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

and procedural aspects relating to the Bank’s measures the under SARFAESI Act and Rules thereunder are still pending adjudication.

98Copy pinpoint98. In the last, Mr. Sibal submitted that the Subsequent Transferee had to borrow significant amount for purchasing the Secured Asset from its financiers who now have the title deeds to the property as security against the loan taken by it. He submitted that if the reliefs sought by the petitioner are granted grave prejudice and hardship would be caused to the Subsequent Transferee. Accordingly he prayed that the present contempt petition and the miscellaneous applications be dismissed and the Subsequent Transferee be permitted to pursue the S.A. No. 46 of 2022 pending before the DRT.

iv. Submissions of the Bank/the respondent no. 3.

99Copy pinpoint99. Mr. Raju Ramachandran, the learned Senior Counsel appearing for the Bank submitted that this Court in its decision in the Main Appeals categorically held that under the amended Section 13(8) of SARFAESI Act, the right of the borrower to redeem a secured asset stands extinguished on the date of publication of public auction notice and overruled the impugned order of the High Court that had allowed the Borrower to redeem the mortgage.

100Copy pinpoint100. He submitted that in the said decision, this Court not only held the redemption of mortgage after auction notice as unlawful but also confirmed the right of the auction purchaser to the Secured Asset and directed the refund of the entire amount paid by the Borrower towards redemption, and further directed the Bank to issue the sale certificate in favour of the petitioner in accordance with Rule 9(6) of the SARFAESI Rules upon payment of an additional amount of Rs. 23.5 crore by it.

101Copy pinpoint101. He submitted that the implied effect of this decision is that the Release Deed executed by the Bank and the Assignment Agreement executed by the Borrower had to be cancelled and the original title deeds to the Secured Asset were to be returned to the bank so that they may be handed over to the petitioner.

102Copy pinpoint102. He submitted that the Bank in compliance of this Court’s decision in the Main Appeals, issued the Sale Certificate for the Secured Asset to the petitioner and on the same day addressed a letter to the Joint Sub-Registrar, Thane, requesting it to take immediate steps for cancellation of the aforesaid Release Deed. The Bank also

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addressed a letter to the Borrower requesting it to take steps for cancellation of the aforesaid deed and provide the title document to the said property along with the bank details to refund its money.

103Copy pinpoint103. The Bank on 06.10.2023 further took steps and got the Sale Certificate issued in favour of the petitioner registered before the Joint Sub- Registrar, Thane– 8 vide Registration No. 22540 of 2023.

104Copy pinpoint104. He submitted that the Bank further addressed another letter to the Borrower requesting it to take immediate steps for cancellation of the Release Deed and to hand-over the title documents of the property to the Bank to enable it to initiate the refund of its money, however the same were to no avail.

105Copy pinpoint105. When the Subsequent Transferee instituted the suit for seek a declaration of title to the Secured Asset in its favour, the Bank immediately took steps by entering appearance and filing an application under Order VII Rule 11 of the CPC inter-alia contending that the reliefs claimed is in violation of the decision of this Court in the Main Appeals.

106Copy pinpoint106. He further submitted that the Bank in order to recover the physical possession of the subject property filed an application under Section 14 of the SARFAESI Act before the District Magistrate, Thane. The said application came to be allowed on 02.02.2024 and possession was scheduled to be taken on 29.02.2024. Against this, the Subsequent Transferee filed an application in the suit for seeking ad-interim injunction and grant of status qua as regards the possession which was allowed, the Bank promptly challenged the same before the High Court. Whereas the Borrower challenged the said possession notice before the DRT which was rejected but in appeal status quo was granted by the DRAT.

107Copy pinpoint107. He submitted that the as per the decision of this Court in the Main Appeals, the Borrower was duty bound to return the possession and title deeds of the secured asset to the Bank for the purpose of handing the same over to the petitioner, and as a natural consequence of the direction to issue the Sale Certificate the Borrower was required to get the Release Deed and the Assignment Agreement cancelled. However, the Borrower in league with the Subsequent Transferee has prevented the implementation of the aforesaid directions as per the judgment of this Court in the Main Appeals and complicated the issue by taking recourse to untenable dilatory litigations against one and all.

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108Copy pinpoint108. In light of the above, the Bank was compelled to prefer the present miscellaneous application before this Court for seeking directions for the implementation of the decision of this Court in the Main Appeals and inter-alia declare the Release Deed dated 28.08.2023 executed by the Bank in compliance of the High Court’s impugned order and the Assignment Agreement dated 28.08.2023 executed by the Borrower in favour of the Subsequent Transferee as null and void and further direct the Borrower to return the original title documents of the subject property to the along with the details for initiating refund of its money paid towards redemption of mortgage, and to direct the District Magistrate Thane to immediately take possession of the secured asset and handover the same to the Bank.

C. ISSUES FOR DETERMINATION

109Copy pinpoint109. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the following questions fall for our consideration: - I. 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 passed by this Court in Civil Appeal Nos. 5542-5543 of 2023? In other words, whether the respondents herein in light of the aforesaid decision of this Court were duty bound to cancel the Release Deed dated 28.08.2023 and hand over the physical possession along with the original title deeds of the Secured Asset to the petitioner herein? II. Whether, the proceedings arising out of S.A. No. 46 of 2022 could have continued after this Court’s judgment and order dated 21.09.2023 directing the issuance of the Sale Certificate of the Secured Asset to the petitioner herein? In other words, whether the petitioner by virtue of the Sale Certificate dated 27.09.2023 is said to have acquired a clear title to the said property? III. Whether the transfer of the Secured Asset in favour of the Subsequent Transferee by way of the Assignment Agreement dated 28.08.2023 is hit by lis pendens? In other words, whether the absence of any registration in accordance with Section 52 of the TPA as amended by the State of Maharashtra renders the lis pendens inapplicable?

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D. ANALYSIS

i. Concept of Abuse of Process of Court and Collateral challenge to judgments that have attained finality.

110Copy pinpoint110. Before we proceed with the analysis, it is necessary to understand the stance of the Borrower throughout the present litigation, as discernible from their pleadings before different forums, which has left us quite perplexed.

111Copy pinpoint111. It is the case of the Borrower that there is no contempt not to speak of any violation of the decision of this Court rendered in the Main Appeals as the issue of validity of the 9th auction was never touched upon by this Court whilst deciding the right of the Borrower to redeem the mortgage, rather this Court had preserved the right of the Borrower to continue with its challenge to the auction proceedings before the DRT. Thus, in essence it is the case of the Borrower that this Court had adjudicated the right of redemption independent of the validity or legality of the SARFAESI proceedings that involved these rights.

112Copy pinpoint112. When the Bank published the notice of sale for the 9th Auction on 12.06.2023, 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 for amending its pleadings to challenge the 9th auction proceedings and for seeking stay of the said auction in the meantime. In the said application, the Borrower inter-alia sought to challenge the 9th Auction on the ground that there was no 30 or 15 days between the ‘service’ of the notice of sale and the date of auction, and thus was in violation of the statutory rules. The relevant grounds sought to be included by way of amendment of pleadings are as under: - “IN GROUNDS: After Ground No. G: Insertion of Ground Nos. G(i) to G(viii) G-(i) Undisputedly, in the 1st auction proceeding under sale notice dated 25th March, 2022, the Respondent failed to give a clear 30 (thirty) days of notice. Likewise, in the 2nd auction proceeding under sale notice dated 30th April 2022, the Respondent failed to give a clear 15 (fifteen)

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days of notice. Additionally, there were several glaring defects and illegalities in both the sale notices. Therefore, the sale notices dated 25th March 2022 and 30th April, 2022 cannot be treated and terms as lawful sale notices. The Respondent suo-moto cannot be considered to have conducted the 1st or 2nd auction and failed. According to the Applicants, the Respondent never conducted the 1st and/or 2nd lawful auction/s process as per law. Therefor, the Respondent is duty bound to give a clear 30 (thirty) days gap as the 1st auction notice was never conducted nor termed as lawful. Thus, the impugned Auction Sale Notice dated 12th June 2023 has failed. xxx xxx xxx G-(v) That, the sale notice dated 12 June 2023 is bad in th

law and not issued in accordance with the provisions of SARFAESI Act and rules thereunder. More particularly, the impugned Sale Notice is perverse for the following reasons; a. There is no 30/15 days gap between service of the notice and the auction as under law this is first auction. b. Known encumbrance has not been disclosed as per Rule 8 of the SIE Rules. c. Sale process is in blatant violation of Rule 8 & 9 of the SIE Rules. d. Sale notice has not been pasted at the secured assets. e. It is not in a statutory format provided at Appendix IV-A. f. Rule 8(5) of the SIE Rules has not been followed in its true spirit as it seems that reserve price is being fixed based on desktop valuation. “ Accordingly, the Borrower by way of the aforesaid application for amendment sought an additional prayer for quashing and setting- aside of the Auction Sale Notice dated 12th June 2023 and all further and consequential measures pursuant thereto. The prayer sought reads as under: -

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“IN RELIEFS SOUGHT: After Paragraph No. 6(b): Insertion of Paragraph No. 6-(b)-i 6-(b)-i That, this Hon’ble Tribunal may be pleased to quash and set-aside the impugned Auction Sale Notice and Public Notices dated 12th June 2023 and hold all further and consequential measures pursuant to the impugned Auction Sale Notice dated 12th June 2023 as defective and in violation of the SARFAESI Act and Rules made thereunder.”

113Copy pinpoint113. While the aforesaid applications were still pending the Borrower decided to move the High Court with Writ Petition No. 9523 of 2023 seeking the indulgence of the High Court to call for the proceedings arising from the S.A. No. 46 of 2022 pending before the DRT-I, Mumbai to itself, and then adjudicating the same by examining the validity of the actions taken by the Bank under the SARFAESI Act and thereafter permit the Borrower to redeem the mortgage. In the alternative, it was prayed that the Bank may be directed to not take any further steps in confirming the sale to the petitioner till the S.A. No. 46 of 2022 is decided by the DRT. Thus, in essence, the prayer of the Borrower before the High Court was two-fold: - (i) Prayer (a) / Para 11(a) of the writ petition: Either to seize the issues arising in the S.A. No. 46 of 2022 before the DRT for itself and decide the same in favour of the Borrower and consequentially permit it to redeem the mortgage of the Secured Asset or; (ii) Prayer (b) & (c) / Para 11(b) (c) of the writ petition: Alternatively, stay the confirmation of the sale under the 9th auction by the Bank till the S.A. No. 46 of 2022 is decided by the DRT along with a further direction that the Borrower be given the liberty to tender the remaining amount and redeem the mortgage i.e., prayers 11(c) and 11(b) respectively. At the cost of repetition, the relevant prayers sought by the Borrower in the writ petition before the High Court 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

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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 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)

114Copy pinpoint114. What can be discerned from the above is that the initial stance of the Borrower before the High Court was that its right of redemption was wholly dependent upon the adjudication of S.A No. 46 of 2022. In such circumstances, it had prayed before the High Court to either decide the said securitization application itself and thereupon permit the redemption of mortgage or otherwise to stay the auction proceedings till the same was decided by the DRT. Thus, the Borrower’s case at that time was clearly that its right of redemption is not independent of the challenge to the validity of the measures taken by the Bank under the SARFAESI Act and rather was consequential to it, which is why both its primary prayer and its alternative prayer sought for the adjudication of the S.A No. 46 of 2022 on the basis of which its right may then be adjudicated. The prayer made by the Borrower

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in paragraph 11(b) of its writ petition is particularly interesting, inasmuch as it is seeking a direction from the High Court that it may be permitted to redeem the mortgage during the pendency of the S.A No. 46 of 2022, which further reinforces that until the securitization application was decided it could not have redeemed its mortgage without a specific direction permitting it to do so.

115Copy pinpoint115. The pleadings of the Borrower in the aforesaid writ petition are also significant to the controversy at hand. The Borrower had assailed the demand notice dated 07.06.2021 under Section 13(2), the possession notice dated under Section 13(4) and the e-auction sale notices dated 25.03.2022 issued under the SARFAESI Act on various grounds. Pertinently, the Borrower in its writ petition never imputed any illegality or perversity to the 9th Auction notice. From a plain reading of the aforesaid writ petition, the following position emerges: - (i) Although the Borrower at paragraph 4.28 has stated that the aforesaid auction notice was issued on 12.06.2023 scheduling the auction for 30.06.2023, yet there is nothing to indicate that the Borrower had assailed the said notice on the ground of want of a 30/15 days period of notice in terms of Rule 8 and 9 of the SARFAESI Rules. (ii) In the very next paragraph i.e., at paragraph 4.29, although the Borrower has stated that the sale process is absolutely erroneous, yet it has not laid any specific challenge to the 9th auction notice dated 12.06.2023. Thus, far from a mere bald assertion that the sale process is erroneous, no specific plea as regards the absence of a 30/15 days gap between the sale notice and auction was taken, which the Borrower now seeks to espouse in the present contempt petition. (iii) Pertinently, in the grounds, the Borrower has left no stone unturned for challenging the demand notice, the possession notice, the first sale notice, the valuation of the Secured Asset by the Bank etc. Yet again, the plea which the Borrower seeks to take in the present contempt petition is conspicuously absent. The ground taken by the Borrower at paragraph ‘x’ again at best can be construed as seeking to challenge the validity of the first sale notice and not the 9th auction notice.

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(iv) The only ground which remotely touches the validity of the 9th auction notice dated 12.06.2023 appears to be at paragraph hh. which again does not contain the plea which the Borrower has taken in the present contempt petition as regards the validity of the said sale notice, rather, the Borrower’s contention in the said paragraph is plain & simple that due to the infirmities in the earlier measures taken by the Bank under the SARFAESI Act, namely the demand notice, the possession notice and the first sale notice, all subsequent actions are also rendered illegal and contrary to the provisions of the Act. The relevant paragraphs of the Borrower’s writ petition referred to above are reproduced hereunder: - “4.28 On 12th June, 2023, Respondent No. 1 has published Sale Notice scheduling auction of the said property on 30th June, 2023 with a Reserve Price of Rs. 105,50,00,000/- . Hereto annexed and marked Exhibit “F” is a copy of the Sale notice dated 12th June, 2023. 4.29 The Petitioners most respectfully submit that without prejudice to their rights and contentions, the sale process was absolutely erroneous in addition to the defects already committed by the Bank as stated herein above. xxx xxx xxx GROUNDS: - xxx xxx xxx n. that the actions on the part of the Respondent as measures under ·provisions of SARF AESI Act are entirely illegal, arbitrary, unreasonable and unjustified; xxx xxx xxx r. that, the E-auction sale notice dated 25 March 2022 th

which was delivered upon the Petitioners only on 3lst March 2022, whereas the Auction is fixed on 29th April 2022 Thus, there is no clear gap of 30 (thirty) days. Being 1st auction Respondent is duty bound to give clear 30 (thirty) day notice to the Petitioners as per the mandate· of Rule 8(6) read with Rule 9(1) of the SIE Rules. Thus, the impugned e-auction notice dated 25th March 2022 and all further and consequential action become perverse;

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s. that, the impugned sale notice dated 25th March 2022 is in violation of Rule 8(7) (b) of SIE Rules. Under Rule 8(7)(b), legislature requires authorized officer to state the “secured debt for recovery of which the property is to be sold”. Perusal of the impugned auction notice, demonstrates that Respondent has recorded alleged outstanding as on 28th February 2022 and failed to state exact outstanding as on the date of sale notice for which the property is getting sold. The amount of dues mentioned in the purported auction· notice is uncertain and vague. In these peculiar circumstances it is more than enough to prove that there is basic and patent illegality in the. entire E-auction proceeding; t. that, as per the mandate of Rule 8(6)(f), mandates of the secured creditor/authorized officer to disclose the encumbrances known to the Respondent. Herein, admittedly the Secured creditor was fully aware about the encumbrances of Rs.2,08,40;362/- (Rupees· Two Crores Eight Lakhs Forty Thousand Three Hundred and Sixty-Two Only) OR Rs.2,53,40,362/- (Rupees Two Crores Fifty-Three Lakhs Forty Thousand Three Hundred and Sixty-Two Only). towards property tax bill which was found pasted by the Respondent during their site visit as, duly recorded in a Bank’s letter dated 14th January 2022. Once, again, Petitioner vide letter dated 17th January 2022 confirmed that the property tax dues are pending and Corporation has pasted the notice for an encumbrance of Rs. 2,53,40,362/- (Rupees Two Crores Fifty-Three Lakhs Forty Thousand Three Hundred and Sixty Two Only); u. that moreover, the Rule 9(10) of the Security Interest (Enforcement) Rule states that the certificate of sale to be issued by the Authorised Officer shall specifically mention that whether purchaser has purchased the immovable secured asset free from any encumbrance known to the secured creditor or not. A plain reading of the SARFAESI. Act/Rules casts a duty upon the, Bank/Financial Institution to furnish those encumbrances which are known to them on the property which are sold by them. As stated above, despite having fully known about the encumbrances of

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property tax, Authorized Officer at clause 4 of the impugned sale notice has falsely and misleadingly recorded that ‘’NOT KNOWN”. On this ground alone, impugned sale notice dated 25 March, 2022 fails in its entirety; w. that, sale notice dated 25th March, 2022 is bad in law and not issued in accordance with the provisions of SARFAESI Rules thereunder. Impugned Sale Notice is perverse for following reasons; x. that there is no 30 days gap between service of notice and auction; y. that known encumbrance has not disclosed as per Rule 8; z. that sale process is in blatant violation of Rule 8 & 9; aa. that sale notice has not been pasted at the secured assets and the same is not in statutory format provided at Appendix IV-A; cc. that Rule 8(5) has not been followed in its true spirit as it seems that ·reserve· price is being fixed based· on desktop valuation;” (Emphasis supplied)

116Copy pinpoint116. Even before the High Court, as evident from the impugned order, the Borrower had not canvassed any submissions on the illegality or invalidity of the measures taken by the Bank under the SARFAESI Act including the validity of the 9th auction notice dated 30.06.2023. The specific plea which the Borrower had taken in the present contempt petition, namely the lack of a 30/15 days gap between the sale notice and auction is conspicuously absent. On the contrary it appears that the Borrower in the aforesaid writ petition had abandoned its right to challenge the validity of all measures taken by the Bank under the SARFAESI Act. We say so because of the following reasons: - (i) First, before the High Court the Borrower had submitted that if they are unable to pay the entire dues for redemption of mortgage by 31.08.2023, then the possession of the Secured Asset would be voluntarily handed over to the petitioner. The relevant observations read as under: -

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“5. Today, Mr. Shinde, the learned Advocate appearing for the Respondent Bank, on instructions, has stated that if the Petitioners are willing to pay the entire amount of Rs. 129 crores on or before 31st August 2023 and subject to them paying over to the Bank a sum of Rs. 25 crores today [by Demand Drafts], they have no difficulty in allowing the Petitioners to redeem the mortgage. The further condition that Mr. Shinde put forth for accepting this offer was that the Securitization Application filed before the DRT would stand dismissed on the passing of this order, and if the payment is not made by 31st August 2023, possession of the secured asset would be handed over by the Petitioners to the Auction Purchaser on 5th September 2023.

6. Mr. Khandeparkar, on taking instructions, has fairly stated that in the event the entire amount of Rs. 129 crores is not paid by the Petitioners on or before 31st August 2023, then the Petitioners shall voluntarily hand over vacant, peaceful, and quiet possession of the secured asset to the Auction Purchaser on or before 5th September 2023.” (Emphasis supplied)

(ii) Secondly, the High Court in view of the aforesaid categorically held that on passing of the impugned order the entire challenge laid to the actions of the Bank under the SARFAESI Act would come to an end. It further held that even if the Borrower failed to redeem the mortgage even then no challenge could be laid to the sale of the secured asset and that the physical, vacant and quiet possession would be handed over to the auction purchaser. The relevant observations are reproduced hereunder: - “11. We have heard the learned Counsel for the parties at some length. We have also perused the papers and proceedings in the above Writ Petition. It is not in dispute that the Petitioners have approached the DRT by filing an application for redemption of the mortgage. As mentioned earlier, this application is an Interim

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Application filed in Securitization Application No. 46 of 2022 and which is also pending. Considering these facts, under normal circumstances, we would not have entertained the above Writ Petition. However, in the peculiar facts and circumstances of the present case, we are of the opinion that considering stand taken by the Respondent Bank [and which is accepted by the Petitioners without any conditions or reservations], it would be in the interest of all concerned if the consensus reached between the Respondent Bank and the Petitioners is taken cognizance of by us. We say this because in the present scenario, by 31st August 2023, the Respondent Bank will receive its entire dues one way or the other. In the event the Petitioners adhere to its promise to pay the entire dues [of 129 crores] by 31 st August 2023, then naturally, the Bank will receive its entire money. In contrast, if the Petitioners default in making payment of the entire sum of Rs.129 crores, the sum of Rs. 25 crores to be paid over to the Respondent Bank today, would be appropriated by the Bank towards the outstanding dues of the Petitioners, and the balance Rs.105.05 crores would be received from the Auction Purchaser who has already deposited the entire sale consideration with the Respondent Bank. It is taking these circumstances into consideration that the Respondent Bank has changed its stand from the stand it took before the DRT when it opposed the Petitioners’ application for redemption. Another reason why the Respondent Bank has changed its stand is because the entire litigation will come to an end on the passing of this order. In other words, on the passing of this order itself, the entire challenge laid by the Petitioners to the actions of the Bank [under the provisions of the SARFAESI Act, 2002] comes to an end. Therefore, even if the Petitioners default in making payment by 31st August 2023, no challenge can be laid to the sale of the secured asset to the Auction Purchaser. Further, as per the

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statement of Mr. Khandeparkar, in the event the Petitioners fail to pay the entire dues of Rs.129 crores to the Respondent Bank by 31st August 2023, vacant, quiet, and peaceful possession of the secured asset would be handed over by the Petitioners to the Auction Purchaser and the Bank would then issue a sale certificate in favour of the Auction Purchaser. When one looks at all these facts, we find that the arrangement referred to above is in the interest of all, including the Auction Purchaser. We say this because, by 31st August 2023, the Auction Purchaser will either get the secured asset free from litigation or will get a refund of the entire amount paid by it to the Respondent Bank for agreeing to purchase the secured asset.” (Emphasis supplied)

(iii) Lastly, the High Court whilst permitting the Borrower to redeem the mortgage specifically noted, that in light of its order nothing survived in the S.A. No. 46 of 2022 pending before the DRT and that the sale of the Secured Asset shall stand confirmed in favour of the petitioner. Furthermore, the High Court treated the Borrower’s leave to withdraw the aforesaid securitization application and not challenge the validity of the measures taken under the SARFAESI Act as an undertaking to the High Court. The relevant observations read as under: - “15. In light of the foregoing discussion, the following order is passed: - xxx xxx xxx (e) In the event the balance amount of Rs. 104 crores are not paid by the Petitioners to the Respondent- Bank on or before 31st August 2023, the Respondent Bank shall then be entitled to appropriate the money from the No Lien interest bearing account towards the dues payable by the Petitioners and the sale of the secured asset shall be confirmed in favour of the Auction Purchaser and a sale certificate shall be issued in their favour. All formalities in relation to

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registration of that certificate shall also be done by the Respondent-Bank and the Auction Purchaser. (f) In light of this order, Mr. Khandeparkar has stated that, nothing would survive in Securitization Application No. 46 of 2022 and/or the Interim Applications filed therein and seeks leave to withdraw the same within a period of one week from today. The said statement is accepted as an undertaking given to the Court. It is needless to clarify that even if the Petitioners do not withdraw the Securitization Application, the same shall stand dismissed in light of this order and the Petitioners will not be permitted to litigate any further with the Respondent Bank in relation to the secured asset. In other words, if the Petitioners default in making the balance payment of Rs.104 crores to the Respondent Bank by 31st August 2023, the Auction Purchaser shall get the secured asset free from litigation. As per the statement made by Mr. Khandeparkar, and which is accepted as an undertaking given to the Court, if the Petitioners default in making the balance payment of Rs.104 crores by 31st August 2023, physical, vacant, quiet, and peaceful possession of the secured asset shall be handed over to the Auction Purchaser on or before 5th September 2023.” (Emphasis supplied)

117Copy pinpoint117. What can be discerned from the above is that although the Borrower in its writ petition had initially prayed for adjudication of the S.A. No. 46 of 2022 either by the High Court itself or in the alternative by the DRT subject to the auction proceedings being stayed, yet during the hearing it had effectively waived of its right to pursue the said securitization application and to challenge the actions taken by the Bank under the SARFAESI Act including the 9th auction notice. Similarly, although the High Court permitted the Borrower to redeem the mortgage yet its right to challenge the validity of the sale had been foreclosed by the High Court irrespective of whether the Borrower is able to actually tender the dues for redemption or not. Moreover,

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the proceedings under the said S.A. No. 46 of 2022 did not merely come to an end as a consequence of the impugned order of the High Court but rather due to the unconditional undertaking of the Borrower to withdraw the same within a period of 1-week, independent to the exercise of its right of redemption. Thus, effectively the Borrower at that stage had waived its right to pursue the S.A. No. 46 of 2022 on its own accord, and at no point of time did it contend before the High Court to preserve this right in the event it was unable to redeem the mortgage.

118Copy pinpoint118. Thereafter the said matter travelled to this Court. Manifold submissions were made by the Borrower, the Bank and the petitioner on the issue of redemption of mortgage in terms of Section 13(8) of the SARFAESI Act. The petitioner herein assailed the impugned order of the High Court permitting the borrower to redeem the mortgage inter-alia on the ground that it was contrary to the amended Section 13(8) of the SARFAESI Act, and that once the sale stood confirmed by the Bank, the sale certificate of the Secured Asset could not have been withheld. Accordingly, the petitioner prayed that not only the impugned order of the High Court be set-aside, but the Bank be further directed to issue the sale certificate for the Secured Asset. In response, the Borrower herein inter-alia contended that no error not to speak of any error law could be said to have been committed by the High Court in the interpretation of Section 13(8) of the SARFAESI Act, and that since the Borrower has already redeemed the mortgage during the pendency of the Main Appeals in compliance of the High Court’s order, the only issue which remained was the refund of the amount deposited by the petitioner pursuant to the auction. After hearing the parties at length, this Court vide its order dated 01.07.2023 reserved the matter for judgment and further directed the parties to file their written submissions.

119Copy pinpoint119. Pursuant to the above, the petitioner herein on 04.09.2023 at 15:40 PM filed its written submissions wherein it inter-alia submitted that since the auction was already completed and the Bank had confirmed the sale of the Secured Asset to the petitioner, a vested right in the Secured Asset had accrued in its favour. It further submitted that of the manner in which the Borrower and the Bank during the pendency of the Main Appeals, had precipitated the matter by hastily entering into private arrangements to overtake the proceedings and undermine the issue involved, prayed that this Court not only set-

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aside the High Court’s impugned order but also inter-alia order the issuance of sale certificate of the Secured Asset and the handing over of its original title deeds along with reversal of all steps taken by the Bank and the Borrower pursuant to the High Court’s order. The relevant portion of the petitioner’s written submissions are reproduced hereunder: - “5.6 Knowing that the Supreme Court may consider the legality of what was being attempted, the Borrowers and the Bank have precipitated matters with the intention of letting events overtake this Hon’ble Court’s scrutiny. Not only has the Bank accepted payment of Rs. 129 crore but it has also hastily proceeded to sign and register the mortgage cancellation documents and issue a no-dues certificate. 5.7 No regard has been shown for this Hon’ble Court considering the matter. One can understand that the Borrowers would pay the Rs. 129 crores by 31.08.2023. However, the haste with which steps have been taken thereafter is for everyone to see. The petitioner has obviously refused refund of its money, pending the decision of this Hon’ble Court. 5.8 However, considering the illegality which the Impugned Judgment has permitted and that steps have been taken to implement the Impugned Judgment during the pendency of this SLP, the Petitioner respectfully submits that to do complete justice, this Hon’ble Court must not only set aside the Impugned Judgment but must also order that: i) All steps taken pursuant to the Impugned Judgment be reversed; ii) The registered documents executed pursuant to the Impugned Judgment be cancelled; iii) The borrowers be ordered to handover the title documents of the secured asset back to the Bank; iv) The Bank be ordered to pay to the Borrowers, a sum of Rs. 129 crores;

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v) The Bank be permitted to cancel its no-dues certificate issued to the Borrowers and also be permitted to take recourse to whatever remedies it has in law to recover the remained of its outstandings from the Borrowers; vi) The Bank be ordered to issue in the Petitioner’s favour, a sale certificate; have the same registered and do and carry out all other acts necessary under the SARFAESI Act and the Security Interest Rules. 5.9 It is only because the High Court has interfered in the matter and every step has been taken by the Borrowers and the Bank to defeat the vested rights of the Petitioner, that such extra-ordinary orders are warranted. This is the only manner in which the Petitioner’s vested right as an auction purchaser can be protected and given effect to.” (Emphasis supplied)

120Copy pinpoint120. On the very next day i.e., 05.09.2023 at 10:32 AM, the Borrower herein filed its written submissions wherein apart from contending that the right of redemption under the amended Section 13(8) of the SARFAESI Act does not get extinguished upon issuance of the notice of sale and that the impugned order of the High Court warranted no interference of this Court in view of the fact that the mortgage has already been redeemed and that even the Secured Asset stood transferred to a third-party, the Borrower interestingly never raised the issue of the illegality of the 9th auction notice. Even though the petitioner herein had contended that it had a vested right in the Secured Asset and prayed for issuance of sale certificate to that effect and handing over of original title deeds, the Borrower remarkably neither disputed the same nor imputed any illegality in the very auction process through which the petitioner claimed its vested right. The Borrower having already waived/abandoned its right to challenge the legality of the auction proceedings before the High Court did not even put forth an alternative plea to preserve its right to pursue S.A. No. 46 of 2022 in the event this Court held that it had no right to redeem the mortgage. The entire written submissions of the Borrower is being reproduced hereunder: -

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“WRITTEN SUBMISSIONS ON BEHALF OF RESPONDENT NO. 1

1. The present Special Leave Petition arises out of the impugned order dated 17.08.2023 (uploaded on 26.8.2023) in Writ Petition No. 9523 of 2023 along with Interim Application Stamp No. 21706 of 2023 before the Hon’ble High Court of Judicature at Bombay.

2. Vide the impugned order, the Hon’ble High Court has allowed the original Petitioners i.e. Respondent No.1 herein, to exercise their right of redemption upon property being Plot No. D-105, D-110 and D-111, Trans Thane Creek Industrial Area, MIDC Village Shirwane, Thane, Belapur Road, Nerul, Navi Mumbai, Thane, Maharashtra 400906 (for short “the secured asset”), prior to the issue of the Sale Certificate, in lieu of repayment of the Entire Mortgage Amount on Ledger Balance (Principal+Interest+Penal Interest+ Overdue Charges + Costs) of the Secured Creditor i.e. Respondent No. 3, Union Bank of India. .

3. Through the said Writ Petition, the Hon’ble High Court rightly, in the peculiar facts and circumstances (as noted in para 11 of the impugned order) exercised its in extraordinary jurisdiction under Article 226, passed the following directions favour of Respondent No.1 herein:- a. The Respondent No.1 herein shall hand over a sum of Rs. 25 Crores to the Respondent Bank today i.e. on 17.8.2023 (in compliance with this direction, the Counsel for the Respondent before High Court handed over three Demand Drafts in the sum of Rs. 10 Crores, 10 Crores and 5 Crores respectively to the Advocate appearing on behalf of which was duly acknowledged by him); b. The balance amount of Rs. 104 Crore shall be paid by the Respondent No.1 herein to the Respondent Bank on or before 31%* August

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2023 in the designated account (Already Complied with on 28” August 2023); c. If the amount of Rs. 104 Crores is paid in the said account on or before 31.8.2023, the same shall be appropriated by the Respondent Bank towards the dues of the Respondent No.1 herein. The Bank shall then return the original title deeds of the secured asset to the Respondent No.1 herein, execute all such documents for cancellation of mortgage, and issue a ‘No Dues Certificate’ to the Respondent No.1 herein.

4. It is necessary to note that the said land was mortgaged with Union Bank of India i.e. the Respondent No.2 and Tata Motors Finance Solutions Limited had a second charge on the said property. The said charge was duly registered with MIDC. Respondent No.1 was constrained to approach the Hon’ble High Court invoking extraordinary jurisdiction under Article 226

5. The Respondent No. 1 had approached Debt Recovery Tribunal no 1-Mumbai challenging Auction Proceedings initiated by Respondent no 3 whereby upon urgent mentioning, Securstisation Application no 46/2022 was placed for urgent hearing on 18th June 2023 along with Connected Applications, i.e. Application for Right to Redemption. Despite various hearings taking place, where on multiple occasions, the Respondent No. 1 informed the DRT that a Demand Draft of Rs. 10 Crores is ready (And during course of hearing before the Hon’ble DRT Demand Draft totalling Rs. 25,00,00,000/- were ready to be submitted), and the total amount of Rs. 1,24,00,00,000/- would be paid on or before 31.08.2023, no orders came to be passed by the Hon’ble DRT 1. This was even prior to the Auction Purchaser 1.e. The Petitioner herein, depositing 100% of the Purchase value, and despite the Auction Purchaser not having paid the balance 75% purchase fees.

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6. It is DRT), relevant to note that before the Mumbai Debt Recovery Tribunal-I (the Respondent No. 1 had carried a draft for Rs. 10 crores and also expressed it willingness to make the balance payment by 31.8.2023 See para 4.31 of Writ Petition at pg. 133 of the SLP (as has been eventually directed by the High Court in the impugned order). Since Respondent No.1, the borrower, has a subsisting right of redemption till a sale certificate is issued (as detailed hereinbelow), it was constrained to approach the High Court by way of a writ petition, as there was a genuine apprehension that the right of redemption would be extinguished pending the hearing and final disposal of the Interim Application in the Secutitization Application No. 46/2022. Subsequent events have rendered the SLP infructuous:

7. The present SLP, at the time of its filing, has been rendered infructuous due to the following events.

8. That after the impugned order was dictated in open court on 17.8.2023 and subsequently uploaded on the website of Hon’ble Bombay High Court on 26.8.2023, the following developments have taken place: a. The Respondent No.1 and Respondent no.2 transferred an amount of Rs. 104 Crores to the Respondent No. 3 i.e. Union Bank o f I n d i a v i d e RT G S , h a v i n g U T R N o . HDFCR52023082882894716. b. This was followed by the Respondent No.3 1.e. Union Bank of India issuing a No Dues Certificate dated 28.08.2023 thereby acknowledging that the Respondent No.1 does not owe any further amount to the Bank and releasing the personal guarantees as well. c. Further, after the No Dues Certificate was issued by Respondent No. 3, Respondent No.1 executed a registered Deed of Release

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with Tata Motors Financial Solutions Limited registered with the Joint Sub Registrar, Thane 8 having registration No. 19283/2023, whereby the second charge that Tata Motors Finance Solutions Limited had on the second property came to be released, pursuant to payment of Rs. 15 Crores (Rs. 10 Crores on 18.08.2023 and Rs. 5 Crores on 22.08.2023 ), which came to be duly acknowledged by Tata Motors Finance Solutions Limited. d. Following this, the Respondent No. 1 has also entered into a registered Agreement of Assignment of Leasehold Rights for transfer of leasehold rights in the secured asset with M/s Greenscape L.T. Park LLP on 28.8.2023, which came to be registered before the Joint Sub Registrar, Thane 8 having registration No. 19286/2023. Copies of Documents issued/ registered/executed subsequent to passing of the Impugned Order are attached herewith as Annexure R-1 (Colly).

9. Since there has been full compliance of the Impugned Order by the Respondent No.1 herein as well as the Respondent No.3 Bank, the SLP has essentially become infructuous.

10. The only issue which remains is the refund of the amount deposited by the Petitioner herein. This is an issue between the Petitioner and the Respondent No.3 Bank and the Respondent No.1 has no reason to come in the way of the refund of the amount to the Petitioner herein.

11. There is a specific direction of the Hon’ble High Court that the Respondent Bank shall immediately keep the entire amount of Rs. 105.05 Crores (deposited by the Auction Purchaser/Petitioner herein) in a ‘No Lien Interest Bearing Account’ and if the Respondent No.1 pays the balance amount of Rs. 104 Crores to the Respondent Bank by 31.8.2023 (which it has),

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then the Respondent Bank shall refund the amount of Rs. 105.05 Crores deposited by the Auction Purchaser together with accrued interest on or before 7.9.2023. The impugned order correctly interprets Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security interest Act,2002 (SARFAESI Act):

12. During the arguments on 01.9.2023, the main issue of contention that arose was till what stage does the right of redemption survive, more so, in the light of the 2016 Amendment which amended Section 13(8) of the SARFAESI Act, 2002.

13. It is stated by the Respondents that the right of redemption is nowhere mentioned in the SARFAESI Act, and one has to refer to Section 60 of the Transfer of Property Act, 1882, which has been interpreted to reserve the right of Mortgagor to redeem the property fill the stage of the same being conveyed/transferred to a third party.

14. This interpretation has been upheld in the landmark case of Nardas Karsondas V/s S.A. Kamtam and Anr [Annexure R-2] (1977) 3 SCC 247 where it has been held that: “34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by of parties. The combined effect of Section 54 of the Transfer of Property Act and Section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India, it is only on execution of the conveyance and registration of transfer of the Mortgagor’s interest by registered instrument that the mortgagor’s right of redemption will be extinguished. The conferment of power to sell without intervention of the Court in a Mortgage

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Deed by itself will not deprive the mortgagor of his right t redemption. The extinction of the right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale.

35. The mortgagor’s right to redeem will survive until there has been completion of sale by the mortgagee by a registered Deed. In England a sale of property takes place by agreement but it is not so in our country. The power to sell shall not be exercised unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. Further Section 69(3) of the Transfer of Property Act shows that when a sale has been made in professed exercise of such a power, the right of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale. Therefore, until the sale is complete by registration the mortgagor does not lose right of redemption.”

15. This position has also been echoed in the case of Mathew Varghese V/s M. Amrithakumar, 2014 5 SCC 610 [Annexure R-3] where this Hon’ble Court has held that upon a combined reading of S. 60, 54 of the Transfer of Property Act and S. 17 of the Registration Act, it can be concluded that the extension of the right of redemption comes much later than the sale notice.

16. Though the decision in Mathew Varghese (supra) was prior to the 2016 Amendment to SARFAESI Act, its applicability has been continued to be held valid even after the amendment to the said Act. A Division Bench of the Hon’ble High Court of Telangana in the case of Concern Readymix V/s Authorized Officer, Corporation Bank and Anr, 2018 SCC OnLine Hyd 783 [Annexure R-4], whereby the Hon’ble Court, after juxtaposing the Amended and Unamended provisions of Section 13(8) of the SARFAESI Act,

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qua the right of redemption available to the Mortgagor held that the Amended S. 13(8) of the SARFAESI Act only puts a restriction on the right of the Mortgagee to deal with the property and does not speak in express terms about the equity of redemption available to the Mortgagor (at para 13). It was further held that the danger of interpreting Section 13(8) as though it relates to the right of redemption, is that if payments are not made as per Section 13 (8), the right of redemption may get lost even before the sale is be complete in all respects and that holding that the right of redemption would extinguished at the stage of issue of notice under Rule 9(1) would be tantamount to annulling the relevant provision of the Transfer of Property Act, 1862 which do not stand expressly excluded insofar as the question of redemption is concerned (para 14). The said judgment was challenged before this Hon’ble Court vide SLP (Civil) Diary No. 28967/2019 and the same came to be dismissed, hence, confirming the said judgment.

17. The view expressed in Concern Readymix (supra) was echoed by a Division Bench of the High Court of Punjab and Haryana in the case of M/s Pal Alloys & Metal India Private Limited and others V/s Allahabad Bank and Ors. CWP No. 6402 0£2019 (O & M) dated 23.12.2021 [Annexure R-5] wherein the Hon’ble High Court, inter alia, considered the specific issue “(a) till what time and date can the right of redemption of the Mortgage can be exercised by the Mortgagors/Borrowers in the light of the amendment to Section 13 (8) of the SARFAESI Act”.

18. While answering the said question, the Court considered the report of the Joint Committee on the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 (the Report) as well as the law laid down by this Hon’ble Court in Mathew Varghese (supra) and the judgment in Concern Readymix

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(supra), in order to determine whether the said right of redemption was available up to the date of transfer of the asset or only up to the date of publication of the sale notice. On a consideration of Section 60 of the Transfer of Property Act as well as the judgment in Nardas Karsondas (supra), it was observed that: “Thus even if the sale of secured assets is under a special statute like State Financial Corporations Act, there is no deviation from the general principle that the mortgagor’s right of redemption is not extinguished till the execution of conveyance.”

19. It was ultimately held as below:- “that the amended Section 13 (8) of the SARFAESI Act merely prohibits a secured creditor from proceeding further with the transfer of the secured asset by way of lease, assignment or sale; a restriction on the right of the mortgagee to deal with the property is not exactly the same as the equity of redemption available to the mortgagor, the payment of the amount mentioned in Section 13 (8) of the SARFAESI Act ties the hands of the mortgagee (secured creditor) from exercising any of the powers conferred under the Act; that redemption comes later; extinction of the right of redemption comes much later than the sale notice; and the right of redemption is not lost immediately upon the highest bid made by a purchaser in an auction being accepted. We also hold that such a right would continue till the execution of a conveyance i.e. issuance of sale certificate in favour of the mortgagee. A similar view has been taken by this Branch in M/s Hoshiarpur Roller Flour Mill Private Limited and another V/s Punjab National Bank (CWP No. 1440 of 2021). …

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It would therefore, certainly be available to the Petitioners herein before the issuance of sale certificate in favour of Respondent Nos. 2 and

3. Point (a) is answered accordingly in favour of the Petitioners and against the Respondents.”

20. The said judgment also considered and distinguished the judgment of this Hon’ble Court in Shakeena and Anr. V/s Bank of India and Ors. (2021) SCC 761 [Annexure R-6] holding that that the said case did not consider the concept of redemption u/s 60 of the Transfer of Property Act, 1882. It is submitted that the observations in para 30 of Shakeena are in the nature of obiter dicta as in the said case the auction had concluded prior to the amendment of Section 13(8) and in any event the sale certificate had already been issued. Thus, the question of interpretation of Section 13(8) was not directly in issue. Effect of amendment to S. 13(8) of the SARFAESI Act, 2002

21. It was vehemently argued by the Petitioners that the amended provisions of Section 13(8) of the SARFESI Act, 2002 puts a positive restriction upon the Mortgagor to restrict its right of redemption until the date of publication of the notice.

22. A perusal of the Report The report of Joint Committee on the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 [Annexure R-7], more particularly para 24, shows that the proposed amendment to S. 13(8) of the Act was intended to deal with: - “Provisions to stop secured creditor to lease or assignment or sale in the prescribed conditions”. The important thing to note is also that the report does not indicate that the Committee had considered the effect of Section 60 of the Transfer of Property Act, 1882, which is a

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general law regarding redemption of mortgage vis a vis the provisions of SARFAESI.

23. The focus of the Committee in the said reply is on the obligations of the Mortgagee to not create third party rights up to a certain time-period, but it is silent on the rights of the Mortgagor to exercise its redemption for which Section 60 of the Transfer of Property Act, 1882 is the relevant provision.

24. It is further necessary to note that the non obstante clause in Section 13 specifically excludes only S. 69 and 69A of the Transfer of Property Act, 1882. This section does not specifically include the words “Notwithstanding anything contained in any other Act for the time being in force” which is the standard term used in non obstante clauses. In view thereof, the legislative intent has to be interpreted to only exclude S. 69 and 69A of the Transfer of Property Act, 1862 and the same does not affect the applicability of Section 60 of the Transfer of Property Act, 1862.

25. It is thus humbly submitted that the arguments and contentions of the Petitioner are liable to be rejected. Various High Courts have consistently held that the right of redemption has to be exercised in terms of S. 60 of the Transfer of Property Act, 1862 and not u/s 13 (8) of the SARFAESI, 2002 and the amendment to Section 13(8) does not affect or take away this right in any manner. It is therefore respectfully submitted that the present case is not a case warranting exercise of this Hon’ble Court’s jurisdiction under Article 136 of the Constitution.”

121Copy pinpoint121. What can be discerned from the above is that: - (i) It is true the Borrower had assailed the actions of the Bank under the SARFAESI Act before the DRT by way of S.A. No. 46 of 2022. When the 9th Auction notice came to be issued on

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12.06.2023 which the Borrower alleges to have received on 14.06.2023, the same was also challenged in the aforesaid securitization application by way of I.A. No. 2253 of 2023. (ii) Before the DRT could conclude the proceedings, the Borrower on its own volition moved the High Court by way of its Writ Petition No. 9523 of 2023, wherein the Borrower sought to subsume the entire issue emanating from the S.A. No. 46 of 2022 in the writ petition before the High Court and as a primary relief prayed that either the High Court should decide the same and thereafter allow it to redeem the mortgage or in the alternative the DRT be directed to ultimately decide the issue and then permit it to redeem the mortgage. (iii) Thereafter, in the proceedings before the High Court, the Borrower voluntarily abandoned its aforesaid prayers and waived the right to pursue the S.A. No. 46 of 2022 before the DRT, irrespective of whether it was able to redeem the mortgage or not. In view of the above, the High Court by its impugned order permitted the Borrower to redeem the mortgage and directed that within a period of 1-week the S.A. No. 46 of 2022 be withdrawn and further clarified that even if the Borrower failed to withdraw the same, the said application would stand dismissed in light of its order and the Borrower would no longer be permitted to litigate any further in respect of the Secured Asset. (iv) When the judgment in Main Appeals was reserved by this Court on 01.07.2023, the aforesaid period of 1-week had already elapsed. The Borrower never withdrew the securitization application. The Borrower in its written submissions before this Court claimed that it had already complied with the terms of the impugned order, but conveniently it never withdrew the S.A. No. 46 of 2022 which it was required to. (v) Pertinently, during the course of hearing of the Main Appeals before this Court the petitioner herein/the successful auction purchaser apart from contending that the Borrower’s right to redeem the mortgage had been extinguished under the law, it specifically prayed that not only the impugned order of the High Court be set-aside but that the Bank be directed to issue the sale certificate to the Secured Asset and by its extension confirm the sale in its favour as evinced from its written submissions.

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(vi) The Borrower being fully aware of the aforesaid prayers and even after having gone through the written submissions of the petitioner never contended that irrespective of whether its right to redeem the mortgage is available under the law or not, the sale at any cost cannot be confirmed in favour of the petitioner due to alleged illegality in the auction process. Not once did the Borrower raise the issue of there being no 30/15-days’ time gap between the notice of sale and the auction nor the issue that as per the terms of the auction, the same was subject to the outcome of the S.A. No. 46 of 2023. (vii) Remarkably, although the Borrower during the course of hearing of the Main Appeals urged that no indulgence of this Court was warranted as it had already complied with the terms of the High Court’s impugned order and that the entire matter had been rendered infructuous, yet at the same time, not once did the Borrower even remotely indicate that it was in the process of withdrawing the S.A. No. 46 of 2023 as evinced from its written submissions. (viii) Moreover, the Borrower despite being fully aware of the prayer of the petitioner for seeking confirmation of the sale in its favour and issuance of the sale certificate to the Secured Asset both during the course of hearing and in its written submissions which would have rendered the S.A. No. 46 of 2022 infructuous, it never prayed that in the event sale certificate is issued, its right to pursue S.A. No. 46 of 2022 be preserved, or that the sale certificate be made subject to the outcome of the said application.

a. The Decision of this Court in Celir LLP v. Bafna Motors & Ors. (2023 INSC 838) and the Scope of challenge before it.

122Copy pinpoint122. It would now be apposite to understand what was the nature and scope of challenge before this Court in the Main Appeals, and what was ultimately decided in it. As discussed earlier, the Borrower had preferred a writ petition wherein it had sought to subsume the issue arising out of S.A. No. 46 of 2022 pending before the DRT, particularly the challenge to the actions of the Bank under the SARFAESI Act. The writ petition was not a separate remedy distinct from the securitization application pending before the DRT, as the prayers made therein indicate that it was not merely for seeking redemption of mortgage.

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123Copy pinpoint123. We say so, because it is not the case that the remedy for redeeming mortgage could not have been a part of the S.A. No. 46 of 2022 nor can it be said that such a remedy was wholly alien to the provisions of the SARFAESI Act, and could not have been granted by the DRT at all.

124Copy pinpoint124. It is no longer res integra that Section 17 of the SARFAESI Act, is a complete code that confers upon the DRT the jurisdiction to examine all the steps or measures taken by the secured creditor under the Act and provide remedies to any person aggrieved by any of those measures. By virtue of the said provision the DRT is clothed with a wide range of powers, to determine any issue or aspect pertaining to the SARFAESI proceedings initiated by the secured creditor and further a power to interfere with the same where necessary. Section 17 of the SARFAESI Act provides a broad mechanism for an efficacious remedy to “any person” who is aggrieved by any of the “measures” taken or proposed to be taken by the secured creditor under the Act. The omnibus provision of Section 17 sub-section (3) is of a wide import and enables the DRT to grant any relief in respect of any action or proceeding under the Act.

125Copy pinpoint125. In Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir reported in (2022) 5 SCC 345, this Court held that where the Borrower is aggrieved by any proceedings initiated under the SARFAESI Act or any action proposed to be taken by a secured creditor, it has to avail the remedy under the SARFAESI Act and no writ petition would lie or be maintainable. The relevant observations read as under: - “18. [...] If proceedings are initiated under the Sarfaesi Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the Sarfaesi Act and no writ petition would lie and/or is maintainable and/or entertainable. [...]” (Emphasis supplied)

126Copy pinpoint126. Thus, the remedy for seeking redemption of mortgage was not only available to the Borrower under Section 17 of the SARFAESI Act but was also availed by him, by way of I.A. No. 2339 of 2023 in S.A. No. 46 of 2022. This application for seeking redemption of mortgage was also heard by the DRT for quite some time, and even orders were reserved. However, suddenly, the Borrower decided to move

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the High Court for seeking the very same relief that it had sought in the securitization application.

127Copy pinpoint127. As there was virtually no difference between either the scope of proceedings or the prayer sought before the DRT and that before the High Court, once the Borrower had chosen to espouse the same matter already sub-judice in one forum before another, in this case the High Court, it was the duty of the Borrower to bring within the fold of its case all issues and grounds in respect of the 9th auction proceedings in the proceedings arising from the writ petition, by virtue of the Doctrine of Election.

128Copy pinpoint128. Once, the Borrower had elected to move the High Court for the very same cause of action and underlying prayers, the moment the same was entertained by the High Court, which it did, the Borrower was precluded from pursuing its remedies before the DRT by way of S.A. No. 46 of 2024, and was duty bound to now espouse it only in the writ proceedings, as otherwise it would tantamount to having a second bite at the cherry and relitigating what it has already litigated.

129Copy pinpoint129. Thus, when the impugned order of the High Court was challenged before this Court in the Main Appeals, the scope of proceedings before us also entailed the issue of validity of the Bank’s actions under the SARFAESI Act. As discussed by us in the foregoing paragraphs of this judgment, that the Borrower for reasons best known to it, never agitated the validity of the proceedings under the SARFAESI Act including the legality of the 9th auction notice. Not once did the Borrower submit either in the course of its arguments or in its written submissions that the very auction process is allegedly illegal and in contravention of the SARFAESI Act.

130Copy pinpoint130. It was in this backdrop, that the decision in the Main Appeals being Celir LLP v. Bafna Motors & Ors. was rendered by this Court. Since, no challenge had been raised to the measures taken by the Bank under the SARFAESI Act and the 9th auction notice by the Borrower, this Court proceeded to determine only the issue of right of redemption under Section 13 sub-section (8) of the SARFAESI Act. Accordingly, this Court held that under the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. However, under the amended provisions of Section 13(8) of the SARFAESI Act the right of the borrower to redeem the secured asset would

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be available only till the date of publication of the notice under Rule 9(1) of the SARFAESI Rules and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser.

131Copy pinpoint131. This Court thereafter proceeded to determine the Borrower’s right of redemption and after going through the facts of the case, held that since at the time of redemption of mortgage the notice of auction had already been published, it was impermissible for the High Court to allow the Borrower to redeem the same.

132Copy pinpoint132. Thus, this Court only went on to determine the Borrower’s right to redeem the mortgage and having done so, this Court inter-alia set- aside the impugned order of the High Court and in view of the fact that the Bank had already confirmed the sale in favour of the petitioner, and in the absence of any challenge to the auction process, further directed that the sale certificate of the Secured Asset be issued to the petitioner. The operative portion of the said decision reads as under: - “106. In the result, both the appeals succeed and are hereby allowed.

107. The impugned judgment and order passed by the High Court is hereby set aside.

108. The respondent Bank shall refund the entire amount deposited by the borrowers i.e., an amount of Rs.129 crore paid by them in lieu of the redemption of mortgage of the secured asset at the earliest. The appellant herein shall pay an additional amount of Rs. 23.95 crore to the Bank within a period of one week from today and subject to such deposit, the Bank shall issue the sale certificate in accordance with Rule 9(6) of the Rules of 2002.

109. The pending applications if any shall stand disposed of.”

133Copy pinpoint133. It is material to note that even in the review petition preferred by the Borrower including the application for additional grounds of review therein, the contention of the Borrower in the present contempt petition as to the illegality of the SARFAESI proceedings including the 9th auction or the contravention of the 30/15 days statutory period, does not figure. In fact, the Borrower in the review petition did not

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even lay any challenge to the direction of this Court to issue the sale certificate in the Main Appeals. No averment at all was made in countenance of the S.A. No. 46 of 2022, or as regards the measures of the Bank under the SARFAESI Act, the 9th auction notice issued in lieu thereof, or the approval of the sale of the Secured Asset by issuance of the sale certificate in its respect. The said review petition was ultimately dismissed by this Court vide its order dated 18.07.2024.

134Copy pinpoint134. Thus, the Borrower having admittedly failed to even remotely indicate the aforesaid issues to this Court let alone contend it in both the Main Appeals and the review thereof, the only question that now remains to be answered is whether it is permissible for the Borrower to raise it and again litigate the same subsequently either in the present contempt petition or in the S.A. No. 46 of 2022 which is still pending before the DRT.

b. The ‘Henderson’ Principle as a corollary of Constructive Res- Judicata.

135Copy pinpoint135. The ‘Henderson Principle’ is a foundational doctrine in common law that addresses the issue of multiplicity in litigation. It embodies the broader concept of procedural fairness, abuse of process and judicial efficiency by mandating that all claims and issues that could and ought to have been raised in a previous litigation should not be relitigated 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.

136Copy pinpoint136. In Henderson v. Henderson reported in [1843] 3 Hare 999, the English Court of Chancery speaking through Sir James Wigram, V.C. held that where a given matter becomes the subject of litigation and the adjudication of a court of competent jurisdiction, the parties so litigating are required to bring forward their whole case. Once the litigation has been adjudicated by a court of competent jurisdiction, the same parties will not be permitted to reopen the lis in respect of issues which might have been brought forward as part of the subject in contest but were not, irrespective of whether the same was due to any form of negligence, inadvertence, accident or omission. It was further held, that principle of res judicata applies not only to points upon which the Court was called upon by the parties to adjudicate

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and pronounce a judgement but to every possible or probable point or issue that properly belonged to the subject of litigation and the parties ought to have brought forward at the time. The relevant observations read as under: - “In trying this question I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. [...]” (Emphasis supplied)

137Copy pinpoint137. The above proposition of law came to be known as the ‘Henderson Principle’ and underwent significant evolution, adapting to changing judicial landscapes and procedural requirements. The House of Lords in Johnson v. Gore Wood & Co reported in [2002] 2 AC 1, upon examining the ‘Henderson Principle’ authoritatively approved it with the following observations: - (i) Lord Bingham of Cornhill integrated the principle with the broader doctrine of abuse of process and held that the bringing of a claim or the raising of a defence in later proceedings which ought to have been raised earlier will not always be hit by this principle, but rather will apply where such point is sought to be raised as an additional or collateral attack on a previous decision and the bringing forth of such ground amounts to misusing or abusing the process of the court or as a means for unjust harassment of a party. The relevant observations read as under: -

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“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same : that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not [...]” (Emphasis supplied)

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(ii) Lord Millett construing the Principle held that it does not belong to the doctrine of res-judicata in the strict sense but rather was analogous to the doctrine, as it goes a step further to encompass even those proceedings that either culminated into a settlement or issues which had never been adjudicated previously in order to protect the process of the court from abuse and the defendant from oppression. The relevant observations read as under: - “As the passages which I have emphasised indicate, Sir James Wigram V-C did not consider that he was laying down a new principle, but rather that he was explaining the true extent of the existing plea of res judicata. Thus he was careful to limit what he was saying to cases which had proceeded to judgment, and not, as in the present case, to an out of court settlement. Later decisions have doubted the correctness of treating the principle as an application of the doctrine of res judicata, while describing it as an extension of the doctrine or analogous to it … But these various defences [res judicata, issue or cause of action estoppel] are all designed to serve the same purpose : to bring finality to litigation and avoid the oppression of subjecting a defendant unnecessarily to successive actions. While the exact relationship between the principle expounded by Sir James Wigram V-C and the defences of res judicata and cause of action and issue estoppel may be obscure, I am inclined to regard it as primarily an ancillary and salutary principle necessary to protect the integrity of those defences and prevent them from being deliberately or inadvertently circumvented. In one respect, however, the principle goes further than the strict doctrine of res judicata or the formulation adopted by Sir James Wigram V-C, for I agree that it is capable of applying even where the first action concluded in a settlement. Here it is necessary to protect the integrity of the settlement and to prevent the defendant from being misled into believing that he was achieving a complete settlement

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of the matter in dispute when an unsuspected part remained outstanding. However this may be, the difference to which I have drawn attention is of critical importance. It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen’s right of access to the court conferred by the common law and guaranteed by article 6 … While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression [...]” (Emphasis supplied)

138Copy pinpoint138. In Virgin Atlantic Airways Ltd. v. Zodiac Seats UK Ltd. reported in [2014] AC 160 Lord Sumption JSC further expounded the ‘Henderson Principle’ as although separate and distinct from cause of action estoppel or res judicata yet having the same underlying public interest that there should be finality in litigation and that a party should not be twice vexed in the same matter. The relevant observations read as under: - “The principle in Henderson v Henderson has always been thought to be directed against the abuse of process involved in seeking to raise in subsequent litigation points which could and should have been raised before. There was nothing controversial or new about this notion when it was expressed by Lord Kilbrandon in the Yat Tung case [1975] AC 581. The point has been taken up in a large number of subsequent decisions, but for present purposes it is enough to refer to the most important of them, Johnson v Gore-Wood & Co [2002] 2 AC 1, in which the House of Lords considered their effect. This appeal

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arose out of an application to strike out proceedings on the ground that the plaintiffs claim should have been made in an earlier action on the same subject matter brought by a company under his control. Lord Bingham of Cornhill took up the earlier suggestion of Lord Hailsham of St Marylebone LC in Vervaeke (formerly Messina) v Smith [1983] 1 AC 145, 157 that the principle in Henderson v Henderson was “both a rule of public policy and an application of the law of res judicata”. He expressed his own view of the relationship between the two at p. 31 as follows: “Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole”.” (Emphasis supplied)

139Copy pinpoint139. Even in a common law action it was said by Blackburn, J.: “I incline to think that the doctrine of res judicata applies to all matters which existed at the time of giving of the judgment, and which the party had an opportunity of bringing before the Court.” [See: Newington v. Levy reported in (1870) 6 CP 180 (J)].

140Copy pinpoint140. The fundamental policy of the law is that there must be finality to litigation. Multiplicity of litigation benefits not the litigants whose rights have been determined, but those who seek to delay the enforcement of those rights and prevent them from reaching the rightful beneficiaries of the adjudication. The Henderson Principle, in the same manner as the principles underlying res judicata, is intended to ensure that grounds of attack or defence in litigation must be taken in one of the same proceeding. A party which avoids doing so does it at its own peril. In deciding as to whether a matter might have been urged in the earlier proceedings, the court must ask itself as to whether it could have been urged. In deciding whether the matter ought to have been urged in the earlier proceedings, the court will have due regard to the ambit of the earlier proceedings and

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the nexus which the matter bears to the nature of the controversy. In holding that a matter ought to have been taken as a ground of attack or defence in the earlier proceedings, the court is indicating that the matter is of such a nature and character and bears such a connection with the controversy in the earlier case that the failure to raise it in that proceeding would debar the party from agitating it in the future. The doctrine itself is based on public policy flowing from the age-old legal maxim interest reipublicae ut sit finis litium which means that in the interest of the State there should be an end to litigation and no party ought to be vexed twice in a litigation for one and the same cause.

141Copy pinpoint141. The Henderson Principle was approvingly referred to and applied by this Court in State of U.P. v. Nawab Hussain reported in (1997) 2 SCC 806 as the underlying principle for res-judicata and constructive res-judicata for assuring finality to litigation. The relevant observations read as under: - “3. The principle of estoppel per rem judicatam is a rule of evidence. As has been stated in Marginson v. Blackburn Borough Council [(1939) 2 KB 426 at p. 437], it may be said to be “the broader rule of evidence which prohibits the reassertion of a cause of action”. This doctrine is based on two theories: (i) the finality and conclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be protected from multiplication of litigation. It therefore serves not only a public but also a private purpose by obstructing the reopening of matters which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief on the same cause of action, for otherwise the spirit of contentiousness may give rise to conflicting judgments of equal authority, lead to multiplicity of actions and bring the administration of justice into disrepute. It is the cause of action which gives rise to an action, and that is why it is necessary for the courts to recognise that a cause of action which results in a judgment must lose its identity and vitality and merge in the judgment when pronounced. It cannot therefore survive the judgment, or give rise to another

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cause of action on the same facts. This is what is known as the general principle of res judicata.

4. But it may be that the same set of facts may give rise to two or more causes of action. If in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation, that would aggravate the burden of litigation. Courts have therefore treated such a course of action as an abuse of its process and Somervell, L.J., has answered it as follows in Greenhalgh v. Mallard [(1947) All ER 255 at p. 257] : “I think that on the authorities to which I will refer it would be accurate to say that res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them. This is therefore another and an equally necessary and efficacious aspect of the same principle, for it helps in raising the bar of res judicata by suitably construing the general principle of subduing a cantankerous litigant. That is why this other rule has some times been referred to as constructive res judicata which, in reality, is an aspect or amplification of the general principle.” (Emphasis supplied)

142Copy pinpoint142. This Court in Devilal Modi v. Sales Tax Officer, Ratlam & Ors. reported in AIR 1965 SC 1150, held that if the underlying rule of constructive res judicata is not applied to writ proceedings, it would be open to the party to take one proceeding after another and urge new grounds every time, and would be inconsistent with considerations of public policy. The relevant observations read as under: - “8. [...] the rule of constructive res judicata which is pleaded against him in the present appeal is in a sense a somewhat technical or artificial rule prescribed by the Code of Civil Procedure. This rule postulates that if a plea could have been taken by a party in a proceeding

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between him and his opponent, he would not be permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action; but basically, even this view is founded on the same considerations of public policy, because if the doctrine of constructive res judicata is not applied to writ proceedings, it would be open to the party to take one proceeding after another and urge new grounds every time; and that plainly is inconsistent with considerations of public policy [...]” (Emphasis supplied)

143Copy pinpoint143. In Shankara Coop. Housing Society Ltd. v. M. Prabhakar, reported in (2011) 5 SCC 607, this Court held that the ground of non-compliance of statutory provision which was very much available to the parties to raise but did not raise it as one of the grounds, cannot be raised later on and would be hit by the principles analogous to constructive res judicata. The relevant observations read as under: - “89. In the present case, it is admitted fact that when the contesting respondents filed WP No. 1051 of 1966, the ground of non-compliance with statutory provision was very much available to them, but for the reasons best known to them, they did not raise it as one of the grounds while challenging the Notification dated 11-12-1952 issued under the Evacuee Property Act. In the subsequent writ petition filed in the year 1990, initially, they had not questioned the legality of the notification, but raised it by filing an application, which is no doubt true, allowed by the High Court. In our view, the High Court was not justified in permitting the petitioners therein to raise that ground and answer the same since the same is hit by the principles analogous to constructive res judicata.” (Emphasis supplied)

144Copy pinpoint144. From the above exposition of law, it is clear that the ‘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

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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.

145Copy pinpoint145. 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 relitigated; (ii) issue estoppel or, “decided issue estoppel,” where an issue is sought to be relitigated 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.

146Copy pinpoint146. 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.

147Copy pinpoint147. We are conscious of the fact, that ordinarily this principle has been applied to instances where a particular plea or ground was not raised at any stage of the proceedings, but were later sought to be raised. However, it must be borne in mind that construing this rule in a hyper- technical manner or through any strait-jacket formula will amount to taking a reductive view of this broad and comprehensive principle.

148Copy pinpoint148. Although in the present case, the Borrower had raised the issue of the validity of the measures taken by the Bank under the SARFAESI

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Act and the legality of the 9th auction conducted 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 reagitating it in the pretence that the two proceedings were distinct, is nothing but a textbook case of abuse of process of law.

149Copy pinpoint149. 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 ‘relitigating’ and the Henderson Principle would be applicable.

150Copy pinpoint150. Parties cannot be allowed to exploit procedural loopholes and different foras to revisit the same matters they had deliberately chosen not to pursue earlier. Thus, 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.

151Copy pinpoint151. Similarly, where a plea or issue was raised in earlier proceedings but later abandoned it is deemed waived and cannot be relitigated in subsequent. Allowing such pleas to be resurrected in later cases would not only undermine the finality of judgments but also incentivize strategic behaviour, where parties could withdraw claims in one case with the intention of reintroducing them later. proceedings. Abandonment signifies acquiescence, barring its reconsideration in subsequent litigation. This ensures that judicial processes are not misused for tactical advantage and that litigants are held accountable for their procedural choices. Parties must litigate diligently and in good faith, presenting their entire case at the earliest opportunity.

152Copy pinpoint152. 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

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manipulation. Judicial propriety demands that courts maintain the finality and integrity of their decisions, preventing repeated challenges to settled matters. Once a matter has been adjudicated, it should not be revisited unless exceptional circumstances warrant such reconsideration. Repeated litigation of the same issue not only wastes judicial resources but also subjects the opposing party to unnecessary expense and harassment. judicial processes are not merely technical mechanisms but are rooted in principles of equity and justice.

153Copy pinpoint153. 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. Thus, the assertion that the determination is only on one of the issues is flawed as it is nothing but an indirect way of asserting that the whole judgment is flawed and thereby relitigating the entire cause of action once more. 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.

154Copy pinpoint154. In the present case, the very issue of the validity of the measures taken by the Bank under the SARFAESI Act and by it the legality of the 9th auction proceedings was innately and inextricably linked to the proceedings before this Court in the Main Appeals. We say so, because: - (i) The very issue of the cut-off date for exercising the right of redemption under Section 13 sub-section (8) of the SARFAESI Act entailed as a natural corollary to it, the issue of validity of the SARFAESI proceedings, at least in respect of the 9th auction notice dated 12.06.2023. When the Main Appeals were being heard by this Court, the Borrower was well aware that the issue before this Court was whether the right of redemption extinguishes upon the publication of sale notice or upon the transfer of the secured asset, and as such if at all such right were to extinguish upon the publication of the sale notice, it by default involved the issue whether such notice was valid or non- est. Being so, the very issue of validity of the 9th auction notice and the proceedings thereto properly belonged to the subject of litigation in the Main Appeals before this Court and ought to have been brought forward as part of the subject in contest.

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(ii) Moreover, since there was virtually no difference between the prayer sought before the DRT and that before the High Court, once the Borrower had chosen to espouse the same matter already sub-judice in DRT before the High Court, it was the duty of the Borrower to bring within the fold of its case all issues and grounds in respect of the 9th auction proceedings in the proceedings arising from the writ petition, by virtue of the Doctrine of Merger and Election. Since the prayers that were sought before the DRT had been merged with the prayers before the High Court, the scope of proceedings of the Main Appeals encompassed the issue of validity of the Bank’s actions under the SARFAESI Act and by extension the 9th auction notice dated 12.06.2023 which the Borrower for reasons best known to it, and such now cannot be permitted to raise these issued when they ought to have been raised in the Main Appeals. In this regard we may refer to the decision of this Court in Vodafone Idea Cellular Ltd. v. Ajay Kumar Agarwal reported in (2022) 6 SCC 496 which held that as per the Doctrine of Election, once a party has elected to choose remedy under one forum, again the same cause of action cannot be challenged before another forum: - “25. The above position was reiterated in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna13 by a three-Judge Bench of this Court, of which one of us (D.Y. Chandrachud, J.) was a part. Indu Malhotra, J., speaking for the Bench invoked the doctrine of election, which provides that when two remedies are available for the same relief, the party at whose disposal such remedies are available, can make the choice to elect either of the remedies as long as the ambit and scope of the two remedies is not essentially different. These observations were made in the context of an allottee of an apartment having the choice of initiating proceedings under the 1986 Act or the RERA.” (Emphasis supplied)

(iii) Furthermore, by virtue of the Doctrine of Election, the Borrower cannot be permitted to pursue two inconsistent remedies, once

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the Borrower had availed the remedy to redeem its mortgage and 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. For instance, if in a will, X bequeaths property owned by Y to Z while giving Y a substantial gift. Y must choose to either (i) accept the gift and let Z retain the property or (ii) reject the gift and assert ownership of the property, but can certainly not pursue both the remedies, and as such, the Borrower cannot be permitted to have its cake and eat it as well. In this regard we may refer to the decision of this Court in Joint Action Committee of Air Line Pilots’ Assn. of India (ALPAI) & Ors. v. DGCA reported in (2011) 5 SCC 435 wherein it was held as under: - “12. The doctrine of election is based on the rule of estoppel—the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity. By that law, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily.” (Emphasis supplied)

(iv) The premise on which the writ petition came to be filed by the Borrowers before the High Court is also significant. The Borrower in the writ petition contended that they have an apprehension that the DRT may reject their redemption application and the entire matter would become infructuous as the Bank at that point of time had already accepted the entire sale consideration for the auction from the petitioners and as such may likely issue