Allowed

P.I.Poley v. K.F.C. and Others

Kerala HC1 Jul 2010WP(C)/3765/2010

Case brief

AI extract

What is this about?

Petitioner challenging attachment of immovable property attached by Kerala Financial Corporation before his purchase at DRT auction. Court held attachment subsists only for balance proceeds after satisfying first charge. Directed removal of attachment from records.

What did the court decide?

Petitioner declared right of redemption extinguished by sale; second respondent directed to remove attachment from records.

P.I.Poley Vs K.F.C. and Others — Banking and Recovery | Kerala HC (2010)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 1ST JULY 2010 / 10TH ASHADHA 1932

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WP(C).No. 3765 of 2010(U)

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---------------------------------------

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PETITIONER(S):

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------------------------

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P.I.POLEY, S/O.P.P.AIPPU, PUTHUSSERRY HOUSE, ALLAPRA PO, PERUMBAVOOR,

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BY ADVS. SRI.M.A.ABDUL HAKHIM, SRI.JYOTHISH.J.KALLINGAL.

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RESPONDENT(S):

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1. KERALA FINANCIAL CORPORATION, REPRESENTED BY ITS CHIEF MANAGER, ERNAKULAM.

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2. SUB REGISTRAR, SUB REGISTRAR'S OFFICE, SREEMOOLANAGARAM.

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3. THE DEPUTY TAHSILDAR(RR) KERALA FINANCIAL CORPORATION ERNAKULAM.

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R1 BY ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC R2 & R3 BY GOVERNMENT PLEADER SRI. M.A. ASIF

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Kss

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WPC.NO.3765/2010 U

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APPENDIX

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PETITIONER'S EXHIBITS:

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P1: COPY OF THE CERTIFICATE OF SALE OF IMMOVABLE PROPERTY.

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P2:	COPY OF THE LETTER OF REQUEST OF THE RECOVERY OFFICER.
P3:	COPY OF THE CERTIFICATE OF ENCUMBRANCE.

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RESPONDENT'S EXHIBITS: N I L

/TRUE COPY/

P.A.TO JUDGE

Kss

S. SIRI JAGAN, J.

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- - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 3765 of 2010

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- - - - - - - - - - - - - - - - - - - - - - - Dated this the 1^st day of July, 2010

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J U D G M E N T

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The petitioner purchased 31.38 Ares of land on

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13.10.2009 in a public auction conducted by the Debts

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Recovery Tribunal, Ernakulam, as per a Recovery Certificate No.2789 issued in O.A. No.12/2006. That sale was for execution of a decree passed by the DRT in favour of a Bank, with whom the property in question was mortgaged by a borrower as security for the loan. That purchase was on 13.10.2009. It appears that during the pendency of the O.A. before the DRT, the Kerala Financial Corporation attached the property in question on 19.03.2007 for realisation of amounts due to the KFC from

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the original owner of the property. Petitioner challenges the said attachment seeking the following reliefs in this writ petition.

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W.P.(C)No. 3765 of 2010

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a) Issue a writ of certiorari or such other writ order or direction setting aside the attachment of the 1^st respondent dated 19/3/2007 disclosed in Ext.P3 Encumbrance Certificate and in the Registry of the 2^nd respondent.

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b) Issue a writ of mandamus or such other writ, order or direction compelling respondents 1 & 2 to remove the attachment of the 1^st respondent dated 19/3/2007 disclosed in Ext.P3 and recorded in the Registry of the 2^nd respondent.

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c) Declare that the confirmation of the sale of the property as per Ext.P1 in favour of the petitioner extinguished the right of redemption of the mortgagors, judgment debtors before the Debt Recovery Tribunal, Ernakulam in O.A. No.12/2006 and consequent attachment of the 1^st respondent dated 19/3/2007 disclosed in Ext.P3 and recorded in the Registry.

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2. According to the petitioner, when a mortgaged

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property is sold for realisation of the mortgage money, and the sale is confirmed, the right of redemption of the mortgagor is extinguished and consequently the attachment of the right of redemption also stand extinguished. Consequently the attachment is liable to be lifted is the contention raised by the petitioner. He further points out that, a similar question relating to execution of a sale deed pursuant to the sale conducted by the DRT in respect of some other property in the very same O.A. was considered by this court in W.P.(C) No.35555/2009, wherein rejecting

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W.P.(C)No. 3765 of 2010

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the contention of the KFC, this court directed registration of the sale deed.

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Heard the standing counsel for the KFC also, who would argues in favour of the action of the respondents. According to him since the attachment was before the sale in favour of the petitioner, that sale can only be subject to the attachment.

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After hearing, I am unable to agree with the standing counsel for the KFC. The sale by the DRT was for realisation of money due to the Bank which has a first charge in the property, in view of the mortgage executed by the original owner of the property in favour of the bank as security for due repayment of the loan amount. At the most a subsequent creditor who attaches the mortgaged property can only seek payment out of the sale amount, if any amount is left after satisfying claim of the bank. For that the KFC has to approach the DRT. As such, the attachment can continue to subsist only for that purpose, in so far as the DRT has already sold the property to the

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W.P.(C)No. 3765 of 2010

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petitioner for realisation of the 1^st charge of the Bank on the property. In the above circumstances, this writ petition is allowed with the following directions:

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It is declared that the KFC can only seek payment out of the sale proceeds if any amount is left after satisfying the debt, for which the KFC can approach the DRT. The 2^nd respondent is directed to remove the attachment from the records of the Sub Registrar in respect of the property in question.

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S. SIRI JAGAN JUDGE

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shg/

P.I.Poley v. K.F.C. and Others

Case brief

What is this about?

What did the court decide?

P.I.Poley v. K.F.C. and Others

Case brief

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What did the court decide?

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