The Federal Bank Limited and an auction purchaser of a property sold by them under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act)

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN THURSDAY, THE 11[TH] DAY OF NOVEMBER 2021 / 20TH KARTHIKA, 1943`** ## **`WP(C) NO. 19014 OF 2021`** ## **`PETITIONERS:`** - `1 THE FEDERAL BANK LTD., HEAD OFFICE AT ALUVA, BRANCH AT PUZHAKKAL, REPRESENTED BY THE ASSISTANT VICE PRESIDENT OF LCRD THRISSUR DIVISION, S.T. NAGAR, THRISSUR, JOHNSON M.T.` - `2 SANTHI, D/O. SADASIVAN, KOTTAKAKATHU THEKKETHIL HOSUE, KANIYAMPAL VIA, KUNNAMKULAM, THRISSUR DISTRICT-680 503.` ``` BY ADVS. A.ANTONY LEELAMMA ANTONY ``` ## **`RESPONDENTS:`** - `1 SUB REGISTRAR, SUB REGISTRY OFFICE, THRISSUR-680 001.` - `2 SATHYAN T.K., S/O. KOCHUKUTTAN, THAMARASSERY HOUSE, MUDIKKODE, PATTIKKAD P.O., THRISSUR-680 652.` - `3 BINOY T.G., S/O. THARAYIL GOPI, KANIMANGALAM VILLAGE, KANIMANGALAM DESOM, THRISSUR DISTRICT-680 027.` - `4 M.I.PAUL, S/O. MECHERY ISAC, VALARKAV, AMBALANADA, KURIACHIRA P.O., THRISSUR DISTRICT-680 006.` - `5 RAJESH T.K., THEKKINIYEDATH KUNDIL HOUSE, ERAVIMANGALAM, NADATHARA VILLAGE, THRISSUR-680 751` - `6 DEERKHA KURIES PVT. LTD., MENONS BUILDING, M G ROAD, THRISSUR-680 001 REPRESENTED BY ITS MANAGING DIRECTOR.` - `7 KRISHNASOPANAM KURIES PVT. LTD., ARUNATUKARA, ARUNATTUKARA P.O., THRISSUR-680 618, REPRESENTED BY ITS MANAGING DIRECTOR.` WPC 19014/21 2 - `8 SUBURBAN CHIT FUNDS PVT. LTD., NADUVILAL SHOPPING COMPLEX, ROUND WEST, THRISSUR-680 001, REPRESENTED BY ITS MANAGING DIRECTOR.` - `9 ROLAND KURIES PVT. LTD., AMA COMPLEX, POOTHOLE ROAD, KUTTIPUZHA NAGAR, POOTHOLE, THRISSUR-680 004. REPRESENTED BY ITS MANAGING DIRECTOR.` - `10 UCO BANK, ASWINI JUNCTION, THRISSUR-680 001., REPRESENTED BY ITS BRANCH MANAGER.` - `11 C.K.OUSEPH, S/O. KOCHAPPAN, CHOONDAL HOUSE, MANNUR DESOM, MULAYAM VILLAGE, THRISSUR DISTRICT-680 751.` - `12 UDAY KURIES PVT. LTD., P.V. COMPLEX, WEST FORT, ARNATTUKARA VILLAGE, ARNATTUKARA, THRISSUR-680 004, REPRESENTED BY ITS MANAGING DIRECTOR.` - `13 AMARADRI KURIES PVT. LTD., PALLIKULAM ROAD, CHEMBUKKAVU VILLAGE, THRISSUR DISTRICT-680 001., REPRESENTED BY ITS MANAGING DIRECTOR.` - `14 BRD FINANCE LTD., BETHANY COMPLEX, THRISSUR ORAD, KUNNAMKULAM, THRISSUR-680 503., REPRESENTED BY ITS BRANCH MANAGER.` ``` BY ADV. SMT SURYA BINOY – SR GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WPC 19014/21 3 ## **`JUDGMENT`** The Federal Bank Limited and an auction purchaser of a property sold by them under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity), are the petitioners before this Court. 2. The first petitioner-Bank says that the original owners of the property involved in this case had executed an equitable mortgage over it in their favour, towards collateral security for a loan availed of by them; but that when they defaulted payment of the same, they were constrained to bring it to sale under the provisions of the SARFAESI Act. They say that, however, when they presented Ext.P2 Sale Certificate before the 1[st] respondent – Sub Registrar, he refused to register it, merely saying that there are several attachments over the property on the orders of competent Civil Courts. 3. The petitioners say that, as is evident from Ext.P4 WPC 19014/21 4 Encumbrance Certificate, since all attachments in question were brought on the property much after the date of equitable mortgage, namely 15.01.2009, the same cannot impede registration of the Sale Certificate; and that they are entitled to have the entries of the same effaced from the Encumbrance Certificate going by the judgment of this Court in Secretary, Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar Alias Sajitha P.M. [2020(6) KLT 68]. 4. I have heard Sri.A.Antony - learned counsel for the petitioners; Sri.H.Ramanan – learned counsel appearing for the 10[th] respondent and Smt.Surya Binoy - learned Senior Government Pleader appearing for the 1[st] respondent. 5. Even though notices from this Court have been validly served on respondents 2,3,4,5,7,8,11,12 and 13 they have chosen not to be present in person or to be represented through counsel; thus inferentially guiding me to the impression that they have nothing to offer in answer to the various WPC 19014/21 5 allegations made in this Writ Petition. 6. As regards respondents 6 and 9 are concerned, notices sent to them have returned with an endorsement ‘left’ and since the petitioners say that their addresses shown in the cause title are their registered ones, I am certain that this Court will be justified in disposing of this Writ Petition in the manner that I presently propose. 7. Sri.H.Ramanan – learned Standing Counsel appearing for the 10[th] respondent, conceded that the attachment brought on the property in question by his client was much after 2009, but argued that in spite of the same, they are entitled to enforce it because the sale conducted by the Federal Bank is in violation of the provisions of the SARFAESI Act. 8. The learned Senior Government Pleader – Smt.Surya Binoy, submitted that the 1[st] respondent has been incapacitated from registering the Sale Certificate because of the various attachments on the property; but added that if this Court is so WPC 19014/21 6 inclined, the said Authority is willing to do so, without any avoidable delay. 9. When I consider the afore submissions, it is without doubt that the issues involved in this case have been affirmatively spoken by this Court and the Honorable Supreme Court in a series of judgments. It has been well settled, without requirement for restatement, that when the Bank has equitable mortgage over the property much prior to the date on which the attachments were brought on it, they obtain a first charge over it, so as to enable them to bring it to sale under the provisions of the SARFAESI Act. 10. In the case at hand, it is without doubt, going by the Encumbrance Certificate, that all the attachments over the property are much after the year 2009, when the 1[st] petitioner claims equitable mortgage over the same. None of the respondents have contested the creation of equitable mortgage in favour of the Bank and am certain, therefore, that this Court WPC 19014/21 7 is enjoined to accept the version of the petitioners. As regards the contention of the 10[th] respondent against the sale of the property conducted by the 1[st] petitioner-Bank is concerned, it is irrefutable that if they require to assail it, they will have to invoke their available remedies in law against it and cannot seek any relief in this Writ Petition. In the afore circumstances and being guided by the judgment of this Court in Secretary, Keechery Service Cooperative Bank Ltd (supra), I allow this Writ Petition and leave liberty to the petitioners to present Ext.P2 Sale Certificate before the 1[st] respondent – Sub Registrar; and if this is done within a period of one month from the date of receipt of a copy of this judgment, the same shall be registered without any avoidable delay thereafter. Needless to say, once the registration of the Sale Certificate is completed, the Registrar shall proceed to efface all attachments over the property after the year 2009 and issue a WPC 19014/21 8 fresh Encumbrance Certificate to the 2[nd] petitioner, so as to enable her to use it without any impediment in future. It also goes without saying that the rights and contentions of all the party respondents are left open if they intent to proceed against the sale or any other proceedings, as they may be advised; however, subject to law and after following due procedure. ``` RR ``` ``` Sd/- DEVAN RAMACHANDRAN JUDGE ``` WPC 19014/21 9 ## **`APPENDIX OF WP(C) 19014/2021`** ## `PETITIONER EXHIBITS` ``` Exhibit P1 ``` ``` TRUE COPY OF THE INTIMATION OF THE VENKITESWARAN T.S. DATED 16.1.2009 CONFIRMING THE DEPOSIT OF TITLE DEED OF THE PROPERTY AS EQUITABLE MORTGAGE AS ENVISAGED UNDER SECTION 58(F) OF THE TRANSFER OF PROPERTYA CT. ``` ``` Exhibit P2TRUE COPY OF THE SALE CERTIFICATE DATED 26.9.2018 EXECUTED BY THE IST PETITIONER IN FAVOUR OF THE 2ND PETITIONER. ``` ``` Exhibit P3TRUE COPY OF THE REPRESENTATION DATED 17.2.2021 OF THE IST PETITIONER ADDRESSED TO THE IST RESPONDENT. Exhibit P4TRUE COPY OF ENCUMBRANCE CERTIFICATE ISSUED BY THRISSUR SRO DATED 11.7.2018 ```