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Issues: (i) whether the respondents committed contempt by acting contrary to the earlier judgment and by not cancelling the release deed and handing over possession and title deeds; (ii) whether the proceedings in the securitisation application could continue after confirmation of the sale and issuance of the sale certificate; (iii) whether the assignment in favour of the subsequent transferee was hit by lis pendens despite the Maharashtra amendment to Section 52 of the Transfer of Property Act, 1882.
Issue (i): whether the respondents committed contempt by acting contrary to the earlier judgment and by not cancelling the release deed and handing over possession and title deeds.
Analysis: The earlier judgment had upheld the auction purchaser's rights, set aside the High Court's order permitting redemption, directed issuance of the sale certificate, and required restoration of the legal position that followed from that result. The respondents thereafter took steps that obstructed implementation of that outcome, including retaining possession, resisting transfer of title deeds, and adopting proceedings and communications inconsistent with the final adjudication. Civil contempt is not confined to the breach of an express prohibitory order; deliberate conduct that frustrates or circumvents the effect of a binding judgment may also amount to contempt. At the same time, the standard remains strict and the Court retained discretion to consider whether the contemnors had attempted to purge their conduct.
Conclusion: The conduct was found to be contemptuous in substance, though the Court declined, for the moment, to record guilt of contempt and granted one final opportunity to comply.
Issue (ii): whether the proceedings in the securitisation application could continue after confirmation of the sale and issuance of the sale certificate.
Analysis: The Court held that the challenge to the SARFAESI measures, including the validity of the auction process, ought to have been pursued in the earlier proceedings and could not be fragmented across different forums. Applying the doctrines of abuse of process, constructive res judicata, the Henderson principle, and election, the Court concluded that the borrower had abandoned or waived the right to pursue the securitisation application on those issues. Once the sale was confirmed and the sale certificate was directed to issue, the auction purchaser's title became absolute and the pending proceedings could not be used to undo that consequence.
Conclusion: The pending securitisation proceedings were held not to survive in opposition to the confirmed sale, and the auction purchaser was held to have an absolute title through the sale certificate.
Issue (iii): whether the assignment in favour of the subsequent transferee was hit by lis pendens despite the Maharashtra amendment to Section 52 of the Transfer of Property Act, 1882.
Analysis: The transfer in favour of the subsequent transferee was made after institution and pendency of the proceedings before the Supreme Court. The Court held that lis pendens applied notwithstanding the absence of a registered notice under the Maharashtra amendment, because the statutory modification did not confer an absolute right on a transferee to defeat the doctrine. Given the knowledge of pending proceedings and the direct connection between the transfer and the subject matter of litigation, the transfer could not be insulated by a claim of bona fide purchase.
Conclusion: The assignment was held to be hit by lis pendens and was declared void.
Final Conclusion: The Court upheld the auction purchaser's title, directed reversal of the post-judgment transfer arrangements, and required the borrower and subsequent transferee to undo the acts that defeated the effect of the earlier judgment, while leaving contempt punishment in abeyance for the time being.
Ratio Decidendi: A party cannot split or abandon a challenge to SARFAESI measures in one proceeding and revive it later in another forum after a confirmed auction sale; once a court finally upholds the sale and directs issuance of the sale certificate, subsequent attempts to defeat that result by collateral proceedings or pendente lite transfers are barred and may attract contempt-like consequences.
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