Disposed

M/S. Housing Development Finance Corporation Bank Limited (Hdfc Bank Lmited) v. the Sub Registrar

Kerala HC26 Jun 2024WP(C)/20021/2024

Case brief

AI extract

What is this about?

A secured creditor sought registration of a SARFAESI sale certificate despite later attachments by third parties. The Court held attachments created subsequent to the mortgage have no effect on the SARFAESI sale, directed effacement of the attachments from revenue records and registration of the sale certificate.

What did the court decide?

Respondents 1-3 directed to efface the two post-mortgage attachments from revenue records; Sub Registrar to register Ext.P4 sale certificate without regard to those attachments.

M/S. Housing Development Finance Corporation Bank… — Banking and Recovery | Kerala HC (2024)

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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 N.NAGARESH

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WEDNESDAY, THE 26^TH DAY OF JUNE 2024 / 5TH ASHADHA, 1946

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WP(C) NO. 20021 OF 2024

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PETITIONER:

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M/S. HOUSING DEVELOPMENT FINANCE CORPORATION BANK LIMITED (HDFC BANK LMITED) DOOR NO.39/6457 OF COCHIN CORPORATION, RAVIPURAM JUNCTION, M.G.ROAD, PERUMANOOR P.O., ERNAKULAM DISTRICT REPRESENTED BY ITS AUTHORIZED OFFICER SRI. SACHIN A S , S/O T K SHANAVAS, AGED 40, PIN – 682015

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BY ADVS. SHIJU VARGHESE SACHU THOMAS

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RESPONDENTS:

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1 THE SUB REGISTRAR KANNUR, KANNUR.P.O., KANNUR DISTRICT, PIN - 670002

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2 THE TAHSILDAR KANNUR TALUK OFFICE, KANNUR P O, KANNUR DISTRICT, PIN - 670002

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3 THE VILLAGE OFFICER KANNUR -1 VILLAGE, KANNUR P O, KANNUR DISTRICT, PIN - 670002

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4 RAMSEENA T P KOOCOTH HOUSE, KALLUKETTU CHIRA, KOTTALI P O, KAKKATTU, KANNUR DISTRICT, PIN - 670005

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5 MUHAMMED SHIHAB P KOOCOTH HOUSE,, KALLUKETTU CHIRA, KOTTALI P O, KAKKATTU, KANNUR DISTRICT, PIN - 670005

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6 BASHITH PUNATHIL S/O. HAMEED, AGED 55 YEARS, AFNA HOUSE, MUZHATHADAM,PO THANA, KANNUR DISTRICT, PIN - 670012

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W.P.(C) No.20021/2024

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: 2 :

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7 ABDUL AZEEM V S/O. MOHAMOOD, AGED 44 YEARS, YASMEEN NIVAS, THANA PO, KANNUR DISTRICT, PIN - 670012

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8 SHABEEB E V S/O HASSANKUNHI A T , SOUDHA MANZIL, NEAR CIRAKKAL KULAM PALLI, KANNUR P O, KANNUR DISTRICT, PIN – 670003

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BY SRI.BINOY DAVIS, GOVERNMENT PLEADER

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.20021/2024

: 3 :

N. NAGARESH, J.

W.P.(C) No.20021 of 2024

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Dated this the 26^th day of June, 2024

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J U D G M E N T

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~ ~ ~ ~ ~ ~ ~ ~ ~

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The petitioner, who is a secured creditor, has filed

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this writ petition seeking to quash Ext.P5 letter of the Sub Registrar and to direct the Sub Registrar to register Ext.P4 Sale Certificate. The petitioner also seeks to direct the Sub Registrar to efface the attachments, which are entry Nos.2 and 3 in Ext.P3 Encumbrance Certificate.

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The petitioner states that they advanced a financial facility of ₹35 lakhs to respondents 4 and 5 on 27.05.2016. Respondents 4 and 5 mortgaged 2.04 Ares of land comprised in Re-survey No.10/1, 11 situated at Kannur--1 Village, Kannur Taluk, Kannur District. The borrowers defaulted loan repayment whereupon the

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W.P.(C) No.20021/2024

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: 4 :

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petitioner took possession of the property invoking Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner then sold the property in public auction to one Shaheeb E.V. for ₹50 lakhs. Ext.P2 Sale Certificate dated 29.02.2024 was issued by the Bank.

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In order to register Sale Certificate, the petitioner obtained Ext.P3 Encumbrance Certificate dated 15.05.2024. Ext.P3 revealed that the 6^th respondent has effected an attachment over the property by virtue of an order from the Sub Court, Kannur on 24.07.2020. The 7^th respondent also effected an attachment over the property on 21.10.2020.

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When the petitioner presented the Sale Certificate for registration, the 1^st respondent-Sub Registrar rejected the same citing attachment orders.

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The counsel for the petitioner argued that all encumbrances/attachments effected subsequent to the mortgage created in favour of the Banks have no impact on the sale conducted under the Securitisation and

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W.P.(C) No.20021/2024

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: 5 :

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Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the same ceased to have any effect, the moment the sale is confirmed. This is evident from the judgment in Madhan S. v. Sub Registrar [2014 (1) KLT 406] .

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I have heard the learned counsel for the petitioner

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and the learned Government Pleader representing respondents 1 to 3.

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The petitioner-Bank gave financial advance to respondents 4 and 5 on 27.05.2016. As a security for the advance, respondents 4 and 5 mortgaged 2.04 Ares of land. The mortgage was on 27.05.2016. This is evident from Ext.P1.

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It appears that subsequently respondents 6 and 7 obtained attachment orders over the property. This is evident from Ext.P3. This Court has held in the judgment in Madhan S. (supra) that all encumbrances/attachments effected subsequent to the mortgage created in favour of the Banks cannot have any impact on the sale conducted under

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W.P.(C) No.20021/2024

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: 6 :

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the SARFAESI Act.

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If that be so, the mortgage in favour of the petitioner being anterior the two attachments recorded in Ext.P3 certificate, made on 24.07.2020 and 21.10.2020 cannot have any effect.

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The writ petition is therefore disposed of directing respondents 1 to 3 to efface the aforesaid attachments from revenue records. The 1^st respondent is further directed to register Ext.P4 Sale Certificate without regard to the attachments in question.

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Sd/-

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N. NAGARESH, JUDGE

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aks/10.07.2024

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W.P.(C) No.20021/2024

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: 7 :

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PETITIONER'S EXHIBITS

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Exhibit P1	TRUE COPY OF THE HOME LOAN AGREEMENT DATED 27.05.2016
Exhibit P2	TRUE COPY OF THE SALE CERTIFICATE DATED 29.02.2024
Exhibit P3	TRUE COPY OF THE ENCUMBRANCE
	CERTIFICATE BEARING NO. 3848/2024 DATED 15.05.2024
Exhibit P4	TRUE COPY OF THE SALE CERTIFICATE ENGROSSED ON 15.05.2024 AND SUBMITTED
	BEFORE THE 1ST RESPONDENT FOR REGISTRATION
Exhibit P5	TRUE COPY OF THE LETTER ISSUED BY THE 1ST RESPONDENT BEARING NO. C 85/2024 DATED 15.05.2024
Exhibit P6	TRUE COPY OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF KERALA IN W.P. (CIVIL) NO. 35380/2018, SHAMLA K. U. AND ANOTHER V. SUB REGISTRAR DATED 30.10.2018 REPORTED IN 2018 KHC 811
Exhibit P7	TRUE COPY OF THE JUDGMENT IN WRIT PETITION (CIVIL) 20463/2023 DATED 14.11.2023
Exhibit P8	TRUE COPY OF THE PROCEEDINGS OF THE SUB REGISTRAR, KOTTAPPADY DATED 03.02.2024
Exhibit P9	TRUE COPY OF THE JUDGMENT IN WRIT
	PETITION (CIVIL) NO. 6193/2024 DATED 26.02.2024

M/S. Housing Development Finance Corporation Bank Limited (Hdfc Bank Lmited) v. the Sub Registrar

Case brief

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M/S. Housing Development Finance Corporation Bank Limited (Hdfc Bank Lmited) v. the Sub Registrar

Case brief

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