State Bank of India v. Sub Registrar, Eravipuram Sub Registrar Office, Eravipuram; Village Officer Mundakkal; Dinesh Kumar. K; Nandu

## **`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.30178 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, PIN - 695033 BY ADVS. JAWAHAR JOSE CISSY MATHEWS SAFEER BAWA A.S. ``` ## **`RESPONDENTS:`** - **`1 THE SUB REGISTRAR, ERAVIPURAM SUB REGISTRAR OFFICE, ERAVIPURAM (P.O) KOLLAM DISTRICT, PIN - 691011`** - **`2 THE VILLAGE OFFICER, MUNDAKKAL NEAR AMRITHAKULAM, POLAYATHODE - CHAYAKKADAMUKKU ROAD, MUNDAKKAL (P.O), KOLLAM DISTRICT, PIN - 691010`** - **`3 DINESH KUMAR. K, S/O.N.KRISHNA MENON, MANAGING PARTNER, M/S.GREANZ VENTURES, RESIDING AT "MAKAYIRA", AMRUTHA KULAM, POLAYATHODE, MUNDAKKAL EAST (P.O), KOLLAM DISTRICT, PIN - 691010`** - **`4 NANDU, RESIDING AT NANDU NIVAS IVERKALA EAST, KOTTARAKKARA (P.O), KOLLA DISTRICT, PIN – 691507`** ``` BY SRI.V.S.SREEJITH, GOVERNMENT PLEADER ``` ``` 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.30178 OF 2023 2 ## **`JUDGMENT`** ``` Thepetitioner,aNationalisedBank (hereinafter referred to as the 'Bank'), has approached this Court challenging Ext.P6 order issued by the 1[st]respondent, Sub Registrar refusing to register Ext.P5 Sale Certificate on the ground that the mortgaged property is having attachment from the Civil Court. ``` ``` 2. The 3[rd] respondent availed a Cash Credit Loan from the Bank by creating equitable mortgage in respect of an extent of 3 Ares of property by deposit of title deeds. When the 3[rd] respondent defaulted payment of the instalments, the loan account was classified as Non Performing Asset and Bank initiated proceedings under the SARFAESI Act. The secured asset was sold in auction pursuant to Ext.P4 sale notice and Ext.P5 Sale Certificate was ``` WP(C) NO.30178 OF 2023 3 ``` issued to the successful bidder. When Ext.P5 sale certificate was presented for registration, the 1[st] respondent refused to register the same on the ground that the property is having attachments from the Civil Court. Ext.P7 Encumbrance Certificate shows that the mortgaged property has been attached by the Sub Court, Kottarakkara in O.S. No. 36/2020 on 27.10.2020 in favour of the 4[th] respondent, who is the plaintiff in the said suit. It is further submitted that the Suit itself was rejected by the Court on 24.05.2022 for non payment of Court fee and the order of attachment ceased to exist. It is submitted by the Bank that the equitable mortgage was created on 17.01.2014 as evident from Ext.P1 memorandum of deposit and the date of attachment by the Court is on 27.10.2020. The petitioner contends that the attachment effected subsequent to the creation of ``` WP(C) NO.30178 OF 2023 4 ``` 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. ``` ``` 3. The learned counsel for the petitioner relies on the decision 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 ``` WP(C) NO.30178 OF 2023 5 ``` affect the right of the Bank to sell the mortgaged property and the 2[nd] respondent Village Officer has to efface the attachment from the revenue records. ``` ``` 4. Though notice was issued to respondents 3 & 4 by special messenger, there is no appearance for them when the case is taken up for consideration. ``` ``` 5. This Court, inRajalekshmi 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, ``` WP(C) NO.30178 OF 2023 6 ``` by the fact that 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 ``` WP(C) NO.30178 OF 2023 7 ``` 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 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 inAli Asharaf M.M. and Anotherv. Sub Registrar, Thrissur(Judgment dated 24.7.2015 in W.A. No.612/2015) has affirmed the law laid down in ``` WP(C) NO.30178 OF 2023 8 ## **`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: ``` ``` “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 ``` WP(C) NO.30178 OF 2023 9 ## _**`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. P6 is quashed. The attachment effected subsequent to the creation of equitable mortgage has to be effaced by the 2[nd] respondent from the Revenue records and the 1[st] respondent is directed to register Ext.P5 Sale Certificate as and when presented, notwithstanding the order of attachment of the Sub Court, Kottarakkara in O.S. No. 36/2020 dated 27.10.2020, if the document is otherwise in order. ``` ``` The writ petition is disposed of with the above direction. ``` ``` Sd/- ``` ``` MURALI PURUSHOTHAMAN JUDGE ``` ``` sp/30/09/2023 ``` WP(C) NO.30178 OF 2023 10 ## **`APPENDIX`** ## **`PETITIONER’S EXHIBITS:-`** ``` EXHIBIT-P1TRUE COPY OF MEMORANDUM OF DEPOSIT OF TITLEDEEDS,DATED18-1-2014, EVIDENCING THE CREATION OF EQUITABLE MORTGAGE IN FAVOUR OF THE STATE BANK OF INDIA. ``` - **`EXHIBIT-P2 TRUE COPY OF THE DEMAND NOTICE DATED 4- 12-2020 ISSUED TO THE 3RD RESPONDENT AND OTHERS.`** ``` EXHIBIT-P3TRUE COPY OF THE POSSESSION NOTICE DATED 25-8-2021 ISSUED TO THE 3RD RESPONDENT AND OTHERS. ``` - **`EXHIBIT-P4 TRUE COPY OF THE SALE NOTICE DATED 166-2023 WHICH WAS ISSUED TO THE 3RD RESPONDENT AND OTHERS.`** - **`EXHIBIT-P5 TRUE COPY OF THE SALE CERTIFICATE DATED 11-8-2023 ISSUED TO ST. MANJULA BORGIA.`** - **`EXHIBIT-P6`** - **`TRUE COPY OF THE ORDER DATED 17-8-2023 ISSUED BY THE 1ST RESPONDENT.`** - **`EXHIBIT-P7 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 11-7-2023 ISSUED FROM THE OFFICE OF THE SUB REGISTRAR, ERAVIPURAM.`** ``` EXHIBIT-P8TRUE COPY OF THE JUDGMENT DATED 24-5- 2022 IN O.S.NO.36/2020 ON THE FILES OF THE HON'BLE SUBORDINATE JUDGE COURT, KOTTARAKKARA. ```