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

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN SATURDAY, THE 7[TH] DAY OF NOVEMBER 2023/16TH KARTHIKA, 1945 WP(C) NO.12412 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, AGED 33 YEARS, S/O.JOSHY CYRIAC, RESIDING AT CHUMAPPUNKAL HOUSE, KALPETTA NORTH, WAYANAD DISTRICT, PIN - 673121 ``` ## **`BY ADV.VARGHESE C.KURIAKOSE`** ## **`RESPONDENTS:`** - **`1 STATE OF KERALA, REP.BY SECRETARY, DEPT.OF REVENUE, SECRETARIAT, TRIVANDRUM, PIN - 682031`** - **`2 THE SUB REGISTRAR, SUB REGISTRY OFFICE, CHELAKKARA, THRISSUR DISTRICT, PIN - 680586`** - **`3 THE VILLAGE OFFICER, VENGANELLORE VILLAGE OFFICE, CHELAKKARA, THRISSUR, PIN - 680586`** - **`4 SUNIL KUMAR C.M., AGED 45 YEARS S/O.SREEDHARAN NAIR, CHENGOL MANNATIL HOUSE, MANNUR POST, PATHIRIPALA, PALAKKAD DISTRICT, PIN - 678642`** - **`5 ASHA K.R., AGED 36 YEARS, W/O.SUNIL KUMAR C.M., CHENGOL MANNATIL HOUSE, MANNUR POST, PATHIRIPALA, PALAKKAD DISTRICT, PIN - 678642`** - **`6 ANILKUMAR, S/O.CHEMMANGATTUKUNNATHU CHANDRAN, CHEMMANGATTUKUNNATHU HOUSE, PULAKKODE P.O., CHELAKKARA VILLAGE, THRISSUR DISTRICT, PIN – 680642 [DELETED]`** - **`R6 DELETED AS PER ORDER IN I.A.NO.1/2023 DATED 07.11.2023`** ## **`BY SMT.DEEPA, GOVERNMENT PLEADER`** ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) No.12412 of 2023 2 ## **`JUDGMENT`** ``` The petitioner, a housing finance institution, has approached this Court for a direction to the 2[nd] respondent to register a sale certificate issued pursuant to the proceedings initiated under the SARFAESI Act. ``` ``` 2. The petitioner’s case is that respondents 4 and 5 availed a loan of Rs.4,25,000/- from the petitioner institution and equitable mortgage was created by deposit of title deed, on 31.01.2012. Since respondents 4 and 5 defaulted payment of the instalments, proceedings under SARFAESI Act were initiated by the petitioner and the property was sold in auction. Ext.P4 is the sale certificate. When the auction purchaser took steps for registeringthesalecertificate,the ``` WP(C) No.12412 of 2023 3 ``` 2[nd] respondent refused to register the same on the ground that there is attachment over the property in O.S.No.1043 of 2013 on the files of the Munsiff’s Court, Wadakkanchery at the instance of the 6[th] respondent[who is deleted from the party array as per order dated 07.11.2023 in I.A. No. 1 of 2023]. The order of attachment is dated 23.11.2013. The petitioner submits that the aforesaid suit itself was dismissed by Ext.P6 judgment dated 28.11.2015. It is further submitted that the attachment at the instance of the 6[th] respondent is subsequent to the creation of equitable mortgage and that the same cannot affect the right of the petitioner to sell the property under the provisions of the SARFAESI Act. It is also stated that the right of the borrowers to redeem the mortgaged property has already been ``` WP(C) No.12412 of 2023 4 ``` extinguished as per Section 13(8) of the SARFAESI Act. Accordingly, the petitioner has filed this writ petition for a direction to the 2[nd] respondent to register Ext.P4 sale certificate after effacing the entry regarding attachment in Book No.1 maintained by the 2[nd] respondent. The petitioner also submits that, in the light of the decisions inJacob P.C v. Village Officer, Ernakulam & Another [2020 (4) KLT 271] the 2[nd] respondent cannot insist for production of Record of Right certificate (ROR) as a condition for effecting the registration. ``` ``` 3. Heard the learned counsel for the petitioner as well as the learned Government Pleader appearing for respondents 1 to 3. Though notice was served to respondents 4 and 5, there is no appearance. ``` WP(C) No.12412 of 2023 5 ``` 4. The learned counsel for the petitioner relies on the decision of this Court in Madhan S. v. Sub Registrar, Kollam & Others [2014 (1) KLT 406]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 the 2[nd] respondent has to efface the attachment from the register. ``` **`5. In Madhan's case (supra), this Court in`** **`paragraph 9 held as follows:`** - _**`“9. The preponderance of judicial`**_ - _**`opinion leads to the irresistible`**_ WP(C) No.12412 of 2023 6 ``` 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 ``` WP(C) No.12412 of 2023 7 ``` 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 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 Madhan's case. ``` ``` 7. 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 ``` WP(C) No.12412 of 2023 8 ``` 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”. ``` ``` 8. 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 ``` WP(C) No.12412 of 2023 9 ``` has to be effaced from the encumbrance register. ``` ``` 9. In Jacob[supra] this Court has held that production of ROR certificate is only optional and cannot be made mandatory and the registration officials concerned will not have jurisdiction to refuse registration on the mere ground that the party has not produced the ROR certificate in respect of the property concerned. ``` ``` 10. In the light of the decisions cited above, there will be a direction to the 2[nd] respondent to efface the attachment reflected in Ext.P5 Encumbrance Certificate made by the Munsiff's Court, Wadakkanchery in O.S.No.1043 of 2013 from Book No.1 maintained by the 2[nd] respondent and to register Ext.P4 sale certificate without insisting for ROR, as and when presented for registration, if it is otherwise in order. As and when the ``` WP(C) No.12412 of 2023 10 ``` registration is facilitated, the 3[rd] respondent shall effect mutation in the name of the purchaser. ``` ``` The writ petition is disposed of. ``` ``` Sd/- ``` ## **`MURALI PURUSHOTHAMAN`** ``` JUDGE ``` ``` sp/30/10/2023 ``` WP(C) No.12412 of 2023 11 ## **`APPENDIX`** ## **`PETITIONER'S EXHIBITS :-`** ``` EXHIBIT P1TRUE PHOTOSTAT COPY OF THE 13 (2) NOTICE DATED 11.02.2013 ISSUED BY THE PETITIONER ``` ``` EXHIBIT P2TRUE PHOTOSTAT COPY OF THE POSSESSION NOTICE DATED 02.01.2014 ISSUED BY THE PETITIONER ``` - **`EXHIBIT P3 TRUE PHOTOSTAT COPY OF THE SALE NOTICE DATED 16.02.2023ISSUED BY THE PETITIONER`** - **`EXHIBIT P4 TRUE PHOTOSTAT COPY OF THE SALE CERTIFICATE DATED 17.03.2023 IN FAVOUR OF THE PURCHASER ROHIT P.`** - **`EXHIBIT P5 TRUE PHOTOSTAT COPY OF THE ENCUMBRANCE CERTIFICATE DATED 21.02.2023 OF CHELAKKARA SUB REGISTRY`** - **`EXHIBIT P6 TRUE PHOTOSTAT COPY OF THE JUDGMENT DATED 28.11.2015 IN O.S.NO.1043/2013 ON THE FILES OF MUNSIFF'S COURT, WADAKKANCHERY`** ``` EXHIBIT P7 ``` ``` TRUEPHOTOSTATCOPYOFTHE REPRESENTATIONDATED24.03.2023 SUBMITTED BY THE PETITIONER BEFORE RESPONDENTS NO.2 AND 3 ``` ``` EXHIBIT P8TRUEPHOTOSTATCOPYOFTRACK CONSIGNMENT RECORD OF INDIA POST DATED 27.03.2023 ``` WP(C) No.12412 of 2023 12 ``` EXHIBIT P9 ``` ``` TRUE PHOTOSTAT COPY OF THE TRACK CONSIGNMENT RECORD OF INDIA POST DATED 28.03.2023 ``` ``` EXHIBIT P10TRUE PHOTOSTAT COPY OF THE SPECIFIC REQUEST DATED 24.03.2023 GIVEN TO 2ND RESPONDENT FOR ERASING THE ATTACHMENT ``` ``` EXHIBIT P11 ``` ``` TRUE PHOTOSTAT COPY OF THE TRACK CONSIGNMENT RECORD OF INDIA POST DATED 27.03.2023 ```