State Bank of India v. Sub Registrar, Kundara; Stephen Bernad; Siby Kurian

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** ## **MONDAY, THE 4[TH] DAY OF APRIL 2022 / 14TH CHAITHRA, 1944** ## **WP(C) NO. 9571 OF 2022** ## **PETITIONER:** THE STATE BANK OF INDIA, REPRESENTED BY ITS CHEF MANAGER, STRESSED ASSETS RECOVERY BRANCH (SARB), LMS COMPOUND, OPPOSITE MUSEUM WEST GAGE, VIKAS BHAVAN (PO), THIRUVANANTHAPURAM, PIN-695 033. BY ADVS. JAWAHAR JOSE CISSY MATHEWS JAISON ANTONY EDWIN JOSEPH ## **RESPONDENTS:** 1 THE SUB REGISTRAR, KUNDARA, MINI CIVIL STATION, KUNDARA (PO), KOLLAM DISTRICT, PIN-691 501. 2 STEPHEN BERNAD, ROBIN DALE HOUSE, PADINJARE KADAVIL, VELLIMON WEST (PO), KOLLAM, PIN-691 511. 3 SIBY KURIAN, AGED 37 YEARS S/O.P.M.KURIAN, PROPRIETOR, SIM-TECH INTERNATIONAL TRADE LINKS, TC 2/158(3), MOSQUE LANE, KESAVADASAPURAM, THIRUVANANTHAPURAM, PIN-695 004. BY ADV THIRUMALA MANI P.K. SHRI.LIJU V. STEPHEN ## **OTHER PRESENT:** SMT.K.AMMINIKUTTY.SR.G.P. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.04.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **WP(C) NO. 9571 OF 2022 2** ## **JUDGMENT** The State Bank of India, which is a nationalized Bank, has approached this Court alleging that the 1[st] respondent – Sub Registrar is refusing to register Ext.P3 Sale Certificate, issued by them in favour of the auction purchaser of the property mentioned therein, which was brought to sale under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI ACT for short), solely saying that there is an order of attachment over the property in question, ordered by the competent Civil Courts. 2. Sri.Jawahar Jose – learned Standing Counsel appearing for the petitioner Bank, argued that the law has been now well settled that attachments subsequent to the date of equitable mortgage, obtained by his client over the property in question, can never impede their rights to sell it; and that, therefore, refusal of the 1[st] respondent to register Ext.P3 is egregiously improper and **WP(C) NO. 9571 OF 2022 3** contrary to law. He fortified his submissions asserting that, as is evident from Ext.P6 Encumbrance Certificate, the attachment brought on the property by respondent No.3 is dated 20.12.2014; while the mortgage obtained by his client was as early as on 15.07.2013. He, therefore, reiteratingly prayed that 1[st] respondent be directed to register Ext.P3 _de hors_ the order of attachment reflected in Ext.P6, within a time frame to be fixed by this Court; and that pursuant thereto, the entries of attachment be effaced. 3. Shri.Thirumala Mani – learned counsel appearing for respondent No.3, submitted that this writ petition is not maintainable because his client has obtained an attachment over the property through a valid process pending before the Civil Court and that, if the Bank is allowed to sell the property at this stage, his client will be left without any remedy against respondent No.2, who is the debtor; and thus prayed that this writ petition be dismissed. He then submitted that his client has filed a counter affidavit, wherein, he has ## **WP(C) NO. 9571 OF 2022 4** explained that not all the items of properties over which his client has brought out the attachment are mortgaged to the Bank. He, therefore, prayed that even if this Court is inclined to grant any relief to the petitioner – Bank, it may be confined to those extents which are specifically mortgaged to them and no other. 4. Shri.Liju V.Stephen, learned counsel appearing for the 2[nd] respondent, conceded that his client had created an equitable mortgage over the property in question in favour of the petitioner – Bank; but that he intends to challenge its sale, since it has been done in blatant violation of law. He, therefore, prayed that this writ petition be dismissed. 5. Smt.K.Amminikutty–learned Senior Government Pleader appearing for respondent No.1, submitted that said Authority has been incapacitated from acceding to the request of the petitioner because he noticed the attachment over the property in question by a competent Civil Court. She submitted that, however, if this Court is so inclined, he is ## **WP(C) NO. 9571 OF 2022 5** ready and willing to register Ext.P3 in terms of law. 6. In Reply, Sri.Jawahar Jose submitted that law has been well settled through various judgments of this Court, including **Secretary,** _**Keechery**_ _**Service Co-operative Bank Ltd., v. Sajitha Nizar Alias Sajitha P.M. (2020 (6) KLT 68),**_ that the petitioner - Bank obtains a primary charge over the property on the strength of an equitable mortgage and that subsequent attachments cannot override it. He then added that the submissions of Shri.Thirumala P.K. Mani, that all the properties are not mortgaged to his client, are factually incorrect and that the documents in possession of the Bank would establish to the contrary. 7. When I evaluate the afore submissions, it is without doubt that, whatever be the contentions of the 3[rd] respondent against the 2[nd] respondent, as long as the Bank is able to establish an equitable mortgage prior to the date of attachment, 3[rd] respondent cannot enforce the said order against the Bank in any manner whatsoever. **WP(C) NO. 9571 OF 2022 6** 8. Axiomatically, if any attachment has been brought on the property after 15.07.2013, same could also be subject to the rigour of the declarations of this Court in the afore two precedents. 9. Of course, the question whether all the properties are covered by the mortgage cannot be affirmatively stated by this Court at this stage because it will require an assessment by the competent Authority of veracity of such assertion, particularly when the 3[rd] respondent says that one or two items are not so covered. In the afore circumstances, I order this writ petition and direct the 1[st] respondent - Sub Registrar, to hear the competent Officer of the petitioner - Bank, as well as the 3[rd] respondent and decide upon their rival contentions relating to the extents over which the equitable mortgage operates, which shall be done, on an assessment of the relevant documents to be produced by both parties; and then to take up Ext.P3 Sale Certificate and register the same, adverting to the afore two ## **WP(C) NO. 9571 OF 2022 7** precedents; thus culminating in an appropriate order and necessary action thereon as expeditiously as is possible, but not later than one month from the date of receipt of a copy of this judgment. As far as the 3[rd] respondent is concerned, the Sub Registrar will be obligated to register Ext.P3 _de hors_ the attachment, if it is found that the property covered by the same is under equitable mortgage executed by the 2[nd] respondent; and he is left with full liberty to invoke such other remedies against the said respondent in terms of law, as may be available to him. Sd/- ## **DEVAN RAMACHANDRAN** **JUDGE** **MC/4.4** ## **WP(C) NO. 9571 OF 2022 8** ## **APPENDIX OF WP(C) 9571/2022** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE MEMORANDUM DATED 15.07.2013 (TWO IN NUMBER) WHEREBY THE TITLE DEEDS WERE DEPOSITED WITH THE BANK. Exhibit P2 TRUE COPY OF THE SALE NOTICE DATED 07.12.2021 ISSUED UNDER THE SARFAESI ACT. Exhibit P3 TRUE COPY OF THE SALE CERTIFICATE DATED 04.02.2022 ISSUED BY THE BANK TO THE AUCTION PURCHASER. Exhibit P4 TRUE COPY OF THE REPRESENTATION DATED 24.02.2022 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. Exhibit P5 TRUE COPY OF THE ORDER DATED 25.02.2022 WHEREBY THE REGISTRATION IS DENIED BY THE 1ST RESPONDENT. Exhibit P6 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 14.02.2022. RESPONDENT EXHIBITS Exhibit R3(A) TRUE COPY OF THE ATTACHMENT PETITION IN I.A. 4622/2014 IN O.S 241/2014 FILED BEFORE THE PRINCIPLE SUB COURT, THIRUVANANTHAPURAM WITH SCHEDULE OF PROPERTIES TO BE ATTACHED Exhibit R3(B) TRUE COPY OF THE ATTACHMENT ORDER DATED 20/12/2014 IN I.A. 4622/2014 IN O.S 241/2014 IN PRINCIPLE SUB COURT, THIRUVANANTHAPURAM