High Court of KeralaSingle Judge2022-03-21Petition allowed; Registrar directed to erase p...

The South Indian Bank Ltd. v. Registrar, Sub-Registrar Office, Mulassery, Thrissur and Others

Case / Petition Number:WP(C) NO. 23815 OF 2021

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Devan Ramachandran
Judgment Date: 2022-03-21
Court Decision / Holding: The Court allowed the petition. It directed the 1st respondent Registrar to efface all entries of attachments on Ext.P4 Encumbrance Certificate that are after 19 January 2001 (date of mortgage) and to re-issue or issue a fresh Encumbrance Certificate to the petitioner as expeditiously as possible, but not later than one month from receipt of the judgment.
Final Disposition: Petition allowed; Registrar directed to erase post-mortgage attachments and re-issue Encumbrance Certificate within one month; Sale Certificate already registered, bank's security interest protected under SARFAESI act.

Parties to the Case

Appellants / Petitioners

The South Indian Bank Ltd.

Respondents

Registrar, Sub-Registrar Office, Mulassery, Thrissur
K.K. Saneesh
Haridas
Rejindas
Balachandran
Deena Lawrence
Kumaran
Unnikrishnan
Swapna Ravindran
Soumya Ravindran
Thankamani Ravindran

Legal Representation & Advocates

Counsels for Petitioners

• K.N. Sivasankar
• Sunil Shanker

Counsels for Respondents

• M.R. Sasith
• K.P. Pradeep
• Rasmi Nair T.
• Smt. Amminikutty

Case Synopsis & Summary

This writ petition, filed by The South Indian Bank Ltd., seeks a direction to erase all entries of attachments on a mortgaged property from the Encumbrance Certificate, dating the mortgage to 19 January 2001. The Bank contends it acquired an equitable mortgage over the property and later purchased it after the default, with a Sale Certificate registered. The Encumbrance Certificate (Ext.P4) shows multiple attachments entered by various respondents after the mortgage date, prompting the Bank to approach the High Court for relief. Respondents argue that attachments were issued by competent Civil Courts and reflect lawful orders; the Registrar is thus constrained from erasing them. Some respondents admit that attachments were indeed obtained after 19 January 2001. The Court places emphasis on settled law, citing Secretary, Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar Alias Sajitha P.M. (2020 (6) KLT 68), holding that if the Bank can establish a first charge based on a prior equitable mortgage, attachments created subsequently must yield to the Bank’s right to proceed under the SARFAESI Act. On these premises, the Court finds in favor of the Bank, directing the Registrar to efface all attachments on Ext.P4 post-19 January 2001 and to issue a fresh Encumbrance Certificate, within a month. Sale Certificate having been registered, relief is granted to safeguard the Bank’s security interest under SARFAESI.

Provisions of Law Cited

Banking Companies Act, 1913Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

Legal Doctrines & Maxims

First charge over property based on prior equitable mortgage prevails over subsequent attachments (as clarified in Keechery case)
SARFAESI Act permits enforcement of security interests against secured assets despite Civil Court attachments

Submissions & Arguments

Contentions of Appellants / Petitioners

The Bank contends that it has a first charge on the property based on an equitable mortgage created on 19 January 2001. After default, it purchased the property, and a Sale Certificate was registered. The Encumbrance Certificate (Ext.P4) reveals attachments after the mortgage date. Since the Bank has a senior security interest, all subsequent attachments must give way under SARFAESI. The Court should direct the Registrar to efface such entries and reissue a clean Encumbrance Certificate, thereby protecting the Bank’s priority over the property and enabling SARFAESI remedies.

Contentions of Respondents

Respondents submit that attachments were issued by competent Civil Courts and reflect lawful orders; the Registrar cannot erase them. They acknowledge some attachments occurred after 19 January 2001, and several respondents rely on post-mortgage Civil Court orders. The Registrar is bound by those orders, and any direction to erase must be weighed against the civil process. Some respondents concede the post-date attachments but argue they are legally valid under Civil Court proceedings.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Secretary, Keechery Service Co-operative Bank Ltd., v. Sajitha Nizar Alias Sajitha P M	2020 (6) KLT 68	Positive	The court cites this decision as establishing that a bank with a first charge based on an prior equitable mortgage takes precedence over later attachments, guiding the outcome in favor of the Bank.

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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 DEVAN RAMACHANDRAN** **MONDAY, THE 21[ST] DAY OF MARCH 2022 / 30TH PHALGUNA, 1943** ## **WP(C) NO. 23815 OF 2021** ## **PETITIONER:** **THE SOUTH INDIAN BANK LTD., SIB HOUSE, MISSION QUARTERS, THRISSUR, PIN-680 001. REP. BY ITS SENIOR MANAGER, DRT CELL, MRS.JILU HANNAH EAPEN.** **BY ADVS.K.N.SIVASANKARAN SUNIL SHANKER** ## **RESPONDENTS:** - **1 REGISTRAR, SUB-REGISTRAR OFFICE, MULASSERY, THRISSUR, PIN-680 510.** - **2 K.K. SANEESH, S/O.KUMARAN, KARAMAKKAL, VENKITANGU VILLAGE, CHAVAKKAD TALUK, THRISSUR DISTRICT, PIN-680 510.** - **3 HARIDAS, S/O.PONNARASSERY GOPALAN, KANDANASSERI VILLAGE, THALAPPALLY TALUK, MATTOM DESOM, THRISSUR DISTRICT, PIN-680 102.** - **4 REJINDAS, S/O.PONNARASSERY HARIDAS, KANDANASSERI VILLAGE, THALAPPALLY TALUK, MATTOM DESOM, THRISSUR DISTRICT, PIN-680 102.** - **5 BALACHANDRAN, S/O.OLLEKKAT KUNJIRAMAN, THOYOKKAVU DESOM, VENKITANGU VILLAGE, CHAVAKKAD TALUK, THRISSUR DISTRICT, PIN-680 510.** - **6 DEENA LAWRENCE, W/O.KANJIRATHINGAL LAWRENCE, VENKITANGU DESAM AND VILLAGE, CHAVAKKAD TALUK, THRISSUR DISTRICT, PIN-680 510.** - **7 KUMARAN, S/O.AYYAPPAN, KALLAYIL, KANNOTH DESAM, VENKITANGU VILLAGE, CHAVAKKAD TALUK, THRISSUR DISTRICT, PIN-680 510.** - **8 UNNIKRISHNAN, S/O. KAZHUNGILL PRABHAKARAN, VENKITANGU DESAM AND VILLAGE, CHAVAKKAD TALUK,** **WP(C) NO. 23815 OF 2021** **-2-** ## **THRISSUR DISTRICT, PIN-680 510.** **9 SWAPNA RAVINDRAN, D/O.RAVINDRAN, VENNAMGOTTE HOUSE, PONNANI VILLAGE, PONNANI TALUK, MALAPPURAM DISTRICT, PIN-679 577.** - **10 SOUMYA RAVINDRAN, D/O. RAVINDRAN, VENNAMGOTTE HOUSE, PONNANI VILLAGE, PONNANI TALUK, MALAPPURAM DISTRICT, PIN-679 577.** - **11 THANKAMANI RAVINDRAN, W/O. RAVINDRAN, VENNAMGOTTE HOUSE, PONNANI VILLAGE, PONNANI TALUK, MALAPPURAM DISTRICT, PIN-679 577.** **BY ADVS.M.R.SASITH K.P.PRADEEP** **RASMI NAIR T. SMT.K.AMMINIKUTTY, SR.GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C) NO. 23815 OF 2021** **-3-** ## **JUDGMENT** The petitioner South Indian Bank Limited, operating under the provisions of the Banking Companies Act, 1913, has approached this Court seeking a direction to the 1[st] respondent – Registrar, to efface all entries of attachments on the property involved in this case subsequent to 19.01.2001, the date on which they assert to have obtained an equitable mortgage over it. 2. Smt.Vidya Gangadharan – learned counsel for the petitioner, explained that her client had obtained mortgage over the property from its original owners as collateral security for a loan availed of by them; but that when they defaulted payment of the same, it was purchased by the Bank itself, since there were no other bidders and that the consequent Sale Certificate has also been registered. She says that, however, when Ext.P4 ## **WP(C) NO. 23815 OF 2021** **==> picture [22 x 9] intentionally omitted <==** Encumbrance Certificate was obtained, it is seen that there are various attachments brought over it by the party respondents subsequent to the date of mortgage, namely 19.01.2001; and therefore, that Bank has been left without any other option, but to approach this Court through this writ petition. 3. In response, the learned Senior Government Pleader – Smt.K.Ammnikutty, submitted that since the Registrar found that all the entries reflected in Ext.P4 are as per the orders of competent Civil Courts, he has been incapacitated from effacing the same; however, adding that if this Court is inclined to hold otherwise, he will abide by any directions to be issued. 4. Smt.T.Thasmi – learned counsel appearing for the 6[th] respondent, submitted that her client has obtained an attachment over the property in question from the Sub Court, Thrissur, in O.S.No.830/2006 and therefore, prayed this writ ## **WP(C) NO. 23815 OF 2021** **-5-** petition be dismissed. She, however, expressly conceded that said attachment was obtained much after 19.01.2001. 5. Sri.Sasith Panicker – learned counsel appearing for respondents 3 and 4, also had similar submissions to make as Smt.T.Thasmi, saying that his clients have obtained orders of attachment over the property in question from the Civil Court; but admitting that it was after the date of mortgage as claimed by the petitioner Bank. 6. When I evaluate the afore rival submissions, it is without doubt that the law has now been well settled by this Court, through various judgments, including _**Secretary, Keechery**_ _**Service Co-operative Bank Ltd., v. Sajitha Nizar**_ _**Alias Sajitha P** ._ _**M** ._ [2020 (6) KLT 68], that as long as the Bank is able to establish first charge over the property based on prior equitable mortgage, ## **WP(C) NO. 23815 OF 2021** **-6-** all attachments brought on it subsequently will have to give way to the right of the Bank to proceed against it under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'SARFAESI Act', for short). This forensic declaration has not been challenged by any of the party respondents; but unequivocally admit that they have obtained attachments from the competent Civil Courts subsequent to the date of mortgage. 7. I am, therefore, of the firm view that petitioner is entitled to relief, particularly because Sale Certificate has been already registered by the Registrar without demur. Resultantly and for the afore reasons, I order this writ petition and direct the 1[st] respondent – Registrar, to efface all orders and entries of attachments from Ext.P4 Encumbrance Certificate, ## **WP(C) NO. 23815 OF 2021** **-7-** which are subsequent to 19.01.2001 – stated to be the date of mortgage and which is not contested; and to re-issue the same or to issue a fresh Encumbrance Certificate to the petitioner, as expeditiously as is possible, but not later than one month from the date of receipt of a copy of this judgment. **Sd/DEVAN RAMACHANDRAN JUDGE** akv **WP(C) NO. 23815 OF 2021** **-8-** ## **APPENDIX OF WP(C) 23815/2021** ## **PETITIONER EXHIBITS** **EXHIBIT P1 TRUE COPY OF SETTLEMENT DEED NO. 54/2001, MULLASSERY SRO.** **EXHIBIT P2 TRUE COPY OF CONFIRMATION LETTER OF SHOBHA AND SIVADAS.** **EXHIBIT P3 TRUE COPY OF SALE CERTIFICATE DOCUMENT NO. 1631/2013, MULLASSERY SRO. EXHIBIT P3 (A) TRUE COPY OF BASIC TAX RECEIPT OF THE VILLAGE OFFICE, VENKITANGU.** **EXHIBIT P4 TRUE COPY OF ENCUMBRANCE CERTIFICATE NO. 5453/2021 ISSUED BY SUB REGISTRAR OFFICE, MULLASSERY.** **RESPONDENT'S/S EXHIBITS : NIL.** **//TRUE COPY// P.A. TO JUDGE**