JUDGMENT K GOVINDARAJULU J.—One Shankar Rao had filed Writ Petition No. 30642/2001 against Karnataka State Financial Corporation (for short hereinafter referred to as ‘KSFC’) and others. It is the case of Shankar Rao that one S.K. Paramesh-proprietor of Classic Garments, No. 1B, Jarakabande Kaval, Mahalakshmi Layout, Bangalore 560086 had raised loan with KSFC. Thereafter, S.K. Paramesh requested transfer of all the liabilities to M/s. Trendswear International-respondent No. 3. Correspondences between them has taken place. It is contended by the writ petitioner that the title deed of the property standing in the name of his father Sri B.T.M. Ramachandra Rao is withheld by respondent No. 1 though the petitioner’s father has not created any mortgage in favour of KSFC. So, pray for allowing the writ petition. 2. As against the case of the petitioner, the defence by the KSFC is that while transferring the loan in favour of respondent No. 3-C.R. Chennabasappa, B.T.M. Ramachandra Rao has deposited the title deeds of his property securing the loan borrowed by the borrowers and B.T.M. Ramachandra Rao has stood as guarantor. Unless the loan is discharged, the documents cannot be returned. The writ petition is not maintainable as the petitioner has moved without paying the mortgage debt. So, pray for dismissal of the writ petition. 3. By the impugned judgment, learned Single Judge has directed respondent Nos. 1 and 2 to return the original title deed dated 5.9.1956 to the petitioner as the petitioner is the son of B.T.M. Ramachandra Rao. Thereby, the learned Single Judge has accepted the case of the petitioner, rejected the defences of respondents 1and 2. Respondents 1 and 2 are in appeal by filing Writ Appeal No. 2504/2002. 4. Third respondent C.R. Chennabasappa in W.P. 30642/2001 has preferred Writ Appeal 934/2002 challenging the observations of the learned Single Judge that it is open to KSFC to take steps against C.R. Channabasappa. 5. Respondent No. 3 C.R. Chennabasappa in Writ Petition No. 30642/2001 has also preferred Writ Petition No. 14352/2002. Respondent No. 3 seeks for a writ of certiorari or any other appropriate writ, order, direction to declare the notification in “Vijaya Karnataka” dated 26.6.2002 in regard to Sl. 5. Respondent No. 3 C.R. Chennabasappa in Writ Petition No. 30642/2001 has also preferred Writ Petition No. 14352/2002. Respondent No. 3 seeks for a writ of certiorari or any other appropriate writ, order, direction to declare the notification in “Vijaya Karnataka” dated 26.6.2002 in regard to Sl. No. 1 as illegal, quash the same, for a writ restraining the respondents, namely, KSFC and its agents from mentioning the petitioner as a party for M/s. Classic Garments, further a direction not to bring to auction property of the petitioner, for a further direction to return the original hypothecation deed dated 24.9.1992 and for such other orders. 6. It is contended in the writ petition that in anticipation of the transfer of assets and liabilities of M/s. Classic Garments, a hypothecation deed was executed on behalf of M/s. Trendswear International of which he is the proprietor. So, the finding in Writ Petition No. 30642/2001 that there was no transfer of assets and liabilities of Classic Garments in favour of Trendswear International is not correct. So Classic Garments continued to be the loanee. Hypothecation deed being executed in anticipation of intending transfer of loan, respondent Nos. 1 and 2, viz., KSFC and the Deputy General Manager of KSFC were bound to return the hypothecation deed. It is further pleaded that when the petitioner sought for return of the hypothecation deed, KSFC is contending that the property belonging to the petitioner is also secured, when the original transaction itself has not materialised, KSFC cannot hold the hypothecation deed and contend that the property is secured. This unreasonable stand taken by KSFC has resulted in the sale of the property of the petitioner in Sy. No. 104/45 of Jarakabande Kaval is sought for sale. So, challenge action of KSFC in bringing the property of the petitioner for auction sale as per Annexure “B”. 7. Statement of objections are filed by respondent/KSFC contending that it has taken over assets and liabilities of erstwhile Classic Garments-a proprietary concern of S.K. Paramesh. Petitioner having defaulted, proceedings were initiated under Section 29 of the State Financial Corporation Act, 1951. Challenging the said taking over, petitioner has filed Writ Petition No. 407/1993. In the said Writ Petiton, petitioner has narrated that the property is brought for sale. In addition to the above, petitioner has filed OS 8385/1992. Petitioner having defaulted, proceedings were initiated under Section 29 of the State Financial Corporation Act, 1951. Challenging the said taking over, petitioner has filed Writ Petition No. 407/1993. In the said Writ Petiton, petitioner has narrated that the property is brought for sale. In addition to the above, petitioner has filed OS 8385/1992. In the statement of objections and in the pleadings in the suit, it is positively contended by KSFC that it has taken over the possession of the assets. So, the Writ Petition was withdrawn and the suit came to be dismissed for non-prosecution. The petitioner instigated one Shankar Rao s/o B.T.M. Ramachandra Rao to become the co-obligant for the loan, liability is taken over by the petitioner from Classic Garments. Learned Single Judge has considered only the submission of the guarantor that the liabilities were not transferred to Sri C.R. Channabasappa who has become the borrower by operation of law. KSFC has challenged the said portion of the order of the learned Single Judge passed in Writ Petition No. 30642/2001 in Writ Appeal 2504/2002. The order passed by the learned Single Judge for return of the document is stayed by the Division Bench of this Court on 13.8.2002. Petitioner has also challenged the order by preferring Writ Appeal 934/2002 but the Division Bench declined to stay the recovery of the dues from the petitioner. So, petitioner is not entitled for the reliefs prayed for. 8. Writ Petition No. 9804/2006 is filed by the petitioner against KSFC, its representatives and respondent No. 3 in W.P. No. 30642/2001. 9. It is the case of the petitioner that KSFC issued paper publication for auctioning the property of M/s. Classic Garments situated at No. 194/25, New No. 23, 2nd Cross, “G” Block, Mahalakshmi Layout, Bangalore belonging to C R Chanabasappa (Respondent No. 3 in W.P. 30642/2001). The auction was fixed at 11.00 a.m. on 14.3.2002. Petitioner participated in the public auction by depositing an EMD of Rs. 50,000/- on 4.3.2002. Petitioner was a successful bidder. Petitioner deposited Rs. 12.00 lakhs on 4.3.2002. Thereafter, on 15.3.2002 a sum of Rs. 20.00 lakhs, on 16.3.2002 a sum of Rs. 15.00 lakhs was deposited. KSFC’s representative, Recovery Officer, Special Tahsildar has confirmed the public auction in favour of the petitioner. Thereafter, the papers are forwarded to the Assistant Commissioner to obtain permission for executing necessary documents. Petitioner deposited Rs. 12.00 lakhs on 4.3.2002. Thereafter, on 15.3.2002 a sum of Rs. 20.00 lakhs, on 16.3.2002 a sum of Rs. 15.00 lakhs was deposited. KSFC’s representative, Recovery Officer, Special Tahsildar has confirmed the public auction in favour of the petitioner. Thereafter, the papers are forwarded to the Assistant Commissioner to obtain permission for executing necessary documents. Petitioner is approaching KSFC to take steps for execution of the sale deed in favour of the petitioner from 26.7.2002. In total, a sum of Rs. 47.50 lakhs is held up with the respondents. 1st respondent has not forwarded papers to the Assistant Commissioner, Bangalore. So, petitioner is obliged to approach this Court seeking for a direction directing the respondents to execute the sale deed. So, pray for a direction to respondent No. 1 KSFC for taking steps for the execution of the sale deed, handover possession in pursuance of the letter dated 26.7.2002, also issue a direction to pay damages @ 24% compound interest or as per the norms laid down by the Reserve Bank of India on Rs. 47,50,000/- and for such other reliefs. 10. KSFC has filed objections contending that Special Tahsildar has brought the property of Channabasappa for sale on 14.3.2002. Final highest bid of the petitioner is accepted by the Special Tahsildar. It is reported to the Assistant Commissioner. Assistant Commissioner has not passed an order confirming the same as the one required under the Karnataka Land Revenue Act. In the meanwhile, Channabasappa filed Writ Petition 14352/2002. Learned Single Judge has granted stay on 28.5.2002. In view of the stay order, the sale is not confirmed. It is informed to the writ petitioner that the sale deed would be executed after vacation of the stay. Petitioner is aware of the facts, has filed the writ petition as if he is not aware of the proceedings. Petitioner is not entitled for any relief. So, pray for dismissal of the writ petition. 11. Heard learned advocate Sri T.N. Raghupathy, Sri B. Gururaj Joshi, Sri K.V. Narasimhan and Sri Shivaram. 12. Learned advocate Sri Gururaj Joshi appearing for KSFC submits that the statement in the written statement is made by mistake. Documents are produced. Documents produced would support the case of the KSFC that B.T.M. Ramachandra Rao having secured the loan by deposit of title deeds in regard to his property, loan is not discharged. 12. Learned advocate Sri Gururaj Joshi appearing for KSFC submits that the statement in the written statement is made by mistake. Documents are produced. Documents produced would support the case of the KSFC that B.T.M. Ramachandra Rao having secured the loan by deposit of title deeds in regard to his property, loan is not discharged. S.K. Paramesh has purchased sewing machine with further finance of Rs. 12 lakhs. So, the reasoning of the learned Single Judge that there is an admission is not applicable to the facts of this case. Do not dispute the position of law that admission is the best piece of evidence but his case is that there should be scope for explanation of the said admission. Suit filed being dismissed for non-prosecution, Corporation could not have an opportunity to explain, in view of the documents supporting the claim of KSFC, of creation of equitable mortgage, the order of the learned Single Judge in directing the KSFC to handover the original document is improper, not justified. So, pray for allowing the writ appeal. 13. Learned advocate Sri T.N. Raghupathy submits that learned Single Judge has decided the case on admission. In the suit filed, KSFC is one of the defendants. KSFC has filed the written statement. KSFC has admitted that B.T.M. Ramachandra Rao has not created the mortgage in favour of KSFC. 14. Learned advocate Sri K.V. Narasimhan submits that when there is admission of the KSFC in the written statement, it cannot be taken back. So, the approach of the learned Single Judge is proper. Property of Chanabasappa cannot also be brought for sale, the sale is without the basic loan documents, alleged transfer of loan is not complete. So, pray for allowing the writ petition. 15. Learned advocate Sri Shivaram submits that his client is the purchaser of property in a Court auction. Nearly Rs. 47,50,000/- is blocked for no fault of his client. He prays for a direction to the KSFC to take steps for confirmation of the sale, execution of the sale deed. In the alternative to direct KSFC to reimburse not only the sum of Rs. 47,50,000/- but also to pay interest @ 24% or at the bank rate till the payment of the entire money deposited by the writ petitioner. So, pray for orders. 16. In the alternative to direct KSFC to reimburse not only the sum of Rs. 47,50,000/- but also to pay interest @ 24% or at the bank rate till the payment of the entire money deposited by the writ petitioner. So, pray for orders. 16. We have given careful consideration to the contentions of the learned counsel appearing for the appellants and scrutinised the material on record. 17. The undisputed facts that emerge are as under: KSFC is said to have sanctioned a loan for Rs. 3,60,000/- to M/s. Manjushree Apparels. Manjushree Apparels is a proprietory concern of which Smt. Girija Maheshan was the proprietor. Smt. Girija Maheshan sought permission to transfer the assets and liabilities to M/s. Classic Garments. M/s. Classic Garments was also the proprietary concern and S.K. Paramesh was the proprietor. The said S.K. Paramesh was also said to be related to Smt. Girija Maheshan. It is at the request of Smt. Girija Maheshan dated 26.6.1991, the process of transfer of the assignment of the loan was started. S.K. Paramesh sought for additional loan to an extent of Rs. 12.00 lakhs. KSFC sanctioned the same. Certain sewing machines were imported from Germany, they were purchased out of the additional funds provided to S.K. Paramesh. While so, on 15.6.1991 S.K. Paramesh sought permission to transfer the liability in favour of Trendswear International-C.R. Chanabasappa, (Respondent No. 3 in Writ Petition 30642/2001) he was the Managing Partner in the said firm. The letter dated 15.6.1992 addressed by the 3rd respondent would support this request of 3rd respondent. By letter dated 5.8.1992, respondent No. 3 in Writ Petition No. 30642/2001 agreed to take over the assets and liabilities, addressed a request letter. On 5.8.1992, a letter is addressed to Trendswear International and KSFC requested that the property of B.T.M. Ramachandra Rao should also be offered as guarantee. In this regard, KSFC addressed a letter dated 21.9.1992. It gives the particulars and requirements for completing the transaction of assignment. Thereafter, the assignment is recorded. While so, a suit is filed and temporary injunction is obtained against the personnel of the KSFC. Further, it is claimed by KSFC that 3rd respondent in Writ Petition 30642/2001 has trespassed into the property, a criminal case is also filed. At the advice of the audit and accounts, on account of spate of litigation’s filed by S.K. Paramesh and C.R. Channabasappa the statement is made in the suit. Further, it is claimed by KSFC that 3rd respondent in Writ Petition 30642/2001 has trespassed into the property, a criminal case is also filed. At the advice of the audit and accounts, on account of spate of litigation’s filed by S.K. Paramesh and C.R. Channabasappa the statement is made in the suit. The action of S.K. Paramesh and C.R. Channabasappa is intended to defraud the KSFC. 18. As against this case of the KSFC, letter of KSFC is relied by both S.K. Paramesh and S.R. Channabassappa to contend that the requirements as the one sought for by KSFC having not been complied with, the letter of KSFC dated 21.9.1992 remained as a proposal. So, the transaction is not complete. In this factual background, learned Single Judge has considered the case of the son of B.T.M. Ramachandra Rao and has given the following reason for an order of returning of the documents/original title deeds of B.T.M. Ramachandra Rao: “No doubt, any fact pleaded which is not admitted by the other side require to be proved by adducing evidence under Section 21 of the Evidence Act. But in the instant case, the specific plea/stand of the Respondents 1 and 2 in their written statements filed before the Civil Court in a suit pending before the Civil Court as well as in the application filed under Section 151 C.P.C. before this Court in W.P. No. 407/1993 is that the loan/liability from Sri S.K. Paramesh’s M/s. Classic Garments has not been transferred and Sri S.K. Paramesh continues to be the original loanee and he is the owner of the unit in respect of which the loan was sanctioned. When the Respondents 1 and 2 have taken a definite stand as stated above, it is estopped them from taking any inconsistent stant in subsequent proceedings of the “principles of estoppel”. If that is so, the contention of Sri. Joshi, learned counsel appearing for the Respondent Nos. 1 and 2 that the plea taken by him in the written statement is further requires to be proved when it is not disputed nor denied by the other side cannot be accepted”. 19. This reasoning of the learned Single Judge is based upon admission of the KSFC. The said admission is in pleading. Admission being the best piece of evidence, it is acted upon. 19. This reasoning of the learned Single Judge is based upon admission of the KSFC. The said admission is in pleading. Admission being the best piece of evidence, it is acted upon. In Thiru John vs. Subramhamanyan, reported in AIR 1977 SC 1724 , Hon’ble Apex Court has held as follows: “It is well settled that a party’s admission as defined in Sections 17 to 20 fulfilling the requirements of Section 21, Evidence Act, is substantive evidence propria vigore. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker on the principle that “what a party himself admits to be true may reasonably be presumed to be so and until the presumption is rebutted the fact admitted must be taken to be established.” 20. But, at the same time assertion of the KSFC that S.K. Paramesh approached for additional loan of Rs. 12.00 lakhs and it was sanctioned to the firm of Classic Garments of which S.K. Paramesh is the proprietor and sewing machines were purchased has gone unchallenged. So, the following contention relied by learned counsel Sri Raghupathy, Sri K.V. Narasimhan, “We request you to communicate your acceptance to the above transfer proposal in writing and execute necessary legal documents in favour of the Corporation” cannot be the basis for admission in the suit. The facts placed before the Court requires finding of fact, viz.: (a) To what extent loan is advanced to Smt. Girija Maheshan? (b) What was the loan outstanding as on the date of assignment in favour of S.K. Paramesh as proprietor of Classic Garments? (c) What was the loan outstanding when it was sought to be transferred in favour of C.R. Channabasappa as proprietor of Trendswear International? (d) What was the security that was offered and what made the KSFC to advance the loan? Unless these subjects are gone into and findings are given, the claim of S.K. Paramesh or C.R. Channabasappa or Shankar Rao cannot be adjudicated. 21. Without going into the disputed facts if a finding is given, it will be outside the writ jurisdiction. (d) What was the security that was offered and what made the KSFC to advance the loan? Unless these subjects are gone into and findings are given, the claim of S.K. Paramesh or C.R. Channabasappa or Shankar Rao cannot be adjudicated. 21. Without going into the disputed facts if a finding is given, it will be outside the writ jurisdiction. But, at the same time, the acts of KSFC in exercising the power to sell the property without giving a finding on disputed facts, i.e., creation of mortgage by Sri Ramachandra Rao, C.R. Chanabasappa is found in the facts of the case. So, while accepting the submission of the learned advocate for KSFC in part, Court holds that the action of KSFC in asserting that B.T.M. Ramachandra Rao has created a mortgage, C.R. Channabasappa has also created a mortgage is unjustified. In the light of the above finding, we are obliged to refer to the distinction between Sections 29 and 31 of State Financial Corporation Act, 1951. Section 29 authorise the Finance Corporation to take over the management or possession, right to transfer, all other rights in regard to the secured property including stock-in-trade. Under Section 29(4), the State Financial Corporation is authorised to sell the property, adjust the loan payable from out of the sale proceeds while Section 29(5) declares that the property so taken over by the State Financial Corporation be deemed as an owner of such concern for all purposes. This section authorise the State Financial Corporation not only to take over the property of a defaulter/loanee but also take appropriate action to deal with the property so that the loan is recovered from the borrower. 22. Whereas, in Section 31 of the State Financial Corporation Act, the power conferred upon the Corporation is to move the District Judge for adjudication. In the light of this Court coming to conclusion that there are disputed questions of fact in this case, i.e., to say the case of the borrowers that the transfer of the loan is not complete as it still remained as only a proposal, whereas Corporation contends that the transaction is complete. It is a disputed question of fact. So, the State Financial Corporation can move the District Judge under Section 31 for adjudication. If such an application is moved, learned District Judge shall decide the case in accordance with law. 23. It is a disputed question of fact. So, the State Financial Corporation can move the District Judge under Section 31 for adjudication. If such an application is moved, learned District Judge shall decide the case in accordance with law. 23. In view of the conclusion reached, the order of the learned Single Judge in directing KSFC to return the documents in favour of Shankar Rao is liable to be set-aside. Writ Appeal 2504/2002 is allowed. 24. In the light of the disputed subject of legality of the creation of the loan being probabalised, Writ Appeal 934/2002 insofar as the direction issued by the learned Single Judge authorising respondents 1 and 2 to take steps is set-aside. Writ Appeal 934/2002 is accordingly allowed to that extent. It is made clear that this order shall not come in the way of the KSFC to proceed in accordance with Section 31 of the State Financial Corporation Act stated supra. 25. In view of the findings on a disputed fact noted supra, the claim of C.R. Chanabasappa-writ petitioner in W.R. 14352/2002 for return of the hypothecation deed dated 24.9.1992 is rejected. His prayer for declaration of the notification dated 26.2.2002 published in “Vijaya Karnataka” for auction of item No. 1 is allowed. This order is also subject to the rider imposed by the Court stated supra authorising KSFC to take steps under Section 31 of the Act. 26. In the light of the findings that there is a disputed question of law and fact in between the financier-KSFC, borrowers-C.R. Chanabasappa, S.K. Paramesh, the sale of the properties of C.R. Chanabasappa is liable to be set-aside. Writ appeal 2504/2002 is allowed. Writ appeal 934/2002 is allowed in part. Writ Petition 14352/2002 is allowed in part. 27. The next point to be considered by the Court is in regard to the submission of the learned advocate Sri Shivaram. In view of the law declared by the Hon’ble Apex Court in M.V. Janardhan Reddy vs. Vijaya Bank, reported in (2008) 7 SCC 738 wherein Hon’ble Supreme Court was considering similar case of the position of the auction purchaser when the auction is set-aside. Their Lordships have held as under: “31. Taking into consideration all these factors, in our opinion, ends of justice would be met if Respondent 3 M/s. MSN Organics (P) Ltd., which has purchased the property for Rs. Their Lordships have held as under: “31. Taking into consideration all these factors, in our opinion, ends of justice would be met if Respondent 3 M/s. MSN Organics (P) Ltd., which has purchased the property for Rs. 1.80 crores is directed to pay an amount of Rs. 20,00,000 (twenty lakhs only) to the appellant herein. In our judgment, payment of this amount to the appellant (auction-purchaser) would work as “some solatium for his trouble and disappointment for the loss of that which is, perhaps, a good bargain” [Chundi Charan Mandal vs. Banke Behary Lal Mandal, ILR (1899) 26 Cal 449]. 28. So, the writ petitioner in W.P. 9804/2006 is entitled for Rs. 47.50 lakhs + 20% of the said value i.e., Rs. 9,50,000/-. So, Writ Petition No. 9804/2006 is also allowed in part. Three months time is granted to KSFC to pay the petitioner in W.P. 9804/2006.