2 hrs ago
Bombay High Court Backs PNB in 42-Year Flat Dispute
A bank and a company argued for many years about who should own a flat in Mumbai.
In 1982, the company agreed to sell the flat to the then New Bank of India for Rs 15 lakh.
The bank paid Rs 14 lakh and received possession.
The company later said the flat was only being used as security for a loan.
The Bombay High Court examined records about the payment and possession.
It decided that the agreement was for a sale, not just loan security.
The court reversed an earlier ruling that had favoured the company.
It ordered Punjab National Bank to pay the remaining Rs 1 lakh within four weeks, with interest calculated from 1987.
The Bombay High Court ruled for Punjab National Bank in a 42-year dispute over a Cuffe Parade flat.
The court held that a 1982 agreement was a genuine sale agreement, not loan security.
The flat was agreed to be sold to the then New Bank of India for Rs 15 lakh.
The bank had paid Rs 14 lakh and received possession; the court ordered it to pay the remaining Rs 1 lakh.
The court overturned a 2023 City Civil Court decree and set a four-week deadline, with 12% annual interest on the balance from June 30, 1987.
- Who
- Punjab National Bank and M/s Mohan Gandhi & Company.
- What
- The Bombay High Court upheld PNB’s claim to the flat and ordered specific performance of the sale agreement.
- Where
- Flat No. A/1, Cuffe Castle Co-operative Housing Society, Cuffe Parade, Mumbai.
- When
- The ruling was reported on October 7, 2026; the disputed agreement dates to 1982.
- Why
- The court found that the agreement and transfer of possession showed a sale for Rs 15 lakh, rather than the flat being loan security.
PNB’s position
Mohan Gandhi & Company’s position
Nature of the 1982 transaction
PNB’s position
PNB argued that the flat was sold for Rs 15 lakh; the bank paid Rs 14 lakh and received possession.
Mohan Gandhi & Company’s position
The firm argued that the flat was given as collateral for a Rs 14 lakh loan to Argee Textiles and was to be returned after repayment.
Execution of the agreement
PNB’s position
The court relied on bank records, payment vouchers, and possession as evidence supporting a sale.
Mohan Gandhi & Company’s position
The firm alleged that the agreement was signed late at night under pressure, without proper legal advice, and questioned signatures by two minor partners.
Key facts
- Court
- Bombay High Court
- Judge
- Justice Sharmila Deshmukh
- Property
- Flat No. A/1, Cuffe Castle Co-operative Housing Society, Cuffe Parade
- Agreed sale price
- Rs 15 lakh
- Amount already paid
- Rs 14 lakh
- Balance ordered
- Rs 1 lakh, with 12% annual interest from June 30, 1987
- Payment deadline
- Within four weeks
- Earlier ruling overturned
- 2023 City Civil Court decree favouring M/s Mohan Gandhi & Company
Quotes
Justice Sharmila Deshmukh
Bombay High Court judge who decided the dispute
“The agreement when read holistically indicates that the agreement between the parties was a transaction of sale of flat for total consideration of Rs. 15 lakhs”
freepressjournal.in
Sources
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