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

Not available · 2024 INSC 978Decided 13 Dec 2024
Not available
Justice J.B. Pardiwala · Justice Manoj Misra

Background

Celir LLP had successfully purchased a mortgaged industrial property at a bank e-auction, and the Supreme Court had already confirmed its title to that property in an earlier 2023 judgment. After that ruling, the original borrower and a third party (a "Subsequent Transferee" to whom the borrower had purportedly "redeemed" and re-transferred the very same property) took a series of steps to stop Celir LLP from getting physical possession, writing to government land and registry authorities asking them to freeze any transfer, lodging a police complaint against the bank, and filing a fresh civil suit seeking to invalidate the sale certificate the Supreme Court had already upheld.

Decision Breakdown

The Court held that the release deed and assignment agreement executed by the borrower and the transferee, being made while the matter was already pending before it, were void under the doctrine of "lis pendens," and reaffirmed Celir LLP's absolute title. It directed the transferee to hand over peaceful possession and the original title deeds within a week, with police assistance if needed, and ordered the bank to refund the transferee's mortgage-redemption money. The Court found that both the borrower and the transferee had indeed committed contempt of its earlier 2023 order through these evasive acts, but since they subsequently withdrew their suit and gave an unconditional undertaking to comply, it declined to formally punish them for contempt at this stage.

Lesson Learnt

Once the Supreme Court finally decides a dispute, parties cannot use side-deals, fresh lawsuits, or complaints to government authorities to quietly undo that decision, doing so is itself contempt of court, even if the Court ultimately chooses leniency in punishing it.

Official source (sci.gov.in)View Judgment (PDF)

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