Allowed

Indian Overseas Bank v. the Sub Registrar Edappally

Kerala HC12 Oct 2021WP(C)/3554/2021

Case brief

AI extract

What is this about?

The High Court held that an attachment created after a prior mortgage lacks legal validity. The writ petition allowed, directing the Sub Registrar to efface the attachment from revenue records and set aside the communication denying such removal.

What did the court decide?

Direction to efface attachment from revenue records and set aside the communication issued by the Sub Registrar.

Indian Overseas Bank Vs the Sub Registrar Edappally — Property and Title | Kerala HC (2021)

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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 BECHU KURIAN THOMAS

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TUESDAY, THE 12^TH DAY OF OCTOBER 2021 / 20TH ASWINA, 1943

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WP(C) NO. 3554 OF 2021

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PETITIONER :

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INDIAN OVERSEAS BANK, M.G. ROAD ERNAKULAM BRANCH,

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M.G.ROAD, ERNAKULAM, REPRESENTED BY ITS ASSISTANT GENERAL MANAGER, SRI. CHAND KUMAR.L, S/O. M.P. LAKSHMANAN, AGED 57 YEARS.

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BY ADV LEO GEORGE

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RESPONDENTS :

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1 THE SUB REGISTRAR, EDAPPALLY, SUB REGISTRAR'S OFFICE, EDAPPALLY, KOCHI-682 024.

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2 THE TAHSILDAR, TALUK OFFICE, KANAYANNUR, ERNAKULAM DISTRICT, PIN-682 011. 3 THE VILLAGE OFFICER, EDAPPALLY SOUTH VILLAGE, ERNAKULAM DISTRICT, PIN-682 024. 4 SHAJAN JOSEPH K.R., S/O. LONAN RAPHAEL, PROPRIETOR, M/S. TIMBER GLASS HOUSE, KOMAROTH HOUSE, AZAD ROAD, KALOOR, KOCHI-682 017. 5 SHAINA SHAJAN, W/O. SHAJAN JOSEPH K.R., KOMAROTH HOUSE, AZAD ROAD, KALOOR, KOCHI-682 017.

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WP(C) NO. 3554 OF 2021

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6 MUTHOOT VEHICLE AND ASSET FINANCE LTD., MUTHOOT CHAMBERS, OPPOSITE SARITHA THEATRE, BANERJI ROAD, KOCHI-682 018, REPRESENTED BY ITS MANAGING DIRECTOR.

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R1 TO R3 BY SENIOR GOVT. PLEADER ADV.JUSTIN JACOB R6 BY ADV.SHIJU VARGHESE

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

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12.10.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 3554 OF 2021

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BECHU KURIAN THOMAS, J.

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=-=-=-=-=-=-=-=-=-=-=-=-=-=

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Dated this the 12^th day of October, 2021

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JUDGMENT

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A secured creditor seeks for directions inter alia to quash Ext.P7 communication issued by the first respondent denying its request to remove an encumbrance in the form of an attachment effected on the basis of court orders over a property mortgaged with the secured creditor. The communication stated that the encumbrance has been shown in the revenue records on the basis of an order of attachment issued by a civil court and that the said entry can be removed only on the basis of court orders.

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Petitioner had granted a cash credit facility to respondents 4 and 5 on 01.06.2017 and an equitable mortgage was created in favour of the petitioner, as a measure of security for repayment of the amount due under the cash credit facility. The mortgage was created by depositing Sale Deed No.6817/2006 of the Edappally Sub Registry office which is evident from Ext.P2 confirmation letter. It is also pleaded that the particulars of the security interest have been filed with the Central Registrar

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WP(C) NO. 3554 OF 2021

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constituted under Section 21 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the 'SARFAESI Act'). The petitioner pleads that since the cash credit facility offered to respondents 4 and 5 became irregular, proceedings were initiated under the SARFAESI Act and while the same were continuing, it was learnt that an attachment was effected on the property at the instance of the 6^th respondent. Immediately on becoming aware about the attachment, Ext.P6 application was filed, requesting for effacing the attachment reflected in the revenue records on the ground that the attachment was carried out subsequent to the creation of mortgage and that the same had no legal validity. It is in response to the said request that Ext.P7 was issued by the first respondent intimating that the attachment was effected on the basis of the order of the District Court, Ernakulam in CMA (Arb.).No.730/2019 filed by the 6^th respondent and that it can be removed only on getting orders from the Court.

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A counter affidavit has been filed by the first respondent stating that the attachment was effected over the property on the basis of court orders and that the first respondent has no authority to release the attachment without orders from the court. A copy of the order of attachment dated 09.07.2019 is

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WP(C) NO. 3554 OF 2021

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produced by the first respondent as Ext.R1(a).

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I have heard Adv.Leo George, the learned counsel for the petitioner as well as the learned Senior Government Pleader Adv.Justin Jacob for respondents 1 to 3 and Adv.Shiju Varghese, the learned counsel for the 6^th respondent. No counter affidavits have been filed by respondents 4, 5 or 6.

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It is a settled proposition of law that attachments created on the properties after creation of a mortgage has no legal validity. When such attachments are effected even by orders of courts of law, the same cannot prevail over the prior mortgage. Reference is invited to the decision of this Court in Madhan v. Sub Registrar [2014 (1) KLT 406] and Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar [2020 (6) KLT 68] .

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Since in the instant case the mortgage was created on 01.06.2017 as is evident from Ext.P2 and the attachment was effected only on 09.07.2019, as can be gathered from Ext.R1(a), the attachment ordered in Ext.R1(a) cannot sustain and the same is liable to be effaced from the revenue records. Ext.R1(a) is the order of attachment as directed by the District Court, Ernakulam in IA.No.4641 of 2019 in CMA (Arb) No.730 of 2019 dated 09.07.2019.

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WP(C) NO. 3554 OF 2021

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In view of the above, there will be a direction to the first respondent to efface the attachment effected on the property having an extent of 11.94 Ares in Survey No.70/9/A of Edappaly South Village, Kanayannoor Taluk, Edappally Sub District, Ernakulam and covered by Sale Deed No.6817/2006 of Edappally Sub Registry office as attached by Ext.R1(a) order of attachment. To enable the effacement of such attachment over the property, Ext.P7 shall stand set aside.

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The writ petition is allowed as above.

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Sd/- BECHU KURIAN THOMAS, JUDGE

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RKM

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WP(C) NO. 3554 OF 2021

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APPENDIX OF WP(C) 3554/2021

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PETITIONER'S EXHIBITS :

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EXHIBIT P1 A TRUE COPY OF SALE DEED NO.6817/2006 OF EDAPPALLY S.R.O.ALONG WITH TRUE ENGLISH TRANSLATION.

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EXHIBIT P2 A TRUE COPY OF MEMORANDUM EVIDENCING DEPOSIT OF TITLE DEEDS EXECUTED BY RESPONDENTS 4&5 IN FAVOUR OF PETITIONER BANK DATED 2.6.2017.

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EXHIBIT P3 A TRUE COPY OF THE SECURITY INTEREST DETAILS MAINTAINED AT THE CENTRAL REGISTRY OF SECURITISATION ASSET RECONSTRUCTION AND SECURITY INTEREST OF INDIA.

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EXHIBIT P4 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE FOR A PERIOD COVERING FROM 1.1.1985 TILL 23.9.2020 ALONG WITH TRUE ENGLISH TRANSLATION.

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EXHIBIT P5 A TRUE COPY OF THE NOTICE ISSUED UNDER RULE 8(I) OF THE SECURITY INTEREST ENFORCEMENT RULES 2002 DATED 7.12.2020.

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EXHIBIT P6 A TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BANK BEFORE THE FIRST RESPONDENT DATED 5.11.2020.

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EXHIBIT P7 A TRUE COPY OF THE COMMUNICATION ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER BANK DATED 27.11.2020 ALONG WITH TRUE ENGLISH TRANSLATION.

Indian Overseas Bank v. the Sub Registrar Edappally

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. the Sub Registrar Edappally

Case brief

What is this about?

What did the court decide?

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