High Court of KeralaSingle Judge2024-01-08Writ petition allowed; directed erasure of the ...

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

Case / Petition Number:W.P.(C).No.40484 of 2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Viju Abraham, J.
Judgment Date: 2024-01-08
Court Decision / Holding: Writ petition disposed of with a direction to respondents 2 to 4 to forthwith erase/delete the entry regarding the initiation of revenue recovery (RRC No.2022/2705/2007) from revenue records, including the Basic Tax Register and other relevant records, to facilitate mutation in the name of the 2nd petitioner based on sale certificate No.3389/2023 of SRO Aluva, within one month from the date of judgment.
Final Disposition: Writ petition allowed; directed erasure of the relevant RRC entry and mutation to be completed within one month from the judgment date.

Parties to the Case

Appellants / Petitioners

Sundaram Home Finance Ltd (formerly Sundaram BNP Paribas Home Finance Ltd) represented by its Authorized Officer, Abu Roshan Andrews
Rubil P.M.

Respondents

State of Kerala represented by Secretary, Department of Revenue, Secretariat, Thiruvananthapuram
District Collector, Ernakulam District
Deputy Tahasildar (RR), Aluva Taluk
Village Officer, Aluva East Village
D. Jayachandran
Vinodini Jayachandran
Canara Bank, Kalamassery Branch
(as Canara Bank Kalamassery Branch, acting through its Chief Manager)

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Varghese C. KuriaKose

Counsels for Respondents

• Adv. Shynimol (Government Pleader)

Case Synopsis & Summary

This writ petition challenges a revenue-recovery entry that obstructs mutation of title in the name of the second petitioner following a SARFAESI-driven sale. Sundaram Home Finance Ltd sanctioned a loan of Rs.30 lakhs on 26.04.2014 to the respondents, secured by a mortgage. When the loan defaulted on 31.01.2015, proceedings under the SARFAESI Act were initiated, possession of the property was taken on 04.08.2015, and the property was subsequently sold. The sale certificate (Ext. P6) was registered in the name of the second petitioner. During mutation, it emerged that revenue-recovery proceedings had been initiated in respect of a bank debt—allegedly not a crown debt—by Canara Bank, Kalamassery (the successor in interest of Syndicate Bank) for Rs.65,822, with the amount due only from 22.05.2017. The petition relies on Madhan S. v. Sub Registrar, Kollam and Others (2014 (1) KHC 249), which held that attachments created after a mortgage do not affect the sale under the SARFAESI Act and that such encumbrances may cease to exist upon sale if properly reflected in records. After hearing, the court followed Madhan’s ratio, holding the petitioner is entitled to relief, and disposed of the petition with a direction to erase the RRC entry and enable mutation in one month from the judgment date, thereby aligning the revenue records with the sale certificate.

Provisions of Law Cited

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

Legal Doctrines & Maxims

Attachments created after mortgage do not affect title to property sold under the SARFAESI Act; sale is free of encumbrances once confirmed.
Where a sale under the SARFAESI Act has been confirmed, post-mortgage attachments may be effaced from records to facilitate clear title and mutation.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contended that the loan admissible under the first petitioner’s credit facility was sanctioned on 26.04.2014, while the loan considered by the 7th respondent was sanctioned on 26.06.2015, which is after the first loan and outside the mortgage period. Relying on Madhan S. v. Sub Registrar, Kollam and Others (2014 (1) KHC 249), they argued that the sale under the SARFAESI Act is free from encumbrances and that post-mortgage attachments do not affect the title; the RRC entry initiated by the bank should be erased to permit mutation in favor of the second petitioner based on the registered sale certificate (Ext. P6). The petition asked for a categorical direction to erase the revenue-record entries to reflect the sale and mutation.

Contentions of Respondents

The respondents argued that the Canara Bank’s revenue-recovery entry reflects a bank debt secured by property; mutation cannot negate legitimate recovery proceedings, and revenue records should reflect the lien and the bank’s claim; the balance between execution–sale and ongoing revenue-recovery actions must be maintained. They stressed that the debt and RRC linked to the mortgage must be addressed through due process and in accordance with statutory rights.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Madhan S. v. Sub Registrar, Kollam and Others	2014 (1) KHC 249	Positive	Cited to support that post-mortgage attachments do not affect the sale under the SARFAESI Act and that such encumbrances can be erased from records once the sale is confirmed.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** ## **MONDAY, THE 8[TH] DAY OF JANUARY 2024 / 18TH POUSHA, 1945** ## **WP(C) NO. 40484 OF 2023** ## **PETITIONERS:** 1 SUNDARAM HOME FINANCE LTD (FORMERLY KNOWN AS SUNDARAM BNP PARIBAS HOME FINANCE LTD) SUNDARAM TOWERS, 46, WHITES ROAD, CHENNAI, PIN600014, 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 2 RUBIL P.M AGED 45 YEARS S/O MAJEED, 13/412, THAVAKKAL HOUSE, KOCHANGADI CROSS ROAD, CHULLIKKAL, MATTANCHERY, KOCHI, PIN - 682002 BY ADV VARGHESE C.KURIAKOSE ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY SECRETARY, DEPT. OF REVENUE, SECRETARIAT, TRIVANDRUM, PIN - 695001 2 THE DISTRICT COLLECTOR ERNAKULAM DISTRICT CIVIL STATION, KAKKANAD ERNAKULAM, PIN - 682030 3 THE DEPUTY TAHASILDAR (RR) ALUVA TALUK, GROUND FLOOR, MINI CIVIL STATION, FIRST FLOOR, MINI CIVIL STATION, CIVIL STATION RD, PERIYAR NAGAR, ALUVA, ERNAKULAM, PIN - 683101 4 THE VILLAGE OFFICER ALUVA EAST VILLAGE BRIDGE ROAD, PERIYAR NAGAR, KOCHI, ALUVA, KERALA, PIN - 683101 5 D.JAYACHANDRAN S/O DAMODARAN, VALAMPARAMBIL HOUSE, VIDAKKUZHA ALUVA, ERANKULAM, PIN - 683106 6 SMT VINODINI JAYACHANDRAN W/O D.JAYACHANDRAN, VALAMPARAMBIL HOUSE, VIDAKKUZHA ## **W.P.(C).No.40484 of 2023 2** ALUVA, ERANKULAM, PIN - 683106 7 THE CANARA BANK KALAMASSERY BRANCH KALAMASSERY REP BY ITS CHIEF MANAGER., PIN – 683563 GP - SHYNIMOL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C).No.40484 of 2023 3** ## **VIJU ABRAHAM,J** ## **-----------------------** ## **W.P.(C).No.40484 of 2023 --------------------------------Dated this the 8[th] day of January, 2024** ## **JUDGMENT** Petitioner has approached this Court seeking a direction to the respondents 2 to 4 to forthwith erase/delete the entry regarding the initiation of revenue recovery at the instance of the 7[th] respondent through RRC No.2022/2705/2007 from the revenue records including basic tax register and all other relevant records to facilitate mutation in the name of the 2[nd] petitioner based on the registered sale certificate No.3389/2023 of SRO Aluva. 2. The 1[st] petitioner is a housing finance institution accepted security from respondents 5 and 6 and disbursed an amount of Rs.30 lakhs as loan on creating a security interest on 26.04.2014. Since the transaction became non performing on 31.01.2015 proceeding under the SARFAESI Act was initiated. The property was taken possession on 4.8.2015. Later on the property was ## **W.P.(C).No.40484 of 2023 4** put to sale and the sale was confirmed in the name of the 2[nd] petitioner and Ext.P6 sale certificate was registered with the Sub Registrar Office, Aluva. When the matter was taken up with the Village Officer, the 4[th] respondent, for the purpose of effecting mutation, it was disclosed that revenue recovery proceedings are initiated at the instance of Canara Bank, Kalamassery branch which is the successor in interest of Syndicate Bank. It is to be seen that the amount sought to be recovered is not a crown debt, it is a bank debt and the amount payable is Rs.65,822/- and the debt became due only on 22.05.2017. The amount covered as per Ext.P7 is only subsequent to the mortgage in favour of the 1[st] petitioner. 3. The learned counsel for the petitioner would point out that the loan was sanctioned by the 1[st] petitioner on 26.4.2014 whereas the loan sanctioned by the 7[th] respondent was on 26.6.2015, which is subsequent to the loan sanctioned by the 1[st] petitioner. Petitioner relies on the judgment in **Madhan S v. Sub Registrar, Kollam and Others** ## **W.P.(C).No.40484 of 2023 5** **(2014 (1) KHC 249)** , in support of his contentions, paragraph 9 of the judgment reads 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 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.”_ ## 4. Heard the learned counsel for the petitioner, the learned Standing counsel for the Bank and the learned Government Pleader also. After hearing both sides, in view of the categorical declaration of law in **Madhan's** case ## **W.P.(C).No.40484 of 2023 6** cited supra, which is followed by this Court in other judgments, I am of the opinion that the petitioner is entitled for succeed. Therefore, the writ petition is disposed of with a direction to the respondents 2 to 4 to forthwith erase/delete the entry regarding the initiation of revenue recovery at the instance of the 7[th] respondent through RRC No.2022/2705/2007 from the revenue records including basic tax register and all other relevant records to facilitate mutation in the name of the 2[nd] petitioner based on the registered sale certificate No.3389/2023 of SRO Aluva, within a period of one month from the date of receipt of a copy of the judgment. sd/- **VIJU ABRAHAM, JUDGE** pm **W.P.(C).No.40484 of 2023 7** ## **APPENDIX OF WP(C) 40484/2023** PETITIONERS' EXHIBITS |Exhibit P1|TRUE PHOTOSTAT COPY OF THE DEMAND| |---|---| ||NOTICE DATED 01.02.2015 ISSUED BY THE| ||1ST PETITIONER| |Exhibit P2|TRUE PHOTOSTAT COPY OF THE POSSESSION| ||NOTICE DATED 04.08.2015| |Exhibit P3|TRUE PHOTOSTAT COPY OF THE JUDGMENT| ||DATED 04.01.2023 IN W.P.(C)| ||NO.43009/2022| |Exhibit P4|TRUE PHOTOSTAT COPY OF THE LETTER DATED| ||02.05.2023 SUBMITTED BY 6TH RESPONDENT| |Exhibit P5|TRUE PHOTOSTAT COPY OF SALE NOTICE| ||DATED 11.10.2023 ISSUED BY THE 1ST| ||PETITIONER| |Exhibit P6|TRUE PHOTOSTAT COPY OF THE SALE| ||CERTIFICATE DATED 01.11.2023 ISSUED BY| ||THE 1ST PETITIONER IN FAVOUR OF 2ND| ||PETITIONER| |Exhibit P7|TRUE PHOTOSTAT COPY OF THE DEMAND| ||NOTICE DATED 26.03.2022 ISSUED BY THE| ||RESPONDENTS 2, 3 AND 4| |Exhibit P8|TRUE PHOTOSTAT COPY OF THE CERTIFICATE| ||DATED 14.11.2023 ISSUED BY THE VILLAGE| ||OFFICER| |Exhibit P9|TRUE PHOTOSTAT COPY OF THE LETTER OF| ||REQUEST SUBMITTED BY THE PETITIONER ON| ||16.11.2023 TO THE RESPONDENTS NO.2 TO 4| |Exhibit P10|TRUE PHOTOSTAT COPY OF THE| ||ACKNOWLEDGMENT CARD SIGNED BY THE 2ND| ||RESPONDENT ON 18.11.2023| |Exhibit P11|TRUE PHOTOSTAT COPY OF THE| ||ACKNOWLEDGMENT CARD SIGNED BY THE 3RD| ||RESPONDENT ON 18.11.2023| ## **W.P.(C).No.40484 of 2023 8** Exhibit P12 TRUE PHOTOSTAT COPY OF THE ACKNOWLEDGMENT CARD SIGNED BY THE 4TH RESPONDENT ON 18.11.2023