Sreeraj S. v. State of Kerala and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **WEDNESDAY, THE 18TH DAY OF JULY 2018 / 27TH ASHADHA, 1940** **WP(C).No. 24100 of 2018** ## **PETITIONER** **SREERAJ S., AGED 40 YEARS, S/O.M.N.SREEDHARAN NAIR, MUNDAPALLIL HOUSE, KARIKKATTOOR P.O., MANIMALA, KOTTAYAM DISTRICT, KANJIRAPPALLY TALUK, MANIMALA VILLAGE, MANIMALA KARA.** **BY ADVS.SRI.CHERIAN GEE VARGHESE SRI.P.HARIDAS SRI.BIJU HARIHARAN SRI.R.B.BALACHANDRAN SRI.RENJI GEORGE CHERIAN SRI.P.C.SHIJIN SRI.RISHIKESH HARIDAS** ## **RESPONDENTS:** **1. STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF REVENUE, STATE SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001.** **2. DISTRICT COLLECTOR, PATHANAMTHITTA - 689 645.** **3. SUB REGISTRAR, OFFICE OF THE SUB REGISTRAR, MALAPPALLY - 689 645.** **BY GOVERNMENT PLEADER SMT. A.C. VIDHYA** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 24100 of 2018 (J)** **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **EXHIBIT P1 TRUE COPY OF THE JUDGMENT IN WPC NO.6880/2017 OF THIS HON'BLE COURT DATED 31/5/2017. EXHIBIT P2 TRUE COPY OF SALE CERTIFICATE DATED 9/2/17. EXHIBIT P3 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE NO.2142/18 DATED 7/6/2018.** ## **RESPONDENTS EXHIBITS NIL** **/TRUE COPY/** **PA TO JUDGE** **sdr/24.7.18** **ALEXANDER THOMAS, J.** ================== W.P.(C).No. 24100 of 2018 ================== Dated this the 18[th] day of July, 2018 **J U D G M E N T** It is stated that the petitioner purchased a property under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). That, when the Sub Registrar refused to register sale certificate without endorsement regarding the prior attachment and charges, the petitioner was constrained to file a Writ Petition as W.P.(C).No. 6880/2017. This Court as per Ext.P-1 judgment dated 31.5.2017 had disposed of W.P.(C).No.6880/2017 with the direction that the respondent SRO shall register the certificate without mentioning any prior attachment. That pursuant thereof, the sale certificate was registered. But that now the Sub Registrar is not issuing encumbrance certificate without endorsement of previous attachment. It is in the light of these factual averments, that the petitioner has filed the instant Writ Petition (Civil) with the following prayers: - _“(a) Call for the records leading to registration records pertaining to properties covered by Ext.P-3 and may quash all the entries pertaining attachments and charges created over the said property prior to Ext.P-3 sale certificate._ - _(b) Issue a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the 3[rd] respondent to issue_ W.P.(C).24100/18 - : 2 :- _an encumbrance certificate to the petitioner without endorsing any attachment or charges created over the property prior to Ext.P-3.”_ 2. Heard Sri.P.Haridas, learned counsel appearing for the petitioner and Smt.A.C.Vidhya, learned Govt. Pleader appearing for the official respondents. 3. This Court had rendered Ext.P-1 judgment dated 31.5.2017 in W.P.(C).No.6880/2017 filed by the petitioner herein. The said judgment reads as follows: _The petitioner purchased an item of property in a proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the SARFAESI Act'). Ext.P7 is the sale certificate obtained by the petitioner in this connection. The grievance of the petitioner in the writ petition concerns the inaction on the part of the third respondent in registering Ext.P7 sale certificate._ _2. A counter affidavit has been filed by the third respondent. In the counter affidavit, it is stated that the registration of the sale certificate was declined as the petitioner has not disclosed the existing attachments over the property in the sale certificate._ _3. A statement has been filed by the sixth respondent Bank, indicating that the property covered by the sale certificate is a property mortgaged to the Bank by way of security on 13.11.2008 for the credit facilities availed by one Chitravelu Nadar. It is also stated that during 2016, one Mathew Thomas had filed a suit as O.S.No.4 of 2016 before the Sub Court, Thiruvalla against the wife and children of Chitravelu Nadar, who died in the meanwhile, for realization of certain amounts and obtained an attachment in respect of the property mortgaged to the Bank. It is stated that the said attachment being one effected long after the mortgage, the same need not be shown in the sale certificate._ _4. Heard the learned counsel for the petitioner, the learned counsel for the sixth respondent, as also the learned Government Pleader._ _5. It is beyond dispute that the attachment referred to by the third respondent is an attachment obtained by Mathew Thomas during 2016 over the property. In so far as the said attachment is one obtained over the property long after the mortgage, the sale of the property in favour of the petitioner is free from the said attachment. As such, it is not necessary to mention the said attachment in the sale certificate at all. It is seen that in identical cases, such a view has been taken by this Court._ _**Housing Development Finance and another** v._ _**Sub Registry Officer and Others** (2011 KHC 851) is one of such cases._ W.P.(C).24100/18 - : 3 :- _In the circumstances, the writ petition is allowed and the third respondent is directed to register Ext.P7 sale certificate without any modification or correction, forthwith. Needless to say that if the petitioner seeks to effect mutation in respect of the property based on Ext.P7 sale certificate, respondents 4 and 5 shall also effect mutation in respect of the property._ 4. It has been held by this Court in _**Madhan v. Sub Registrar**_ reported in 2014 (1) KLT 406, that attachments effected subsequent to the creation of equitable mortgage be effaced after the property is purchased by another in the sale conducted by the Recovery Officer of the Debts Recovery Tribunal (D.R.T) and that such attachment will not affect the title and ownership over the subject property. This Court had considered the specific question in _**Madhan's case**_ supra as to whether the attachment effected subsequent to the creation of equitable mortgage be effaced after the property is purchased by another in the sale conducted by the Recovery Officer of the Debts Recovery Tribunal. It will be profitable to refer paras 1 and 9 of the abovesaid decision of this Court in _**Madhan's case**_ supra, which read as follows: (see KLT report) _Can the attachments effected subsequent to the creation of equitable mortgage be effaced after the property is purchased by another in sale conducted by the Recovery Officer of the Debts Recovery Tribunal ?_ **==> picture [159 x 6] intentionally omitted <==** _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_ W.P.(C).24100/18 - : 4 :- _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.”_ 5. It is now submitted by Sri.P.Haridas, learned counsel appearing for the petitioner that the mortgage in the instant case was created on 30.1.2018 and that whereas, the impugned attachments orders have been issued only on 6.2.2016 and 1.8.2016 as can be seen from serial Nos.6 and 7 of Ext.P-3 encumbrance certificate. In view of the conclusive legal position so settled by this Court in _**Madhan's case**_ supra and series of other cases, it is declared that the attachment orders granted after the creation of the mortgage will have no efficacy and it falls to the ground the moment the sale has been duly confirmed. However, it is seen that the beneficiaries in the impugned attachment orders are now not before this Court. It is stated by the petitioner that the details of the beneficiaries of the attachment orders are given in serial Nos.6 and 7 of Ext.P-3 encumbrance certificate issued by 3[rd] respondent SRO. In order to ensure procedural fairness to the affected parties, it is ordered that the petitioner will file an application before the 3[rd] respondent SRO praying that a non-encumbrance should be issued in respect of the W.P.(C).24100/18 - : 5 :- abovesaid property without showing the attachments and in the said application, the petitioner should also array as respondents, the affected parties, viz., the beneficiaries in the attachment orders in question. The application in that regard should be filed by the petitioner within ten days from the date notified for receiving a certified copy of this judgment. If such an application is received, then the 3[rd] respondent SRO will issue notices of hearing to the petitioner and the respondents therein (who are the beneficiaries of the attachment orders in question). The petitioner may produce necessary documents evidencing the date of creation of the mortgage in respect of the property in question, etc. If, after hearing the petitioner and the affected persons, it is established that the impugned attachment orders have issued after the creation of the mortgage, then the 3[rd] respondent will issue the requisite non encumbrance certificate in respect of the petitioner's property without showing the encumbrances relating to the abovesaid attachments. It is also ordered that, in such eventuality, the 3[rd] respondent SRO will also ensure that the impugned attachment orders, which are granted after the creation of the mortgage, are effaced from its records. Orders in that regard should be passed by the 3[rd] respondent SRO without much delay, preferably within a W.P.(C).24100/18 - : 6 :- period of ten days from the date of hearing of the parties concerned. After securing the abovesaid orders, it is also open to the petitioner to approach the competent Revenue official/village officer concerned so as to ensure the effacement of the attachment orders from the Revenue records and such request should also be considered and acted upon by the competent Revenue officials without any further delay, in the light of the abovesaid declaration of law made herein above. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. Sd/sdk+ **ALEXANDER THOMAS, JUDGE** ///True Copy/// P.S. to Judge