Canara Bank v. Sub Registrar, Vadannapilly Thrissur and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE VIJU ABRAHAM`** ## **`THURSDAY, THE 15[TH] DAY OF FEBRUARY 2024 / 26TH MAGHA, 1945`** ## **`WP(C) NO. 18223 OF 2023`** ## **`PETITIONER:`** ``` CANARA BANK ``` ``` CANARA BANK CHAVAKKAD BRANCH 1ST FLOOR, KAMMUS ARCADE CHAVAKKAD, THRISSUR REPRESENTED BY ITS MANAGER, PIN - 680506 ``` ``` BY ADVS. ANIRUDH KADAVIL M.J.RAJASREE K.V.ANIL ``` ## **`RESPONDENTS:`** - `1 SUB-REGISTRAR SUB- REGISTRAR OFFICE VADANAPPALLY THRISSUR, PIN - 680569` - `2 SHAFEER I K S/O KUNJUMOHAMMED ITHIKKATT HOUSE KADAPPURAM P.O. CHAVAKKAD THRISSUR, PIN - 680514` - `3 RAMSEELA M M W/O SRI.SHAFEER I K ITHIKATTU HOUSE KADAPPURAM P.O. CHAVAKKAD THRISSUR, PIN - 680514` - `4 SURAYYA ITHIKKAT MOHAMMED W/O SRI.JAHANGIR HABEEBULLAH ITHIKKAT HOUSE ANJANGADI KADAPPURAM CHAVAKKAD THRISSUR, PIN - 680514` - `5 HEDGE FINANCE LTD MAMANGALAM - ANCHUMANA TEMPLE ROAD SONIA NAGAR, PALARIVATTOM KOCHI REPRESENTED BY SENIOR MANAGER, PIN - 682025` - `6 NASEEMA` - `W/O SRI.PUTHIYAVEETIL SHIHAB CHAVAKKAD VADANAPILLY P.O. THRISSUR, PIN - 680614` - `7 AMINA W/O SRI.PUTHIYAVEETIL MUHAMMED CHAVAKKAD VADANAPILLY P.O. THRISSUR, PIN - 680614` - `BY G.P. - DEEPA V.` WP(C) No. 18223 of 2023 : 2 : ``` THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) No. 18223 of 2023 : 3 : ## **VIJU ABRAHAM , J. =========================== WP(C) No. 18223 of 2023 ============================ Dated this the 15[th] day of February, 2024** ## **J U D G M E N T** ## Petitioner has approached this Court seeking the following reliefs:- a) To issue a writ in the nature of Certiorari or any other writ or order or direction quashing Exhibit P3 issued by the 1[st] respondent to the extent that the same is having an order of attachment dated 10.12.2021 in item No.1 in Exhibit P2 which is kept as security for the Equitable Mortgage. b) To issue a writ in the nature of Certiorari or any other writ or order or direction to declare that the 1[st] item property mentioned in Exhibit P2 i.e. 10.52 ares of land in Survey No.243/4-5 in Vadanapilly Panchayath, Chavakkad Taluk of Thrissur District is free of all Encumbrances. c) To issue a writ in the nature of certiorari or any other writ or order or direction that the attachment mentioned in Exhibit P3 is not valid since the District Court, Ernakulam attachment is subsequent to the mortgage and the issue is already covered in Exhibit P4 and PS Judgments. d) To issue a writ in the nature of Mandamus or any other writ or order or direction to the 1[st] Respondent to remove the entries in their registers relating to the attachments made over the subject property mentioned in Exhibit P1 i.e, 10.52 Ares of land in Survey No.243/4-5 in Vadanapilly Panchayath, Chavakkad Taluk of Thrissur District since the attachment is subsequent to the Mortgage. WP(C) No. 18223 of 2023 : 4 : e) To grant such other appropriate reliefs to the petitioners as this Honourable Court may deem fit and proper in the interest of justice 2. Petitioner is a Bank. Respondents 2 and 3 availed credit facility from the petitioner by executing a mortgage of the property on 19.08.2019 whereby the 4[th] respondent stood as guarantor. Later the amount was defaulted and SARFAESI proceedings were initiated and the proceedings for sale of the property is being initiated by the Bank. While so, Ext.P3 encumbrance certificate was obtained which shows an attachment in respect of the said property at the instance of 5[th ] respondent which is dated 10.12.2021. Petitioner relying on the provisions of the SARFAESI Act submitted that any attachment subsequent to the mortgage will not affect the right of the petitioner. 3. Heard the learned counsel for the petitioner and the learned Government Pleader 4. The learned counsel for the petitioner relied on the decision of this Court in **Madhan S. v. Sub Registrar, Kollam and Others [2014 (1) KHC 249]** and the decision of a Division Bench of this Court in **Secretary, Keechery Service Cooperative Bank Ltd. v. Sajitha Nizar alias Sajitha P.M. and Others, [2020 (5) KHC 231]** and contends that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property and the attachment has to be WP(C) No. 18223 of 2023 : 5 : effaced from the encumbrance register. A similar view was taken in Exts.P4 and P5 judgments. 5. In **Madhan's** case (supra), this Court 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 prejudicially affecting the marketability and title to the property even though they ceased to have any legal 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. In **Keechery Service Co-operative Bank** case (supra), WP(C) No. 18223 of 2023 : 6 : 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.In the light of the aforesaid declaration of law by this Court the order of dismissal of the petition filed for lifting the attachment ordered under Ext R7 (a) viz., Ext R7 (b) by the Federal Bnk would pale into insignificance. 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 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”. Thus it is trite law that attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. It is evident from the documents produced in the writ petition that the attachment obtained by the 5th respondent is subsequent to the creation of equitable mortgage by the borrowers in favour of the petitioner 7. This Court in **Phoenic ARC Pvt. Ltd. v. Sub Registrar, Feroke [2023 KHC Online 9452]** while considering an identical issue referring to Section 89(5) of the Registration Act, 1908 has WP(C) No. 18223 of 2023 : 7 : held that since the attachment subsequent to creation of equitable mortgage has lost its efficacy and has to be obliterated from the records, the same can be done by the Sub Registrar by filing the certified copy of the order/judgment of this Court in Book No.1 maintained by the Sub Registrar. 8. In view of the same, the petitioner is entitled to the reliefs sought for. Accordingly, there will be a direction to the 1[st] respondent to efface the attachment obtained by the 5[th] respondent noted in Ext.P3 encumbrance certificate from Book No.1 by filing the certified copy of this judgment in the said book. With the above said direction, the writ petition is disposed of. Sd/- **VIJU ABRAHAM JUDGE** sbk/- WP(C) No. 18223 of 2023 : 8 : ## **`APPENDIX OF WP(C) 18223/2023`** ``` PETITIONER EXHIBITS Exhibit P1A TRUE COPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEEDS DATED 19.08.2019 DEPOSITED ON 17.08.2019 EXECUTED BY THE 2ND RESPONDENT IN FAVOUR OF PETITIONER BANK Exhibit P2A TRUE COPY OF THE DEMAND NOTICE DATED 02.05.2023 ISSUED BY THE PETITIONER BANK UNDER SARFAESI ACT Exhibit P3A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE NO.4620/2022 DATED 01.08.2022 IN RESPECT OF 1ST ITEM OF EXHIBIT P2 ISSUED BY THE 1ST RESPONDENT Exhibit P4A TRUE COPY OF THE JUDGMENT DATED IN 24.07.2015 IN WA NO.612/2015 BY THE HONOURABLE HIGH COURT Exhibit P5A TRUE COPY OF ORDER DATED 19.05.2020 IN DBA 1/2020 BY THE HONOURABLE HIGH COURT ```