Law: Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997

Section: 9

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--Ss.9, 15 & 21---Civil Procedure Code (V of 1908), O.XXXIV, R.1---Decree in suit for recovery of loan amount by sale of mortgaged property---Necessary parties---Contention of appellants (non-parties to suit) was that they had purchased lease-hold rights in two suit properties before institution of suit, but they were not impleaded in suit, although they were necessary parties in view of O.XXXIV, R.1, C.P.C., having an interest in mortgage security and rights of redemption, thus, impugned decree could not be executed against them; and that mortgage qua such properties allegedly created by debtors­ defendants was in nature of equitable mortgage, but in original lease deed executed by Cantonment Board, there was specific clause that no encumbrance would be created on its property without its permission, thus, such mortgage was invalid having no adverse effect upon appellants rights---Bank did not object to joining appellants as parties in suit, subject to maintaining ,impugned and decree against debtors---High Court remanded case to Baking Court for its decision after allowing Bank to file within one month amended plaint by impleading appellants as defendants, and thereafter appellants would have a right to file leave application within 20 days, and impugned decree would remain intact against ­ debtors and in abeyance regarding such properties. ORDER Regular First Appeals Nos.721 and 782 of 2001 are being disposed of together, as these are against the same judgment and decree dated 25-9-1998. 2. Briefly stated the facts of the case are that the respondent-Bank instituted a mortgage suit against respondents Nos.2 to 9, for the recovery of the amount mentioned in the suit and the decree. Suit was contested by the said respondents by filing leave application, which was rejected and correspondingly decree was passed. Learning about the above decree, the appellants have challenged the same on the ground that out of the suit properties, the lease hold rights of the Plots Nos.90 and 91-C. had been purchased by them vide registered lease, deed dated 10-1-1996 i.e. before the…

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