Chandrashekhar S/O Gurunath Bangare, Vs Town Municipal Council

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE QUASH ANNEXURE-F DATED 05.08.2014 BEARING NO.£À¸ÀzÁA:PÀAzÁAiÀÄ 2014-15/194 ISSUED BY RESPONDENT NO.1

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AS NULL AND VOID AND ISSUE A WRIT IN THE NATURE OF MANDAMUS DIRECTING THE 1^ST RESPONDENT TO ENTER THE

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HC-KAR

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NAME OF THE PETITIONER BY ACCEPTING THE APPLICATION DATED 11.02.2014 VIDE ANNEXURE-E.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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ORAL ORDER

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(PER: THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE)

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This Petition is filed assailing the order dated 05.08.2014 marked at Annexure-F. In terms of the said order, the Town Municipality, Dandeli directed the petitioner to get the encumbrance of Syndicate Bank, JN Road, Dandeli branch cleared before getting the petitioner's name mutated in the property extract pursuant to the registered sale certificate.

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2. Learned counsel appearing for the petitioner submits

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that the petitioner had purchased the property in an auction conducted by Vijaya Bank, as the borrower from Vijaya Bank had defaulted in repaying the loan amount. The petitioner emerged as the successful bidder in the public auction and the sale certificate was issued to the petitioner, which came to be registered on 18.01.2014.

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HC-KAR

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Thereafter, the petitioner approached the Town Municipality, Dandeli to enter his name in the property records pursuant to registered sale certificate. The Town Municipality, Dandeli, issued an endorsement stating that the petitioner's name cannot be entered in the property records unless the charge of the Syndicate Bank is cleared.

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Learned counsel appearing for the petitioner would invite the attention of the Court to the encumbrance certificate dated 09.07.2002 for the year 01.04.1987 to 08.07.2002 to contend that for the said period, the property was free from encumbrance and the encumbrance certificate would reveal that the property is sold by the Municipality Dandeli to one Shridhar C.L. the borrower from Vijaya Bank.

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Learned counsel appearing for the petitioner would also refer to the encumbrance certificate dated 16.12.2013 for the period 01.04.2000 to 13.12.2013, which again does not reveal any encumbrance of any third party, except revealing the sale transaction between the Town Municipality, Dandeli and Shridhar C.L.

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HC-KAR

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Referring to these documents, it is urged that the claim of the Town Municipality, Dandeli that there is encumbrance of Syndicate Bank Dandeli is incorrect.

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Learned counsel appearing for respondent No.3Canara Bank, which is now merged with Syndicate Bank, would contend that the Syndicate Bank had advanced loan to one Nithyanand, and Shridhar C.L. stood as a guarantor to the said loan transaction. Thereafter, Nithyananda defaulted and the bank filed a suit for recovery of money against Nithyanand and Shridhar C.L. and another guarantor M.R.Chockalingam in O.S. No.156/2005 on the file of Senior Civil Judge, Sirsi. The said suit came to be decreed for recovery of Rs.4,73,155/- along with interest at the rate of 15.5% per annum from the date of the suit till realization of the entire amount. The decree is passed against all the three defendants named above.

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Referring to the said decree, it is urged that the Syndicate Bank which is now merged with Canara Bank has prior claim over the properties. Thus, learned counsel appearing for respondent No. 3 would urge that the petition be dismissed and

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HC-KAR

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the petitioner be directed to clear the loan of Canara Bank, formerly loan of Syndicate Bank, availed by Nithyanand.

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This Court has considered the contentions raised at the bar and perused the records.

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It is not in dispute that the petitioner purchased the property in a public auction and later sale certificate was issued and same came to be registered on 18.01.2014. The original owner of the property has not raised any dispute relating to the auction.

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The question is whether the petitioner is liable to clear the dues of Syndicate Bank. The answer to this question depends on whether the property was mortgaged to Syndicate Bank before the auction.

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Though respondent No.3 has produced the records relating to loan transaction and also the decree for recovery of money, the documents do not indicate that the property was mortgaged in favour of Syndicate Bank.

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NC: 2025:KHC-D:15410 WP No. 102194 of 2015

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HC-KAR

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Attention of the Court is invited to Annexure-R4- the

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Tax Assessment extract pertaining to the property. In column No.35, there is an endorsement to the following effect:

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“ªÀåªÀ¸ÁÜ¥ÀPÀgÀÄ ¹ArPÉÃmï ¨ÁåAPï, zÁAqÉÃ°, EªÀgÀ ¥ÀvÀæ ¢:-4-12-04 gÀAvÉ gÀÆ-8,00,000/- [JAlÄ ®PÀë] ¨sÉÆÃd zÁR¯É ªÀiÁrzÉ.”

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Referring to these documents, it is urged that the encumbrance of the Sydicate Bank is recorded in the property extract. Thus, he would urge that the petitioner is liable to clear the charge of Syndicate Bank, Dandeli.

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It is to be noticed that document at Annexure-R4 is issued on 13.07.2015. The entry in column No.35 does not reveal the date on which the entry is certified. More than anything else, mere entry in the property record does not create a charge in favour of the Bank. To create a charge, there has to be a proper document creating charge by the borrower or the guarantor.

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Respondent No.3-Bank has not produced any records to show that the property is mortgaged. Respondent No.3-Bank has not produced any records to show that the entry is made in

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HC-KAR

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the property records pursuant to an attachment order passed by the Court. The decree passed in favour of the Bank also does not indicate that it is a mortgage decree.

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Thus, the entry in column No.35 does not create a right in favour of respondent No.3-Bank, unless said entry is supported by a legally executed document creating mortgage in favour of respondent No.3-Bank.

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This being the position, this Court has to hold that as on the date of the auction in the year 2014 the property was not subject matter of any mortgage or attachment by the Court.

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Under the circumstances, the endorsement issued by respondent- Municipality directing the petitioner to get the loan of Syndicate Bank cleared before the petitioner's name is entered in the property records is wholly unsustainable.

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Hence, the following:

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ORDER

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(i) Writ Petition is allowed .

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(ii) The impugned endorsement at Annexure-F is quashed.

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HC-KAR

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(iii) Respondent- Municipality shall enter the name of the petitioner in the property records based on registered sale certificate within 30 days from the date of receipt of certified copy of this Order.

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Sd/(ANANT RAMANATH HEGDE) JUDGE

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GVP-CT:BCK LIST NO.: 2 SL NO.: 8

Chandrashekhar S/O Gurunath Bangare, v. Town Municipal Council

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Chandrashekhar S/O Gurunath Bangare, v. Town Municipal Council

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