When the different claims are raised against one and another – equities should be worked out subject to the results of the respective claims.
2020 APEX COURT [26 ]-When the different claims are raised against one and another – equities should be worked out subject to the results of the respective claims.- Since Sarasamma was in dues and had to pay certain amounts to the State Financial Corporation, the property of Sarasamma was put to auction pursuant to the directions of the Court. The property was sought to be purchased by the appellant who is lessee on the said property, for the price of Rs.2.92 crores.The challenge was thereafter raised by said Sarasamma which challenge was accepted and the purported sale in favour of the appellant by the State Financial Corporation was set aside. – Sarasamma filed suit against the appellant for eviction & recovery of arrears of lease and got attached the sale amount which was transferred by way of financial accommodation in favour of appellantby City, is refundable by SFC to the appellant due no cancellation of the sale. City union Bank obtained a certificate against the appellant for the financial accommodation made in purchasing the property.-Apex court held that the State Financial Corporation submitted that as on 16.10.2019, the amount lying in deposit with the State Financial Corporation had aggregated to 5.48 crores (subject to TDS in respect of interest to be credited). If the sum of Rs.2.92 crores which is lying under attachment pursuant to the order of the City Civil Court, Bangalore is set apart to abide by further directions issued by the City Civil Court, Bangalore; that would still leave the balance of 2.56 crores (subject to TDS adjustment as stated hereinabove). It is a matter of record that the consideration in respect of the sale effected through auction had come directly from the City Union Bank Ltd. into the account of State Financial Corporation by way of financial accommodation in favour of appellant. Now that the entire transaction stands nullified, the equity needs to be adjusted with return of the money which State Financial Corporation has received. Subject to the adjustment as stated above, the balance sum, therefore, be refunded to the City Union Bank Ltd. against simultaneous return of the documents executed by State Financial Corporation alongwith the original documents – without prejudice their rights and claims and an official receiver be appointed and the appellant has to act like an agent of official receiver as none of the partners of the Tamarind have any assets which could be proceeded against.