HDFC Bank Ltd v State of Kerala & Others (WP(C) Nos. 25662 of 2023 and 37228 of 2023)

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE VIJU ABRAHAM`** ## **`MONDAY, THE 8[TH] DAY OF JANUARY 2024 / 18TH POUSHA, 1945`** ## **`WP(C) NO. 37228 OF 2023`** ## **`PETITIONER:`** ``` HDFC BANK LTD HDFC HOUSE, VAZHUTHACAUD P.O., THYCAUD VILLAGE, THIRUVANANTHAPURAM DISTRICT. REPRESENTED BY ITS ASST. VICE PRESIDENT AND AUTHORIZED OFFICER, S.SIVAKUMAR, PIN-695014. ``` ``` BY ADV LATHEESH SEBASTIAN ``` ## **`RESPONDENTS:`** |`1`|`STATE OF KERALA`| |---|---| ||`REPRESENTED BY THE CHIEF SECRETARY,`| ||`SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001`| |`2`|`THE SUB REGISTRAR`| ||`SUB REGISTRAR'S OFFICE, CHALA,`| ||`THIRUVANANTHAPURAM, PIN - 695306`| |`3`|`VILLAGE OFFICER`| ||`VILLAGE OFFICE, THIRUMALA VILLAGE OFFICE,`| ||`THIRUVANANTHAPURAM, PIN - 695006`| |`4`|`SATHEESH E.S`| ||`S/O SASIDHARAN PILLAI, KRISHNA, CHADYIRA,`| ||`POOJAPPURA, THIRUVANANTHAPURAM, PIN - 695012`| |`5`|`SARITHA KUMARI T`| ||`W/O SATHEESH, AGED 42 YEARS`| ||`CRA 68, KRISHNA, CHADYIRA, POOJAPPURA,`| ||`THIRUVANANTHAPURAM, PIN - 695012`| |`6`|`PREETHA RANI S`| ||`VAYALNIKATHIYA PUTHEN VEEDU, TC 40/1701,`| ||`JAGATHY, THIRUVANANTHAPURAM, PIN - 695014`| |`7`|`GANEESH KUMAR`| ||`TC 40/1099, SREE VARAHAM,`| ||`THIRUVANANTHAPURAM, PIN - 695014`| ``` WP(C)NO.37228/2023&conn. ``` ``` 2 ``` ``` BY ADV.SMT.SHYNIMOL, GOVERNMENT PLEADER ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.01.2024, ALONG WITH WP(C).25662/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C)NO.37228/2023&conn. ``` ``` 3 ``` # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THE HONOURABLE MR.JUSTICE VIJU ABRAHAM MONDAY, THE 8[TH] DAY OF JANUARY 2024 / 18TH POUSHA, 1945 ``` ## **`WP(C) NO. 25662 OF 2023`** ## **`PETITIONER:`** ``` HDFC BANK LTD HDFC HOUSE, VAZHUTHACAUD P.O., THYCAUD VILLAGE, THIRUVANANTHAPURAM DISTRICT-695014, REPRESENTED BY ITS ASST. VICE PRESIDENT AND AUTHORIZED OFFICER, S. SIVAKUMAR. ``` ## `BY ADV LATHEESH SEBASTIAN` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM - 695001 2THE SUB REGISTRAR SUB REGISTRAR'S OFFICE, KOLLAM- 691011 3VILLAGE OFFICER VILLAGE OFFICE, KOLLAM WEST VILLAGE, KOLLAM, PIN - 691001 4NAGESWARY J W/O SURESH @ SURESH KUMAR, RAJAMATHA ILLATH, SUNDAY COLONY, THIRUMULLAVARAM, KOLLAM EAST VILLAGE, CHINNAKKADA P. O, KOLLAM, PIN - 691002 5HARINI D/O SURESH @ SURESH KUMAR, RAJAMATHA ILLATH, SUNDAY COLONY, ``` ``` WP(C)NO.37228/2023&conn. ``` ``` 4 ``` ``` THIRUMULLAVARAM, KOLLAM EAST VILLAGE, CHINNAKKADA P.O., KOLLAM, PIN - 691002 ``` ``` 6MARIMUTHU S/O COLUMBAS, DOOR NO.7A, PALEL ROAD, VIRUDHUNAGAR, TAMIL NADU, PIN - 626001 ``` ``` 7V.VASANTHI W/O VIVEKANANDHAN, DOOR NO.4/441, KALLURSANDAI ROAD, VIRUDHUNAGAR, TAMIL NADU, PIN - 626001 ``` ``` BY ADVS. SMT.SHYNIMOL, GOVERNMENT PLEADER S.SREEKUMAR (KOLLAM) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.01.2024, ALONG WITH WP(C).37228/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C)NO.37228/2023&conn. ``` ``` 5 ``` ## **JUDGMENT** _Dated this the 08[th] day of January, 2024_ ## WP(C) No. 25662 of 2023 The petitioner is a scheduled Bank. The late husband of the fourth respondent along with the fourth respondent had availed loan from the erstwhile Housing Development Finance Corporation Ltd., which was subsequently amalgamated with the petitioner Bank. The loan was availed on 25.02.2012 and 23.11.2013 and thereafter there was default in repayment of the loan instalments. The petitioner initiated SARFAESI proceedings and the property was taken possession on 10.05.2022 and the same was sold in auction on 07.03.2023. The sale was confirmed on 07.03.2023 and the sale certificate was issued to the purchaser on 25.03.2023. Respondents 6 and 7 in collusion with respondents 4 and 5 with intention to defeat the rights of the petitioner collusively secured attachment on 24.09.2021 from the Additional District Court, Virudhunagar, Tamilnadu in O.S.Nos.7 and 8 of 2020. ``` WP(C)NO.37228/2023&conn. ``` ``` 6 ``` 2. The petitioner relying on the judgment in **State Bank of India and others v. State of Kerala and others** [2019 (5) KHC 330] contended that the sale conducted under the SARFAESI Act is having priority over the charge of the third parties like respondents 6 and 7 and hence refusal of the second respondent to register the sale certificate issued by the petitioner to the auction purchaser on 25.03.2023 is highly improper. The petitioner also relies on the judgment in **Madhan.S. v. The Sub Registrar, Kollam and others** [2014 (1) KHC 249] ## WP(C) No.37228 of 2023 3. Respondents 4 and 5 availed loan on 31.08.2018 and committed default in payment of the loan instalments. SARFAESI proceedings were initiated and the property was taken possession on 17.05.2022 and the same was sold in auction on 26.07.2023. The sale was confirmed on 30.08.2023 and the petitioner issued sale certificate to the purchaser on 12.09.2023. Respondents 6 and 7 in collusion with respondents 4 and 5 filed O.S.Nos.475 of 2019 and 584 of 2019 before the Munsiff Court, Thiruvananthapuram ``` WP(C)NO.37228/2023&conn. ``` ``` 7 ``` and attachment was secured on 21.03.2019 and 12.10.2020 respectively. In both these cases, the petitioner has approached this Court seeking a direction to the second respondent to efface the encumbrances/attachments of respondents 6 and 7 as reflected in Ext.P7 encumbrance certificate and register Ext.P6 sale certificate ignoring/effacing attachment of respondents 6 and 7 as reflected in Ext.P7 encumbrance certificate on presentation of the sale deed without any delay and insisting for ROR. 4. Though notice was taken out by paper publication on the party respondents in both the cases, there is no appearance for them when the case was taken up for consideration. 5. Learned Government Pleader also, upon instructions, submitted that since the attachments were subsequent, the petitioner Bank will have priority over other charges. This Court in **State Bank of India and others v. State of Kerala and others** [2019 (5) KHC 330] has held that the sale conducted under the SARFAESI Act is having priority over the charge of the others. The said ``` WP(C)NO.37228/2023&conn. ``` ``` 8 ``` decision is reiterated by this Court in the judgment in **Madhan.S.** ' case cited supra. 6. In view of the categoric declaration of law as stated above, the petitioner is entitled for the relief sought for in the Writ Petition. Therefore, there will be a direction to the second respondent to efface the encumbrances/ attachments of respondents 6 and 7 as reflected in Ext.P7 encumbrance certificate and register Ext.P6 sale certificate ignoring/effacing attachment of respondents 6 and 7 as reflected in Ext.P7 encumbrance certificate on presentation of the sale deed without any delay and without insisting for ROR and to effect mutation of the sale deed in favour of the purchaser of property covered by Ext.P6 sale certificate ignoring attachment of the court. Writ Petitions are disposed of as above. **Sd/VIJU ABRAHAM JUDGE** csl ``` WP(C)NO.37228/2023&conn. ``` ``` 9 ``` ## **`APPENDIX OF WP(C) 25662/2023`** ``` PETITIONER’S EXHIBITS ``` - `Exhibit P1` - `TRUE COPY OF ONE OF SUCH LOAN AGREEMENT OF THE PETITIONER AND THE HUSBAND OF THE 4TH RESPONDENT AND 4TH RESPONDENT DATED 25.11.2013` - `Exhibit P2 TRUE COPY OF THE POSSESSION NOTICE ISSUED UNDER THE SARFAESI ACT ON 10.05.2022` - `Exhibit P3 TRUE COPY OF THE POSSESSION NOTICE OF THE PETITIONER ISSUED TO THE RESPONDENTS 4 AND 5 AT NEW INDIAN EXPRESS NEWSPAPER ON 11.05.2022` - `Exhibit P4 TRUE COPY OF THE ORDER OF THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM IN M.C NO 196/2021 DATED 14.12.2021` - `Exhibit P5 TRUE COPY OF THE NOTICE OF THE PETITIONER DATED 18.05.2022` - `Exhibit P6 TRUE COPY OF THE SALE NOTICE OF THE PETITIONER DATED 15.02.2023 ISSUED TO THE RESPONDENTS 4 AND 5` - `Exhibit P7 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER ON 09.03.2023` ``` WP(C)NO.37228/2023&conn. ``` ``` 10 ``` ## **`APPENDIX OF WP(C) 37228/2023`** ``` PETITIONER’S EXHIBITS ``` ``` Exhibit P1TRUE COPY OF THE MAIN LOAN AGREEMENT OF THE PETITIONER AND THE RESPONDENTS 4 AND 5 DATED 31.08.2018 ``` - `Exhibit P2 TRUE COPY OF THE POSSESSION NOTICE ISSUED UNDER THE SARFAESI ACT TO THE RESPONDENTS ON 17.05.2022` - `Exhibit P3 TRUE COPY OF THE ORDER OF THE CHIEF JUDICIAL MAGISTRATE COURT, THIRUVANANTHAPURAM IN M.C NO. 242/2022 DATED 14.03.2022` - `Exhibit P4 TRUE COPY OF THE MAHAZER PREPARED BY THE ADVOCATE COMMISSIONER HANDING OVER POSSESSION OF THE SECURED ASSET TO THE PETITIONER DATED 17.05.2022` - `Exhibit P5 TRUE COPY OF THE NOTICE OF THE PETITIONER DATED 28.07.2023` - `Exhibit P6 TRUE COPY OF THE SALE CERTIFICATE ISSUED BY THE PETITIONER TO THE PURCHASER OF THE PROPERTY DATED 12.09.2023` - `Exhibit P7 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER ON 13.09.2023`