JUDGMENT (Per : HONOURABLE MR.JUSTICE JAYANT PATEL) As both the appeals arise from the common judgment, they are being considered simultaneously. Both the appeals are directed against the judgment and decree passed by the 3rd Additional Senior Civil Judge, Ahmedabad (Rural) (hereinafter referred to as “lower court”) in Special Civil Suit No.220/03, whereby it has been declared that the transaction of sale by the original defendants no.2 and 3 for sale of the property to defendant no.1 is unauthorised, illegal, fraudulent and malafide and it has been further declared that the transaction of sale of land at Sanand bearing Block No.104, 105 (a) and 105 (b) with the shed vide two sale deeds is also declared illegal, fraudulent and malafide and irregular. The lower court has further granted permanent injunction restraining the defendant no.2, its directors, officers and its employees to utilise and/or sell and/or create any license or transfer or create any encumbrance over the property and has further restrained them from interfering to the utilisation of all the movable properties by plaintiff, its Directors and/or the employees. By the very decree, the lower court has also directed defendant no.2, its directors, officers and managers from making any recovery from plaintiff or its guarantors without following any due process of law and has further restrained defendant no.2 from taking any action based on the documents executed by the Company or guarantors by bypassing the process of the Court. We may for the sake of convenience, refer the parties herein as per the status before the lower court and/or in the present appeal. The short facts of the case appear to be that the original plaintiff filed Special Civil Suit No.220/03 before the lower court on 26.08.2003 contending inter alia that the loan was sanctioned in favour of the plaintiff for Rs.4,40,47,000/- at different stages and at the time when the loan was sanctioned, the valuation report of the property was submitted of Rs.3,17,90,000/- made in the year 1999 and thereafter, there was additional construction made of the sheds and investment was made and keeping in view the said aspects, the loan was sanctioned. As per the plaintiff, on account of the earthquake on 26.01.2001, the business was adversely affected and as a result thereof, the plaintiff could not pay the installment of the term loan and plaintiff had requested for extension of time and re-schedulement of the installment, but the Bank and its officers in March 2002 unauthorisedly applied seal over the factory premises and as per the plaintiff, the Bank could not have done so without due process of the Court. It was averred by the plaintiff that as per the notice issued by the Bank on 27.10.2001, the overdue amount in the loan account of the plaintiff was of Rs.2,43,50,912.48 and the Bank had called upon the said amount to be paid within 8 days to the plaintiff. Thereafter, under the guise that the payment was not made, it had applied seal and closed the running unit of the factory of the plaintiff which resulted into huge responsibility of 300 employees upon the plaintiff. The plaintiff had averred in the plaint that the officers of the Bank at the time of grant of loan had got documents executed of Power of Attorney dated 19.01.2001 in favour of the Bank and also the equitable mortgage and as per the plaintiff, the Bank could not have taken over possession of the property without due process of law and it was the case of the plaintiff that some of the plant and machineries for which the possession was taken over by the Bank was hypothecated to Navnirman Cooperative Bank Ltd. and the plaintiff had requested the officers of the Bank to release the same, but such properties were also not realised. It was averred by the plaintiff that the property of the plaintiff worth Rs.6.5 crore has been sold away fraudulently by the Bank with the malafide purpose and while undertaking the said course, the advertisement was given on 24.10.2002 for sale of the property on “as is where is basis” contending that the Bank on account of the Power of Attorney is entitled to do so. As per the said advertisement, 10 days time was given to submit offer and the earnest money was to be submitted of Rs.20000/- only and in the said advertisement, the outstanding amount, the construction made over the land, the time for opening of the tender, the upset price were not fixed. As per the said advertisement, 10 days time was given to submit offer and the earnest money was to be submitted of Rs.20000/- only and in the said advertisement, the outstanding amount, the construction made over the land, the time for opening of the tender, the upset price were not fixed. The plaintiff on 03.11.2002, had addressed a letter to the Bank for restarting of the factory and thereafter vide letter dated 16.11.2002, the Bank had called upon the plaintiff to remain present on 20.11.2002 informing the plaintiff that the sealed tenders received in response to the advertisement dated 22.10.2002 are to be opened on 20.11.2002. The plaintiff averred that on 20.11.2002, the objection raised by the plaintiff was not heard and the plaintiff was asked to go away and thereafter, the plaintiff had to file Lavad Suit before the Board of Nominees being Lavad Suit No.3164/02 on 22.11.2002 and prayed that without due process of law and without consent of the parties, the Bank has no right to sell the factories, plaint and machinery, stock books etc. It was also prayed that the Bank be restrained from selling the property in response to the advertisement dated 24.10.2002. The further prayers were also made to direct the Bank to handover the possession of the factory to the plaintiff on the condition as may be fixed by the Court. The said suit came to be disposed of by the learned Board of Nominees vide order dated 12.03.2003 and the process of sale undertaken by the Bank was set aside but it was directed that fresh tender be invited. The plaintiff carried the matter before the Cooperative Tribunal and in the interim stay application in the said appeal before the Tribunal, the Tribunal ultimately passed an order on 17.04.2003, whereby it directed that if 25% of the amount is deposited within 3 months, the operation of the order of the learned Nominee shall remain stayed and the plaintiff be handed over the possession of the factory. As per the plaintiff, before the aforesaid order was passed, on 18.03.2003, the advertisement was given by the Bank in hot haste based on the order of the learned Nominee inviting offer from the interested persons to purchase the properties. As per the plaintiff, before the aforesaid order was passed, on 18.03.2003, the advertisement was given by the Bank in hot haste based on the order of the learned Nominee inviting offer from the interested persons to purchase the properties. It is the case of the plaintiff that it had submitted tender on 24.03.2003 stating that they shall offer 5 lakhs more than the highest offer received and together with the offer, the earnest money of Rs.1 lakh was deposited. It is the case of the plaintiff that thereafter, the tenders were opened on 21.07.2003 but their tender was not opened and the objections submitted by the plaintiff were not accepted and in collusion, the factory, plant and machinery worth Rs.6.5 crore has been sold away for Rs.1.18 crore by a preplanned action and immediately on the next date, i.e., 22.07.2003, the possession of the factory was also handed over. It was additionally averred by the plaintiff that in Company Petition No.227/01, vide order dated 03.07.2003, a prohibitory order was passed against the plaintiff from selling or alienating of the property and therefore, as the Bank was holding Power of Attorney, it could not have sold the property and the aspects of order passed by the High Court was brought to the notice but inspite of the same, no heed was given since the sale deed was already executed and the relief was also prayed against the purchaser. The plaintiff filed Civil Suit for the relief to declare the action of the Bank as illegal, unauthorised, fraudulent and collusive for sale of the property and it also prayed for the other consequential reliefs. The original defendants, viz., the purchasers of the property and the Bank and its officers did not defend the suit separately, but submitted a common written statement and resisted the suit contended inter alia that the loan was granted, the documents were executed, there was power with the Bank to recover the amount and also to sell the property and proper advertisement was given, the offers were invited and the offer of the highest offerer has been accepted. The opportunity was also given to the plaintiff to pay 25% of the amount which was not availed of by the plaintiff and therefore, the Bank accepted the highest offer and the amount as was fully paid, the documents were executed and the possession of the factory and the plant and machinery has been handed over. The defendants contended that the transaction is bonafide and not malafide nor fraudulent or in collusion as alleged. The defendants also denied the allegations made by the plaintiff in the plaint and the defendants also denied the contents of the documents produced by the plaintiff including that of the property at the time when the loan was sanctioned and the defendants also denied the jurisdiction of the civil court and contended that the suit cannot be maintained in absence of statutory notice etc. The lower court thereafter had framed the issues at exhibit 78 and thereafter, oral as well as documentary evidence in support of their respective pleadings was led which has been referred to by the lower court at paras 6 to 9 of the impugned judgment. The lower court thereafter, at the conclusion of the suit has passed the impugned judgment and the decree as referred to hereinabove against which the present appeals before this Court. We may state that First Appeal No.2123/09 has been preferred by the purchaser-original defendant no.1 whereas First Appeal No.2121/09 has been preferred by the Bank and its officer-original defendants no.2 and 3. But as both the appeals arise from the common impugned judgment, they have been heard simultaneously. We have heard Mr.S.I.Nanavati, learned Senior Counsel for the original defendant no.1-purchaser of the property in both the appeals and we have heard Mr.M.B. Gandhi for the Bank and its officers/original defendants no.2 and 3 in both the appeals. We have heard Mr.Mihir Joshi, learned senior counsel with Mr.Shah for the original plaintiffs in both the appeals. We may also state that the learned counsel appearing for the appellants as well as for the respondents have produced the compilation of the record of the suit before the lower court, viz., oral as well as documentary evidence produced by both the sides and we have considered the same. We have also considered the judgment and the reasons recorded by the Lower Court. We have also considered the judgment and the reasons recorded by the Lower Court. The learned counsel for the appellants in both the appeals raised the first preliminary contention of non-maintainability of the suit. We may at first instance deal with the contentions which were two fold; one by Mr.Nanavati, learned counsel for the original defendant no.1 that the suit for the relief of declaration without their being any relief for possession of the property could not be maintained and it was submitted that in any case the Court could not have granted declaratory relief in absence of the relief of possession. The second fold of the contention raised by the learned counsel for the original defendants no.2 and 3 and so adopted by the original defendant no.1 was that since the suit before the learned nominee was preferred before the learned nominees, the second suit was barred and could not be preferred. We may first deal with the aspects of any bar operating on account of the Lavad Suit preferred before the learned nominee by the original plaintiff. It is an admitted position that when the suit was preferred before the learned nominee, the matter was at the stage of inviting offer for sale of the property in response to the advertisement by the Bank dated 24.10.2002 in newspaper “Sambhav” for sale of the property of the plaintiff and the said suit being Lavad Suit No.3164/04 was preferred for sale of the property without due process and without consent of the plaintiff and it was prayed in the suit to direct the Bank to hand over the possession on the terms as may be fixed by the Court. The said suit came to be disposed of vide judgment dated 12.03.2003, whereby the learned nominee declined the prayer to handover the possession of the factory premises to the plaintiff but did find that the offers are required to be invited by giving wide publicity and the negotiation be also made and therefore, the suit was partly allowed to the extent that the process of inviting sale undertaken by the Bank was set aside and a fresh tender was ordered to be invited by the Bank. It is true that against the said judgment of the learned nominee, the appeal was preferred by the plaintiff before the tribunal and in the said appeal, vide order passed by the learned nominee below the application for interim relief, the Tribunal had granted ad interim injunction on the condition that if the applicant therein-original plaintiff herein deposits 25% of the total amount due, the order of the learned Nominee would remain stayed (in other words, the process of sale as was ordered by the learned Nominee by inviting fresh tender would remain stayed) and it was further directed that the Bank shall open the seal and handover the possession of the property of the plaintiff. Therefore, as such, two aspects could be said as where the subject matter of the suit before the learned nominee; one was to get back the possession of the property and another was the contemplated action by the Bank to dispose of the property. Both in any event were not at the stage when the property was already sold by registered document to a third party, viz., original defendant no.1 herein. It is not even the case of the defendant Bank that the property came to be sold in response to the advertisement dated 24.10.2002. Under the circumstances, when the present suit was based on the action of the Bank to sell the property in response to the subsequent advertisement dated 15.03.2003 in Sandesh daily newspaper, which was in any case after the disposal of the suit by the learned Nominee on 12.03.2003 and hence, it cannot be said that the present suit was barred in view of the Lavad Suit No.3164/02. Apart from the above, when the cause of action in the present suit was also for the action of the sale of the property by the Bank already undertaken on 21.07.2003 for acceptance of the offer and dated 22.07.2003 for execution of the sale deed and handing over of the possession of the property, they were the fresh causes of action accrued which could be agitated by the original plaintiff by separate suit. Further, when third party right had already entered in the movable as well as immovable properties of the plaintiff, on account of the registered sale deed, etc., viz., defendant no.1 who in any case was not the member of defendant no.2 Bank, the relief against the said third party defendant no.1 could not have been granted by the learned Nominee. Under these circumstances, it cannot be said that the present suit was not maintainable as sought to be canvassed. The question of inviting fresh offer, the sale already undertaken by the Bank and the execution of the sale deeds were never the subject matter of the suit before the learned nominee, since admittedly all such question arose after the disposal of the suit by the learned nominee. Under these circumstances, even if the rights were to be agitated for challenging the action of the bank and for execution of the sale deed, the proper course available to the plaintiff was to file a fresh suit, but as observed earlier, third party-original defendant no.1 non-member rights had entered against which the relief could not have been granted by the learned nominee, the remedy of the present suit before the Civil Suit could not be said as barred. Under the circumstances, the contention of non-maintainability of the present suit on account of the suit already preferred before the learned nominee is meritless and hence, cannot be accepted. The contention canvassed by pressing in service section 34 of the Specific Relief Act also should not detain us more. It is true that section 34 of the Act provides for the bar operating on the power of the Court to give the relief of declaration if the plaintiff has omitted to pray for further relief and the contention of the appellants in the present matter is that since the relief of possession has not been prayed, the relief of declaration could not have been granted. Be it noted that it is not a case where prior to the impugned actions, for which the declaration was prayed, the plaintiff was already in possession of the property and it had omitted to pray for the relief of recovery of the possession. Be it noted that it is not a case where prior to the impugned actions, for which the declaration was prayed, the plaintiff was already in possession of the property and it had omitted to pray for the relief of recovery of the possession. But it is rather an admitted position that prior to the impugned action of the Bank for sale of the property and execution of the registered Sale Deed, the property was in possession of the Bank and not in possession of the plaintiff. Under these circumstances, if the cause of action for the relief prayed had started from the action of the Bank of inviting offer vide advertisement dated 15.03.2004, then the action of the Bank to sell the property on 21.07.2003 and the action of the Bank of execution of the sale deed and handing over of the possession of the property on 22.07.2003, it could not be said that the bar as provided under section 34 would operate over the power of the Court to grant the relief of declaration. In the decision of the Apex Court in the case of Vinay Krishna v. Keshav Chandra and another, reported in AIR 1993 SC page 957, the facts narrated at para 2 clearly go to show that the plaintiff in the facts of that case had averred that he was in exclusive possession of all the three bunglows which is not the fact situation in the present case. In the another decision of the Apex Court in the case of Mehar Chand Das v. Lal Babu Siddique and Ors. reported in AIR 2007, SC 1499, at paragraph 11, in the judgment, it has been recorded that the appellant-defendant had been in the possession of the suit property which is not the fact situation in the present case. In the case of Anathula Sudhakar Vs. P. Bucchi Reddy reported in (2008) 4 SCC 594 , at paragraph 2 of the judgment, it has been mentioned that the plaintiff claimed to be in possession of two sites having purchased by them under two registered sale deeds and as stated, such is not fact situation in the present case. In the case of Anathula Sudhakar Vs. P. Bucchi Reddy reported in (2008) 4 SCC 594 , at paragraph 2 of the judgment, it has been mentioned that the plaintiff claimed to be in possession of two sites having purchased by them under two registered sale deeds and as stated, such is not fact situation in the present case. Under the circumstance, we find that not only the decision upon which the reliance has been placed by the learned counsels for the appellant are of no help but the contention of invoking section 34 of the Specific Relief Act is misconceived and hence, cannot be accepted. The aforesaid would take us to examine the core aspect of the case as to whether the impugned action of the Bank of inviting offer by advertisement dated 15.03.2003, acceptance of the offer on 21.07.2003 and execution of the sale deed on 22.07.2003 and handing over of the properties in question can be said as illegal or unauthorised or fraudulent or collusive or not. Before we proceed to examine the aforesaid aspects facts, we may first consider some relevant statutory aspects and the case law related thereto. The capacity of the respondent Bank at the first instance was as a mortgagee in whose favour the right existed as per the equitable mortgage. If the mortgagee, as per the provisions of the Transfer of Properties Act, 1882 (hereinafter referred to as “TP Act”), had to realise its interest, it will have a right of foreclosure of the mortgage under section 67 of the TP Act. But for such purpose, the mortgagee has to obtain a decree through the process of the Court and thereafter, the property can be sold if there is failure to pay the mortgaged money. Section 69 of the TP Act provides for power to sell the mortgaged property by the mortgagee in certain type of mortgages only. But for such purpose, the mortgagee has to obtain a decree through the process of the Court and thereafter, the property can be sold if there is failure to pay the mortgaged money. Section 69 of the TP Act provides for power to sell the mortgaged property by the mortgagee in certain type of mortgages only. However, the pertinent aspect is that even in those cases where mortgagee has been authorised by the statute to sell the property, sub-section(4) of the said section reads as under– “(4) The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior encumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.” (Emphasis supplied) The aforesaid shows that the money so realised out of the sale of the property in absence of any contract to the contrary is to be held by the mortgagee in trust. The aforesaid makes it clear that even in cases where the mortgagee is authorised to sell the property, he holds the property in fiduciary capacity and money realised by sale of the property is to be held in fiduciary capacity. As per the Indian Contract Act, 1872 the contract of agency includes appointment of Power of Attorney which is provided under Chapter X. Section 211 of the Indian Contract Act reads as under – “211. Agent's duty in conducting principal's business - An agent is bound to conduct the business of his principal according to the directions given by the principal, or, in the absence of any such directions, according to the custom which prevails in doing business of the same kind at the place where the agent conducts such business. Agent's duty in conducting principal's business - An agent is bound to conduct the business of his principal according to the directions given by the principal, or, in the absence of any such directions, according to the custom which prevails in doing business of the same kind at the place where the agent conducts such business. When the agent acts otherwise, if any loss be sustained, he must make it good to his principal, and, if any profit accrues, he must account for it.” The aforesaid provision shows that the relationship of the agent with the principal is also in fiduciary capacity and if any loss is sustained by the principal on account of the action of the agent, it is the duty of the agent to make it good to the principal and if any profit accrues, he may account for it. Section 212 of the Contract Act further provide as under – “212. Skill and Diligence required from agent - An agent is bound to conduct the business of the agency with as much skill as is generally possessed by persons engaged in similar business, unless the principal has notice of his want of skill. The agent is always bound to act with reasonable diligence, and to use such skill as he possesses; and to make compensation to his principal in respect of the direct consequences of his own neglect, want of skill or misconduct, but not in respect of loss or damage which are indirectly or remotely caused by such neglect, want of skill or misconduct.” The aforesaid provision shows that agent while discharging the work on behalf of the principal is always bound to act with reasonable diligence and to use such skill as he possesses and to compensate his principal in respect of any direct consequence on account of his negligence or want of skill or misconduct. Section 215 of the Contract Acts reads as under: “215. Section 215 of the Contract Acts reads as under: “215. Right to principal when agent deals, on his own account, in business of agency without principal's consent - If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.” The aforesaid shows that the principal can repudiate the transaction if the case shows that either any material fact has been dishonestly concealed by the agents or that the dealings of the agent have been disadvantageous to him. Section 220 of the contract Act reads as under – “220. Agent not entitled to remuneration for business misconducted - An agent who is guilty of misconduct in the business of the agency is not entitled to any remuneration in respect of that part of the business which he has misconducted.” The aforesaid shows that the agent would not be entitled to remuneration in respect of the that part of the business which he has misconducted. Under sections 222 and 223 of the Contract Act read as under: “222. Agent to be indemnified against consequences of lawful acts - The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him. 223. Agent to be indemnified against consequences of acts done in good faith - Where one person employs another to do an act, and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act, though it causes an injury to the rights of third persons” The aforesaid provisions show that the agent shall stand indemnified only to the extent of the authority lawfully exercised by him and only to the extent of the action taken by him in good faith with the third party. Section 227 of the Contract Act reads as under– “227. Section 227 of the Contract Act reads as under– “227. Principal how far bound, when agent exceeds authority - When an agent does more than he is authorised to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.” The aforesaid shows that when the agent does anything more than what he is authorised to do, qua third party, such action can be separated into two parts; one would be within the authority and another would be outside the authority and the action within the authority would be only binding to the principal. Section 238 of the Contract Act reads as under: “238. Effect, on agreement, of misrepresentation or fraud by agent - Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed, by the principals; but misrepresentations made, or frauds, committed, by agents, in matters which do not fall within their authority, do not affect their principals.” The aforesaid shows that misrepresentation made or fraud committed by the agent will have the same effect but the agreement made by such agent as if such misrepresentation or fraud was committed by the principal, but to the extent which do not fall within the authority. The aforesaid provisions of the Contract Act in case of an agent may be in capacity as the irrevocable Power of Attorney of which the status has been claimed by the Bank while exercising the power to sell the property shows that the relationship of the agent and the principal is also in fiduciary capacity of a trust reposed by the principal in agent and the authority extends to the exercise of the power for action taken in good faith and not if the exercise is by misconduct or not in good faith. In a case where the state financial corporation which has granted loan and there is default by the loanee of paying the amount, power has been provided by section 29 of the State Financial Corporation Act to take over the possession of the property and the property so vest to the Corporation and it also provides for power with the Corporation to sell the property and sub-section (4) of section 29 provides as under: (4) Where any action has been taken against an industrial concern under the provisions of sub-section (1), all costs, charges and expenses which in the opinion of the Financial Corporation have been properly incurred by it as incidental thereto shall be recoverable from the industrial concern and the money which is received by it shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto. (Emphasis supplied) The aforesaid shows that where the Corporation is to sell the property and money realised is to be held in trust to be applied as per the provisions of the statute. Therefore, after the possession is taken over, while exercising the power to sell the property, the principles of trusteeship has been made applicable. It is no more res intergra that while exercising the power under section 29 of the Act, the State Financial Corporation has to make an attempt to procure the best possible price. At this stage, we may refer to the decision of the Apex Court in the case of Gajraj Jain Vs. State of Bihar reported at 2004(7) SCC 151 wherein at paragraph 12, it has been observed as under: “12. Under S. 29(1) of the 1951 Act, where any industrial concern under a liability to the Financial Corporation makes any default in repayment of loan, the Corporation is empowered to take over possession of the industrial concern and realize the property pledged, mortgaged, hypothecated or assigned to the Corporation. Under S. 29(1) of the 1951 Act, where any industrial concern under a liability to the Financial Corporation makes any default in repayment of loan, the Corporation is empowered to take over possession of the industrial concern and realize the property pledged, mortgaged, hypothecated or assigned to the Corporation. Under S. 29(4), all costs, charges and expenses incurred by the Corporation as incidental to such realization of the property pledged, hypothecated or mortgaged shall be recovered firstly from the industrial concern and the balance shall be paid to the person entitled thereto. As stated above, a charge consists in the right of a creditor to receive the payment out of the proceeds of the realization of property of fund charged with the debt. A bare reading of sub-sections (1) and (4) of S. 29 shows that it is similar to S. 69 of T.P. Act under which it is stipulated that a mortgagee exercising the power of sale is a trustee of the surplus sale proceeds and after satisfying his own charge he holds the surplus for the subsequent encumbrances and ultimately for the mortgagor (See Rajah Kishendatt Ram v. Rajah Mumtaz Ali Khan, reported in (Vol. VI Indian Appeals 145 (PC)). Section 29(1) contemplates, therefore, a sale for distribution of sale proceeds and not a sale for distribution of property charged with the debt. It also implies that the first charge holder must act in a manner which protects not only its own interest but also the interest of the subsequent charge holder and the mortgagor. This in turn implies that the first charge holder is bound to obtain the best possible price for the mortgaged assets and the best possible price must, in the context, mean the fair market value.”(Emphasis supplied) Therefore, the principal obligation is upon the charge holder or the mortgagee to obtain the best possible price for the mortgaged assets and the best possible price as held by the Apex Court is fair market value of the property. In the case of Kerala Financial Corporation Vs. Vincent Paul reported at 2011 (4) SCC 171 , the Apex Court has issued following directions to the State Financial Corporation to sell the properties while exercising the power under section 29 of the State Financial Corporation Act at paragraph 20 of the said decision, which reads as under: “20. In the case of Kerala Financial Corporation Vs. Vincent Paul reported at 2011 (4) SCC 171 , the Apex Court has issued following directions to the State Financial Corporation to sell the properties while exercising the power under section 29 of the State Financial Corporation Act at paragraph 20 of the said decision, which reads as under: “20. ......Till such formation of Rules or guidelines or orders as mentioned above, we direct the KFC to adhere the following directions for sale of properties owned by it: (i) The decision/intention to bring the property for sale shall be published by way of advertisement in two leading newspapers, one in vernacular language having sufficient circulation in that locality. (ii) Before conducting sale of immovable property, the authority concerned shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods: (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying such assets; or (b) by inviting tenders from the public; or (c) by holding public auction; or (d) by private treaty. Among the above modes, inviting tenders from the public or holding public auction is the best method for disposal of the properties belonging to the State. (iii) The authority concerned shall serve to the borrower a notice of 30 days for sale of immovable secured assets. (iv) A highest bidder in public auction cannot have a right to get the property or any privilege, unless the authority confirms the auction sale, being fully satisfied that the property has fetched the appropriate price and there has been no collusion between the bidders. (v) In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold. This can be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. It becomes a legal obligation on the part of the authority that property be sold in such a manner that it may fetch the best price. (vi) The essential ingredients of sale are correct valuation report and fixing the reserve price. It becomes a legal obligation on the part of the authority that property be sold in such a manner that it may fetch the best price. (vi) The essential ingredients of sale are correct valuation report and fixing the reserve price. In case proper valuation has not been made and the reserve price is fixed taking into consideration the inaccurate valuation report, the intending buyers may not come forward treating the property as not worth purchase by them. (vii) Reserve price means the price with which the public auction starts and the auction bidders are not permitted to give bids below the said price, i.e., the minimum bid at auction. (viii) The debtor should be given a reasonable opportunity in regard to the valuation of the property sought to be sold, in absence thereof the sale would suffer from material irregularity where the debtor suffer substantial injury by the sale.” It is true that the directions as referred to by the Apex Court are only by the aforesaid decision in the year 2011, but such can be considered in order to find out as to whether principles of trusteeship or holding the property and realisation of the money in fiduciary capacity has been properly observed by the mortgagee or by the irrevocable power of attorney holder while selling the property in question or not. The aforesaid leads us to record three conclusions; (1) In a case where the mortgagee has a right to sell the property may be under the TP Act or any other statute, the property in possession of the mortgagee is held in trust and the money realised is also to be held in trust. Therefore, mortgagee or the first charge holder is bound to obtain best possible price of the mortgaged assets and the best possible price must mean fair market price. (2) Even in the case of contract of agency, whereby the agent has been so authorised by the principal to sell the property for paying the outstanding debt of the bank, the agent who is in possession of the property holds the property in trust and hence, the agent is bound to obtain the best possible price of the property for whose sale he is so authorised and the best possible price means the fair market value. (3) Since similar power is to be exercised by the State Financial Corporation under section 29 of the State Financial Corporation Act, while realising the money from the property of the mortgagor or the loanee, the principles as observed by the Apex Court in the above referred decision in the case of Kerala State Financial Corporation (supra) can be considered in order to find out as to whether the aforesaid obligation to obtain the best possible price or fair market value has been properly discharged or not. Mr.Joshi, learned counsel appearing for the original plaintiff made an attempt to contend that the action of the Bank of disposal of the property is in contravention with the provisions of the TP Act even if the capacity of the bank may be as that of irrevocable power of attorney holder as mortgagee, and in his submission unless it is so authorised by the statute expressly, section 69 of the TP Act bars the power to sell the property by the mortgagee without any intervention of the Court and therefore, he submitted that the whole action by the Bank of taking over of the possession and of sale of the property is barred by the provisions of the TP Act. He further submitted that the power of attorney executed by the plaintiff cannot be read to nullify the express provision of section 69 of the Act. Whereas, on behalf of the original defendants, the learned counsel for the purchaser and the Bank and its officers submitted that the irrevocable Power of Attorney executed expressly so authorises the officer of the Bank to sell the property and therefore, section 69 of the TP Act will have no role to play. It was submitted that when the officer of the Bank in exercise of the power given to it in capacity as irrevocable power of attorney executed the sale deed, the rights as mortgagee of the property are relinquished simultaneously and therefore, it cannot be said that the sale was barred by the provisions of the TP Act. Had it been a case of only equitable mortgage by the plaintiff by the bank in transaction of the loan, it might stand on different footing. It is true that if it is only a transaction of mortgage, section 69 of the Act may have role to play. Had it been a case of only equitable mortgage by the plaintiff by the bank in transaction of the loan, it might stand on different footing. It is true that if it is only a transaction of mortgage, section 69 of the Act may have role to play. However, in the present case, there is additional aspect and the same is that against the consideration of the loan transaction, in addition to the transaction of mortgage, an irrevocable power of attorney has been executed by the plaintiff in favour of the officer of the Bank authorising the sale of the property. In the relevant clause of the irrevocable power of attorney, exhibit 133, vide clause no.7, it has been mentioned as under: “7. In consideration of the loan facility granted by the Bank and in further consideration of the Equitable Mortgagor by deposit of the title deeds, the mortgagors hereby give this Irrevocably power of Attorney in the name of the General Manager/Manager/Recovery Officer of the Bank who is empowered and authorised singly in all said properties equitable mortgaged in favour of the Bank, other by private negotiation and/or by public auction and further empowered to execute sale deed or deeds for and on behalf of the mortgagors and to present the same for registration before the concerned registering authority and to admit the same and to complete all the formalities of registration for and on behalf of the mortgagors, and the said power of attorney is further empowered to handover the possession of the said properties to the purchasers and to deposit and/or pay the Bank's dues from the consideration thereof and to receive notice in respect of mutation of the said properties in favour of the purchasers and to complete all the formalities of transferring the properties in favour of the purchasers, and to sign and give necessary applications, statements, etc. for transferring and the said properties in favour of the purchasers and the mortgagors also agree that all deeds, acts, and things done and executed be done, and executed by the said Power of Attorney shall be deemed to be done, made and executed by the mortgagors and shall be deemed to be confirmed by the mortgagors and the mortgagors further undertake that this power of attorney is irrevocable power of attorney which shall not be cancelled or revoked by the Mortgagors on any ground or reason until the Bank's dues are completely paid up.” (Emphasis supplied) Section 2 of the TP Act read with section 4 of the TP Act goes to show that the TP Act shall not be deemed to affect any provisions of any other enactment not expressly repealed by the TP Act or any terms of the contract if allowed by the law for the time being in force. Further, the important aspect is that there is no prayer made for challenging the irrevocable power of attorney being executed by fraud or misrepresentation or barred by the provisions of the TP Act or otherwise. Under these circumstances, the attempt made by Mr.Joshi cannot be countenanced nor it can be held that the officer of the bank had no power to sell the property when it was so expressly permitted by the aforesaid document of irrevocable power of attorney, exhibit 133. Further, on the aspect of deprivation of the possession by the bank and its officers to the original plaintiff is concerned, as referred to in the earlier paragraph, the Lavad Suit was filed and the relief was prayed which was not granted by the learned nominee against which it is stated that the appeal was preferred before the Tribunal and the appeal thereafter came to be dismissed for default. But the original plaintiff is contemplating to file the application for restoration. Be as it may, since the action of deprivation of the possession or there was no relief claimed for possession and since prior to the suit, the plaintiffs were not in possession of the property, we find that no opinion deserves to be given on the said aspects. But the original plaintiff is contemplating to file the application for restoration. Be as it may, since the action of deprivation of the possession or there was no relief claimed for possession and since prior to the suit, the plaintiffs were not in possession of the property, we find that no opinion deserves to be given on the said aspects. The aforesaid would now take us examine as to whether the power exercised by the bank and its officers in capacity as the power of attorney holder could be said as unauthorised, malafide, fraudulent, or not or in any case, whether the obligation to realise the best possible price of the property has been discharged or not by examining the facts of the case. We may state that the lower court has discussed the evidence under the head of reasons on the said aspect at para 12 onwards of the impugned judgment. We have also considered the evidence produced on record before the lower court and certain important aspects can be narrated as under: It has come on record that when the original plaintiff had applied for loan, the valuation report of the property was submitted of Shri Bharat H.Shah and Company (exhibit 134) showing the value of the machinery purchased and installed by the original plaintiff of Rs.268.77 lakhs. Further, together with the said report, the valuation report of Mr.B.R.Rami dated 15.06.1998 for the immovable property has come on record wherein the value of the land was assessed at Rs.1,60,00,000/- and value of the construction made thereon was assessed at Rs.1,51,88,660/- and accordingly, the total value of the aforesaid immovable property was assessed at Rs.3,17,88,660/- and the valuation if rounded off Rs.3,17,90,000/- and it can be said that Rs.3.18 crore. The Bank having accepted the aforesaid valuation of the immovable property as well as plant and machinery, had advanced the loan of Rs.4,40,47,000/- (if rounded off, it can be said as Rs.4.40 crore). In the advertisement issued in Sandesh newspaper, exhibit 127, dated 15.03.2003, no details are mentioned by the officer of the Bank about the aforesaid tentative valuation as on 1998 and even if it is considered that it was not mandatory, there is no fixation of any upset price whatsoever. In the advertisement issued in Sandesh newspaper, exhibit 127, dated 15.03.2003, no details are mentioned by the officer of the Bank about the aforesaid tentative valuation as on 1998 and even if it is considered that it was not mandatory, there is no fixation of any upset price whatsoever. Further, if the matter is considered on the basis of 10% of the offered amount being earnest money, the amount fixed was Rs.1 lakh at the time of submitting offer and therefore, it could be said that Rs.1 crore was the minimum offer invited as against the value of Rs.3.18 crore in the year 1998 of the land and building thereof and the machinery valued at Rs.2.68 crore in the year 2001, total Rs.5.86 crore. As per the aforesaid advertisement, exhibit 127, time to submit offer was provided of 10 days only. No proceedings of auction are drawn nor any objection is raised by the original plaintiff against the sale taken on record and highest offer accepted is of Rs.1.18 crore. If the said amount of Rs.1.18 crore is considered with the sale deed executed at exhibit 226 for the land bearing block no.104 admeasuring 16198 square meter, the value/consideration accepted by the officer of the bank in capacity as a power of attorney holder is only Rs.4,01,000/-. Whereas in the another sale deed, exhibit 227 for the land bearing block no.105 admeasuring 16114 square metre, the value/consideration is Rs.4.91 lakhs. So total comes to Rs.8.92 lakhs being the value/consideration at which the officer of the bank in capacity as power of attorney holder has sold the land with the immovable property thereon as against the valuation made in the year 1998 of Rs.3.18 crore. Whereas the sale in the year 2003 by the bank of immovable property of land with the building thereon at Rs.8.92 thousand only. If the well settled principles of appreciation and depreciation as per Land Acquisition Act and Income Tax Act are broadly taken into consideration and the appreciation is considered of the value of the land which was Rs.1.60 crore for the year 1998, at the rate of 10% p.a.(16 lakhs every year for 5 years, it will be 80 lakhs approximately), it will be 50% appreciation which would come to approximately Rs.2.40 crore. Moreover, the value of the construction made thereon was of Rs.1.57 crore and if depreciation is considered at the rate of 10% p.a. for the construction, it would come to Rs.15.57 lakhs every year, total would come to Rs.78.50 lakh approximately. So approximately, the net valuation of the construction would come to Rs.0.79 crore. If the same amount is added with the value of the land, it would come to Rs.3.19 crore (Rs.2.40 for land and Rs.0.79 for the construction thereon) and if rounded of, it would be Rs.3 crore approximately. The said property has been sold against the consideration of Rs.8.92 lakhs, which would roughly come to 2.97% and if rounded of, it would come to 3% of the aforesaid value of Rs.3.00 crore of the land and the building thereon. The agreement for the sale of the other plant and machinery is for the remaining amount, which would come to around Rs.1.10 crore as against the value of the machinery of Rs.2.69 crore in the year 2001. If the depreciation is considered at the rate of 15% every year, it would be Rs.40 lakh every year and for two years it would be Rs.80 lakh since the property is sold in the year 2003 and hence, the net valuation can be said as Rs.1.90 crore (if rounded off Rs.1.89 crore). As against the same, it is sold for Rs.1.10 crore approximately, roughly 54.62% and if rounded off, 57% of the value at which the plant and machinery has already been sold by the officer of the Bank in the capacity as Power of Attorney. If the figure is considered in consolidation since the land and building thereon is of Rs.3.00 crore and the plant and machinery of Rs.1.90 crore as per the value arrived at in the year 2003, the total would come to Rs.4.90 crore. As against the same, the property is sold at Rs.1.18 crore, roughly 24% of the value at which the property is sold by the officers of the Bank in capacity as the power of attorney holder. As against the same, the property is sold at Rs.1.18 crore, roughly 24% of the value at which the property is sold by the officers of the Bank in capacity as the power of attorney holder. Taking the case of the Bank at the best, it would be in any case 24% being the value realised, i.e., Rs.1.18 crore as against the aforesaid market value of Rs.4.90 crore and if both the figures are considered, one can say that the value realised is less by 3.70 crore (Rounding off Rs.3.72 crore) and in any case less by 3.50 crores even if conservative figure is considered. The condition no.4 of the tender agreement provided that when the offer is accepted within 2 days from the date of acceptance of the amount, 25% of the amount was to be paid and the remaining amount was to be paid within 15 days thereafter. Whereas in the present case, the amount has been paid on the very day by issuance of the cheque of Rs.1.18 crore which has been realised on the next date. The offer was accepted on 21.07.2003 and on the very day at Ahmedabad, the stamp papers were purchased from Surat on 21.07.2003 and the sale deed has been executed immediately on the next date though presented for registration in the month of August 2003. On the date when the sale deeds were executed, the bank had not approved the action of its officers, but after the resolution of the bank, the sale deeds have been registered. After taking into the aforesaid factual background, it deserves to be examined as to whether the bank in capacity as the Power of Attorney itself, may be consequently in capacity as the mortgagee at the time of appropriation of money realised has maintained broadly the principles to be observed in fiduciary capacity of holding the property and realisation of the money in trust or not or in any case, as observed by the Apex Court in the case of Gajraj Jain (supra), the obligation to obtain best possible price for mortgaged assets equivalent to fair market value is discharged or not? Considering the evidence on record and keeping in mind the aforesaid vital aspects of the evidence which has come on record, if the property is sold at the rate of 24% than the fair market value of the property, it cannot be said that the obligation to obtain the best market value is in any manner discharged by the Bank and its officers-original defendants no.2 and 3. Further, if the principles and the directions issued by the Apex Court in case of Kerala State Financial Corporation (supra) while discharging the obligation for disposal of the property are considered, there are basic infirmities in the action for sale of the property inasmuch as (1) The advertisement was not given in two leading newspaper having wide circulation in the State of Gujarat and it was only given in Sandesh daily newspaper which is in Gujarati vernacular language (2) Before conducting sale of the immovable property, no valuation report of the property was obtained by the Bank or its officers but we may state that the secured creditor by filing objections at exhibit 128, gave in writing vide letter dated 03.11.2002 in response to the first advertisement that the market value of the property is Rs.5.41 crore (upset price/reserved price). (3) The bank has not taken any care to be satisfied on the aspect that the property has fetched appropriate price nor it has ever examined the aspect that whether there was any collusion between the bidders. (4) The legal obligation on the part of the Bank that the property be sold in the manner which may fetch best price has not been complied with. (5)As the valuation of the property either by upset or reserved price was not fixed by the Bank, in absence thereof, it can be said that the sale suffers from material irregularities where the debtor can be said as has suffered substantial injury by sale. (5)As the valuation of the property either by upset or reserved price was not fixed by the Bank, in absence thereof, it can be said that the sale suffers from material irregularities where the debtor can be said as has suffered substantial injury by sale. Under these circumstances also, even if the directions issued by the Apex Court in the case of Kerala State Financial Corporation (supra) are considered as a guiding factor, we are of the view that the basic or rather important parameter to be observed for sale of the immovable property and plant and machinery worth about more than 4.50 crore have not at all been satisfied nor evidence has come on record that the bank or its officers had made any sincere attempt to comply with the same. Under the circumstance, in view of the three important peculiar aspects as it appears from the evidence on record that (1)The Bank has not fixed up any upset or reserve price of the property though the original plaintiff had intimated vide letter dated 03.11.2002 exhibit 121 that the market value is Rs.5.41 crore. (2) No detailed description of the property was given in the advertisement nor any reasonable time was given to the prospective buyer to purchase the property and only 10 days time to submit offer was given for such property having value of about more than 4 crore. (3) No attempt whatsoever has been made by the bank to find out the fair market value of the property even before the sale prior to the advertisement or even after the offers were received nor there is any application of mind or there is any attempt made to find out as to whether the offer received is equivalent to the fair market value of the property or not. Under the circumstances, it can be said that the sale is made by the bank and its officers in capacity as its Power of Attorney holder may be indirectly in capacity as mortgagee by not discharging the reasonable prudence for disposal of the property and thereby not maintaining the principles of trusteeship or fiduciary capacity to maintain the dominated consideration to secure the best possible market value or a fair market value of the property. As per the assessment of the market value made by us hereinabove, if the well accepted principles under the Land Acquisition Act and Income Tax Act are broadly taken into consideration for assessment of the market value, it can be said that the sale is at a price of 24% than the fair market value, consequently less by about 3.5 crore which the principal on account of the act of the agent could be said as suffered. The aforesaid is coupled with the circumstance of action for execution of the sale deed taken in hot haste inasmuch as the consideration is paid on the very day on which the offer was accepted in order to see that the same is given immediate effect. Further the stamp paper was purchased by the original defendant no.1 from Surat, though the sale was confirmed at Ahmedabad and immediately on the next date, the documents are executed including that of immovable property though the defendants were fully aware that the documents required registration since the same are also for immovable property. The possession of the property was also handed over on the same date, i.e., 22.07.2003 though the general body of the bank did not approve the action at the relevant point of time. The aforesaid shows lacking of bonafide action not only on the part of the bank and its officers, but since the bank and its officers were acting for the benefit of the original defendant no.1 purchaser, it could be said that there is exercise of power in malafide which may also be said as an action in collusion with one another. Had it been a case of deciding the action singularly as that of paying the amount/consideration on the very day or date of purchasing the stamp paper from Surat, or that of handing over of the possession of the property immediately on the next day or that of execution of the sale deed on the next day separately and independently, it might stand on different consideration. However, if such circumstances are considered with the important aspect that the property is sold at a price of 24% than the fair market value or less by about Rs.3.50 crore, it can be said that there is a fraud in exercise of the power by the bank and its officers in capacity as Power of Attorney directly or indirectly in the capacity as the mortgagee who was to relinquish all rights in the property of the mortgagee in favour of the purchaser. The original defendant no.1 being the purchaser of the property is direct beneficiary thereof. The attempt was made by Mr.S.I.Nanavati, learned counsel appearing for one of the appellant-original purchaser that the original defendant No.1 can be said as bonafide purchaser and therefore, his rights, even if the bank has committed any wrong, he cannot be made responsible for such alleged mistake on the part of the Bank or its officers. It was also attempted to contend on behalf of the bank by Mr.Gandhi that when a fair play action was taken, i.e., by giving opportunity to the original plaintiff to pay 25% of the amount ordered by the tribunal below the interim application and opportunity was also given to the original plaintiff to submit higher offer and when the original plaintiff had also participated in the auction proceeding, it can be said that the principles of fair play were observed and the original plaintiff was estopped from challenging the auction proceedings since he had participated in such proceeding. We fail to appreciate the contention of either side and the reason being that the bank after having known that as per the original plaintiff, the property is worth more than 5 crores, in all fairness being a reasonable prudent agent acting in bonafide, it could have done valuation of the property through the approved valuer and thereafter, could have fixed the upset price. Such was admittedly not done. Further, in the course of auction proceedings, it came on evidence that on behalf of the original plaintiff, it was submitted that the property was worth about 6 crore, but before acceptance of the offer, no attempt was made by the Bank to find out the fair market value of the property and thereafter only to accept the offer or not. If the agent has not acted in bonafide or has acted in a careless manner for disposal of the property of the principal, it cannot be said that the principal is barred from challenging the action. Further, the purchaser-original defendant no.1 is the direct beneficiary of the action taken by the bank not only with the material irregularity, but acted in hot haste to sell away the property at any price without taking any care whatsoever about the prejudice which may be caused to the principal and the original defendant no.1 having played role for procuring the benefit thereof, it cannot be said that the original defendant no.1 is a bonafide purchaser. Hence the additional aspect in the present case and which has already been considered by the lower court and which we find it proper to record is that the capacity of the officer of the bank was as contended by them was as of Attorney holder of the plaintiff for sale of the property. In the proceeding of the Company Petition No.227/01 preferred by one Dipi Dye Chem Corporation, this Court had passed the interim order on 03.07.2003 prohibiting the plaintiff company from sale of the property and the injunction was binding to the plaintiff Company and its agent which would include power of attorney. The factum of prohibitory order passed by this Court dated 03.07.2003 in Company Petition No.227/01 was brought to the notice of the officers of the bank at the time of auction proceeding. Further, it has come on the record that the injunction order was sent to the bank, but the same came back with the endorsement as refused. If the injunction was prohibiting the principal to sell the property, it would equally prohibit to the agent acting on behalf of the principal for disposal of the property. As a normal prudence, the Bank could have moved the Company Court for vacating of the injunction, but no attempts were made and in defiance to the order, or rather by ignoring the order, the offer is accepted. The aforesaid is with the circumstance that the original defendant no.1 having known about the same since the said fact was disclosed on behalf of the plaintiff in the auction proceeding, has opted to purchase the property by maintaining the offer. Under these circumstances, both the attempts cannot be countenanced. The aforesaid is with the circumstance that the original defendant no.1 having known about the same since the said fact was disclosed on behalf of the plaintiff in the auction proceeding, has opted to purchase the property by maintaining the offer. Under these circumstances, both the attempts cannot be countenanced. Mr.Nanavati, learned counsel for the original defendant no.1 as well as Mr.Gandhi for the original defendants no.2 and 3 did content that it has come in evidence that after the purchase of the property, the original defendant no.1 has incurred expenses of about Rs.75 lakhs and with the expenses of the sale, it can be said as Rs.80 lakhs after purchase of the property in addition to the amount of the offer of Rs.1.18 crore and therefore, it was submitted that if the said aspect is taken into consideration, it cannot be said that the sale is not equivalent to fair market value of the property. In our view, even if the said aspect is taken into consideration for the sake of examination, then also, the total cost may come to Rs.2 crore as against the fair market value arrived at as per the above referred calculation of Rs.4.90 crore. Then in that case also, such amount would come to 40% of the fair market value and it would not meet with the obligation to be discharged to obtain best possible price nor can it be termed as observance of reasonable prudence in fiduciary capacity while selling the property of the principal or the guarantor, as the case may be. At the most, such aspect may assume importance in the event this Court on equitable consideration is to balance the rights of the parties for ensuring that no one is allowed to earn any undue benefit. In view of the aforesaid discussion, we find that the lower court cannot be said as having committed error in recording the finding of fact that the sale was unauthorised, fraudulent, malafide, collusive, and upon re-appreciation of the evidence, we find that the said finding of the lower court does not deserve to be interfered with. But the matter does not end there. But the matter does not end there. The important aspect which has been totally lost sight of by the lower court is that after the properties were purchased by the original defendant no.1, it has made huge investment and there is a going on unit wherein a statement was made at bar at the time when the interim order was passed by this Court on 01.10.2010 that about 4000 employees are working and the original defendant no.1 has secured loan of Rs.300 crores from the other nationalised bank. The decree of the lower court includes further declaration of the sale as unauthorised, fraudulent, malafide and irregular, prohibitory injunction against the bank and its officers, defendants no.2 and 3 from interfering the plaintiff and its officers from utilising and enjoying all movable and immovable property which is subject matter of the suit. Therefore, it appears to us that in order to render complete justice to the parties by balancing the rights of both the sides, it was required for the lower court to issue suitable directions further. The lower court has failed to consider the aspect of return of the amount of Rs.1.18 crore with the reasonable interest as well as it has failed to consider the aspect of prejudice caused to the plaintiff on account of the alleged sale. If the decree is to operate as it is, the consequence may arise for restoration of the property prior to the sale, but what will be the effect of such restoration upon the investment already made by the original purchaser in any case to the extent of the amount already paid with reasonable interest or in order to avoid such complication, whether the interest of the plaintiff can be taken care of by imposition of suitable condition has not been considered at all by the lower court. Since the present proceedings are by way of appeal, we find that this appeal being continuous of the proceeding of the suit, such can be taken into consideration in order to render complete justice to the parties. Since the present proceedings are by way of appeal, we find that this appeal being continuous of the proceeding of the suit, such can be taken into consideration in order to render complete justice to the parties. To some extent, the said aspect was taken into consideration by this Court at the time when the aforesaid interim order read with the reasons recorded therein was passed on 01.10.2010, which of course has been subsequently modified by the Apex Court to the extent that as against Rs.3.50 crore, as was ordered to be deposited by this Court, Rs.1 crore shall be deposited with the Bank and the bank guarantee of Rs.2.50 crore will be furnished and the said condition accordingly has been complied with. The consequence is that Rs.1 crore has been deposited and Bank guarantee of Rs.2.50 crore will be furnished and the said condition accordingly has been complied with by the original purchaser-appellant of First Appeal No.2123/09 pending the appeal and the decree of the lower court has remained stayed. It is true that the observations made at the the interim stage are not binding to the court when the final order in the appeal is to be passed, but in view of the reasons recorded by us hereinabove in the present judgment, we find that if the original plaintiff has suffered on account of the aforesaid impugned sale, and the court is to set aside the sale, even the original plaintiff cannot take any undue benefit nor the purchaser-defendant no.1 can be made to suffer. The prejudice caused to the original plaintiff or in any case the action taken by the original defendant no.1-purchaser after the sale in bonafide should be taken care of. Therefore, it calls for appropriate directions to render complete justice to the parties and if such additional directions are not complied with, the consequence of the decree to the fullest extent may arise. Therefore, it calls for appropriate directions to render complete justice to the parties and if such additional directions are not complied with, the consequence of the decree to the fullest extent may arise. If the aspect of investment of more than 300 crore by the original defendant no.1 after purchase of the property that too having taken loan from the nationalised bank and the employment of 4000 persons by restarting of the unit are considered, as per the statement made at the bar and recorded in the above referred order in the interim order and if such is not taken care of, it would create large number of complications and therefore also, appropriate directions by way of additional opportunity to the original defendant no.1 deserves to be given failing which the decree may operate in toto, but at that also, the original plaintiff cannot be allowed to take any additional benefit thereof. We would have adopted the course of permitting the bank to re-sell the property by a fresh action of sale after setting aside of the sale in favour of original defendant no.1, but the property has completely changed its character inasmuch as there is additional investment of about 300 crores and there is going on concern of public limited company wherein employees employed are about 4000 persons. Therefore, even if resale of the property is to take place, the improvement made by the original defendant no.1 purchaser cannot be ignored and it can rather be said that the nature of the property has been completely changed and altered, whereby the resale of the property would cause enormous harm and damage to the defendant no.1 and its employees. As against the same, the interest on the part of the original plaintiff as it is apparent from the suit was that the property worth huge value of more than Rs. 6 crore has been sold at Rs.1.18 crore. In view of the finding recorded by us hereinabove, we have also found that on account of such sale with the material irregularity and in malafide, the prejudice could be said as caused of Rs.3.50 crore to the original plaintiff. If such is taken care of by balancing the rights, it would create a situation of complete justice to the parties after taking into consideration principles of equities. If such is taken care of by balancing the rights, it would create a situation of complete justice to the parties after taking into consideration principles of equities. At this stage, we may incidentally refer to some of the observations made by this Court in the case of Neetaben U. Chokshi Vs. Gujarat State Financial Corporation reported at 2010 (2) GLH 301 (decision of the Single Judge) (one of us, Jayant Patel J.) at paragraphs 15, 16, 20 and 21, which reads as under: “15. But the question would further be required to be considered on the aspects of authority of the Corporation to invite offer for sale of the property and to execute the sale deed in purported exercise of the power under Section 29 of the Act. As observed earlier, the Corporation had no authority to take possession under Section 29 of the Act and further in view of the above referred legal position in the case of Karnataka State Financial Corporation Vs. N. Narsimahaiah & Ors. (supra) read with Narayanbhai Raichanddas Patel v. Managing Director & Ors. (supra), if the Corporation could not exercise the power under Section 29 of the Act all subsequent action, on account of the no authority available with the Corporation can rather be termed as without any authority under the law. If such being the situation if the property is conveyed by the Corporation for which it had no authority, and if the rule of law is to be upheld, the sale deed, which is executed by the Corporation, would be required to be set at naught, may be even in favour of the bonafide purchaser. The question of protection of the interest of the bonafide purchaser essentially falls in the realm of equity and such equity, even if considered, at best, cannot be allowed to march over the law. If there is conflict of law and the equity, the Court has to uphold the law as against the equity. Therefore, if the sale is without authority, it can hardly be a valid defence available to the bonafide purchaser to contend that the sale may not be set at naught, since he was a bonafide purchaser. If there is conflict of law and the equity, the Court has to uphold the law as against the equity. Therefore, if the sale is without authority, it can hardly be a valid defence available to the bonafide purchaser to contend that the sale may not be set at naught, since he was a bonafide purchaser. If the authority is not available to the vendor and the vendor could not convey title, such defence may not be available to the bonafide purchaser to the extent of conferment and the retention of the title of the property. At the most, such bonafide purchaser may claim for making the loss good if the Court is to render justice to the fullest extent or to do the complete justice. It may be recorded that this Court had an occasion to consider the question for dealing with a situation in a case where the prayer was to declare sale as void as permission under the Bombay Prevention of Fragmentation & Consolidation of holding Act was not taken in its decision in case of Patel Ratilal Maganbhai v. State of Gujarat, reported at 2003(1) GLR, p. 562. In the said case, the Division Bench of this Court declined the relief as was barred by the law of limitation but certain observations were made inter alia at paragraph 13 upon the rights and liabilities of purchaser and sellor as under:- “If the sellor establishes that the sellor himself as well as the purchaser, both were under the bonafide mistake that the permission of the competent authority for sale is not required, then in the given case, the court keeping in view the intent of the legislature may declare the transaction of sale as void. But, in those circumstances also the court may decline the equitable relief of restoring the possession back to the sellor and even if the court decides to restore the possession back to the sellor, the court may also put the sellor on condition of repaying the sale consideration and the compensation also if circumstances so demand.” 16. But, in those circumstances also the court may decline the equitable relief of restoring the possession back to the sellor and even if the court decides to restore the possession back to the sellor, the court may also put the sellor on condition of repaying the sale consideration and the compensation also if circumstances so demand.” 16. A question also came up for consideration before this Court under the Companies Act while declaring the sale as void or while considering the question of validating the transaction, which was otherwise barred by law, in the case of Star Chemicals (Bombay) Limited v. Vitta Mazda Limited, reported in 2005(0) GLHEL-HC 216070 (in Company Application No.157 of 1999 and allied matters). In the said decision, it was, inter alia, observed at paragraph 7 while summarizing the principles or approach by the Company Court as under:- “1. xxx 2. xxx 3. xxx 4. xxx 5. xxx 6. xxx 7....If the transaction is in breach of any prohibitory order of any competent forum or there were prohibition of transfer of property of a company, then also while declaring the validity of the transaction, the Court may provide for suitable conditions to make loss good in case the Court is satisfied that the purchaser entered into the transaction in bonafide. As the whole exercise of the power of just and equitable consideration, the Court may also put the company in liquidation to fulfill suitable conditions even if the transaction is to be treated as invalid.” 20. It appears to the Court that in normal circumstances had it been a case where the respondent No.2 could not enjoy the fruit of the investment by way of occupation of the property, the matter could have been considered for awarding of interest by way of compensatory measure, but as respondent No.2 has been put into the possession and as per respondent No.2 he has also occupied the property, it would not be just and proper to award interest, since the loss is, in any case, also to the original owner of the property towards deprivation of the property without receipt of any money therefrom. As regards the loss towards appreciation is concerned, it appears to the Court that respondent No.1 Corporation, as observed earlier, has not acted fairly at the time of accepting the offer of respondent No.2, nor even at the time when the sale deed is entered into by putting the respondent No.2 at notice about the pendency of the present proceedings or orders, if any, may be passed by this Court. The normal appreciation even if considered on the basis of the principles, which are being considered under the Land Acquisition Act, would be at the rate of 10% per annum. The sale has taken place in the year 2005 (whereas the petition is being heard in the year 2010), therefore, it could be said that there would be loss of appreciation of the property for five years. If the matter is strictly considered on the basis of the principles as are being applicable under the Land Acquisition Act for awarding compensation the figure may be very high and would be approximately about Rs.15 lac, but keeping in view the fact that the Corporation is a public body and public money is involved therein, respondent No.2, in any case, would be deserved to be compensated by the Corporation to the extent of Rs.5 lac towards the loss caused to respondent No.2 by way of increase in the valuation of the property, since, in any case, respondent No.2 will be required to purchase the other property, if taken over, as per the order, which may be passed by this Court hereinafter. 21. The aforesaid takes me to examine the aspects on modalities to be effected, since the property has changed the hands and even if the property is restored back to the petitioner, the Corporation is, in any case, would be at liberty to exercise the power under Section 31 of the Act for recovery of the amount from the surety i.e. petitioner herein, including by sale of the property in question. The aforesaid observations and discussion would show that the respondent No.2 herein would be entitled to the amount of Rs.38.25 lac even if the sale is to be set at naught and the property is to be taken over from him and to be entrusted to the purchaser. The aforesaid observations and discussion would show that the respondent No.2 herein would be entitled to the amount of Rs.38.25 lac even if the sale is to be set at naught and the property is to be taken over from him and to be entrusted to the purchaser. Out of the said amount, as observed earlier, the amount of Rs.33.25 lac would be required to be deposited by the petitioner and Rs.5 lac will have to be paid by the Corporation, total Rs.38.25 lac. It is only upon such payment, respondent No.2 can be directed to hand over the possession to the Corporation or that the Corporation may be put to liberty to take over the possession of the property, thereafter such property can be entrusted to the petitioner. After such amount is paid, process of re-entrustment of the property is completed, if the petitioner is to contend that the actual amount of Rs.11 lac has not been spent by respondent No.2 for renovation or further construction in the property, petitioner may file suit for recovery of the amount at which there will be a full-fledged inquiry on the aspect of expenses incurred and the proof thereof etc., but if the petitioner is to assert right to get back the possession by setting at naught the sale, such amount is required to be paid to respondent No.2, may be through Gujarat State Financial Corporation or otherwise.”(Emphasis supplied) It is true that in the said case, the sale under section 29 of the guarantors' property was found without any authority of law and therefore, the Court had to modulate the relief and in the present case also, we find that the action undertaken by the original defendant no.1 purchaser in any case after purchase of the property by the impugned sale would fall under the arena of bonafide action. Further, this Court while considering the legality and validity of the sale, as observed earlier, has taken into consideration the statutory aspects coupled with the equitable consideration of the prejudice caused to the original plaintiff. Therefore, while considering the said aspect, prejudice as may be caused on account of the decree which may be passed against the original defendant no.1 purchaser cannot be ignored. Therefore, while considering the said aspect, prejudice as may be caused on account of the decree which may be passed against the original defendant no.1 purchaser cannot be ignored. Under these circumstances, we find that if the condition is imposed giving opportunity to the defendant no.1 to make good the prejudice or the loss caused on account of the sale with the material irregularity or malafide sale, the same would meet with the ends of justice. But upon failure to do so, all consequences of the decree may arise, but at the same time, the original plaintiff or the Bank in its capacity as power of attorney of plaintiff while enjoying the fruits of the decree cannot enjoy in toto, but has to account and make good to the original defendant no.1 purchase of the amount already paid with the reasonable interest. Hence, we find that condition deserves to be imposed upon the original plaintiff or bank in its capacity of power of attorney as well as also to the original defendant no.1 by modifying the judgment and decree of the lower court so as to render complete justice to the party. Further, so far as the original plaintiff is concerned, he is yet to pay the outstanding amount to the Bank and therefore, the Bank in any case who is one of the appellant-original defendants no. 2 and 3 in any case would not suffer by imposition of such condition and the rights of all the parties can be balanced appropriately. Hence, we find that if the original defendant no.1 deposits the amount of Rs.3.50 crore with the reasonable interest at the rate of 8% p.a. from the date of the sale till the amount if actually deposited, the same would sufficiently protect the interest of the original plaintiff. Out of the said amount which may be deposited by the original defendant no.1, the bank may appropriate the amount to the extent of the applicable liability of the original plaintiff at the relevant point of time of sale with the interest at the rate of 8% p.a. and the balance, if any, may be refunded to the original plaintiff. Out of the said amount which may be deposited by the original defendant no.1, the bank may appropriate the amount to the extent of the applicable liability of the original plaintiff at the relevant point of time of sale with the interest at the rate of 8% p.a. and the balance, if any, may be refunded to the original plaintiff. In the event the aforesaid condition is not complied with by the original defendant no.1 purchaser, the decree as ordered by the lower court may operate but with the additional condition that the original defendant no.1 shall be entitled to the refund of the amount of Rs.1.18 crore plus Rs.80 lakhs as already stated to have been spent which has come in evidence towards outstanding dues of the property, total Rs.2 crore if rounded off with interest at the rate of 8% p.a. till the amount is fully refunded. Hence, the following order: The judgment and decree passed by the lower court is modified to the effect that - If the defendant no.1 deposits the amount with the respondents no.2 and 3 bank of Rs.3.50 crore with interest at the rate of 8% p.a. within a period of four months, from the date of purchase of the property, i.e., 22.07.2003 till the amount is fully deposited, the judgment and the decree of the lower court shall not be executed. Under the aforesaid circumstances, no right shall be available to the original plaintiff to execute the decree of the lower court but the only right available to the original plaintiff shall be to get back the balance amount to be calculated in the manner mentioned in earlier paragraph if any from the original defendants no.2 and 3 within one month from such deposit by the original defendant no.1 and the original defendants no.2 and 3 bank shall refund such amount accordingly. The defendant No.1 shall be entitled to have set off of the amount deposited as per the interim order passed in the appeal and the bank guarantee shall be returned after deposit of the remaining amount from Rs.3.5 crores with interest at the rate of 8% p.a. as aforesaid. The defendant No.1 shall be entitled to have set off of the amount deposited as per the interim order passed in the appeal and the bank guarantee shall be returned after deposit of the remaining amount from Rs.3.5 crores with interest at the rate of 8% p.a. as aforesaid. If there is failure on the part of the defendant no.1 to comply with the aforesaid condition within the stipulated period, the plaintiff will have the right to execute the decree of the lower court, but with the further direction that the Bank – original defendants no.2 and 3 shall within 3 months therefrom undertake the exercise to sell the property by discharging the obligation to procure best possible price equivalent to fair market value as per the observations made by this Court in the present judgment and out of the amount as may be realised, the defendants no.2 and 3 shall refund the amount of Rs.2 crore with interest at the rate of 8% p.a. within a period of one month from such realisation and the bank shall also be entitled to appropriate the amount as per the terms and conditions of the Power of Attorney read with the equitable mortgage and the balance amount if any shall be paid within one month thereafter to the original plaintiff. It is further observed and directed that before the sale takes place, the original defendant no.1 shall be entitled to remove all additions made of any superstructure or plant and machinery etc. after purchase of the property on 22.07.2003 by drawing appropriate panchnama to be prepared in presence of authorised representative of all parties. The judgment and the decree of the lower court shall stand modified to the aforesaid extent. Appeals are partly allowed. Considering the facts and circumstances, there shall be no order as to costs.