favour of the Subsequent Transferee is hit by lis pendens despite the fact that no notice of pendency was registered in terms of the amended Section 52 of the TPA. [Paras 175, 176]

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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. [Para 218] 2.1. In the present lis, it is not the case of the Borrower herein that the 9th auction conducted by the Bank was a result of any collusion or fraud either at the behest of the Bank or the Successful Auction Purchaser herein – Aside from the lack of any 15-days gap between the notice of sale and the notice of auction, no other illegality has been imputed to the aforesaid auction proceedings – It is also not the case of the Borrower that due to the absence of the aforesaid statutory period, any prejudice was caused or that it was prevented from effectively exercising its rights due to such procedural infirmity – Despite a total of eight auctions being conducted by the Bank from April, 2022 to June, 2023, not once did the Borrower express its desire to redeem the mortgage – Even when the auction notice came to be issued on 12.06.2023, the Borrower never intimated that it was in process of redeeming the mortgage with the aid of the Subsequent Transferee and that the auction be delayed even though, as per the parties own submissions, they started exploring the possibility of redeeming the mortgage and thereafter transferring in June, 2023 itself – In such circumstances, given the fact that although the S.A. No. 46 of 2022 was still pending, yet since there was nothing before this Court to doubt the validity of the 9th auction, this Court in the Main Appeals confirmed the sale in favour of the petitioner and brought the auction proceedings to its logical conclusion by directing the issuance of the sale certificate – The Borrower never raised the issue of the validity of the 9th auction notice despite having sufficient opportunities to do so even after the pronouncement of the decision in the Main Appeals, and that such pleas are being raised only after the auction was confirmed in favour of the petitioner, there is no good reason to interfere with the 9th auction conducted by the Bank. [Para 217] 2.2. 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

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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 – 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 secured asset, even after having the sale confirmed in its favour. [Paras 219, 220]

Transfer of Property Act, 1882 – s.52 – s.52 does not render a transfer pendente lite void – However, the court while exercising contempt jurisdiction may be justified to pass directions either for reversal of the transactions in question by declaring the said transactions to be void or proceed to pass appropriate directions to the concerned authorities to ensure that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him. [Para 180]

Contempt of Court – Contumacious conduct – Duty of the court – To issue appropriate directions for remedying or rectifying the things done in violation of its orders – Power to take restitutive measures at any stage of the proceedings – Discussed. [Paras 221, 222]

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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 Courts of equity to choose between two inconsistent or alternative rights or claims in cases where there is clear intention of the person from whom he derives one that he should not enjoy both. [Paras 126, 127 and 154(iii)] Maxims – Expressio Unius Est Exclusio Alterius – Expression of one thing is the exclusion of another – Where a court consciously and specifically grants certain reliefs but does not advert to other reliefs or rights, the relief so expressly provided necessarily leads to the implied exclusion of the other reliefs and rights. [Para 154(vii)]

Case Law Cited State of U.P. v. Nawab Hussain [1977] 3 SCR 428 : (1997) 2 SCC 806; Devilal Modi v. Sales Tax Officer, Ratlam & Ors. [1965] 1 SCR 686 : AIR 1965 SC 1150; Shankara Coop. Housing Society Ltd. v. M. Prabhakar [2011] 7 SCR 468 : (2011) 5 SCC 607; Sanjay Verma v. Manik Roy [2006] Supp. 10 SCR 469 : (2006) 13 SCC 608; Thomson Press (India) Limited v. Nanak Builders and Investors Private Limited & Ors. [2013] 2 SCR 74 : (2013) 5 SCC 397; T. Ravi & Anr. v. B. Chinna Narasimha & Ors. [2017] 3 SCR 1 : (2017) 7 SCC 342; Ashok Paper Kamgar Union v. Dharam Godha and Ors. (2003) 11 SCC 1; Ram Kishan v. Tarun Bajaj & Ors. [2014] 1 SCR 538 : (2014) 16 SCC 204; Murray & Co. v. Ashok Kr. Newatia & Anr. [2000] 1 SCR 367 : (2000) 2 SCC 367; Pushpaben & Anr. v. Narandas Badiani & Anr. [1979] 3 SCR 636 : (1979) 2 SCC 394; Reliance Petrochemicals Ltd. v. Proprietors of Indian Express Newspapers, Bombay Pvt. Ltd. & Ors. [1988] Supp. 3 SCR 212 : (1988) 4 SCC 592; Rita Markandey v. Surjit Singh Arora [1996] Supp. 7 SCR 56 : (1996) 6 SCC 14; Jhareshwar Prasad Paul v. Tarak Nath Ganguly [2002] 3 SCR 913 : (2002) 5 SCC 352; Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. & Ors [2008] 12 SCR 1 : (2008) 9 SCC 299; Ram Kishun & Ors. v. State of Uttar Pradesh & Ors. [2012] 6 SCR 105 : (2012) 11 SCC 511; PHR Invent Educational Society v. UCO Bank (2024) 6 SCC 579;

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V.S. Palanivel v. P. Sriram 2024 INSC 659 : [2024] 8 SCR 1263; Janak Raj v. Gurdilal Singh & Ors. [1967] 2 SCR 77 : AIR 1967 SC 608; Baranagore Jute Factory Plc. Mazdoor v. Baranagore Jute Factory Plc. [2017] 4 SCR 700 : AIR Online 2017 SC 410; and State Bank of India & Ors. v. Dr. Vijay Mallya [2022] 15 SCR 384 : 2022 SCC Online SC 826 – relied on. Patel Rajnikant Dhulabhai & Anr. v. Patel Chandrakant Dhulabhai & Ors. [2008] 10 SCR 1169 : (2008) 14 SCC 561 – clarified and relied on. Arce Polymers Private Limited v. Alphine Pharmaceuticals Private Limited & Ors. [2021] 11 SCR 1059 : (2022) 2 SCC 221; ITC Ltd. v. Blue Coast Hotels Limited & Ors. [2018] 5 SCR 516 : (2018) 15 SCC 99; Supertech Limited v. Emerald Court Owner Resident Welfare Association & Ors. [2021] 13 SCR 976 : (2023) 10 SCC 817; Collector of Customs, Bombay v. Kirshna Sales (P) Ltd. (1994) Supp. 3 SCC 73; General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. v. Ikbal & Ors. [2013] 8 SCR 532 : (2013) 10 SCC 83; Vasu P. Shetty v. Hotel Vandana Palace & Ors. [2014] 9 SCR 38 : (2014) 5 SCC 660; Govind Kumar Sharma & Anr. v. Bank of Baroda & Ors. 2024 INSC 326 : [2024] 4 SCR 633; Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [2022] 1 SCR 950 : (2022) 5 SCC 345; Vodafone Idea Cellular Ltd. v. Ajay Kumar Agarwal [2022] 2 SCR 748 : (2022) 6 SCC 496; Joint Action Committee of Air Line Pilots’ Assn. of India (ALPAI) & Ors. v. DGCA [2011] 5 SCR 1019 : (2011) 5 SCC 435; Jayaram Mudaliar v. Ayyaswami [1973] 1 SCR 139 : AIR 1973 SC 569; Guruswamy Nadar v. P. Lakshmi Ammal [2008] 7 SCR 435: (2008) 5 SCC 796; Chander Bhan (D) through Lr. Sher Singh v. Mukhtiar Singh & Ors. 2024 INSC 377 : [2024] 5 SCR 1148; M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy & Ors. 2024 INSC 861; B. Arvind Kumar v. Govt of India & Ors. (2007) 5 SCC 745 and LICA (P) Ltd. v. Official Liquidator (1996) 85 Comp Cas 788 (SC) – referred to. Henderson v. Henderson [1843] 3 Hare 999; Johnson v. Gore Wood & Co [2002] 2 AC 1; Virgin Atlantic Airways Ltd. v. Zodiac Seats UK Ltd. [2014] AC 160; Newington v. Levy (1870) 6 CP 180 (J) and Bellamy v. Sabine (157) 1 De G&J 566 – referred to.

Books and Periodicals Black’s Law Dictionary, Sixth Edition, at page 1599 – referred to.

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List of Acts Transfer of Property Act, 1882; Contempt of Courts Act, 1971; Constitution of India; Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002; Security Interest (Enforcement) Rules, 2002.

List of Keywords Wilful disobedience of judgment; Wilful; Sale certificate; Secured asset; Borrower; Auction purchaser; Subsequent transferee; Third party purchaser; Secured creditor; Bank; Release Deed; Discharge of mortgage; Securitization application; Demand notice; Assignment agreement; Lis pendens; Explicit prohibitory order; Contemptuous conduct; Last opportunity; Contempt jurisdiction; Administration of justice; Rule of law; Contempt of court; Beyond all reasonable doubt; Res judicata; Constructive res judicata; Abuse of process; Henderson Principle; Procedural fairness; Cause of action estoppel; Issue estoppel; Decided issue estoppel; Unraised issue estoppel; Piecemeal litigation; Registered notice of pendency; Doctrine of Pari Delicto; Auction; Sale process; Transfer pendente lite; Duty of the court; Power to take restitutive measures; Doctrine of election; Maxim “expressio unius est exclusio alterius”

Case Arising From INHERENT JURISDICTION: Contempt Petition (C) No(s). 158-159 of 2024 In Civil Appeal No(s). 5542-5543 of 2023 Petition filed for contempt of this Court’s Judgment dated 21.09.2023 in Civil Appeal Nos. 5542-5543 of 2023 With M.A. Nos. 600-601 of 2024 In C.A. Nos. 5542-5543 of 2023

Appearances for Parties Mukul Rohatgi, Neeraj Kishan Kaul, Raju Ramachandran, Dr. A.M. Singhvi, Parag Tripathi, Nikhil Nayar, Devadatt Kamat, Kapil Sibal, Chander Uday Singh, Sr. Advs., Ms. Shyel Trehan, Gaurav Y., Pranav Sarthi, Ms. Krushi Barfiwala, Divyanshu Gupta, Ms. Shivalika Rudrabatla, Ms. Apoorva Singh, Ms. Ira Mahajan,

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Keshav Sehgal, O.P. Gaggar, Sachindra Karn, Avishkar Singhvi, Shreeyash Uday Lalit, Sanam Tripathi, Ms. Sugandha Batra, Ms. Priyansha Sharma, Ms. Arushi Mishra, Shreyash Choudhary, Ms. Runjhun Garg, Himanshu Vats, Angad Pahal, Lavam Tyagi, Ishaan George, Shubhranshu Padhi, Sumeet Lal, Sidhant Kapoor, Masoom Shah, D. Girish Kumar, Jay Nirupam, Pranav Giri, Ekansh Sisodia, Ms. A.M. Harsavardhini, Ms. Sumedha Ray Sarkar, Ms. Rupali Francesca Samuel, Ms. Palak Rawat, Advs. for the appearing parties.

Judgment / Order of the Supreme Court

Judgment J.B. Pardiwala, J.

For the convenience of exposition, this judgment is divided into the following parts: - INDEX*

A. FACTUAL MATRIX ............................................................ 3 i. Facts leading upto the Decision of this Court in Civil Appeal Nos. 5542-5543 of 2023 ................................. 3 ii. Developments during the pendency of Civil Appeal Nos. 5542-5543 of 2023 .............................................. 10 iii. Subsequent Developments and the Acts alleged to be in contempt thereof ............................................... 13 B. SUBMISSIONS OF THE PARTIES .................................. 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

* Ed. Note: Pagination as per the original Judgment.

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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. Whether any contempt is said to have been committed by the respondents herein? .................... 121 iv. Circumstances when a sale of property by auction or other means under the SARFAESI Act may be set-aside after its confirmation ............................... 138 E. FINAL ORDER ................................................................... 146

1. Since the issues raised in both the captioned petitions are same and the parties are also the same, they were taken up for hearing analogously and are being disposed of by this common judgment and order.

2. The present petitions have been filed under Section 2(B) of the Contempt of Court Act, 1971 (for short, the “Act, 1971”) read with Article(s) 129 and 142(2) of the Constitution respectively seeking to initiate contempt proceedings against the respondents/alleged contemnors for wilful disobedience of the final judgment and order dated 21.09.2023 passed by this Court in Civil Appeal Nos. 5542- 5543 of 2023 respectively captioned as ‘Celir LLP v. Bafna Motors (Mumbai)’.

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3. For the sake of convenience, we clarify that the petitioner herein is the successful auction purchaser, the respondent no. 1, Mr. Sumati Prasad Bafna is the original borrower (hereinafter referred to as the ‘Original Borrower’), the respondent no. 4 ‘Greenscape IT Park LLP’ and its director, Mr. Jayesh A. Vavia i.e., the respondent no. 2 herein are the subsequent transferee/third-party purchaser (hereinafter referred to as the ‘Subsequent Transferee’) and the respondent no. 3, ‘Union Bank of India’ is the secured creditor/bank (hereinafter referred to as the ‘Bank’).

A. FACTUAL MATRIX

i. Facts leading upto the Decision of this Court in Civil Appeal Nos. 5542-5543 of 2023.

4. The Original Borrower herein had availed credit facility from the Bank. Accordingly, the Bank on 03.07.2017 sanctioned Lease Rental Discounting (for short, ‘the LRD’) credit facility to the tune of Rs. 100 crore in favour of the Borrowers. The Bank vide its letter dated 02.01.2020 further sanctioned an additional amount of Rs. 6.77 Crore towards the said LRD term loan.

5. Against the aforesaid term loan, a simple mortgage was created over a parcel of land admeasuring 16200 sq. metres having buildings and ancillary structures on it at plot Nos. D-105, D 110 and D-111 respectively situated at the Trans Thane 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 sub-section (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.

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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 “SARFAESI Rules”) to the Borrower and took symbolic possession of the Secured Asset.

9. Aggrieved by the aforesaid, the Borrower preferred a Securitization Application being S.A. No. 46 of 2022, under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal (for short, the ‘DRT’), assailing the aforesaid notice dated 07.06.2021 under Section 13(2), and the notice dated 04.02.2022 under Section 13(4), by the Bank, classifying the Borrower’s Account as an NPA and taking symbolic possession of the Secured Asset, respectively.

10. In the meantime, the Bank decided to put the Secured Asset to auction. On 25.03.2022, the Bank issued a notice of sale of the Secured Asset by way of a public auction slated for 29.04.2022, however, the said sale/auction failed on account of no bids being received. It appears that between April 2022 & June 2023, the Bank attempted eight auctions but all failed.

11. It appears that the borrowers informed the Bank that they were trying to sell the secured asset but were not getting good offers. The borrowers informed the Bank that the maximum they might be able to fetch from the sale of the secured asset would be around Rs. 91-92 crore and they were willing to settle the entire account by offering such amount to the Bank.

12. The Bank however decided to go for one more auction. On 14.06.2023, the Bank published the notice of sale in terms of Rule 8(6) of the SARFAESI Rules for the 9th time. The public auction was scheduled to be conducted on 30.06.2023. The terms of the aforesaid notice of sale, inter-alia stipulated that the Secured Asset would be sold on ‘as is what is and whatever there is basis’ at a reserve price of Rs. 105 crore and that the said auction would be subject to the outcome of the S.A No. 46 of 2022 pending before the DRT. The relevant terms and conditions of the aforesaid e-auction specified in the notice of sale dated 12.06.2023 read as under: - “TERMS AND CONDITIONS OF SALE OF IMMOVABLE SECURED ASSETS:

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“19. The Authorized Officer will deliver the property on the basis of Symbolic possession taken on as is where is basis to the purchaser free from encumbrances, known to the Secured Creditor on deposit of money by the purchaser towards the discharge of such encumbrances. xxx xxx xxx 26, The above movable/immovable secured assets will be sold in “As is where is”, “As is What is” and “whatever there is” condition. xxx xxx xxx

29. The sale is subject to outcome of S.A No. 46/2022 pending before DRT, Mumbai.”

13Copy pinpoint13. 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.

14Copy pinpoint14. 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.

15Copy pinpoint15. 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.

16Copy pinpoint16. On 01.07.2023, the petitioner as per the terms and conditions of the auction notice deposited an amount of Rs, 15,76,25,000/- (INR Fifteen Crore Seventy-Six Lac Twenty-Five Thousand) as 25% of the total sale consideration to the Bank, excluding the EMD already paid.

17Copy pinpoint17. The Borrower realizing that the 9th auction being successful and that the Secured Asset was likely to be sold off, it hurriedly filed an Interlocutory Application bearing No. 2339 of 2023 in the S.A. No. 46 of 2022 on 05.07.2023, seeking to redeem the mortgage created

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over the Secured Asset by paying of the total outstanding sum of Rs. 123.83 crore (approx..) in lieu of the LRD Term Loan. Over the next few weeks, the aforesaid application was taken up by the DRT and both the Bank and the Borrowers were heard at length, but no consequential orders were passed.

18Copy pinpoint18. On 27.07.23, the petitioner herein deposited the balance sum of the total bid amount which was duly received and accepted by the Bank. On the very same day, the redemption application referred to above was also heard by the DRT. The redemption application was opposed by both the petitioner herein as well as the Bank. The DRT after hearing the parties at length, reserved orders to be pronounced on 02.08.23.

19Copy pinpoint19. While the parties were awaiting for the DRT to pass an appropriate order on the redemption application, the borrowers went to the High Court and filed the Writ Petition No. 9523 of 2023, inter-alia i) challenging the demand notice dated 07.06.2021 and the measures taken by the Bank under the SARFAESI Act more particularly the possession notice dated 04.02.2022 and the initial sale/auction notice dated 25.03.2022 AND ii) further seeking directions to the Bank to permit them to redeem the mortgage of the secured asset. The writ petition was filed on the premise that the Borrowers had strong apprehension that the DRT may reject their redemption application and the entire matter would become infructuous more particularly, as the Bank had accepted the entire amount of the bid from the petitioner herein towards the sale consideration. The relevant prayers sought by the Borrowers in the aforesaid writ petition 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

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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)

20Copy pinpoint20. Interestingly, the Borrower herein never challenged the legality or propriety of the 9th Auction that was conducted by the Bank in the aforesaid writ petition before the High Court of judicature at Bombay. Although, in the aforesaid writ petition, the Borrower had itself stated that the 9th notice of sale was published on 12.06.2023 and auction thereto was conducted on 30.06.2023, yet far from imputing procedural impropriety as regards the valuation of the Secured Asset in the said 9th Auction, no challenge was ever made to the manner in which the notice of sale dated 12.06.2023 came to be issued i.e., there was no challenge to the validity of the said notice. We shall discuss the pleadings of the Borrower herein and the scope of proceedings before the High Court in more detail in the latter part of this judgment.

21Copy pinpoint21. Before the High Court, the Borrowers expressed their willingness to pay a total sum of Rs. 129 crore for redeeming the mortgage by 31.08.2023. The Bank which had earlier opposed the plea for redemption of mortgage before the DRT for some good reason expressed its willingness before the High Court to accept the offer of the borrowers. The Bank perhaps got lured by the fact that the

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borrowers were paying almost Rs. 23.95 crore more than what was paid by the petitioner herein and Rs. 5 crore more than the outstanding amount.

22Copy pinpoint22. In the wake of such development, the petitioner herein having come to know about the aforesaid proceedings before the High Court preferred Interim Application (ST) No. 21706 of 2023 for being impleaded in the writ petition.

23Copy pinpoint23. The writ petition along with interim application was heard by the High Court and vide its judgment and order dated 17.08.2023 allowed the writ petition and permitted the borrowers to redeem the mortgage of the secured asset subject to payment of Rs. 25 crore on the same day and the balance amount of Rs. 104 crore on or before 31.08.2023, failing which the sale of the Secured Asset in favour of the petitioner herein would be confirmed.

ii. Developments during the pendency of Civil Appeal Nos. 5542-5543 of 2023.

24Copy pinpoint24. Aggrieved by the aforesaid, the petitioner herein preferred Special Leave Petition Nos. 19523-19524 of 2023 (later renumbered as Civil Appeal Nos. 5542-5543 of 2023) before this Court, challenging the final judgment and order dated 17.08.2023 passed by the High Court. The aforesaid Special Leave Petitions were instituted on 21.08.2023 and it is pertinent 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.

25Copy pinpoint25. 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.

26Copy pinpoint26. 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.

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27Copy pinpoint27. 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. It appears from the material on record that there was a second charge created over the said Secured Asset in favour of one Tata Motors Financial Solutions Ltd. which came to be released pursuant to payment of Rs. 15 crore by the Borrower on the same date vide a Dead of Release registered before the Joint Sub Registrar, Thane 8 having Registration No. 19283 of 2023.

28Copy pinpoint28. On the very same day i.e., 28.08.2023, the Borrower entered into an Agreement of Assignment of Leasehold Rights with a third-party viz. M/s Greenscape I.T. Park LLP i.e., the Subsequent Transferee herein for the transfer of leasehold rights in the Secured Asset. The said agreement was registered before the Joint Sub Registrar, Thane 8 vide Registration No. 19286 of 2023, and franking was completed on the same date.

29Copy pinpoint29. On 01.09.2023, the aforesaid special leave petitions were taken up for hearing. After the arguments from both sides were concluded, leave to appeal was granted, and the matter came to be reserved for judgment by this Court. The parties were further directed to file their written submissions.

30Copy pinpoint30. This Court vide its final judgment and order dated 21.09.2023 in Civil Appeal Nos. 5542-5543 of 2023 inter-alia held that the High Court erred in permitting the Borrower to redeem the mortgage after publication of the notice of sale/auction under Rule 9 sub-rule (1) of the SARFAESI Rules. Accordingly, the High Court’s order dated 17.08.2023 was set-aside. Furthermore, in light of the willingness expressed by the petitioner to make good the difference between the total outstanding dues and the bid amount submitted by him, this Court directed the petitioner to pay an additional amount of Rs. 23.95 crore to the Bank within a period of one week from the date of pronouncement, upon which the Bank was to issue the sale certificate for the Secured Asset in accordance with Rule 9(6) of the SARFAESI Rules. The Bank was further directed to refund the entire amount paid by the Borrower towards redemption of the mortgage of the Secured Asset upon receipt of the balance amount from the petitioner herein.

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iii. Subsequent Developments and the Acts alleged to be in contempt thereof.

31Copy pinpoint31. On 26.09.2023, the Borrower preferred a review against the aforesaid final judgment and order dated 21.09.2023 passed by this Court in Civil Appeal Nos. 5542-5543 of 2023 being R.P. (C) Nos. 611-612 of 2024. On 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.

32Copy pinpoint32. 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.

33Copy pinpoint33. 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. 5542- 5543 of 2023. It further informed that it had filed an application under Section 14 of the SARFAESI being S.A. No. 787 of 2023 for obtaining physical possession of the Secured Asset, and that the said application was pending before the District Magistrate, Thane, Mumbai.

34Copy pinpoint34. In the interregnum, the Borrower filed I.A. No. 3220 of 2023 in S.A. No. 46 of 2022 for amendment of pleadings in the securitization application inter-alia for the purpose of: - i) Bringing on record the subsequent development that had taken place; ii) For challenging the Notice of Sale dated 12.06.2023 on the ground of want of a 30-days period between the date of issuance

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of the notice of sale and the date of auction in terms of Rule 8(6) and 9(1) of the SARFAESI Rules respectively; iii) Praying to set aside the auction dated 30.06.2023 of the Secured Asset conducted by the Bank upon examination of the validity and propriety of all measures taken by the Bank in terms of Section 13(4) of the SARFAESI Act and Rule 8 and 9 of the SARFAESI Rules respectively.

35Copy pinpoint35. Several more correspondences took place between the petitioner and the Bank herein for handing over of possession and title deeds to the Secured Asset, however they were to no avail. The Bank reiterated its helplessness in providing the aforesaid owing to the non-cooperation of the Borrower and the Subsequent Transferee. In view of the above, the petitioner herein issued a legal notice dated 29.12.2023 to all the respondents herein, calling upon them to (a) handover the physical possession of the Secured Asset along with its original title deeds and (b) to take steps towards cancelling the Release Deed dated 28.08.2023. In response to the above, the Borrower herein vide its letter dated 16.01.2024 inter-alia stated that since the Secured Asset stood transferred to the Subsequent Transferee, it had no role to play in handing over of the possession or the original title deeds of the same. Whereas, the Bank vide its Reply dated 23.01.2024 stated that as per the terms of the auction, the Bank was obliged only to provide the symbolic possession of the Secured Asset which had already been delivered. It further assured that the Bank was exploring all options for handing over the original title deeds. In regards to the physical possession, the Bank informed that it had already filed an application under Section 14 of the SARFESI 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.

36Copy pinpoint36. 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

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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”).

37Copy pinpoint37. 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. Pursuant to the aforesaid, the Tehsildar, Thane on 14.02.2024 issued a notice of possession stipulating that in the event the Subsequent Transferee does not handover physical possession of the Secured Asset and the original title deeds within 15-days, then the possession shall be taken over forcefully with the assistance of the local police.

38Copy pinpoint38. In light of the above, the Borrower herein preferred a Securitization Application under Section 17 of the SARFAESI Act for seeking stay of the aforesaid notice of possession dated 02.02.2024 and restraining the Bank from taking any further coercive steps in this regard, even though, it had earlier taken the stance that since the Secured Asset stood transferred by him to the Subsequent Transferee it had no role or any concern with the handing over of the physical possession. Thus, while the Borrower on one hand is remarkably contending that it has nothing to do with the failure in handing over of the Secured Asset yet in the same breath, he is purposefully engaging in various acts to subvert any and all attempts of the petitioner and the Bank herein to regain the physical possession.

39Copy pinpoint39. In the suit proceedings, on an application filed by the Subsequent Transferee the Civil Court, Belapur vide its order dated 05.02.2024, directed that status quo be maintained and restrained the Bank from taking any steps towards obtaining the physical possession of the Secured Asset till it filed its written statement.

40Copy pinpoint40. The DRT vide its order dated 28.02.2024 observed that since the decision of this Court in the Civil Appeal Nos. 5542-5543 of 2023 had allowed the sale in favour of the petitioner, the act of the borrower to continue claiming a right to the Secured Asset on the strength of the Release Deed dated 28.08.2023 was highly deplorable. Accordingly, the DRT refused to grant stay of the notice of possession and dismissed the Borrower’s IA No. 456 of 2024 in S.A. No. 53 of 2024.

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41Copy pinpoint41. The Borrower preferred an appeal against the aforesaid order being Misc. Appeal (D) No. 429 of 2024 before the Debts Recovery Appellate Tribunal, Mumbai (for short, the “DRAT”). It appears from the material on record that the DRAT vide its order dated 29.02.2024 granted status quo and deferred the proceedings for physical possession, and further directed the Bank to deposit Rs. 129 crore paid by the Borrower before it, in contrast to the order of this Court in Civil Appeal Nos. 5542-5543 of 2023 wherein the said amount was ordered to be refunded in clear terms.

42Copy pinpoint42. 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.

43Copy pinpoint43. 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.

44Copy pinpoint44. 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 seeking directions to the Borrower herein to handover the physical possession of the Secured Asset and all original title deeds related thereto in compliance of the decision of this Court in the Main Appeals.

45Copy pinpoint45. The Borrower filed two applications in its Review Petitions that were pending before this Court being I.A. No. 92135 of 2024 and I.A. No. 92136 of 2024 in R.P. (C) Nos. 611-612 of 2024 respectively seeking permission to file additional grounds for review and for open court hearing. The aforesaid Review Petitions along with the interlocutory applications against the Main Appeals came to be dismissed by this Court vide its order dated 18.07.2024.

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46Copy pinpoint46. In such circumstances referred to above more particularly the dubious actions of the respondents and the subsequent development that have taken place after the decision of this Court in the Main Appeals, the petitioner is here before this Court with the present contempt petitions.

B. SUBMISSIONS OF THE PARTIES

i. Submissions of the Successful Auction Purchaser/the petitioner.

47Copy pinpoint47. Mr. Mukul Rohatgi and Mr. Neeraj Kishan Kaul, the learned Senior Counsel appearing for the petitioner submitted that this Court in its decision rendered in the Main Appeals had looked into all the issues at hand regarding the auction and the subsequent transfer, and thereafter had taken a conscious decision to uphold the auction conducted in favour of the petitioner and directed the Bank to issue the Sale Certificate and handover possession of the Secured Asset. However, despite such categorical directions of this Court, till date neither the physical possession nor the original title deeds to the Secured Asset has been handed over by the respondents herein to the petitioner.

48Copy pinpoint48. It was submitted that the petitioner herein as per the directions of this Court had paid an additional amount over and above the bid submitted by it, to the tune of Rs. 24 crore approx. to match the difference between the sale consideration and the amount towards redemption of the mortgage, which the petitioner duly complied with. In such circumstances, the petitioner placing reliance on para 98 of the decision in the Main Appeals, submitted that once the entire bid price is paid and there is no stay granted by any forum known to law, the secured creditor is duty bound to issue a valid sale certificate and handover the physical possession of the secured asset.

49Copy pinpoint49. 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: -

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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.

50Copy pinpoint50. 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.

51Copy pinpoint51. It was further submitted that the acts of the Borrower and the Subsequent Transferee to immediately enter into the Assignment Agreement after redeeming the mortgage of the Secured Asset had been done only to undermine the authority of this Court. The contention of the respondents that they were well within their rights to enter into the above transaction since there was no stay or prohibitory order by this Court is patently erroneous and devoid of merit. It was submitted that on the first day of hearing since the impugned order of the High Court was not available, no effective hearing took place and as such this Court had no occasion to grant or refuse stay. It was further submitted that it is not the case that the respondents were unaware of the pendency of the Main Appeals before this Court at the time of entering into the Assignment Agreement, rather the only reason why the respondents showed undue haste in entering the aforesaid agreement was because they were well aware of the proceedings pending before this Court. Thus, the conduct and actions of the respondents are highly deplorable and cannot be termed to be bona fide or in good conscience.

52Copy pinpoint52. It was also submitted that after the decision of this Court in the Main Appeals, both the Borrower and the Subsequent Transferee herein committed several acts of contempt in order to circumvent the judgment and order of this Court more particularly the direction to issue the Sale Certificate and complete the sale in respect of the Secured Asset, being as follows: - (i) The Subsequent Transferee vide its letter dated 05.10.2023 asked the Sub-Registrar Office, Nerul Thane to not entertain any request of the petitioner regarding the transfer of the Secured Asset.

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(ii) The Borrower on 12.10.2023 addressed one letter to the Chief Executive Officer of the Maharashtra Industrial Development Corporation in whose industrial area the Secured Asset was situated, inter-alia requesting them to not 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. (iii) Similarly, the Subsequent Transferee vide its letter dated 17.10.2023 asked the Executive Officer of the Maharashtra Industrial Development Corporation to not take any action regarding the transfer of the Secured Asset to the petitioner. (iv) In November, 2023, the Borrower filed 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 transaction as invalid. (vi) That the Borrower in its response dated 16.01.2024 to the petitioner’s legal notice outrightly refused to handover the physical possession and the original title deeds to the Secured Asset by contending that it no longer had any role to play or authority over the property in view of its transfer to the Subsequent Transferee. However, when the Tehsildar, Thane

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in pursuance of the Bank’s application for obtaining physical possession of the Secured Asset issued a notice to the Subsequent Transferee, the Borrower filed an application for seeking a stay of the same. (vii) That the Subsequent Transferee on 17.01.2024 also sought for registration of FIR against the Bank and the petitioner herein inter-alia alleging that the Bank had been falsely claiming that this Court in its decision in the Main Appeals had directed the refund of the amount paid towards redemption of mortgage to the Borrower and to transfer the vacant possession of the Secured Asset to the petitioner, and that the Bank in collusion with the petitioner had issued the sale certificate to the Secured Asset despite having executed the Release Deed for the mortgage and the pending litigation before the DRT.

53Copy pinpoint53. In light of the above, it was contended by the petitioner that both the Borrower and the Subsequent Transferee have been acting in tandem with each other to frustrate the implementation of the decision of this Court in the Main Appeals by misleading various authorities and by mischievously instituting proceedings before different forums & thereby thwart any attempt of the petitioner and the borrower to obtain physical possession and original title deeds to the Secured Asset.

54Copy pinpoint54. As regards the contention of the respondents on the issue of auction that was conducted by the Bank being illegal and contrary to the statutory provisions, it was submitted on behalf of the petitioners that the requirement under Rule 8(6) read with Rule 9(1) to maintain a 30-day gap between the notice to the borrower and the notice of sale is mandatory only for the first auction. Placing reliance on the Proviso to Rule 9(1) it was submitted that for any subsequent auctions after the first auction fails, only 15-days’ time period is required between the notice of sale and the date of auction.

55Copy pinpoint55. It was submitted that in the present case, since the Bank had already conducted a total of 8 auctions 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.

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56Copy pinpoint56. 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.

57Copy pinpoint57. 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 the 9th Auction was invalid or illegal and that no pleadings to this effect were made by the Borrower before this Court.

58Copy pinpoint58. In such circumstances, it was submitted that the stance taken by the Borrower in the S.A No. 46 of 2022 and S.A. No. 53 of 2024 respectively after the decision of this Court in the Main Appeals is unscrupulous and self-serving. It was further pointed out that the Borrower in the Assignment Agreement with the Subsequent Transferee had provided an undertaking to withdraw the aforesaid S.A No. 46 of 2022. Thus, in view of the aforesaid coupled with the fact that the Borrower never questioned the validity of the 9th auction in the Main Appeals, it was submitted that the Borrower had waived of its right under the SARFAESI Act and is now estopped from challenging the legality of the recovery measure taken by the Bank and the consequent 9th Auction conducted by it. In this regard, the petitioner relied upon the decision of this Court in Arce Polymers Private Limited v. Alphine Pharmaceuticals Private Limited & Ors., reported in (2022) 2 SCC 221 to contend that if the party relinquishes its right under the SARFAESI Act, then the Borrower is not entitled to subsequently challenge the actions or measures taken under it.

59Copy pinpoint59. In the last, it was submitted that the Sale Certificate of the Secured Asset that was issued by the Bank in favour of the petitioner was never contingent upon or subject to the outcome of the proceedings before the DRT, more particularly S.A. No. 46 of 2022, as this Court in the Main Appeals had upheld the auction and crystalized the rights of the petitioner over the Secured Asset. Placing reliance on paragraph 98 of the Main Appeals, it was contended that once the Sale Certificate is issued, the bank is bound to hand over the physical

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possession of the property and as such, this Court had concluded the rights of all parties and that nothing remained in S.A. No. 46 of 2022 after the decision of this Court.

ii. Submissions of the Borrower/the respondent no. 1.

60Copy pinpoint60. Dr. A.M. Singhvi the learned Senior Counsel appearing for the Borrower submitted that this Court in its decision in the Main Appeals only decided the issue of interpretation of Section 13(8) of the SARFAESI Act, and rightly chose not to decide either the validity of the 9th auction process or to interfere with the proceedings emanating from S.A. No. 46 of 2022 that was pending before the DRT.

61Copy pinpoint61. 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.

62Copy pinpoint62. 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.

63Copy pinpoint63. 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 decide the validity of such measures in view of the fact that S.A. No. 46 of 2022 is pending before the DRT which is the competent authority to decide these issues.

64Copy pinpoint64. It was submitted that the auction of the Secured Asset was conducted on the basis of a symbolic possession and that said auction was subject to the validity of such auction. Placing reliance on the terms and conditions of the auction, it was submitted that as per clause 19,

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it was specified that only symbolic possession of the Secured Asset would be delivered. As per clause 26 it was stipulated that the Secured Asset would be sold to the auction purchaser on ‘as is where is’ and ‘as is what is and whatever there is’ basis and lastly, as per clause 29, it was stipulated that such sale would be subject to the outcome of S.A. No. 46 of 2022 pending before the DRT. Thus, any sale certificate issued in pursuance of such auction would also be subject to such terms of the auctions.

65Copy pinpoint65. He further submitted that, the petitioner herein being fully aware about the aforesaid terms of auction, consciously participated in the auction process, and thus now cannot be permitted to claim either the absolute ownership of the Secured Asset despite the pendency of the proceedings before the DRT or demand physical possession of the same by relying upon the Sale Certificate that was directed to be issued by this Court in the Main Appeals when no such terms were stipulated in the 9th auction notice. He submitted that the Sale Certificate that came to be issued to the petitioner in accordance with the decision of this Court was purely on the basis of the terms of the auction and cannot by any stretch be in derogation of the same.

66Copy pinpoint66. It was also submitted that the present contempt petitions proceed on a fundamental flaw that this Court in the Main Appeals had decided and directed the handing over of physical possession of the Secured Asset. Since physical possession was never the subject matter of the Main Appeals and no prayer to this effect was made by the petitioner, merely because physical possession has not been handed over it cannot be said that any contempt of this Court’s decision has been committed and thus, the present contempt petitions are misconceived.

67Copy pinpoint67. It was further submitted that the petitioner was well aware that as per the terms of auction it was not entitled to obtain physical possession and thus, 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.

68Copy pinpoint68. 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

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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.

69Copy pinpoint69. 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 came to be rejected. Against which, the Borrower filed an appeal before the DRAT, wherein status quo was granted. He submitted that the Bank and the petitioner herein instead of challenging the order passed by the DRAT as required under the statutory provisions, decided to take law in their hands by filing the present contempt petition and MA, which is completely in negation of the statutory provisions of the SARFAESI Act.

70Copy pinpoint70. It was further submitted that after the decision of this Court in the Main Appeals all the parties proceeded to pursue their remedies in accordance with the statutory provisions. The Bank pursued its application under Section 14 of the SARFAESI Act to obtain physical possession of the Secured Asset, the Borrower pursued the S.A. No. 46 of 2022 before the DRT, the petitioner pursued its IA in the aforesaid securitization application and the Subsequent Transferee pursued its suit. None of the parties complained of any contempt for a period of nearly 5-6 months.

71Copy pinpoint71. It was submitted that any order passed by a competent judicial authority having jurisdiction to pass such order can only be challenged by following the due process and cannot be set-aside under the contempt jurisdiction, thus the present contempt petition is completely misconceived. Similarly, since neither the Bank nor the petitioner sought physical possession of the secured asset in the Main Appeals, it cannot be permitted to now seek the same by expanding the scope of the Main Appeals by way of an MA. In this regard, reliance has been placed on the decision of this Court in Supertech Limited v. Emerald Court Owner Resident Welfare Association & Ors. reported in (2023) 10 SCC 817 to contend that filing of MA is not permissible to expand the scope of SLP or re-litigate the matter.

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72Copy pinpoint72. It was further submitted that since in the Main Appeals, there were no directions passed against the Borrower herein to hand over physical possession, no contempt could be said to have been committed. Similarly, the transfer of the Secured Asset to the Subsequent Transferee during the pendency of the Main Appeals also does not amount to contempt as the same was done in compliance of the High Court’s impugned order. Since the High Court had allowed the Borrower to redeem the mortgage on the condition that it tenders the entire dues payable by 31.08.2023 failing which the amount of Rs. 25 crore paid 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.

73Copy pinpoint73. 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.

74Copy pinpoint74. He further submitted that this Court in its decision in the Main Appeals held that a notice of auction can be published in the newspaper only after serving a 30-days clear notice to the borrower. It was submitted that the mandatory nature of the period prescribed is not a mere formality but a safeguard to the borrower to ensure that its right of redemption is given meaningful expression. Since in the present case both the notice to the borrower as-well as the auction notice were made on 14.06.2023, the auction proceedings is said to have taken place contrary to the mandate of law, and the sale of the Secured Asset in favour of the petition pursuant to such auction is illegal and void.

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75Copy pinpoint75. Placing reliance on the decisions of this Court in General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. v. Ikbal & Ors. reported in (2013) 10 SCC 83 and Vasu P. Shetty v. Hotel Vandana Palace & Ors. reported in (2014) 5 SCC 660 it was submitted that the 30-day notice to the borrower in terms of Rule 8 and 9 of the SARFAESI Rules respectively is mandatory in nature and non- compliance of the same would render the auction illegal. Similarly, as per the decision of this Court in Govind Kumar Sharma & Anr. v. Bank of Baroda & Ors. reported in 2024 INSC 326, an auction would be liable to be quashed if no 30-day notice is given by the bank.

76Copy pinpoint76. It was submitted that if S.A. No. 46 of 2022 pending before the DRT is allowed then in light of the decision of this Court in the Main Appeals, the auction would be illegal and the right of redemption of the Borrower would survive and by extension all transactions executed by it in pursuance thereto including the transfer of the Secured Asset in favour of the Subsequent Transferee.

77Copy pinpoint77. It was further submitted that the petitioner’s contention that the pending proceedings under S.A. No. 46 of 2022 before the DRT did not survive after the decision of this Court in the Main Appeals more particularly after the issuance of the Sale Certificate is completely misconceived and untenable. In this regard it was submitted that first, the proceedings before this Court in the Main Appeals emanated from an interlocutory stage and secondly, both the auction and the Sale Certificate issued in pursuance thereto does not vest in the petitioner an absolute ownership in the Secured Asset.

78Copy pinpoint78. He submitted that S.A. No. 46 of 2022 was filed by the Borrower assailing the validity of the measures taken by the Bank under the SARFAESI Act and the same was still 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

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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.

79Copy pinpoint79. He further submitted that this Court whilst directing the Bank to issue the Sale Certificate in the Main Appeals never intended to uphold the legality of the auction, and that no such issue was also framed by it. Since, the terms of auction were clear that it would be subject to the outcome of the proceedings in S.A. No. 46 of 2022 before the DRT, the issuance of the Sale Certificate neither confirms the sale of the secured asset in favour of the petitioner sans the validity of the auction proceedings nor vests any absolute ownership in the same. In this regard, reliance has been placed on the decision of this Court in Valji Khimji (supra) to contend that where the auction is subject to subsequent confirmation by some authority (in this case the DRT) the auction cannot be said to be completed and no rights would accrue until the sale is confirmed by the said authority. Thus, it was submitted that not only does the cause of action for challenging the validity of the auction proceedings survive but also the proceedings in S.A. No. 46 of 2022 pending before the DRT.

80Copy pinpoint80. In the last, Dr. A.M. Singhvi submitted that the Borrower unconditionally apologises to this Court for any of its actions, if they are perceived to be incorrect or in contempt of its decision in the Main Appeal and that the Borrower undertakes to comply with any further order that this Court may deem fit and proper for the ends of justice.

iii. Submissions of the Subsequent Transferee/the respondent nos. 2 & 4.

81Copy pinpoint81. Mr. Kapil Sibal, the learned Senior Counsel appearing for the Subsequent Transferee at the outset submitted that it unconditionally apologizes for any of its actions that might have been perceived to have contravened any direction/order of this Court.

82Copy pinpoint82. Mr. Sibal submitted that the Subsequent Transferee is a bona fide third party purchaser of the Secured Asset. He submitted that

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the Subsequent Transferee was neither arrayed as a party to the proceedings in the Main Appeals nor issued a notice of the said proceedings either by the petitioner or by the Bank, despite the fact that they were aware of the transactions entered into by the Borrower for the transfer of the Secured Asset in its favour. He further submitted that prior to entering into the transaction there was no prohibitory order or interim order of stay concerning the said Secured Asset either by this Court or any other court. Since, the transaction which led to the purchase 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.

83Copy pinpoint83. 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.

84Copy pinpoint84. Since, in the present case admittedly there was no registration of lis pendens by the petitioner as mandated in Maharashtra under the mandatory provisions of Section 52 (1) of TPA, the Subsequent Transferee did not come across any legal impediment or restrictions or prohibitions to purchase of the Secured Asset and accordingly paid the consideration to lawfully acquire the same as a bona-fide purchaser.

85Copy pinpoint85. He submitted that even if lis pendens is assumed to apply then too, it cannot affect the Assignment Agreement in its favour as the matter was neither sub-judice as against it nor was there any prohibitory/ stay order for the transfer of the said property at the time of execution

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of the aforesaid Assignment Agreement. It was submitted that the aforesaid agreement was a lawful transaction pursuant to the High Court’s order and that mere filing of an appeal does not operate as a stay or suspension of the order appealed against as held in Krishna Sales (supra). Therefore, the Subsequent Transferee is said to have acquired a clear title to the said property.

86Copy pinpoint86. When the Borrower redeemed the mortgage and executed the Release Deed with the Bank in pursuance of the impugned order of the High Court, the Bank relinquished its charge over the property and the very contractual relationship of secured creditor and borrower extinguished and as such the Bank had no authority to transfer any interest in the Secured Asset to the petitioner at the relevant time. Placing reliance on the decision of this Court in the Main Appeals, it was submitted that the factual matrix recorded therein discloses that the Subsequent Transferee had acquired a clear title and possession of the said property prior to the said decision and the Sale Certificate issued in lieu thereof. Since the Bank had already issued a No Dues certificate, provided a No Objection certificate, executed the Release Deed for its charge over the Secured Asset and handed over the original title deeds thereto, the Subsequent Transferee is said to have obtained a clear title of the property. He further argued that since there was a second charge over the said property, the Bank could have only confirmed a conditional sale of the Secured Asset. Consequently, even if the auction was completed, the said property would not have been free from all encumbrances and the petitioner would have been required to redeem the second charge to acquire 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.

87Copy pinpoint87. 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.

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88Copy pinpoint88. 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 petitions.

89Copy pinpoint89. He also submitted that the auction process with respect to the Secured Asset was only on the basis of symbolic possession and not physical possession of the said property and as such the parties while transacting as part of an auction process are bound by the process and the mandatory terms laid down therein. Even the Bank in the present miscellaneous application has admitted that it only had symbolic possession, and not the actual physical possession of the said property.

90Copy pinpoint90. He further submitted that the process for obtaining physical possession of the Secured Asset is only by way of initiating a subsequent and completely different proceeding in terms of the statutory procedure laid down in Section 14 of the SARFAESI Act which was never the subject matter before this Court and as such the Subsequent Transferee ought not to be dispossessed without following due process/ procedure laid down in law as per SARFAESI Act/ Rules. The Bank had rightly pursued its remedy under Section 14 for seeking physical possession in line with the decision of this Court in Blue Coast Hotels (supra) and the parties now cannot be permitted to seek the same in the present contempt petitions and the miscellaneous application.

91Copy pinpoint91. He submitted that the aforesaid application of the Bank under Section 14 came to be allowed, which was later challenged before the DRT wherein the Tribunal refused to stay the same. Against this an appeal was preferred wherein the DRAT granted status quo on the ground that possession notice had not been given by the bank/ tehsildar. Rather than challenging the aforesaid order, the petitioner and the Bank have mischievously preferred the present contempt petitions and miscellaneous application respectively as an attempt to short circuit the process of law for obtaining physical possession.

92Copy pinpoint92. He further argued that the scope of proceedings before this Court in the Main Appeals as evident from the questions of law framed therein,

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primarily related to the cut-off date to exercise right of redemption under Section 13(8) of the SARFAESI Act and not regarding the validity of the measures taken under the SARFAESI Act, 2002, including the auction process.

93Copy pinpoint93. Since the auction conducted by the Bank by which the Sale Certificate was issued to the petitioner was subject to the outcome of S.A. No. 46 of 2022 pending before the DRT, the petitioner ought not to be permitted to extend the scope of the matter to overcome these proceedings pending in the DRT.

94Copy pinpoint94. 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.

95Copy pinpoint95. 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, authenticated and crystalized the Assignment Agreement executed in its favour.

96Copy pinpoint96. He further submitted that neither this Court nor the High Court in the writ petition has delved into the aspect of legality of the auction proceedings, and thus, prayed that this Court be pleased to relegate the parties to an appropriate forum in accordance with law for adjudication of several issues relating to the said property and the illegal process of auction conducted thereto to safeguard its constitutional right enshrined under Article 300A of the Constitution.

97Copy pinpoint97. He submitted that the entire gamut of proceedings before this Court in the Main Appeals have emanated from an interlocutory application filed in S.A. No. 46 of 2022 and that the very substantive

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