Sundaram Home Finance Ltd (formerly Sundaram BNP Paribas Home Finance Ltd) v. State of Kerala and Others

**WP(C) NO. 29311 OF 2023 : 1 :** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN FRIDAY, THE 27[TH] DAY OF OCTOBER 2023 / 5TH KARTHIKA, 1945 WP(C) NO. 29311 OF 2023** **PETITIONER:** **SUNDARAM HOME FINANCE LTD (FORMERLY KNOWN AS SUNDARAM BNP PARIBAS HOME FINANCE LTD) SUNDARAM TOWERS, 46, WHITES ROAD, CHENNAI, PIN-600014, REPRESENTED BY ITS AUTHORISED OFFICER, MR. ABU ROSHAN ANDREWS, S/O JOSHY CYRIAC, RESIDING AT CHUMAPPUNKAL HOUSE, KALPETTA NORTH, WAYANAD DISTRICT - 673121** **BY ADVS. VARGHESE C.KURIAKOSE AMRITHA.J** ## **RESPONDENTS:** **1 STATE OF KERALA REP. BY SECRETARY, DEPT. OF REVENUE, SECRETARIAT, TRIVANDRUM - 695001** - **2 THE SUB REGISTRAR, SUB REGISTRY OFFICE MARADU, ERNAKULAM, KOCHI - 682304** - **3 THE VILLAGE OFFICER KUMBALAM VILLAGE, PANANGAD, ERNAKULAM, KOCHI - 682506** - **4 MAYMOL SIBI SEBASTIAN AGED 36 YEARS W/O SIBI SEBASTIAN, FLAT NO.H-95, JAL VAYU VIHAR, MUNDAMVELI POST, KOCHI, PALLURUTHY,** **WP(C) NO. 29311 OF 2023 : 2 :** **ERNAKULAM DISTRICT - 682507** ***5 DILEEP JOSE, AGED 48 YEARS S/O JOSE CHANDY, PROPRIETOR, ANNA PROPERTIES, 1ST FLOOR, APPASSERY BUILDINGS, INTUC JUNCTION, NETTOOR, ERNAKULAM – 682040 (*R5 IS DELETED FROM THE PARTY ARRAY AS PER ORDER DATED 27.10.2023 IN I.A.No.1/2023)** **BY ADVS. R.SANJITH C.S.SINDHU KRISHNAH(K/942/2008) R BY GP ADV.DEEPA NARAYANAN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) NO. 29311 OF 2023 : 3 :** ## **JUDGMENT** The petitioner is a Housing Finance Institution. One E.R.Ramachandran Menon, along with his wife, availed a home loan from the petitioner for Rs.6,50,00,000/-, by creating an equitable mortgage by deposit of title deed on 08.02.2018. As the borrowers failed to repay the loan amount, proceedings were initiated under the SARFAESI Act. The secured assets were sold to one Varghese Sebastian, as per Ext.P10 sale certificate. The petitioner submits that on verification of entries in Book No. 1 maintained by the 2[nd] respondent, it was found that there is an entry regarding an attachment effected at the instance of the 4[th] respondent against the 5[th] respondent (now deceased) through orders in I.A. No. 1173/2018 in O.S.No.54/2018 of the Additional Sub Court, Ernakulam. **WP(C) NO. 29311 OF 2023 : 4 :** 2. The petitioner states that when the sale certificate was produced for registration before the 2[nd] respondent Sub Registrar, the 2[nd] respondent refused to register the same in view of the attachment entered in the encumbrance certificate in respect of the property. Further, the 2[nd] respondent also insisted on ROR as a condition for registration of the property. Since the 2[nd] respondent has refused to register Ext.P10 sale certificate, the petitioner has submitted Ext.P11 representation before the 2[nd] respondent. The petitioner has thus approached this Court for a direction to the 2[nd] respondent to efface the attachment from the encumbrance certificate and register the original sale certificate without insisting on ROR certificate and to effect mutation of the property. 3. Heard the learned counsel for the petitioner, **WP(C) NO. 29311 OF 2023 : 5 :** learned Government Pleader for respondents 1 to 3, and Sri.R.Sanjith, learned counsel appearing for the 4[th] respondent. 4. It is submitted by the learned counsel for the petitioner and the learned counsel for the 4[th] respondent that the 5[th] respondent, the prior owner of the property, has expired. The petitioner has filed an interlocutory application to delete the 5[th] respondent from the party array. 5. The learned counsel for the 4[th] respondent submits that he has filed the suit against the 5[th] respondent on 09.03.2018, and the attachment is dated 14.03.2018, and that O.S.No.54/2018 was settled between them by mediation. 6. Since the equitable mortgage was created by the borrowers on 08.02.2018, the subsequent attachment on 14.03.2018 cannot affect the sale **WP(C) NO. 29311 OF 2023 : 6 :** effected pursuant to the proceedings initiated under the SARFAESI Act. The learned counsel for the petitioner submits that the right of redemption available to the borrowers has also been lost. 7. The learned counsel for the petitioner relies on the decision of this Court in **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 **WP(C) NO. 29311 OF 2023 : 7 :** the Sub Registrar has to efface the attachment from ## Book No. 1. ## 8. 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 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 **WP(C) NO. 29311 OF 2023 : 8 :** 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.” 9. 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. 10. 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_ **WP(C) NO. 29311 OF 2023 : 9 :** _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”._ In the light of the dictum laid down by this Court in the above decisions, the attachment effected subsequent to the creation of equitable mortgage has to be effaced by the 2[nd] respondent from Book No1 maintained under Section 51 of the Transfer of Registry rules, 1966 and the 1[st] respondent is directed to register Ext.P10 Sale Certificate as and when presented, notwithstanding the order of attachment by the Additional Sub Court, Ernakulam in O.S. No. 54/2018 dated 14.03.2018, if the document is otherwise in order. In the light of the decision of this Court in **Jacob P.C. v. Village Officer,2020 (4) KLT 271** , the 2[nd] respondent shall not insist on ROR certificate in respect of the property. The 3[rd] respondent shall effect mutation of **WP(C) NO. 29311 OF 2023 : 10 :** the property when registration is facilitated, if the application is otherwise in order. The writ petition is disposed of with the above directions. **Sd/MURALI PURUSHOTHAMAN JUDGE** SB **WP(C) NO. 29311 OF 2023 : 11 :** ## **APPENDIX** ## **PETITIONER EXHIBITS** - **Exhibit P1 TRUE PHOTOSTAT COPY OF THE LOAN AGREEMENT DATED 31.01.2018 EXECUTED BY THE BORROWERS IN FAVOUR OF THE PETITIONER** - **Exhibit P2 TRUE PHOTOSTAT COPY OF THE DOCUMENT NO.358/2018 OF SRO MARADU DATED 07.02.2018** - **Exhibit P3 TRUE PHOTOSTAT COPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEED EXECUTED ON 08.02.2018** - **Exhibit P4 TRUE PHOTOSTAT COPY OF THE 13(2) NOTICE ISSUED TO THE BORROWERS ON 01.10.2021 ISSUED BY THE PETITIONER** - **Exhibit P5 TRUE PHOTOSTAT COPY OF THE POSSESSION NOTICE ISSUED TO THE BORROWERS ON 11.07.2022** - **Exhibit P6 TRUE PHOTOSTAT COPY OF THE DOWNLOADED ORDER IN M.C. NO.807/2022 DATED 03.10.2022** - **Exhibit P7 TRUE PHOTOSTAT COPY OF THE LAST SALE NOTICE DATED 01.08.2023 ISSUED BY THE PETITIONER** - **Exhibit P8 TRUE PHOTOSTAT COPY OF THE ENCUMBRANCE CERTIFICATE DATED 23.03.2023** - **Exhibit P9 TRUE PHOTOSTAT COPY OF THE SALE CONFIRMATION LETTER DATED 21.08.2023 ISSUED BY THE PETITIONER** - **Exhibit P10 TRUE PHOTOSTAT COPY OF THE SALE CERTIFICATE DATED 25.08.2023. ISSUED BY THE PETITIONER** - **Exhibit P11 TRUE PHOTOSTAT COPY OF THE REPRESENTATION DATED 23.08.2023 SUBMITTED TO THE 2ND AND 3RD RESPONDENTS** - **Exhibit P12 TRUE PHOTOSTAT COPY OF THE REGISTRATION SLIP PERTAINING TO ISSUANCE OF NOTICES TO RESPONDENTS 2 AND 3.**