S.Badrunnisa Vs the District Collector — Banking and Recovery | Madras HC (2025)

S.Badrunnisa Vs the District Collector — Banking and Recovery | Madras HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed with directions: the 3rd respondent (Tahsildar) to remove the 6th respondent's name from the joint patta, include the petitioner's name by acting upon her representation dated 19.07.2024, and issue necessary proceedings within four weeks from receipt of a copy of the order; no costs.

Issue for consideration

Whether a writ of mandamus should issue directing the 3rd respondent (Tahsildar) to act upon the petitioner's representation dated 19.07.2024 and issue patta in her name in respect of the subject property (Door No.81, Ram Nagar, Ayothipattinam, Survey No.158/4D, Ward No.13, 920 sq.feet). +2 more

Court's answer

Title in the subject property came to be transferred in favour of the petitioner by operation of law through the SARFAESI public auction and the sale certificate dated 07.07.2010 issued by the 4th respondent bank.

Ratio / Principle

Once the 2003 sale deed had been acted upon (mortgage, auction sale in 2010, sale certificate to the petitioner), nothing remained in the sale deed; the suit OS No.58 of 2017 seeking a declaration that the sale deed is null and void is like flogging a dead horse, does not bind either the petitioner or the 4th respondent bank, and the declaration sought will not take away the petitioner's right and title in the subject property.

Key takeaways

Filing such a suit after the SARFAESI proceedings were initiated (and after the property was brought for auction sale in 2010) is a clear bar under Section 34 of the SARFAESI Act.ratio¶43
The decree passed in OS No.58 of 2017 by the District Munsif cum Judicial Magistrate, Vazhapadi is non-est in the eye of law insofar as the petitioner and the 4th respondent bank are concerned, for two reasons: (i) the suit was barred under Section 34 of the SARFAESI Act having been filed after the auction sale in 2010; and (ii) the 5th respondent conveniently remained exparte and did not bring the subsequent developments to the notice of the Trial Court, which would otherwise not have passed such a decree.ratio¶48

Detailed headnote1 paragraphs

Madras High Court, WP No. 8173 of 2025 (decided 21-04-2025, N. Anand Venkatesh J.) - Patta - SARFAESI auction purchaser v. prior owner holding exparte decree. Subject property: Door No.81, Ram Nagar, Ayothipattinam, Vazhapadi Taluk, Salem District, Survey No.158/4D, Ward No.13, measuring 920 sq.feet. The 6th respondent conveyed the property to the 5th respondent by registered sale deed dated 13.11.2003 (Doc. No.1760 of 2003); the 5th respondent mortgaged it to Union Bank of India (R4), was declared NPA, and the bank auctioned the property; the petitioner, highest bidder, received a sale certificate dated 07.07.2010 (registered as Doc. No.1021 of 2022), whereby title passed by operation of law. The 6th respondent's subsequent suit OS No.58 of 2017 (District Munsif cum Judicial Magistrate, Vazhapadi) for cancellation of the 2003 sale deed, decreed exparte on 17.11.2022 (Doc. No.4060 of 2023), was held non-est in the eye of law vis-a-vis the petitioner and the bank: (i) the suit was barred under Section 34 of the SARFAESI Act, having been filed after the SARFAESI proceedings and the 2010 auction sale; and (ii) the 5th respondent remained exparte suppressing the subsequent developments. Acting on that decree, the 6th respondent had obtained an order dated 28.12.2023 in WP No.36338 of 2023 and got her name added to joint patta No.1177 - held illegal, the earlier order having been passed without knowledge of the auction-sale facts. Held: the 6th respondent's name must be removed from the patta and the petitioner's name included on her representation dated 19.07.2024; the Tahsildar (R3) to issue necessary proceedings within four weeks. Writ petition allowed; no costs. The petitioner need not challenge the exparte decree, it being non-est qua her and the bank.