The State Bank of India v Sub Registrar, Chalai Killipalum, Sukumaran Nair, and Sreejith S.R.

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN THURSDAY, THE 19[TH] DAY OF OCTOBER 2023 / 27TH ASWINA, 1945 ``` ``` WP(C) NO. 22771 OF 2023 ``` ## **`PETITIONER:`** ``` THE STATE BANK OF INDIA REPRESENTED BY ITS CHIEF MANAGER, STRESSED ASSETS RECOVERY BRANCH (S.A.R.B), LMS COMPOUND, OPPOSITE MUSEUM WEST GATE, VIKAS BHAVAN (P. O), THIRUVANANTHAPURAM, PIN – 695 033. ``` ``` BY ADVS. JAWAHAR JOSE CISSY MATHEWS SAFEER BAWA A.S. ``` ## **`RESPONDENTS:`** - **`1 THE SUB REGISTRAR, CHALAI KILLIPALAM, KARAMANA (P. O), THIRUVANANTHAPURAM, PIN – 695 002.`** - **`2 SUKUMARAN NAIR. N S/O. NARAYANAN NAIR, RESIDING AT HOUSE NO.23, AKARAM GOPAL REDDY COLONY, 2ND THERUVU, JAWAHAR NAGAR (P. O), CHENNAI, PIN – 600 082.`** - **`3 SREEJITH S.R S/O. SREEDHARAN NAIR, RESIDING AT SREE NILAYAM, PUNNAMOODU, PALLICHAL (P. O), THIRUVANANTHAPURAM DISTRICT, PIN – 695 042.`** ``` BY ADV S.SREEKUMAR (KOLLAM) SRI. RIYAL DEVASSY - GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C).No.22771 OF 2023 ``` ``` 2 ``` ## **`JUDGMENT`** Sri.K.Nirmalan (hereinafter referred to as 'borrower') availed an overdraft facility of Rs.2 Crores from the State Bank of Travancore (SBT). The said loan was availed by creating an equitable mortgage by deposit of title deed on 31.03.2015. The borrower also availed a Medium Term loan of Rs.24 Lakhs from the SBT on 29.10.2015 and the properties originally mortgaged on 30.03.2015 was extended as security to the said loan also. 2. SBT later merged with the State Bank of India (SBI). Since the borrower defaulted payment of installments, SARFAESI proceedings were initiated against him and the mortgaged property was sold on 15.12.2022 as per Ext.P4 sale notice. Ext.P5 is the sale certificate dated 28.02.2023. When the authorised ``` WP(C).No.22771 OF 2023 ``` ``` 3 ``` officer of the Bank approached the 1[st] respondent for registration of the sale certificate, the same was refused vide Ext.P7 communication. In Ext.P7, it is stated that the property is having attachments and the sale certificate cannot be registered. 3. The petitioner submits that the 2[nd] respondent had filed a suit before the Additional Sub Court, Thiruvananthapuram as O.S No.116 of 2020 wherein there is a temporary injunction dated 18.06.2020, whereby the borrower is restrained from alienating the mortgaged property. The order of injunction is recorded in Book No.1 maintained by the 1[st] respondent under Section 51 of the Registration Act, 1908 (for short, ‘the Act’). 4. The petitioner also submits that the 3[rd] respondent has filed a suit before Sub Court, Neyyattinkara as O.S. No.23/2017 against the borrower, seeking to recover an amount of ``` WP(C).No.22771 OF 2023 ``` ``` 4 ``` Rs.6,45,00,000/- from him and the said court has passed an order of attachment dated 07.11.2017, attaching the mortgaged property. 5. The petitioner submits that the aforesaid injunction as well as the attachment are subsequent to the creation of the equitable mortgage and that the same cannot restrain the petitioner from selling the secured assets. The petitioner further submits that the borrower has already lost his right to redeem the property in terms of Section 13 (8) of the SARFAESI Act. 6. Heard the learned counsel for the petitioner, the learned counsel for the 2[nd] respondent and the learned Government Pleader for the 1[st] respondent. 7. 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 ``` WP(C).No.22771 OF 2023 ``` ``` 5 ``` 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 property and the 2[nd] respondent Village Officer has to efface the attachment from the revenue records. 8. 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** ``` WP(C).No.22771 OF 2023 ``` ``` 6 ``` **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 SubRegistrar 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 of two months from the date of receipt of a copy of this judgment.”** 9. 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. 10. In Keechery Service Co-operative Bank case ``` WP(C).No.22771 OF 2023 ``` ``` 7 ``` (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”.** `11` . Thus it is trite law that attachment effected subsequent to the creation of equitable mortgage does ``` WP(C).No.22771 OF 2023 ``` ``` 8 ``` not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. 12. Accordingly, there will be a direction to the 1[st] respondent to efface the entry regarding the order of attachment dated 07.11.2017 of the Additional Sub Court, Neyyattinkara and the order of temporary injunction dated 18.06.2020 of the Sub Court, Thiruvananthapuram from Book No.1 maintained under Section 51 of the Act, and to register Ext.P5 sale certificate as and when presented for registration, if the same is otherwise in order. The writ petition is disposed of with the above direction. ## **`Sd/-`** ## **`MURALI PURUSHOTHAMAN JUDGE`** SPR ``` WP(C).No.22771 OF 2023 ``` ``` 9 ``` ## **`APPENDIX`** ## **`PETITIONER’S EXHIBITS :-`** ``` EXHIBIT P1TRUE COPY OF THE MORTGAGE CONFIRMATION LETTER DATED 31-03-2015. ``` ``` EXHIBIT P1(a)TRUE COPY OF THE MORTGAGE CONFIRMATION LETTER DATED 29-10-2015. ``` ``` EXHIBIT P2TRUE COPY OF THE DEMAND NOTICE DATED 21-12-2017 ISSUED UNDER SECTION 13(2 OF THE SARFAESI ACT. ``` - **`EXHIBIT P2(a) TRUE COPY OF THE COMMUNICATION DATED 1001-2018 ISSUED BY THE SUPERINTENDENT OF PRISONS, CENTRAL PRISON, MADURAI, CERTIFYING THE SERVICE OF EXHIBIT-P2 NOTICE.`** ``` EXHIBIT P3TRUE COPY OF THE POSSESSION NOTICE DATED 05-09-2018 ISSUED UNDER SECTION 13(4) OF THE SARFAESI ACT. EXHIBIT P4TRUE COPY OF THE SALE NOTICE DATED 23-11-2022 ISSUED BY THE PETITIONER. EXHIBIT P5TRUE COPY OF THE SALE CERTIFICATE DATED 28-02-2023 ISSUED BY THE PETITIONER. EXHIBIT P6TRUE COPY OF THE LETTER DATED 25-04-2023 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT. EXHIBIT P7TRUE COPY OF THE COMMUNICATION DATED 17-05-2023 BY THE 1ST RESPONDENT. EXHIBIT P8TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 21-03-2023 IN RESPECT OF DOCUMENT NUMBER 1937/2008. ``` - **`EXHIBIT P8 (a) TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 21-03-2023 IN RESPECT OF DOCUMENT NUMBER 2032/2008.`** - **`EXHIBIT1 P8 (b) TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 21-03-2023 IN RESPECT OF DOCUMENT NUMBER 4024/2008.`** ``` EXHIBIT P8 (c) ``` ``` TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 25-03-2023 IN RESPECT OF DOCUMENT NUMBER 66/2010. ``` ``` WP(C).No.22771 OF 2023 ``` ## **`10`** - **`EXHIBIT P8 (d) TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 25-03-2023 IN RESPECT OF DOCUMENT NUMBER 77/2010.`** - **`EXHIBIT P8 (e) TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 25-03-2023 IN RESPECT OF DOCUMENT NUMBER 2587/2014.`** - **`EXHIBIT P8 (f) TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 05-04-2023 IN RESPECT OF DOCUMENT NUMBER 2876/2014.`** ## **`EXHIBIT P9`** - **`TRUE COPY OF THE JUDGMENT DATED 06-032023 IN W.P (C) NO.41881/2022 OF THIS HON'BLE COURT.`** ## **`RESPONDENTS EXHIBITS: NIL.`**