Fraud challenge to mortgage transaction justified interim restraint on bank recovery pending final civil adjudication.

Allegations that a mortgage transaction and supporting sale deed were fraudulent justified interim restraint on bank recovery proceedings while the civil suit remained pending. The civil court's jurisdiction to examine the genuineness of the underlying document and legality of the transaction was preserved because the suit had crossed the threshold of maintainability, issues were framed, and evidence was being recorded. Continuation of recovery before final adjudication would risk irreparable prejudice to the borrower, while the bank's interest remained protected if the suit ultimately failed. On that equitable basis, recovery against the property was stayed until final judgment in the suit.

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Issues: Whether recovery proceedings initiated by the bank should be stayed pending final adjudication of the civil suit alleging that the mortgage transaction and the supporting sale deed were fraudulent.

Analysis: The suit filed by the petitioner had already crossed the threshold of maintainability and was being tried on evidence, with issues framed. The challenge to the mortgage turned on allegations of fraud, a situation in which civil court jurisdiction remains available to test the genuineness of the underlying document and the legality of the transaction. In the circumstances, allowing the bank to continue recovery and proceed against the property before final determination of the suit would risk irreparable prejudice to the petitioner. At the same time, the bank's interest remained protected because, if the suit failed, it could proceed on the basis of the existing decree and security. Exercising discretionary jurisdiction and balancing the equities, interim restraint was warranted.

Conclusion: Recovery proceedings were restrained until final judgment in the civil suit, and the petitioner succeeded on this issue.

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