In Brief
M/s United Auto Tractor Ltd. obtained 51 acres of land in Andhra Pradesh with an agreement permitting mortgage to secure bank loans. After paying 50% of the cost, the company mortgaged the land to Syndicate Bank by depositing the letter of allotment and related documents. The Government later transferred control to APIIC, which cancelled the allotment of 25 acres but left 26 acres with the company. When the company defaulted, the bank sought to sell all 51 acres. The High Court held the mortgage invalid due to absence of a registered sale deed. The Supreme Court held the State and APIIC were estopped from challenging the mortgage validity, given prior express permission and their subsequent conduct. The Court awarded the bank Rs.38,95,51,163/- from auction proceeds with 12% interest per annum, with the balance going to the Telangana Industrial Infrastructure Ltd.
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