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

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM MONDAY, THE 12[TH] DAY OF FEBRUARY 2024 / 23RD MAGHA, 1945** **WP(C) NO. 2894 OF 2024** ## **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, AGED 34 YEARS, S/O JOSHY CYRIAC, RESIDING AT CHUMAPPUNKAL HOUSE, KALPETTA NORTH, WAYANAD DISTRICT, PIN - 673121 BY ADVS. VARGHESE C.KURIAKOSE AMRITHA.J KURUVILLA MATHEW VIPIN C. VARGHESE ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY SECRETARY, DEPT. OF REVENUE, SECRETARIAT, TRIVANDRUM, PIN - 695001 2 THE SUB REGISTRAR SUB REGISTRY OFFICE, KARAKULAM, AZHIKODE ARUVUKKARA RD, AZHICODE-KERALA, PIN - 695564 3 THE VILLAGE OFFICER VATTAPPARA VILLAGE, KUNNATHOORVEEDU, NEDUMANGAD, VATTAPPARA, THIRUVANANTHAPURAM, PIN - 695028 4 PRASANTH. T : **DELETED** AGED 44 YEARS S/O THULASEEDHARAN, NO.20/817, MYLAMOOTTIL VEEDU, MUKKOLAKKAL, MUKKOLA, THIRUVANANTHAPURAM, PIN - 695043 5 SINDHU P : **DELETED** AGED 41 YEARS W/O PRASANTH T., NO.20/817, MYLAMOOTTIL VEEDU, MUKKOLAKKAL, MUKKOLA, **WP(C) NO.2894/2024** 2 THIRUVANANTHAPURAM, PIN – 695043 RESPONDENTS 4 AND 5 DELETED AS PER ORDER DATED 12.02.2024 IN I.A.NO.1/2024 IN W.P.(C) 6 INDIAN OVERSEAS BANK MUKKOLA BRANCH, THIRUVANANTHAPURAM. REPRESENTED BY ITS CHIEF MANAGER, PIN – 695541 BY ADV.SRI.JUSTIC JACOB, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO.2894/2024** 3 ## **JUDGMENT** _Dated this the 12[th] day of February, 2024_ ## Petitioner has approached this Court seeking the following reliefs : “(i) issue a writ, order or direction in the nature of mandamus or other appropriate writ directing the second respondent to forthwith erase the attachment reflected in Ext.P5 encumbrance certificates, which is the result of entering into Book No.1 of Karakulam Sub Registry, Volume 406 pages 243-246 in file No.F86/2022, the attachment effected in O.S.No.870/2022 on the files of Principal Munsiff's Court, Thiruvananthapuram, which is entries 2 in Ext.P5, in the interests of justice. - (ii) Issue a writ, order or direction in the nature of mandamus or other appropriate writ, directing respondent No.2 the Sub Registrar to facilitate registration as and when the sale certificate is presented on stamp paper after erasing the attachment and further direct the Village Officer, the third respondent, to effect mutation in the name of the purchaser to whom the sale certificate will be issued and registered as and when registration is facilitated. - (iii) Allow the petitioner to recover the full costs **WP(C) NO.2894/2024** 4 incurred for the institution and conduct of the proceedings from respondent Nos.4 and 5.” 2. Respondents 4 and 5 are borrowers from the petitioner Company by creating a mortgage in favour of the petitioner on 27.08.2019. Later on the loan amount was defaulted, proceedings were initiated under the SARFAESI Act. The property was put to sale and the sale was conducted on 30.12.2023, and the property was purchased by one Smt.Revathy.S.S. and Ext.P4 sale certificate was issued in favour of the purchaser. Petitioner intended to complete the proceedings by registration of the sale deed. Perusal of Ext.P5 encumbrance certificate dated 30.06.2022 shows that there is an attachment over the property in a suit filed as O.S.No.870 of 2022 before the Principal Munsiff Court, Thiruvananthapuram, at the instance of the sixth respondent. Petitioner submits that the said attachment, which was subsequent to the mortgage created in favour of the petitioner on 27.08.2019, cannot affect the sale conducted as per the provisions of the SARFAESI Act and that the respondents are bound to **WP(C) NO.2894/2024** 5 register the sale certificate. 3. Heard the learned counsel for the petitioner and the learned Government Pleader. 4. The learned counsel for the petitioner relied on the decision of this Court in **Madhan S. v. Sub Registrar, Kollam and Others** [2014 (1) KHC 249] 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] 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 attachment has to be effaced from the encumbrance register. ## 5. 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 **WP(C) NO.2894/2024** 6 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 confirmed in favour of the petitioner. 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 prejudicially 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.” 6. 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. In **Keechery Service Cooperative Bank** 's 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.In the light of the aforesaid declaration of law by this Court the order of dismissal of the petition filed for lifting the attachment ordered **WP(C) NO.2894/2024** 7 under Ext R7 (a) viz., Ext R7 (b) by the Federal Bank would pale into insignificance. 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”. Thus it is trite law that attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. It is evident from the documents produced in the writ petition that the attachment obtained by the sixth respondent is subsequent to the creation of equitable mortgage by the borrowers in favour of the petitioner. 7. This Court in **Phoenic ARC Pvt. Ltd. v. Sub** **WP(C) NO.2894/2024** 8 **Registrar, Feroke** [2023 KHC Online 9452] while considering an identical issue referring to Section 89(5) of the Registration Act, 1908 has held that since the attachment subsequent to creation of equitable mortgage has lost its efficacy and has to be obliterated from the records, the same can be done by the Sub Registrar by filing the certified copy of the order/judgment of this Court in Book No.1 maintained by the Sub Registrar. 8. Accordingly, there will be a direction to the first respondent to efface the attachment obtained by the sixth respondent noted in Ext.P5 encumbrance certificate from Book No.1 by filing the certified copy of this judgment in the said book and register Ext.P4 sale certificate if the same is otherwise in order. The third respondent shall thereafter effect mutation of the said property _de hors_ the said attachment, if there are no other impediments. The Writ Petition is disposed of. Sd/- **VIJU ABRAHAM JUDGE** csl **WP(C) NO.2894/2024** 9 ## **APPENDIX OF WP(C) 2894/2024** PETITIONER'S EXHIBITS Exhibit P1 TRUE PHOTOSTAT COPY OF THE 13 (2) NOTICE DATED 02.08.2021 ISSUED BY THE PETITIONER Exhibit P2 TRUE PHOTOSTAT COPY OF THE POSSESSION NOTICE DATED 16.11.2021 ISSUED BY THE PETITIONER Exhibit P3 TRUE PHOTOSTAT COPY OF THE SALE NOTICE DATED 16.11.2023 ISSUED BY THE PETITIONER Exhibit P4 TRUE PHOTOSTAT COPY OF THE SALE CERTIFICATE DATED 03.01.2024 IN FAVOUR OF THE PURCHASER SURESH P.G Exhibit P5 TRUE PHOTOSTAT COPY OF THE ENCUMBRANCE CERTIFICATE DATED 30.06.2022 OF KODALY SUB REGISTRY Exhibit P6 TRUE PHOTOSTAT COPY OF THE REPRESENTATION DATED 13.01.2024 SUBMITTED BY THE PETITIONER BEFORE RESPONDENT NO.2 Exhibit P7 TRUE PHOTOSTAT COPY OF THE INDIA POST TRACK RECORD INDICATING DELIVERY OF EXT P6 ON 2ND RESPONDENT ON 16.01.2024.