Summary
The Trust was directed to arrange repayment to HUDCO, failing which mortgaged property could be sold in the specified sequence. Twenty-one acres acquired in exchange were not an accession to the original mortgage and were protected pending the agreement purchaser’s arbitration. Running educational and hospital institutions did not excuse repayment of public funds.
Issues
- Whether exchanged land automatically became an accession to the mortgage.
- What sequence and conditions should govern recovery sales.
Provisions considered
- Section 70, Transfer of Property Act, 1882The exchanged twenty-one acres were not an addition to the existing security and did not become mortgaged by accession on these facts. (¶ 27–39)
Held
- The original mortgage continued to burden the land transferred away; replacement land obtained in exchange was not thereby an accession. The purchaser’s agreement preceded the later deposit of its title deed. (¶ 27–39)
- The Court declined an oral request to vacate an unchallenged arbitral status-quo order. HUDCO’s prior security over the approximately forty-three originally mortgaged acres nevertheless remained enforceable. (¶ 23–25)
- Recovery was limited to property needed to satisfy the dues. The final directions required sale first of the forty-three acres, then necessary portions of properties 1–5, with the exchanged land reachable only under the stated arbitration and residual-debt conditions. (¶¶ 25, 42)
Result
Appeals disposed of without costs with modified directions: settle repayment within one month and begin June 2017 payments; on default follow the prescribed sale sequence. Exchanged twenty-one acres sale barred unless arbitration rejects SGS’s purchase claim and secured-property proceeds remain insufficient; arbitration expedited.