Madras High Court
M.Gangadaran vs State Bank Of India on 19 September, 2025
THE HIGH COURT OF JUDICATURE AT MADRAS
Order reserved on : 16.09.2025 Order pronounced on : 19.09.2025
CORAM
THE HON'BLE MR. JUSTICE P.B.BALAJI
CRP.No.885 of 2020
& CMP.No.4707 of 2020
M.Gangadaran ..Petitioner
Vs.
1.State Bank of India,
Arcot Branch,
Rep. by its Branch Manager,
Arcot.
S.Pandiyan (Died)
2.Banu
3.Raja
4.Geetha
5.Saravanan
6.Uma Maheswari
7.Karthikeyan
8.Prabakaran
9.Jayalakshmi
10.G.Kumari ..Respondents
Prayer: Civil Revision Petition filed under Article 227 of Constitution of
India, to set aside the fair and decretal order dated 14.11.2017 in E.A.No.387 of
2008 in E.P.No.125 of 2004 in O.S.No.110 of 2001 on the file of the learned
Subordinate Judge, Ranipet, Vellore District.
1/12
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For Petitioner : Ms.S.Sri Ranjini
for Mr.T.P.Prabakaran
For Respondents : Mr.N.Md.Rifaz for R1
Mr.P.Mani for RR2 to 7
ORDER
The revision petitioner is the judgment debtor in EP.No.125 of 2004 and
the 1st defendant in O.S.No.110 of 2001 before the Subordinate Court, Ranipet.
The present revision petition challenges the order dated 14.11.2017 filed by the
revision petitioner, challenging the said order for sale under Order XXI Rule 90
of CPC.
2.I have heard Ms.S.Sri Ranjini for Mr.T.P.Prabhakaran, learned counsel
for the revision petitioner and Mr.N.Md.Rifaz, learned counsel for the 1st
respondent and Mr.P.Mani, learned counsel for respondents 2 to 7.
3.It is an admitted fact that the revision petitioner approached the 1st
respondent / plaintiff Bank for financial assistance to purchase a Tractor. The
3rd defendant stood as guarantee for the loan availed by the defendants 1 and 2
from the plaintiff/Bank. According to the plaintiff, the defendants 1 and 2
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executed the Hypothecation Agreement on 04.11.1996, in and by which, the
Tractor purchased by the defendants 1 and 2 was offered as a security for the
loan, which was agreed to be repaid in seven yearly installments of Rs. 27,000/-
each, beginning November 1997. It is also the contention of the plaintiff/Bank
that the defendants 1 to 3 deposited their title deeds in respect of an immovable
property on the same day, that is 04.11.1996, with an intention to create an
equitable mortgage over the said properties, as security for repayment of the
aforesaid loan. The suit was admittedly decreed after contest on 25.07.2003.
The 1st respondent Bank also filed an execution petition to recover the amounts
due and payable, by filing EP.No.125 of 2004.
4.Pending the execution petition, on 04.12.2007, the revision petitioner
has approached the Bank and has settled the dues payable to the Bank. A No
Objection letter has been issued by the plaintiff Bank on 04.12.2007, along
with the necessary forms, for termination of the Hire Purchase Agreement, to be
presented before the registering authorities, for cancelling the endorsements
pertaining to the hypothecation.
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5.It is relying on the settlement made by the revision petitioner that the
petitioner filed the application in EA.No.387 of 2008, contending that the dues
of the Bank have been settled and the Bank officials had informed the petitioner
that the original documents of title would be returned after getting necessary
information from the Head Office and that the petitioner was under the
impression that the said EP would be withdrawn, since the matter has been
settled, however, behind his back, the Bank has proceeded to bring the
property, which is subject matter of the mortgage, for sale in Court auction and
challenging the same, the said application was taken out.
6.The application was resisted by the Bank as well as the auction
purchasers and the executing Court dismissed the said application, finding that
the No Due Certificate issued was only for the Tractor and not in respect of the
immovable property. Before the executing Court, the petitioner has marked
Ex.P1 to Ex.P3, which are challans for payment of a total sum of Rs.2,25,000/-
and the No Objection letter issued by the Bank for cancellation of the Hire
Purchase Agreement.
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7.One of the auction purchasers has also been examined as RW1. He has
admitted that he is not aware of any payments made by the petitioner and the
NOC having been issued by the Bank. The executing Court has proceeded to
dismiss the application, mainly on the ground that the petitioner did not even
choose to contest the proceedings and has not produced any documents in
support of the claim of full and final settlement.
8.The learned counsel for the petitioner, Ms.S.Sriranjini, would place
heavy reliance on Ex.P3, the No Objection Certificate issued by the Bank on
04.12.2007 and contend that when the Bank has issued a No Objection
Certificate, it was not open to them to proceed with the execution petition and
bring the property for sale. She would therefore contend that the Bank has acted
fraudulently and the petitioner is entitled to set aside the auction sale.
9.Per contra, Mr.N.Md.Rifaz, learned counsel appearing for the 1st
respondent Bank would contend that the NOC was issued only for the release
of the hypothecation in respect of the Tractor and not for the immovable
property and therefore, when amounts were still due and payable by the
petitioner, the 1st respondent was well within its right to bring the immovable
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property in respect of which an equitable mortgage was created by the
petitioner, for sale in public auction. He would therefore contend that there is
no infirmity in the order of the executing Court warranting interference.
10.Mr.P.Mani, learned counsel appearing for the respondents 2 to
7/auction purchasers would also contend that the NOC was limited to the
Tractor alone and therefore, it does not absolve the petitioners from the liability
which exists insofar as the equitable mortgage created by them.
11.I have carefully considered the submissions advanced by the learned
counsel on either side. I have also gone through the records, including the order
impugned in the present revision.
12.The case of the plaintiff, even in the first instance, namely the suit in
O.S.No.110 of 2001, was only that a total sum of Rs.1,85,000/- was borrowed
by the revision petitioners and in respect of the said borrowing alone, the title
deeds of an immovable property were deposited with the Bank as security for
repayment of the said loan. It is not the case of the 1st respondent Bank that the
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Hire Purchase Agreement / hypothecation of the Tractor and the mortgage were
distinct and independent transactions and nothing to do with the purchase of the
Tractor.
13.On a combined reading of the plaint averments, especially paragraph
Nos.7 and 13 it is clear that the only borrowal that was made by the revision
petitioner was a sum of Rs.1,85,000/- and it is in respect of this amount alone
that the Tractor was hypothecated and the immovable property was offered as
security for repayment. After the suit was decreed, execution petition was laid
by the 1st respondent Bank and in 2007, more specifically on 04.12.2007, the
revision petitioner has approached the 1st respondent Bank and a No Objection
letter dated 04.12.2007 has been issued by the Bank, which is addressed to the
Assistant Registering Authority, Ranipet. It is therefore contended by the Bank
that the said No Objection letter is only in respect of the Hire Purchase
Agreement and cancellation of the hire purchase endorsement and it does not
absolve the petitioner from settling the amounts due and payable to the 1 st
respondent Bank.
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14.The letter, Ex.P3 is admitted. The contents of said letter evidences that
the Bank has received payment in full settlement of the Hire Purchase
Agreement. Therefore, once the bank issues such a No Objection Certificate,
clearly mentioning that they have received payment in full settlement of the
Hire Purchase Agreement, then the claim under the equitable mortgage, which
was only by way of security for repayment, cannot be enforced independently.
If really, as argued by the counsel for the respondents, if the Bank had intended
to only release the hypothecation in respect of the Tractor and further amounts
were still due and payable by the petitioner, then the Bank would have certainly
issued an appropriate letter without conceding that there has been a full
settlement.
15.Even assuming such a letter was necessary for the Hire Purchase
endorsement to be cancelled by the Registering Authority, then at least, the
plaintiff Bank would have been prudent enough to have taken at least an
undertaking from the revision petitioner to the effect that the NOC was being
issued without prejudice to their rights to claim the balance amounts from the
petitioner or that the petitioner was still due and payable certain sum of money
in respect of which the the 1st respondent reserved its right to proceed with the
execution petition.
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16.Having admitted that some amount has been received in full
settlement of the Hire Purchase Agreement, the Bank cannot now go back on
the said No Objection Certificate and contend that the No Objection Certificate
was only in respect of the Hire Purchase and not in respect of the mortgage. As
I have already discussed, the loan amount was only a sum of Rs.1,85,000/- and
it is only in respect of the said single loan transaction, both the hypothecation
as well as the equitable mortgage came to be executed.
17.In view of the above, there is no merit in the submissions of the
respondents, that the 1st respondent was entitled to bring the property for sale
for recovering the balance amounts due and payable. No doubt, as found by the
trial Court, the petitioner was not diligent in at least appearing in the
proceedings and bringing it to the notice of the executing Court that the matter
has been settled fully. However, the mere fact that the petitioner did not appear
cannot be a ground to reject his application to set aside the sale, which is in
contravention and breach of the settlement reached between the petitioner and
the 1st respondent Bank.
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18.In fact, the evidence of the petitioner that the Bank officials have
informed him that the original documents would be returned, after getting
instructions from the Head Office, appears to be probable and cannot be lightly
brushed aside and consequently, the non-appearance of the petitioner before the
executing Court also cannot be found fault with. For all the above reasons, I am
inclined to set aside the order of the Trial Court.
19.In fine, the Civil Revision Petition is allowed. The order dated
14.11.2017 in E.A.No.387 of 2008 in E.P.No.125 of 2004 in O.S.No.110 of
2001 on the file of the Subordinate Court, Ranipet, Vellore District, is set aside.
It is open to the auction purchasers, respondents 2 to 7 to approach the 1st
respondent Bank for refund of any monies that they may have paid / deposited
to the 1st respondent Bank. There shall be no order as to costs. Connected Civil
Miscellaneous Petition is closed.
19.09.2025
Neutral Citation: Yes/No
Speaking/Non-speaking order
Index : Yes/No
ata
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To
The Subordinate Judge, Ranipet.
P.B.BALAJI.J,
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ata
Pre-delivery order made in
19.09.2025
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