Allowed

The State Bank of India, v. the Sub Registrar

Kerala HC14 Nov 2022WP(C)/8544/2022

Case brief

AI extract

What is this about?

This court quashed the order rejecting registration of a sale deed issued under the SARFAESI Act. The petitioner bank purchaser successfully established that the civil court's attachment did not create a charge or encumbrance, thus the Sub Registrar was directed to register the document.

What did the court decide?

The writ petition allowing the Sub-Registrar to register the sale deed de hors the attachment order, after affording an opportunity of hearing to relevant parties.

The State Bank of India, Vs the Sub Registrar — Civil Procedure and Limitation | Kerala HC (2022)

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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 V.G.ARUN

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MONDAY, THE 14^TH DAY OF NOVEMBER 2022 / 23RD KARTHIKA,

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1944

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WP(C) NO. 8544 OF 2022

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PETITIONER/S:

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THE STATE BANK OF INDIA, REPRESENTED BY ITS CHIEF MANAGER, STRESSES ASSETS RECOVERY BRANCH (S.A.R.B), LMS COMPOUND, OPPOSITE MUSEUM WEST GATE, VIKAS BHAVAN (PO) THIRUVANANTHAPURAM, PIN-695 033.

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BY ADVS. JAWAHAR JOSE CISSY MATHEWS JAISON ANTONY

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RESPONDENT/S:

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1 THE SUB REGISTRAR POTHENCODE, SUB REGISTRAR OFFICE, POTHENCODE (PO), THIRUVANANTHAPURAM DISTRICT, PIN-695 584.

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2 SMT. PRIYA R.P, P.R.BHAVAN, VARUVILAKAM, POTHENCODE , THIRUVANANTHAPURAM DISTRICT, PIN-695 584.

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3 SMT. SATHAKUMARI R, S.P NIVAS, NEAR NISAMIA PUBLIC SCHOOL, PLAMOODU, POTHENCODE , THIRUVANANTHAPURAM DISTRICT, PIN-695 584.

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4 MASTER KASHINATH (MINOR), P.R BHAVAN, VARUVILAKAM, POTHENCODE , THIRUVANANTHAPURAM DISTRICT, PIN-695 584. (Represented by Guardian 2^nd respondent Smt.Priya R.P)

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5 SHRI TRADERS, 8/1016, KOYYAMARAKADU, KANJIKODE (PO) PALAKKAD, REPRESENTED BY ITS MANAGING PARTNER, VENKATESH K, S/O KANDHASAMY, 1/69, NAVAKKARAI, MAVAUTHAMPATHI (PO), COIMBATORE DISTRICT, TAMILNADU STATE, PIN-641 032.

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6 V.SATHYAPRIYA, D/O SHANMUGA SUNDARAM, 1/69, NAVAKKARAI, MAVAUTHAMPATHI (PO) COIMBATORE DISTRICT, TAMILNADU STATE, PIN-641 032.

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7 K. VENKATESH, S/O KANDHASAMY, 1/69, NAVAKKARAI,

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W.P.(C) No.8544 of 2022

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MAVAUTHAMPATHI (PO) COIMBATORE DISTRICT, TAMILNDAU STATE PIN-641 032. 8 ABU TAHIR, S/O M. BASHEER, RESIDING AT SB MANZIL, 7/297(3), HARISANKARA ROAD, THAREKKAD, PALAKKAD, PIN-678 001 BY ADVS. SAJAN VARGHEESE K. JOPHY POTHEN KANDANKARY

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.06.2022, THE COURT ON 14.11.2022 DELIVERED THE FOLLOWING:

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W.P.(C) No.8544 of 2022

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JUDGMENT

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Dated this the 14^th day of November, 2022

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The property covered by Ext.P3 sale

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certificate was mortgaged by the third respondent and one S.Prasanth, the predecessor-in-interest of respondents 2 to 4, as security for a loan availed by S.Prasanth from the erstwhile State Bank of Travancore, which later got merged with the petitioner bank. The mortgage of an extent of 3.65 Ares was created by deposit of title deeds as per Ext.P1 dated 03.07.2011 and of the balance extent of 4.77 Ares, by deposit of title deeds as per Ext.P1(a) dated 27.03.2015. The borrower having defaulted repayment, the loan was classified as Non Performing Asset and brought to sale in accordance with the procedure prescribed in the SARFAESI Act and the Security Interest (Enforcement) Rules. The property was purchased

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W.P.(C) No.8544 of 2022

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by one G.Sivankutty Nair in the e-auction conducted on 10.11.2021. The bidder remitted the entire sale price within the stipulated time and the authorised officer of the Bank issued Ext.P3 sale certificate dated 19.01.2022. Thereafter, the first respondent/Sub Registrar was requested to register the sale deed in favour of the purchaser. As per Ext.P5, the first respondent rejected the request on the ground that attachments are subsisting over the mortgaged property, based on orders passed by the civil court. Thereupon the petitioner obtained Ext.P6 encumbrance certificate, which revealed that the mortgage property was attached on 22.02.2019 as per the order of the Principal Munsiff Court, Palakkad in O.S.No.470 of 2018 filed by respondents 5 to 8. That suit was subsequently decreed ex-parte as per Ext.P7 judgment dated 08.04.2019, making the decree a charge over the scheduled property. Aggrieved by the refusal to

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W.P.(C) No.8544 of 2022

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-5-

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filed seeking the following reliefs;

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“i. Call for the records leading to the issuance of Exhibit-P5 order and issue a writ, order or direction in the nature of certiorari quashing Exhibit-P5 order;

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ii. Issue a writ, order or direction in the nature of mandamus directing the 1st respondent to register the sale deed produced by the petitioner, in favour of Shri. G.Sivankutty Nair, notwithstanding the orders of attachment and sale by the Principal Munsiff's Court, Palakkad, in O.S No.470/2018.”

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Adv.Jawahar Jose, learned Counsel for the

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petitioner contended that refusal to register the sale deed based on an order of attachment passed

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many years after the property was mortgaged is patently illegal and unsustainable. It is submitted the position is no longer res integra in the light of the judgments rendered in Francis

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@ Porinju v. Navodaya Kuries & Loans (P.) Ltd and

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others [2010 (3) KLT 609], Rajalekshmi Amma v.

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E.A. Basheer and others [2013 (4) KLT 443] and

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W.P.(C) No.8544 of 2022

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Secretary, Keechery Service Co-operative Bank Ltd

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v. Sajitha Nizar Alias Sajitha P.M. [2020 (6) KLT

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68] . Reliance is also placed on the judgment in W.P.(C) No.9571 of 2022, as per which a learned Single Judge allowed the writ petition filed by the petitioner bank raising the very same contentions.

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Although respondents 2 and 4 were served with notice, there is no appearance on their behalf. Respondents 5 to 8 entered appearance, but did not put forward any argument in reply to the petitioner’s contention. The third respondent refused to accept notice. Hence, service is declared complete on the third respondent.

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Learned Government Pleader submitted that the first respondent is disabled from registering the document in view of the attachments affected over the property based on the order passed by the competent civil court.

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W.P.(C) No.8544 of 2022

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-7-

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As rightly contended by the learned Counsel for the petitioner, the legal position that an attachment does not create any right or interest over the property in favour of the attaching creditors nor does it amount to an

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encumbrance over the property is too well settled to be reiterated. The above position has been clearly laid down in the decisions cited supra. A perusal of the judgment in W.P.(C) No.9571 of 2022 shows that the learned Single Judge, after considering various judgments of this Court,

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including decision in Keechery Service Co-

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operative Bank Ltd , allowed the writ petition and directed the Sub Registrar to hear the competent officer of the petitioner bank as well as the person at whose instance the attachment was effected and to register the document, adverting to the precedents.

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Being in respectful agreement with the above

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W.P.(C) No.8544 of 2022

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judgment and being bound by the precedents cited above, the writ petition is disposed of directing

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the first respondent to take up Ext.P3 sale certificate and register the document, de hors the attachments, if necessary after affording an opportunity of hearing to the representative of the Bank and respondents 5 to 8. Necessary action in this regard shall be taken expeditiously and the document registered within one month of

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receipt of a copy of this judgment.

Sd/-

V.G.ARUN JUDGE

Scl/

W.P.(C) No.8544 of 2022

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-9-

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APPENDIX OF WP(C) 8544/2022

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PETITION	ER EXHI	BITS
Exhibit	P1	TRUE COPY OF THE MEMORANDUM DATED 3.7.2011 WHEREBY THE TITLE DEEDS WERE DEPOSITED WITH THE BANK
Exhibit	P1(A)	TRUE COPY OF THE MEMORANDUM DATED 27.3.2015 WHEREBY THE TITLE DEEDS WERE DEPOSITED WITH THE BANK
Exhibit	P2	TRUE COPY OF THE SALE NOTICE DATED 21.10.2021 ISSUED UNDER THE SARFAEST ACT
Exhibit	P3	TRUE COPY OF THE SALE CERTIFICATE DATED 19.1.2022 ISSUED BY THE BANK TO THE AUCTION PURCHASER
Exhibit	P4	TRUE COPY OF THE REPRESENTATION DATED 14.2.2022 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT
Exhibit	P5	TRUE COPY OF THE ORDER DATED 26.2.2022 2WHEREBY THE REGISTRATION IS DENIED BY THE 1ST RESPONDENT
Exhibit	P6	TRUE COPY OF THE ENCUMBRANCE CERTIFICATE 2.9.21
Exhibit	P7	TRUE COPY OF THE JUDGMENT DATED 8.4.2019 IN OS NO 470/2019 OF THE PRINCIPAL MUNSIFFS COURT, PALAKKAD

The State Bank of India, v. the Sub Registrar

Case brief

What is this about?

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The State Bank of India, v. the Sub Registrar

Case brief

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