State Bank of India v. Sub Registrar, Attingal and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **SATURDAY, THE 28[TH] DAY OF OCTOBER 2023/6TH KARTHIKA, 1945** **WP(C) NO. 19838 OF 2023** ## **PETITIONER:** **STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH, L.M.S COMPOUND, OPPOSITE MUSEUM WEST GATE, VIKAS BHAVAN.,P.O. TRIVANDRUM, REPRESENTED BY ITS AUTHORIZED OFFICER/CHIEF MANAGER., PIN – 695033** **BY ADVS. M.JITHESH MENON P.G.MAHESHKUMAR KURIAN T. VADAKKEL** ## **RESPONDENTS:** - **1 THE SUB REGISTRAR, ATTINGAL, OFFICE OF THE SUB REGISTRAR, COURT ROAD, THIRUVANANTHAPURAM., PIN - 695101** - **2 THE VILLAGE OFFICER, VILLAGE OFFICE, ELAMBA, ELAMBA.P.O., ATTINGAL,THIRUVANANTHAPURAM, PIN - 695103** - **3 SADANANDAN, SRS BHAVAN, CHATHANPARA, THIRUVANANTHAPURAM, PIN - 695605** - **ADDL.R4 MOHANDAS S/O SOMAN, S.N. VILLA, THAZHEMANKONAM, MARKET ROAD, ATTINGAL** **(ADDL.R4 IS IMPLEADED AS PER ORDER DATED 28.102.023 IN IA.1/2023 )** **BY ADV.LATHEESH SEBASTIAN SMT.RESHMI THOMAS, GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.19838/2023 : 2 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.19838 of 2023 ````````````````````````````````````````````````````````````` _Dated this the 28[th] day of October, 2023_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The State Bank of India, as petitioner, has filed this writ petition seeking to quash Ext.P9 and to command the 1[st] respondent to register the sale certificate in favour of the auction purchaser. The petitioner also sought to command respondents 1 and 2 to efface all the attachments made on the property in question, after the date of creation of mortgage in favour of the petitioner and also to effect mutation in the name of the auction purchaser. 2. The petitioner states that the petitioner had sanctioned a Cash Credit Facility, two Term Loans, two Funded Interest Term Loans and two Working Capital Term Loans to M/s. A.R. Enterprises represented by its Managing W.P.(C) No.19838/2023 : 3 : Partner Smt. Sindhu. Sri. P. Vijayan was a Partner of the Firm. For grant of loan, an equitable mortgage of 29.96 Ares of land with building thereon at Elamba Village in Chirayinkeezhu Taluk was made. The title deeds were deposited with the petitioner. The guarantor-cum-mortgager had issued a letter of confirmation of creation of mortgage by deposit of title deeds, on 11.02.2016. 3. When default occurred in the repayment of loans by the borrower, the accounts were classified as Non Performing Assets. Proceedings were initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The physical possession of the secured property was taken and the property was put for sale on 17.03.2023 by issuing a sale notice dated 22.02.2023. The property was sold in auction to one Mohammed Salih, the sale was confirmed and Sale Certificate was issued on 08.05.2023. The encumbrance certificate in respect of the property contained an attachment endorsement pursuant to an order dated 09.06.2022 of the W.P.(C) No.19838/2023 : 4 : Munsiff's Court, Attingal on a suit filed by the 3[rd] respondent. The petitioner therefore issued a letter to the 1[st] respondentSub Registrar requiring him to register the Sale Certificate as the mortgage was prior to the order of attachment on 09.06.2022. The 1[st] respondent, however, issued a reply dated 04.05.2023 intimating that the Sale Certificate can be registered only on the lifting of the attachment. 4. The petitioner states that the said Ext.P9 letter of the 1[st] respondent is absolutely illegal and arbitrary and is contrary to the law laid down by this Court in _**Madhan S. v. Sub Registrar, Kollam and others** [2014 (1) KLT 406]._ In view of the law laid down by this Court, any attachments effected after the mortgage are invalid and are required to be effaced. The stand taken by the 1[st] respondent in Ext.P9 is therefore unsustainable, contended the Standing Counsel appearing for the petitioner. 5. The petitioner impleaded the additional 4[th] respondent, who was the plaintiff in another suit and who has also obtained order of attachment in respect of the property. W.P.(C) No.19838/2023 : 5 : 6. The respondents resisted the writ petition. The respondents contended that when a competent court of law passes orders attaching property, any conveyance of the said property would be invalid. The Sub Registrar cannot be a party to an invalid transaction by facilitating registration of such invalid documents. If the petitioner has any grievance in this regard, the petitioner has to approach the civil court which granted attachment order and try to vacate orders of attachment. A writ petition is not maintainable in such circumstances. The writ petition is therefore liable to be dismissed. 7. I have heard the learned counsel for the petitioner, the learned Government Pleader appearing for respondents 1 and 2 and the learned counsel appearing for the 3[rd] respondent. 8. From the pleadings and arguments, it is evident that the landed property of the petitioner along with building in 29.96 Ares of land in Re-survey No.13/1-1, 15-1, Block W.P.(C) No.19838/2023 : 6 : No.44, Thandapper No.9403 situated at Elamba Village, Chirayinkeezhu Taluk, Attingal Sub Registry, Thiruvananthapuram in the name of Smt.Sindhu was mortgaged to the petitioner in respect of a loan transaction. The guarantor-cum-mortgager had issued Ext.P1 letter of confirmation of creation of mortgage by deposit of title deeds, on 11.02.2016. 9. The petitioner sold the mortgaged property in auction invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and issued Ext.P6 Sale Certificate dated 08.05.2023. Thereafter, the petitioner noticed that in the Encumbrance Certificate in respect of the property, an attachment by the Munsiff's Court, Attingal in OS No.264/2022 was recorded. 10. The attachment obtained by the additional 4[th] respondent in OS No.55/2023 of the Munsiff's Court, Attingal was also included in the encumbrance register. It is based on these court orders that the 1[st] respondent has taken a W.P.(C) No.19838/2023 : 7 : stand that the Sale Certificate issued by the petitioner can be registered only after lifting of the attachment orders of the civil court. 11. This Court considered the legal impact of attachment orders passed by civil courts on properties which were already mortgaged to the secured creditors. In _**Madhan S.**_ (supra), this Court held that the attachments effected subsequent to the mortgage created in favour of the Bank do not affect the title and ownership over the subject property. Such attachments have no impact on the sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the attachment will cease to have any effect or fall to the ground the moment the sale is confirmed in favour of an auction purchaser. Such attachments cannot remain as a permanent taboo prejudicially affecting the marketability and title of the property even though they have ceased to have any legal efficacy. Such attachments are liable to be effaced by the Village Officer. W.P.(C) No.19838/2023 : 8 : 12. In the judgment in _**Secretary, Keecheri Service Co-operative Bank Limited v. Sajitha Nizar and others** [2020 (6) KLT 68]_ , this Court held that orders of attachment of property, after the creation of equitable mortgage to the Bank, cannot affect the right of an auction purchaser. 13. Taking into consideration the law laid down by this Court, the writ petition has to be allowed. The writ petition is therefore ordered as follows:- Ext.P9 letter is set aside. The 1[st] respondent is directed to register Ext.P6 Sale Certificate issued by the petitioner in accordance with law, within a period of two weeks, provided the petitioner complies with other statutory requirements, if any, under the Registration Act and the Indian Stamp Act and the Rules framed thereunder. The 2[nd] respondent is directed to efface any attachment from the records. Sd/- **N. NAGARESH, JUDGE** aks/08.11.2023 W.P.(C) No.19838/2023 : 9 : ## **APPENDIX OF WP(C) 19838/2023** ## **PETITIONER'S EXHIBITS** **Exhibit P1 TRUE COPY OF THE LETTER OF CONFIRMATION FOR CREATION OF MORTGAGE BY DEPOSIT OF TITLE DEEDS EXECUTED BY SMT.SINDHU, MG.PARTNER, M/S A.R.ENTERPRISES AND GUARANTOR DATED 11-2-2016 Exhibit P2 TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 13[2] OF THE SARFAESI ACT TO THE BORROWERS/GUARANTORS DATED 20-72021 Exhibit P3 TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 13[4] OF THE SARFAESI ACT DATED 2-2-2022 Exhibit P4 TRUE COPY OF THE ORDER PASSED BY THE HON'BLE CJM COURT, TRIVANDRUM DATED 27-10-2022 IN M.C.NO.1240/2022. Exhibit P5 TRUE COPY OF THE SALE NOTICE ISSUED BY THE PETITIONER ON 22-2-2023 Exhibit P6 TRUE COPY OF THE SALE CERTIFICATE DATED 8-5-2023 Exhibit P7 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 14.6.2023 Exhibit P8 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 2-5-2023 Exhibit P9 TRUE COPY OF THE REPLY ISSUED BY THE 1ST RESPONDENT DATED 4-5-2023**