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REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NO. 5248   OF  2018  (Arising out of SLP (C) No.32031/2016)  

 THE AUTHORISED OFFICER,   STATE BANK OF INDIA          ....Appellant(s)          

:Versus:    

M/S. ALLWYN ALLOYS PVT. LTD. AND ORS.  ....Respondent(s)    

J U D G M E N T  

A.M. Khanwilkar, J.  

1. The judgment and order dated 30th August, 2016 of the  

Division Bench of the High Court of Judicature at Bombay in  

Writ Petition No.7480 of 2014, is assailed in this appeal,  

whereby the High Court without formally setting aside the  

order passed by the Debts Recovery Appellate Tribunal,  

Mumbai dated 20th November, 2013 in Appeal No.273 of 2013

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connected with M.A. No.886 of 2013, disposed of the writ  

petition with liberty to respondent Nos.5 & 6 (writ petitioners)  

to approach the competent forum for adjudication of their  

right, title and interest in respect of a flat/apartment, i.e. Flat  

No.C-203 on the Second Floor of Blue Heaven Apartment, C-

Wing, Rebellow Road, Bandra (West), Mumbai, which was  

mortgaged to the appellant Bank by the directors of  

respondent No.1 Company by way of an equitable mortgage.  

  2. The Debts Recovery Tribunal (“DRT”) as well as the Debts  

Recovery Appellate Tribunal (“DRAT”) after examining the plea  

taken by respondent Nos.5 and 6 came to hold that the  

document styled as Memorandum of Understanding dated 13th  

March, 2011, relied upon by respondent Nos.5 and 6, was  

subsequently created after the equitable mortgage and moreso  

it was an unregistered document which would not confer any  

right, title and interest in their favour in the said flat.  Further,  

the share certificate of the said flat has already been  

transferred by the Society in the name of the directors of  

respondent No.1 Company i.e. Mrs. Zahoor K. Dhanani, Mr.

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Karim K. Dhanani and Mrs. Habika K. Dhanani (respondent  

Nos.2, 3 and 4 herein).  It is also held that the Society has  

contemporaneously recorded the factum of mortgage created  

by the said respondents in respect of the subject flat in favour  

of the Bank; and that the said respondents were not coming  

forward to deny the stated mortgage. On the basis of the  

documentary evidence, DRT as well as the DRAT concurrently  

held that it is well established that the said respondents had  

legitimately created an equitable mortgage in respect of the  

said flat in favour of the Bank, which has had security interest  

upon the said flat. On the other hand, respondent Nos.5 and 6  

(writ petitioners) have failed to file any documentary evidence  

to establish their subsisting title over the subject flat.  On that  

basis, the relief claimed by respondent Nos.5 and 6 (writ  

petitioners) to restrain the Bank from proceeding with the  

auction of the subject flat stood rejected.  

 3. This decision of the DRAT dated 20th November, 2013  

was assailed by respondent Nos.5 and 6 (writ petitioners) by  

way of Writ Petition No.7480 of 2014.  The Division Bench of

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the High Court noted the plea of the writ petitioners and  

opined that the question regarding the right, title and interest  

or marketable title of the writ petitioners or any interest that  

could have been parted by respondent Nos.2 to 4 under the so  

called mortgage, involved disputed facts and would require  

evidence and a full-fledged trial. After so noting, the High  

Court went on to observe that with a view to give full  

opportunity to the parties to bring on record the relevant facts  

in terms of the pleadings and for full and complete  

adjudication of the matters in issue, it is apposite to give  

liberty to the writ petitioners to contest the matter before a  

proper forum where all the issues could be agitated. For,  

indisputably, respondent No.5 (writ petitioner No.1) is in  

physical possession of the stated flat. The High Court  

proceeded to pass the following operative order in the said writ  

petition:  

“6] Accordingly, we dispose of the writ petition with the  following directions:   a]  Period of 8 weeks is granted for the writ  petitioners to approach  proper forum to get adjudication of the  rights of the writ petitioners as contended in the writ petition  and within the said period of 8 weeks, they shall file and seek

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proper interim relief in their favour. Till expiry of 8 weeks, the  1st respondent bank shall not proceed with the matter in terms  of the order obtained by them before Debts Recovery Tribunal  so far as the property in question;   b]  Amount of Rs.25 Lacs shall be deposited in an  interest earning deposit, by the respondent No.1 bank and  profits of the said deposit shall enure to the benefits of the  parties, who become successful in the litigation; and   c]  No order as to costs.”  

4. The Bank has assailed the aforesaid decision of the High  

Court primarily on the ground that all issues concerning the  

mortgaged/secured property are required to be decided only  

by the DRT; and not in any civil proceedings as has been  

observed by the High Court in the impugned judgment. For,  

filing of a civil suit in respect of secured assets is barred by  

law. Secondly, the DRT as well as DRAT have examined the  

merits of the controversy and justly answered the same  

against the writ petitioners. The concurrent finding of fact  

recorded by the said Tribunals is that the writ petitioners have  

failed to establish any right, title or interest in the subject flat.  

That finding has neither been disturbed nor is it assailable.  

According to the Bank, the High Court judgment under appeal  

is untenable and deserves to be set aside.  

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5. The contesting respondent Nos.5 and 6 (writ petitioners),  

however, supported the view taken by the High Court and  

would contend that it is indisputable that respondent No.5  

(writ petitioner No.1) is in physical possession of the subject  

flat and was entitled to pursue his claim about the right, title  

and interest in the subject flat in view of the Memorandum of  

Understanding dated 13th March, 2011, executed between the  

writ petitioners and respondent Nos.2  to 4 regarding re-sale of  

the subject flat in their (writ petitioners) favour. The  

respondent Nos.5 and 6 would also contend that the original  

share certificate and few receipts of payments made to the  

Society were still in their possession and that the entries  

effected in the Society’s  record to transfer the share certificate  

in favour of respondent Nos. 2 to 4 are fabricated.   

 6. After having considered the rival submissions of the  

parities, we have no hesitation in acceding to the argument  

urged on behalf of the Bank that the mandate of Section 13  

and, in particular, Section 34 of the Securitisation and  

Reconstruction of Financial Assets and Enforcement of

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Security Interest Act, 2002 (for short, “the 2002 Act”), clearly  

bars filing of a civil suit. For, no civil court can exercise  

jurisdiction to entertain any suit or proceeding in respect of  

any matter which a DRT or DRAT is empowered by or under  

this Act to determine and no injunction can be granted by any  

Court or authority in respect of any action taken or to be  

taken in pursuance of any power conferred by or under the  

Act. The fact that the stated flat is the subject matter of a  

registered sale deed executed by the respondent Nos. 5 and 6  

(writ petitioners) in favour of respondent Nos. 2 to 4 and which  

sale deed has been deposited with the Bank along with the  

share certificate and other documents for creating an  

equitable mortgage and the Bank has initiated action in that  

behalf under the 2002 Act, is indisputable. If so, the question  

of permitting the respondent Nos.5 and 6 (writ petitioners) to  

approach any other forum for adjudication of issues raised by  

them concerning the right, title and interest in relation to the  

said property, cannot be countenanced. The High Court has  

not analysed the efficacy of the concurrent finding of fact  

recorded by the DRT and DRAT but opined that the same

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involved factual issues warranting production of evidence and  

a full-fledged trial. The approach of the High Court as already  

noted hitherto is completely fallacious and untenable in law.   

 7. The learned counsel appearing on behalf of the Bank  

persuaded us to decide the merits of the controversy between  

the parties but as noted earlier, the High Court has not  

analysed the same at all but chose to dispose of the writ  

petition by giving liberty to the writ petitioners to pursue their  

remedy before a proper forum.  The respondent Nos.5 and 6  

(writ petitioners) would, however, contend that crucial aspects  

have been glossed over by the DRT and DRAT including the  

effect of admitted position that respondent No.5 (writ  

petitioner No.1) is in possession of the subject property and  

also having custody of the original share certificate and few  

receipts issued by the Society. In these circumstances, we  

deem it appropriate to relegate the parties before the High  

Court by setting aside the impugned judgment and leaving all  

questions open, to be decided by the High Court on its own  

merits and in accordance with law.  

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 8. We find force in the submission made on behalf of the  

Bank that the High Court could not have directed the Bank to  

deposit Rs.25 Lacs in an interest earning deposit and the  

profits of the said deposit to enure to the benefit of the  

successful party. Such a direction, in our view, was wholly  

uncalled for.    

 9. Be that as it may, since we are setting aside the  

impugned judgment of the High Court, we direct that Writ  

Petition No.7480 of 2014 shall stand restored to the file of the  

High Court to its original number for being decided on its own  

merits and in accordance with law. As the proceeding for  

recovery is pending since 2010, concerning the equitable  

mortgage created by respondent Nos. 2 to 4 in respect of the  

subject flat and having failed to repay the loan amount, which  

is quite substantial, we request the High Court to dispose of  

the writ petition expeditiously, preferably by the end of July,  

2018.   

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10. The appeal is allowed on the above terms, with no order  

as to costs.   

.………………………….CJI.  

     (Dipak Misra)   

…………………………..….J.                (A.M. Khanwilkar)  

…………………………..….J.               (Dr. D.Y. Chandrachud)  

New Delhi;  

May 17,  2018.