Bank of Baroda v. District Collector, Kasaragod and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN** ## **THURSDAY, THE 14[TH] DAY OF SEPTEMBER 2023 / 23TH BHADRA, 1945** ## **WP(C) NO. 29232 OF 2023** ## **PETITIONERS:** 1 BANK OF BARODA ROSARB, ERNAKULAM, PALLIMUKKU, M.G.ROAD, ERNAKULAM REPRESENTED BY ITS CHIEF MANAGER MR.SUKLESWAR BASUMATARY, PIN - 682016 2 UDAYAPRAKASH AGED 45 YEARS S/O A. GOPALAKRISHNA, 'SRI SRINGERIMADAM BUILDING STAFF QUARTERS', VTC KALADY P.O., ERNAKULAM DISTRICT, PIN - 683574 BY ADVS. K.M.ANEESH K.SANTHOSH KUMAR (KALIYANAM) ADARSH KUMAR BIJU VARGHESE ABRAHAM DILEEP CHANDRAN SHASHANK DEVAN ## **RESPONDENTS:** 1 DISTRICT COLLECTOR KASARAGOD, CIVIL STATION, VIDYANAGAR, KASARAGOD, KERALA, PIN - 671123 2 TAHSILDAR HOSDURG TALUK OFFICE, KOCHI - PANVEL HIGHWAY,HOSDURG, KANHANGAD, KERALA, PIN - 671315 3 VILLAGE OFFICER, BARE, BARE P.O., KASARAGOD, PIN - 671319 4 STATE BANK OF INDIA ( ESBT) UDUMA BRANCH, UDUMA, KASARAGOD., PIN – 671319 BY SR.G.P. SRI.BIMAL K. NATH BY SMT. BINDUMOL JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 29232 OF 2023 ``` 2 ``` ## **JUDGMENT** The petitioners, a Nationalised Bank and its auction purchaser, have approached this Court to declare that revenue recovery attachment referred to in Exts. P3 to P5 made on the property having an extent of 01.62 Ares (4 cents) in Sy. No.353/2A21 of Bare Village, Hosdurg Taluk, Kasaragod District and the residential building thereon, is non-est and does not affect the marketability of the property and to efface the subsequent attachment and to mutate the property. 2. According to the petitioners, one Mrs. Thahira P.A. had availed a housing loan from Uduma Branch of the 1[st] petitioner Bank and towards the security for repayment of the said loan, she had on 06.10.2015 created equitable mortgage by deposit of title deed of her property referred to above. Since she defaulted repayment of the loan amount, proceedings under the SARFAESI Act was initiated and the property was sold to the 2[nd] petitioner, the WP(C) NO. 29232 OF 2023 ``` 3 ``` successful bidder on 04.05.2023. The 2[nd] petitioner had remitted the entire sale amount and Ext.P2 registered sale certificate, as mandated under the SARFAESI Act, was issued to him. However, when the 2[nd ] petitioner took steps for mutation of the property, respondents 2 and 3 informed that there are revenue recovery attachments over the property based on requisition made by the 4[th] respondent, another Nationalised bank, for recovering a loan availed by said Thahira on 06.11.2015 and therefore mutation cannot be effected. Ext. P4 is the requisition for recovery towards Kisan(KCC) loan issued by the 4[th] respondent Bank and Ext. P5 is the certificate of attachment dated 29.12.2022 issued by the District Collector. The petitioners contend that the attachment effected subsequent to the equitable mortgage created in favour of the 1[st] petitioner Bank will not affect the title and ownership of the 2[nd] petitioner over the property auctioned by the 1[st] petitioner Bank and such attachments have no impact on the sale conducted by the WP(C) NO. 29232 OF 2023 ``` 4 ``` ## 1[st] petitioner Bank. 3. The learned counsel for the petitioners, relying on the decision of this Court in **Madhan S. v. Sub Registrar, Kollam and Others [2014(1) KHC 249: 2014(1) KLT 406: ILR 2014(1) Ker.586: 2014 (1) KLJ 483: AIR 2014 Ker.54]** and the decision of the Division Bench in **Secretary, Keechery Service Co-operative Bank Ltd. v.Sajitha Nizar alias Sajitha P.M. and Others[2020 (5) KHC 231: ILR 2020 (4) Ker.249: 2020(6) KLT 68: 2020(4) KLJ 970]** contends that attachments effected subsequent to the creation of equitable mortgage have to be effaced after the property is purchased by the 2[nd] petitioner under the provisions of the SARFAESI Act. 4. The learned Counsel for the 4[th ] respondent contended that though the attachment entered in Exts. P4 and P5 is subsequent to the equitable mortgage created in favour of the 1[st] petitioner, said attachment is prior to the sale conducted on 16.06.2023. The Counsel also contended ``` 5 ``` WP(C) NO. 29232 OF 2023 that the petitioners ought to have approached the Civil Court or the Debts Recovery Tribunal for redressal of their grievances. 5. In **Madhan's** case (supra), the learned Single Judge, taking note of relevant statutory provisions and various decisions, held in paragraph 9 as follows: “9. The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under Ext. P5 sale certificate under the Act is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property. Such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is confirmed in favour of the petitioner. The declaration so sought by the petitioner is therefore granted and I further direct the Sub-Registrar and the Village Officer to efface the attachments effected subsequent to the mortgage from the relevant records. Otherwise those attachments would remain as a permanent taboo prejudicial affecting the marketability and title to the property even though they ceased to have any legal WP(C) NO. 29232 OF 2023 ``` 6 ``` efficacy. The needful in relation to the property bought by the petitioner shall be done within a period of two months from the date of receipt of a copy of this judgment.” 6. A Division Bench of this Court in **Ali Asharaf M.M. and Another v. Sub Registrar, Thrissur (Judgment dated 24.7.2015 in W.A.No.612/2015)** has affirmed the law laid down in Madhan's case. 7. In **Keechery Service Co-operative Bank** case (supra), another Division Bench of this Court also affirmed the law laid down in **Madhan's** case (supra) and held in paragraph 7 as under: “7. …. We do not find any reason to disagree with the declaration of law in Madhan's case (supra) which was virtually affirmed by the Division Bench in Ali Asharaf's case (supra). In the said circumstances and taking note of the fact that the orders of attachment of the property in question were after the creation of equitable mortgage of the same with Federal Bank we do not find any reason to interfere with the impugned judgment passed by the learned Single Judge following the dictum in Madhan's case (supra), carrying the directions to WP(C) NO. 29232 OF 2023 ``` 7 ``` effect mutation of the property as also to efface all encumbrance over the property effected after 27/06/2014, the date on which the property in question was mortgaged with Federal Bank”. 8. In the light of the dictum laid down by this Court in **Madhan's** case (supra) and affirmed in **Ali Asharaf** and **Keechery Service Co-operative Bank** case (supra), the attachment effected subsequent to the creation of equitable mortgage in favour of the 1[st] petitioner Bank has to be effaced after the property is purchased by the 2[nd] petitioner under the provisions of the SARFAESI Act. The writ petition is allowed and there will be a direction to the 2[nd] respondent to effect mutation of the property in favour of the 2[nd] petitioner within a period of one month from the date of receipt of a copy of this judgment. No order as to costs. ## **Sd/-** ## **MURALI PURUSHOTHAMAN JUDGE** AL/- WP(C) NO. 29232 OF 2023 ``` 8 ``` ## **APPENDIX OF WP(C) 29232/2023** PETITIONER EXHIBITS Exhibit P1 THE TRUE COPY OF THE LETTER OF CONFIRMATION OF MORTGAGE DATED 7-10-2015 SIGNED BY THE ## BORROWER Exhibit P2 THE TRUE COPY OF THE REGISTERED SALE CERTIFICATE ISSUED BY THE 1ST PETITIONER IN FAVOUR OF THE 2ND PETITIONER Exhibit P3 THE TRUE COPY OF THE COMMUNICATION NO.135/23 DATED 25-07- 2023 ISSUED BY THE 3RD RESPONDENT Exhibit P4 THE TRUE COPY OF THE REQUISITION NO. 2021/1077/14 DATED 22- 11-2022 MADE BY THE 4TH ## RESPONDENT Exhibit P5 THE TRUE COPY OF THE CERTIFICATE OF ATTACHMENT NO. RRC NO. 2021/1077 /14 MADE BY THE 1ST RESPONDENT DATED 29-12-2022