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Sadashiv Prasad Singh v. Harendar Singh and others

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 161 of 2014)Decided 8 Jan 2014
Civil Appeal No. 161 of 2014
Justice A.K. Patnaik · Justice J.S. Khehar

Background

A bank obtained recovery orders after a timber business failed to repay its loan. The borrower partner's brother claimed a mortgaged property through an unregistered agreement but stopped pursuing his objection before the Recovery Officer. After a public auction, confirmation and delivery of possession, the High Court displaced the purchaser through a payment arrangement intended to save the property for the brother.

Decision Breakdown

The Supreme Court allowed the auction purchaser's appeal, dismissed the brother's appeal and confirmed the purchaser's rights. A genuine third-party purchaser at a confirmed court-directed auction receives protection, and no fraud or collusion was alleged here. Later price increases and proposed payments did not justify taking away the purchased property. The brother's unregistered agreement did not establish title, he had abandoned the objection proceedings, and he had not used the available statutory appeal. His delay was especially significant because the purchaser had already acquired possession and completed mutation.

Lesson Learnt

Someone claiming rights over property facing recovery should pursue objections and appeals promptly. A completed auction purchase by an independent buyer cannot casually be undone by a later offer to pay more, although fraud or collusion can change the position.

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

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