State Bank of India v. Sub Registrar, Enadimangalam Sub Registrar Office, Elamannoor, Pathanamthitta District & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN** **FRIDAY, THE 29[TH] DAY OF SEPTEMBER 2023 / 7TH ASWINA, 1945** ## **WP(C) NO. 11320 OF 2023** ## **PETITIONER:** **THE STATE BANK OF INDIA REPRESENTED BY ITS CHIEF MANAGER, STRESSES ASSETS RECOVERY BRANCH (S.A.R.B), LMS COMPOUND, OPPOSITE MUSEUM WEST GATE, VIKAS BHAVAN (P.O), THIRUVANANTHAPURAM - 695033** **BY ADVS. JAWAHAR JOSE CISSY MATHEWS SAFEER BAWA A.S.** ## **RESPONDENTS:** - **1 THE SUB REGISTRAR, ENADIMANGALAM SUB REGISTRAR OFFICE, ELAMANNOOR, PATHANAMTHITTA DISTRICT - 691524** - **2 NIRMAL R., S/O. RAJENDRAN NAIR, RESIDING AT SINDHU BHAVAN, KARAVOOR (P.O), PIRAVANTHOOR, KOLLAM DISTRICT - 689696** - **3 SETHU S., W/O. NIRMAL R. RESIDING AT SINDHU BHAVAN, KARAVOOR (P.O), PIRAVANTHOOR, KOLLAM DISTRICT - 689696** - **4 SURESH, AGED 53 YEARS S/O. JALALUDHEEN, RESIDING AT BAITHUL SAIN HOUSE, PADINJATTINKARA VADAKKE MURI, KOTTARAKKARA (P.O), KOLLAM DISTRICT - 691506** - **5 FAUSIA, AGED 39 YEARS W/O. ANEES ALI, RESIDING AT FAUSIA MANZIL, KUNDAYAM MURI, KUNDAYAM (P.O), KOLLAM DISTRICT - 689695** **BY ADVS. JOHN JOSEPH ( ROY) S.KRISHNANKUTTY(K/000792/2016) R BY GP ADV.S.SREEJITH** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) NO. 11320 OF 2023 : 2 :** ## **JUDGMENT** **The petitioner, a Nationalised Bank (hereinafter referred to as the 'Bank'), has approached this Court challenging Ext.P4 order issued by the 1[st] respondent, Sub Registrar refusing to register Ext.P2 Sale Certificate issued by the Bank under the provisions of the SARFAESI Act on the ground that the mortgaged property is having attachment from the Civil Court.** **2. The 2[nd] respondent availed a housing Loan from the erstwhile State Bank of Travancore (SBT) by creating equitable mortgage in respect of an extent of 4.62 Ares of property by deposit of title deeds. When the 2[nd] respondent defaulted payment of the instalments, the loan account was classified as Non Performing Asset by the State Bank of India with which SBT merged and the Bank initiated proceedings under the SARFAESI Act. The secured asset was sold in auction and Ext.P2 Sale Certificate was issued to the successful bidder.** **WP(C) NO. 11320 OF 2023 : 3 :** **When Ext.P2 sale certificate was presented for registration, the 1[st] respondent refused to register the same on the ground that the property is having attachment from the Munsiff Court, Kottarakkara in O.S. No. 357/2022 as per order dated 01.08.2022 in favour of the respondents 4 and 5, the plaintiffs in the suit, against respondents 4 and 5, borrowers. It is submitted by the Bank that the equitable mortgage was created on 12.10.2016 as evident from Ext.P1 memorandum of deposit and the date of attachment by the Court is 01.08.2022. The petitioner contends that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property and the 1[st] respondent is bound to register the sale certificate. Though there were other attachments in respect of the secured asset subsequent to the mortgage and this Court by Ext. P7 judgment had effaced those attachments, the attachment ordered by the Munsiff Court, Kottarakkara in O.S. No. 357/2022 came to the** **WP(C) NO. 11320 OF 2023 : 4 :** **notice thereafter and the 1[st] respondent declined to register the sale deed in view of the said attachment.** **3. The learned counsel for the petitioner relies on the decisions of this Court in** _**Rajalekshmi Amma v. E.A.Basheer & Others [2013 KHC 3678 : 2013 (4) KLT 443 : ILR 2013 (4) Ker.385 : 2013 (4) KLJ 754**_ **,** _**Madhan S. v. Sub Registrar, Kollam and Others [2014 (1) KHC 249: 2014 (1) KLT 406: ILR 2014 (1) Ker.586: 2014 (1) KLJ 483: AIR 2014 Ker.54]**_ **and the decision of a Division Bench** _**-**_ **of this Court in** _**Secretary, Keechery Service Co operative Bank Ltd. v.Sajitha Nizar alias Sajitha P.M. and Others[2020 (5) KHC 231: ILR 2020 (4) Ker.249: 2020(6) KLT 68: 2020(4) KLJ 970]**_ **and contends that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property and the 1[st] respondent has to register the sale deed notwithstanding the attachment ordered by the Munsiff Court, Kottarakkara in O.S. No.** ## **WP(C) NO. 11320 OF 2023 : 5 :** **357/2022.** **4. A counter affidavit has been filed by respondents 2 and 3 contending** _**inter alia**_ **that they are prepared to remit the entire sale consideration and incidental expenses to the Bank. It is too late for the respondents 2 and 3 to raise such claim since their right of redemption has been lost in view of Section 13(8) of the SARFAESI Act.** **5. This Court, in** _**Rajalekshmi Amma**_ **[supra], held as follows:** _**“3. When a mortgage is created in terms of the provisions of the TP Act, it amounts to an encumbrance. An order of attachment before judgment creates no charge. There is nothing in the RR Act or in the SFC Act, which changes the jurisprudential content of a mortgage, in terms of the TP Act when the provisions of either of those legislations are invoked by the KFC. Equally, the quality of the mortgage created in favour of the KFC does not, in any manner, get extinguished or reduced in terms of its legal character and statutory potency in terms of the TP Act, by the fact that**_ **WP(C) NO. 11320 OF 2023 : 6 :** _**alternate modes of recovery were resorted to by KFC, rather than by a suit in terms of Section 67 of the TP Act. The quality of the mortgage as an encumbrance does not get watered down to be subservient to by an order of attachment by the civil court under Code of Civil Procedure. That order of attachment does not override or deserves to be preferred over the rights of a mortgagee or the effect of the mortgage as an encumbrance.”**_ ## **6. In Madhan's case (supra), this Court held in paragraph 9 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 subject property. Such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall**_ **WP(C) NO. 11320 OF 2023 : 7 :** _**to the ground the moment the sale is petitioner. The confirmed in favour of 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 prejudicial 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.”**_ ## **7. A Division Bench of this Court in Ali** **Asharaf M.M. and Another** _**v**_ **. Sub Registrar, Thrissur (Judgment dated 24.7.2015 in W.A. No.612/2015) has affirmed the law laid down in Madhan's case.** **8. In Keechery Service Co-operative Bank case (supra), another Division Bench of this Court also affirmed the law laid down in Madhan's case (supra) and held in paragraph 7 as under:** **WP(C) NO. 11320 OF 2023 : 8 :** _**“7. …. We do not find any reason to disagree with the declaration of law in Madhan's case (supra) which was virtually affirmed by the Division Bench in Ali Asharaf's case (supra). In the said circumstances and taking note of the fact that the orders of attachment of the property in question were after the creation of equitable mortgage of the same with Federal Bank we do not find any reason to interfere with the impugned judgment passed by the learned Single Judge following the dictum in Madhan's case (supra), carrying the directions to effect mutation of the property as also to efface all encumbrance over the property effected after 27/06/2014, the date on which the property in question was mortgaged with Federal Bank”.**_ **9. In the light of the dictum laid down by this Court in the above decisions, Ext. P4 is quashed. The 1[st] respondent is directed to register Ext.P2 Sale Certificate as and when presented, notwithstanding the order of attachment of the Munsiff Court, Kottarakkara in O.S. No. 357/2022,** **WP(C) NO. 11320 OF 2023 : 9 :** **if the document is otherwise in order. The 1[st] respondent shall efface the said attachment from its records.** **The writ petition is disposed of with the above direction.** **Sd/MURALI PURUSHOTHAMAN JUDGE** SB ## **WP(C) NO. 11320 OF 2023 : 10 :** ## **APPENDIX** ## **PETITIONER EXHIBITS** **Exhibit-P1 TRUE COPY OF MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 14-10-2016 EXECUTED BY THE 2ND RESPONDENT.** **Exhibit-P2 TRUE COPY OF THE SALE CERTIFICATED DATED 5-42021 ISSUED BY THE PETITIONER UNDER THE PROVISIONS OF THE SARFAESI ACT.** **Exhibit-P3 TRUE COPY OF THE LETTER DATED 18-3-2023 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT.** **Exhibit-P4 TRUE COPY OF THE ORDER DATED NIL ISSUED BY THE 1ST RESPONDENT TO EXHIBIT-P3 LETTER.** **Exhibit-P5 TRUE COPY OF THE PROCEEDINGS DATED 1-8-2022 IN O.S.NO.357 OF 2022 ON THE FILES OF THE MUNSIFF'S COURT, KOTTARAKARA, DOWNLOADED FROM THE WEBSITE OF E-COURTS.** **Exhibit-P6 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE TAKEN ON BEHALF OF THE PETITIONER FROM THE OFFICE OF THE 1ST RESPONDENT.** **Exhibit-P7 TRUE COPY OF THE JUDGMENT DATED 11-1-2023 IN W.P.(C).NO.30476/2022 OF THIS HON'BLE COURT.**