The South Indian Bank Limited v. Sub Registrar, Kodungallur and Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN`** ``` TUESDAY, THE 7[TH] DAY OF NOVEMBER 2023/16TH KARTHIKA, 1945 ``` ``` WP(C) NO. 10822 OF 2023 ``` ## **`PETITIONER:`** ``` THE SOUTH INDIAN BANK LTD. REGIONAL OFFICE IRINJALAKUDA, VI/950-C&D, AKP CENTRE, CHRIST COLLEGE ROAD CHRIST NAGAR, IRINJALAKUDA, PIN – 680 145. THRISSUR DISTRICT, REPRESENTED BY ITS AUTHORIZED OFFICER. ``` ``` BY ADVS. MOHAN JACOB GEORGE P.V.PARVATHY REENA THOMAS NIGI GEORGE ``` ## **`RESPONDENTS:`** |**`1`**|**`SUB REGISTRAR`**| |---|---| ||**`OFFICE OF THE SUB REGISTRAR`**| ||**`KODUNGALLUR SRO,`**| ||**`PULLUT VILLAGE`**| ||**`KODUNGALLUR TALUK,`**| ||**`THRISSUR DISTRICT,`**| ||**`PIN – 680 741.`**| |**`2`**|**`KOTAK MAHINDRA PRIME LIMITED`**| ||**`FRIENDS MALL COMPLEX,`**| ||**`NEAR THIRUVAMBADI TEMPLE SHORNUR ROAD,`**| ||**`THRISSUR DISTRICT,`**| ||**`PIN – 680 001`**| ||**`REPRESENTED BY ITS MANAGER.`**| |**`3`**|**`MR.BABU,`**| ||**`S/O. PURUSHOTTAMAN`**| ||**`KAREYAZATH HOUSE,`**| ||**`MADAVANA VILLAGE`**| ||**`ATHANI, ERIYADU,`**| ||**`KODUNGALLUR`**| ||**`THRISSUR DISTRICT,`**| ||**`PIN – 680 666.`**| |**`4`**|**`HDFC BANK LIMITED`**| ||**`KMS BUILDING,`**| ||**`OPP. GOVERNMENT MODEL GIRLS SCHOOL THRISSUR,`**| ||**`PIN – 680 020`**| ||**`REPRESENTED BY ITS MANAGER.`**| ``` WP(C).No.10822 OF 2023 ``` ``` 2 ``` - **`5 SYED KARIM ALI SHAH S/O. MUHANNED ABUBACKER, KALLUNGAL HOUSE, PULLUT VILLAGE KODUNGALLUR TALUK, THRISSUR DISTRICT, PIN – 680 663.`** - **`6 HIDROZ, S.O. SYEDALAVI ERATTUPARAMBIL HOUSE, NARAYANAMANGALAM, PULLUT, THRISSUR, PIN – 680 663.`** ``` BY ADVS. B.S.SURESH KUMAR R1 - GP ``` ``` 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.10822 OF 2023 ``` ``` 3 ``` ## **`JUDGMENT`** The petitioner, a banking company, has filed this writ petition for a direction to the 1[st] respondent, Sub Registrar, Kodungallur to delete the entry of attachment in the encumbrance register in respect of its secured asset. 2. M/s.Fancy Chemicals and Fragrances availed financial facilities from the petitioner Bank by creating equitable mortgage by deposit of title deed on 19.11.2009. The borrower defaulted payment of installments and the Bank initiated proceedings against the borrower, co-borrowers and guarantor under the provisions of the SARFAESI Act and the property was sold in auction in favour of the 6[th] respondent. The sale was confirmed as per Ext.P6 sale confirmation letter dated 17.03.2023. 3. In respect of the property mortgaged to the petitioner, the 2[nd] respondent has obtained an ``` WP(C).No.10822 OF 2023 ``` ``` 4 ``` attachment from the District Court, Thrissur in A.O.P No.699/2012. The 3[rd] respondent also has obtained an attachment in respect of the aforesaid property from the Judicial Magistrate Court, Thrissur in C.C No.1141/2013. Further, the 4[th] respondent has obtained an attachment against the property from the District Court, Thrissur in O.P(ARB) No.133/2013 in I.A No.810/2013 and the 5[th] respondent has obtained an attachment from the Sub Court, Irinjalakkuda in O.S No.115/2014 in I.A No.2305/2014. All these attachments are reflected in Ext.P7 encumbrance certificate dated 28.11.2022 of S.R.O, Kodungallur. 4. The petitioner contends that since the attachments are effected subsequent to the creation of equitable mortgage in favour of the petitioner, they are liable to be effaced consequent to the sale conducted by the petitioner under the SARFAESI Act. According to the petitioner, the right of redemption of the ``` WP(C).No.10822 OF 2023 ``` ``` 5 ``` borrower has been extinguished by the operation of Section 13(8) of the SARFAESI Act and that even after the sale, further amounts are due to the petitioner. 5. Heard the learned counsel for the petitioner and the learned Government Pleader for the 1[st] respondent. 6. 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: 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 ``` WP(C).No.10822 OF 2023 ``` ``` 6 ``` property and the attachment has to be effaced from the encumbrance register. 7. 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 ceased to have any legal efficacy. The needful in relation to the property bought by the petitioner shall be done within a period ``` WP(C).No.10822 OF 2023 ``` ``` 7 ``` of two months from the date of receipt of a copy of this judgment.” 8. 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 (supra). In Keechery Service Cooperative 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 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”. ``` WP(C).No.10822 OF 2023 ``` ``` 8 ``` 9. 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. Attachments obtained by respondents 2 to 5 noted in Ext.P7 Encumbrance Certificate are subsequent to the creation of equitable mortgage in favour of the petitioner. 10. Accordingly, there will be a direction to the 1[st] respondent to efface the attachment noted in Ext.P7 encumbrance certificate in favour of respondents 2 to 5 in respect of the property having an extent of 3.601 cents in Sy. No.194 of Pullut Village, Kodungallur Taluk, Thrissur District. The writ petition is disposed of. ## **`Sd/-`** ## **`MURALI PURUSHOTHAMAN JUDGE`** SPR ``` WP(C).No.10822 OF 2023 ``` ``` 9 ``` ## **`APPENDIX`** ## **`PETITIONER’S EXHIBITS :-`** ``` EXHIBIT P1 ``` - **`COPY OF THE SECTION 13(2) NOTICE DATED 04.07.2012 ISSUED BY THE PETITIONER THROUGH ITS AUTHORIZED OFFICER.`** - **`EXHIBIT P2 COPY OF THE LETTER DATED 19.11.2009 OF THE MORTGAGOR CONFIRMING THE DEPOSIT OF THE ORIGINAL TITLE DEED CREATING EQUITABLE MORTGAGE IN FAVOUR OF THE PETITIONER BANK.`** - **`EXHIBIT P3 COPY OF THE POSSESSION NOTICE DATED 11.10.2012 UNDER SECTION 13(4) OF THE SARFAESI ACT.`** - **`EXHIBIT P4 COPY OF THE PAPER PUBLICATION MADE IN THE INDIAN EXPRESS DAILY DATED 18.10.2012.`** - **`EXHIBIT P4(a) COPY OF THE PAPER PUBLICATION MADE IN THE MALAYALA MANORAMA DAILY DATED 18.10.2012.`** - **`EXHIBIT P5 COPY OF THE SALE NOTICE ISSUED BY THE AUTHORIZED OFFICER DATED 24.02.2023.`** - **`EXHIBIT P6 COPY OF THE SALE CONFIRMATION LETTER DATED 17.03.2023.`** - **`EXHIBIT P7 COPY OF THE ENCUMBRANCE CERTIFICATE OBTAINED FROM KODUGALLUR SRO DATED 28.11.2022.`** - **`PAPER PUBLICATION COPY OF THE PAPER PUBLICATION MADE IN THE MATHRUBHUMI DAILY DATED 20.07.2023 THRISSUR EDITION.`** ## **`RESPONDENTS EXHIBITS: NIL.`**