Rasak v. Sub Registrar Karikode & Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE N.NAGARESH`** ``` FRIDAY, THE 21[ST] DAY OF JUNE 2024 / 31ST JYAISHTA, 1946 ``` ## **`WP(C) NO. 18967 OF 2024`** ## **`PETITIONER`** ``` RASAK AGED 42 YEARS S/O. BASHEER, PUTHENPURAYIL HOUSE, VANNAPPURAM KARA, VANNAPPURAM P.O., THODUPUZHA, IDUKKI, PIN – 685607 ``` ``` BY ADVS. LIJI.J.VADAKEDOM ATHUL V. VADAKKEDOM ``` ## **`RESPONDENTS:`** - **`1 THE SUB REGISTRAR-KARIKODE OFFICE OF THE SUB REGISTRAR-KARIKODE, POOMALA ROAD, THODUPUZHA, IDUKKI, PIN - 685585`** - **`2 THE AUTHORIZED OFFICER UNDER SARFAESI ACT THE KERALA STATE CO-OPERATIVE BANK LTD, CREDIT PROCESSING CENTER, IDUKKI COLONY P.O., IDUKKI, PIN - 685602`** - **`3 THE KERALA STATE CO-OPERATIVE BANK LTD REPRESENTED BY ITS GENERAL MANAGER, OFFICE OF THE KERALA STATE CO-OPERATIVE BANK LTD., IDUKKI COLONY P.O., IDUKKI, PIN - 685602`** - **`4 THE SOUTH INDIAN BANK LTD., REPRESENTED BY ITS BRANCH MANAGER, KALIYAR BRANCH, MUNDACKAL TOWERS, IDUKKI ROAD, KALIYAR P.O., IDUKKI, PIN - 685607`** - **`5 MAKKAR K.P, KUNNUMPURATHU HOUSE, ODIYAMPARA, VANNAPPURAM P.O., THODUPUZHA, IDUKKI, PIN – 685607`** ``` WP(C) No.18967 Of 2024 ``` ``` 2 ``` ``` By ADVS. SRI.S.GOPINATHAN-SR.GOVERNMENT PLEADER K.S.ARUN KUMAR-R2 & R3 SUNIL SHANKAR A-R4 M.V.RAJENDRAN NAIR-R5 VIDYA GANGADHARAN(K/000424/2020) GAYATHRI.M.M(K/003350/2022) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) No.18967 Of 2024 ``` ``` 3 ``` ## **JUDGMENT** Dated this the 21[st] day of June, 2024 The petitioner had purchased an extent of 12.14 Ares and 81 Square Meters of property in Survey Nos.1506/2/3, 1506/5/1/2 of Vannappuram Village in the public auction held by 2[nd] respondent-Authorised Officer under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The said sale was conducted to enforce the security interest created in the property by way of mortgage by deposit of Title Deeds on 31.03.2015 by the then owner of the property, when he availed a loan from the 3[rd] respondent- Bank. The sale is free from all encumbrances. 2. After the execution of Sale Certificate, the petitioner approached the 1[st] respondent-Sub Registrar for registration of sale. As evident from Ext.P3, registration fee also was ``` WP(C) No.18967 Of 2024 ``` ``` 4 ``` remitted. But, registration was refused citing the reason that there exists an attachment order obtained by the 4[th] respondent-Bank Manager of South Indian Bank, Kaliyar Branch, over the property. The attachment is shown as Entry Nos.1 and 2 in Ext.P4 Encumbrance Certificate. 3. As evident from Ext.P4 entries, the attachments were ordered in the year 2021 in I.A. No. 157/2021 in O.A. 498/2017 before the Debts Recovery Tribunal-II, Ernakulam. The mortgage in favour of the 2[nd] respondent-Bank was created on 31.03.2015. Therefore, the attachments are admittedly subsequent to the creation of mortgage. 4. It is held in **Axis Bank (M/s.) v. Hilal Ahmed Bhat and Another** [2022 (4) KHC 508] that "Once the sale is confirmed as per the provisions of Section 13(8) of the Act, the purchaser would get title to the property free of all encumbrances and any attachment upon the property will not have any consequence thereafter. The principle that ``` WP(C) No.18967 Of 2024 ``` ``` 5 ``` emanates from the aforesaid decision is that an attachment of the secured asset after creation of mortgage in favour of the secured creditor, could be effaced once the sale is confirmed." 5. This Court in **Phoenix ARC Pvt. Ltd v. Sub Registrar, Ferok [** 2023 KHC online 9452] found that the attachment after the creation of equitable mortgage can be effaced by filing the certified copy of the judgment of this Court directing the effacement of attachment in Book-1 kept at the office of the Sub Registrar. Hence, the petitioner filed this writ petition seeking to efface the entries of attachment orders in Ext.P4 and to effect registration of the Sale Deed. 6. Government Pleader entered appearance on behalf of the 1[st] respondent and submitted that in Ext.P4, there are recording of two attachments by Court Order. 7. Standing Counsel appearing for respondents 2 and 3 submitted that the property was mortgaged by the 5[th] respondent to the Bank on 31.03.2015. As the mortgage is ``` WP(C) No.18967 Of 2024 ``` ``` 6 ``` a prior mortgage comparing to the attachments recorded in Ext.P4, the mortgage will prevail and the attachments are liable to be effaced in view of the judgment of this Court in **Madhan S. v. Sub Registrar, Kollan and others** [2014 (1) KHC 249]. 8. Standing Counsel representing the 4[th] respondent-South Indian Bank submitted that there are attachment in favour of the South Indian Bank, as can be seen from Ext.P4 and even if the mortgage of the property to the 3[rd] respondent-Bank is prior to the attachment, if there is any surplus amount arising out of the auction sale, the 4[th] respondent-Bank is entitled to the said amount. To this contention, the Standing Counsel representing respondents 2 and 3 submitted that there is no surplus amount arising out of the auction sale. 9. Counsel for the 5[th] respondent vehemently resisted the writ petition and submitted that the attachments ``` WP(C) No.18967 Of 2024 ``` ``` 7 ``` ordered by the Courts shall prevail over any private contract between the petitioner and the Bank. Counsel for the petitioner further alleged that the sale of the property is an instance of collusion between respondents 2, 3 and the petitioner. 10. I have heard the learned counsel for the petitioner, the learned Government Pleader representing the 1[st] respondent, the respective Standing Counsel representing respondents 2 to 4 and the learned counsel appearing for the 5[th] respondent. 11. This Court considered the validity of subsequent attachment after the creation of mortgage with any Bank. In the judgment in **Madhan.S** (Supra), this Court held 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 ``` WP(C) No.18967 Of 2024 ``` ``` 8 ``` 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. The writ petition is allowed. No costs.” ## 12. A Division Bench of this Court in Ext.P5 judgment ## in W.A.No.612 of 2015 held as follows- “7. In the light of the aforesaid factual and legal issues, we are of the view that the appellants are entitled for a similar order. Accordingly, we declare that the attachments effected by the Munsiff Court, Thrissur after the date of mortgage are invalid and there will be a direction to the Sub Registrar and the Village Officer to efface the attachments effected after 08/07/2008 in their registers. Writ appeal is allowed as above.” 13. The law laid down in the judgment in **Madhan S.** (supra) was upheld by this Court in the judgment in W.A.No.612/2015 (Ext.P5). Following the law laid down by ``` WP(C) No.18967 Of 2024 ``` ``` 9 ``` this Court, the petitioner is entitled to succeed. The writ petition is accordingly allowed. The 1[st] respondent-Sub Registrar is directed to efface the attachment effected against the property covered by Ext.P1 Sale Certificate, which is shown as per Entry Nos.1 and 2 in Ext.P4 Encumbrance Certificate. The 1[st] respondent is directed to register Ext.P1 Sale Certificate. Sd/- **N.NAGARESH JUDGE** hmh ``` WP(C) No.18967 Of 2024 ``` ``` 10 ``` ## **`APPENDIX OF WP(C) 18967/2024`** ## **`PETITIONER EXHIBITS`** ``` Exhibit P1A COPY OF THE SALE CERTIFICATE DATED 11.3.2024 Exhibit P2A COPY OF THE ORDER DATED 30.1.2018 IN CMP NO. 560/2018 BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, THODUPUZHA Exhibit P3A COPY OF THE PAYMENT DETAILS SHOWING THE REMITTANCE OF REGISTRATION FEE BY THE PETITIONER ``` ``` Exhibit P4A COPY OF THE ENCUMBRANCE CERTIFICATE NO. 991/2024 DATED 2.2.2024 ISSUED BY THE 1ST RESPONDENT ``` ``` Exhibit P5THE COPY OF THE JUDGMENT DATED 24.7.2015 IN W.A. NO. 612/2015 BEFORE THIS HONOURABLE COURT Exhibit P6A COPY OF THE ENCUMBRANCE CERTIFICATE NO. 5344/2024 DATED 14/6/2024 ```