HDB Financial Services Limited v. THE SUB REGISTRAR SUB REGISTRAR OFFICE, VADAKKUMKARA VELLANGALLUR, THRISSUR; THE VILLAGE OFFICER POOMANGALAM VILLAGE EDAKKULAM P.O, THRISSUR; HEDGE FINANCE LIMITED; PANAYARAKUNNAM NIDHI LTD; SANAL SASI S/O SASI SUNIL BHAVAN

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **MONDAY, THE 1[ST] DAY OF JULY 2024 / 10TH ASHADHA, 1946** **WP(C) NO. 20451 OF 2024** ## **PETITIONER:** **HDB FINANCIAL SERVICES LIMITED, 1ST AND 2ND FLOOR, WILSON HOUSE, OLD NAGARDAS ROAD, NEAR AMBOLI SUBWAY, ANDHERI(EAST), MUMBAI 400 069 AND HAVING ITS BRANCH OFFICE AT 2ND FLOOR, THE ART OF LIVING TOWER, 13 CROSS ROAD, SBT AVENUE, NEAR PASSPORT OFFICE, PANAMPILLY NAGAR, ERNAKULAM. REPRESENTED BY ITS AUTHORISED OFFICER MR. RAJ C.R, PIN – 682036** **BY ADVS. P.PAULOCHAN ANTONY SREEJITH K.** ## **RESPONDENTS:** - **1 THE SUB REGISTRAR SUB REGISTRAR OFFICE, VADAKKUMKARA VELLANGALLUR, THRISSUR, PIN – 680662** - **2 THE VILLAGE OFFICER POOMANGALAM VILLAGE EDAKKULAM P.O, THRISSUR, PIN – 680121** - **3 HEDGE FINANCE LIMITED HEDGE HOUSE, MAMANGALAM - ANCHUMANA TEMPLE RD, SONIA NAGAR, PALARIVATTOM, KOCHI, ERNAKULAM, PIN – 682025** - **4 PANAYARAKUNNAM NIDHI LTD 26/1312 UNIVERSAL TOWERS NA, ATTINGAL, THIRUVANANTHAPURAM, PIN - 695101** W.P.(C) No.20451/2024 : 2 : **5 SANAL SASI S/O SASI SUNIL BHAVAN, PLAVILA, PAPPANAM, AMBALATHINKALA P.O KULOATHUMMAL, AMMACHAL TRIVANDRUM, PIN – 695572** **BY ADVS. ADV.ANWAR C K THEERDHA SURESH(K/000713/2023) SRI. BINOY DAVIS, GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.20451/2024 : 3 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.20451 of 2024 ````````````````````````````````````````````````````````````` _Dated this the 1[st] day of July, 2024_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioner has approached this Court seeking to declare that attachment made after mortgage has no existence in the eye of law, particularly after Ext.P3 paper publication. 2. The petitioner is a Finance Company. M/s.Indo US IT Education and its Partners Reshmi Saneesh and Saneesh Gopi availed loans of ₹8,85,620/- and ₹45,90,000/from the petitioner in the year 2017. Mr. Saneesh Gopi mortgaged an extent of 3.24 Ares of land in Poomangalam Village together with a building, towards security. 3. When the borrowers defaulted in repayment of the loan amount, the petitioner issued notice under Section 13(2) W.P.(C) No.20451/2024 : 4 : of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Later, Section 14 proceedings were also initiated before the Chief Judicial Magistrate, Thrissur. 4. The Advocate Commissioner took physical possession of the mortgaged property on 15.09.2023. In the auction conducted on 26.03.2024, the 5[th] respondent purchased the mortgaged property for an amount of ₹40,00,500/-. On payment of entire sale consideration, a Sale Certificate dated 18.05.2024 was issued to the 5[th] respondent. 5. In order to register the Sale Certificate, the petitioner obtained Encumbrance Certificate. In the Encumbrance Certificate, an attachment was seen made by the 3[rd] respondent. The petitioner further found that an attachment made by the 4[th] respondent was noted in the BTR. The petitioner states that any attachments made subsequent to the mortgage are non est in the eye of law. The Apex Court has held that right of redemption comes to W.P.(C) No.20451/2024 : 5 : an end on the date of sale notification as per Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner therefore seeks to direct respondents 1 and 2 to efface the attachments made after mortgage from the BTR and Encumbrance Certificate and to register Ext.P4 Sale Certificate. 6. Counsel appeared on behalf of the 4[th] respondent and resisted the writ petition. The property in question is attached at the instance of the 4[th] respondent and the 4[th] respondent has a superior right to recover their dues from the property. It is as per Ext.P6 order of the Arbitral Tribunal that encumbrance is recorded in Village records. Assuming that the petitioner has a superior right, even then the 4[th] respondent is entitled to any excess amount that may be available after sale of the property by the petitioner, contended the counsel for the 4[th] respondent. 7. I have heard the learned counsel for the petitioner, the learned Government Pleader representing respondents 1 W.P.(C) No.20451/2024 : 6 : and 2 and the learned counsel appearing for the 4[th] respondent. 8. The mortgage in favour of the petitioner was created on 12.07.2017. This is evident from Ext.P1 list of documents reports. The attachment over the property made at the instance of the 3[rd] respondent was on 30.03.2024 as is discernible from Ext.P5. The 4[th] respondent obtained Ext.P6 attachment order from the Arbitral Tribunal, Thrissur on 19.01.2023. It is the attachment as per Ext.P5 which is recorded in the Encumbrance Certificate and it is based on Ext.P6 Arbitral Order that encumbrance is recorded in BTR. 9. In _**Madhan S. v. Sub Registrar** [2014 (1) KLT 406]_ , this Court held that the preponderence of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property is free of all encumbrances and that 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 property. Such attachments have no impact on the sale conducted under the Securitisation and W.P.(C) No.20451/2024 : 7 : Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and such attachments ceases to have any effect or fall to ground the moment the sale is confirmed. 10. In the judgment in _**Celir LLP v. Bafna Motors (Mumbai) Private Limited** [2023 KHC 6860]_ , the Hon’ble Apex Court held that SARFAESI being a special law, it has an overriding effect over all other general laws which includes Transfer of Property Act, 1882. As per Section 13(8) of the SARFAESI Act, the right of redemption of a secured asset stands extinguished on and from the very date of publication of public auction ntoice for sale of the secured asset. 11. In the case of the petitioner, the mortgage in favour of the petitioner was created on 12.07.2017. The attachment in favour of the 3[rd] respondent as seen from Ext.P5 was on 30.03.2024. The attachment in favour of the 4[th] respondent is pursuant to Ext.P6 Arbitral Order which was passed on 19.01.2023. Therefore, the right of redemption of W.P.(C) No.20451/2024 : 8 : respondents 3 and 4 will stand extinguished from the date of public auction notice, which was on 11.10.2023. 12. Going by the law laid down by the Hon’ble Apex Court and by this Court and going by the sequence of events leading to the mortgage and subsequent attachments, the petitioner is entitled to relief. The writ petition is therefore allowed. Respondents 1 and 2 are directed to efface the attachment made after mortgage and to register Ext.P4 Sale Certificate. This shall be done within a period of one month. Sd/- **N. NAGARESH, JUDGE** aks/18.07.2024 W.P.(C) No.20451/2024 : 9 : ## **APPENDIX OF WP(C) 20451/2024** **PETITIONER'S EXHIBITS** **Exhibit P1 TRUE COPY OF DOCUMENT CONFIRMING THE DEPOSIT OF DOCUMENTS DATED 22-05-2017 Exhibit P2 TRUE COPY OF THE ORDER IN THE MC NO. 475/2023 DATED 30.06.2023 Exhibit P3 TRUE COPY OF PAPER PUBLICATION OF SALE NOTICE DATED 11.10.2023 Exhibit P4 TRUE COPY OF THE SALE CERTIFICATE DATED 18.05.2024 Exhibit P5 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 09.04.2024 Exhibit P6 TRUE COPY OF THE ORDER DATED 19.01.2023 PASSED BY THE ARBITRAL TRIBUNAL, THRISSUR**