AIR 2016 DELHI 15 ::2016 (2) ADR 108

Delhi High Court

Hon'ble Judge(s): S. Ravindra Bhat, R. K. Gauba , JJ

(A) Transfer of Property Act (4 of 1882) , S.48— Civil P.C. (5 of 1908) , O.34 R.14— Mortgage debts - Priority of charge - Mortgagee vis-a-vis certificate holder under RDB Act - Mortgagor obtaining loan by deposit of title deed as well as credit facilities from Bank - Recovery certificate in favour of Bank - Cannot effect prior charge of mortgagee - Non-Obstante clause in RDB Act would not override prior charge of mortgagor in view of S. 48 of T. P. Act. Recovery of Debts Due to Banks and Financial Institutions Act (51 of 1993) , S.29, S.34— Interpretation of Statutes - Non-obstante clause - Overriding effect. If the mortgage exists, it will create a prior charge over the property, being prior in time vide S. 48 of T. P. Act. In the instant case, prior mortgage was created by deposit of title deeds in favour of the Minerals and Metals @page-Del16 Trading Corporation (MMTC). Subsequently the mortgagor also obtained cash credit facilities from Bank and defaulted in payment. The MMTC invoked arbitration clause and procured award in its favour. The Bank initiated recovery proceedings under RDDBFI Act. The award of arbitrator was sought to be executed as decree of Civil Court. The fight was between the two lenders over the priority of claims. The Court held that the non-obstante clause in S. 34 of RDDBFI....