Union Bank of India Asset Recovery Branch v Sub Registrar Office Periyar Nagar, Aluva; Tahsildar Taluk Office, Periyar Nagar, Aluva; Village Officer Aluva East Village Office; M/S. SMC Finance Ltd; Praveen M Vasudev

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM MONDAY, THE 19[TH] DAY OF FEBRUARY 2024 / 30TH MAGHA, 1945** ## **WP(C) NO. 21639 OF 2023** ## **PETITIONER:** UNION BANK OF INDIA ASSET RECOVERY BRANCH, 2ND FLOOR, UNION BANK BHAVAN, M.G. ROAD, ERNAKULAM, PIN - 682035 REP. BY ITS CHIEF MANAGER SURESH SACHIDANANDAN, BY ADVS. ASP.KURUP SADCHITH.P.KURUP C.P.ANIL RAJ SIVA SURESH RESHMA RAJ ## **RESPONDENTS:** 1 THE SUB REGISTRAR OFFICE OF SUB REGISTRAR PERIYAR NAGAR, ALUVA, PIN - 683101 2 THE TAHSILDAR TALUK OFFICE, PERIYAR NAGAR, ALUVA, PIN - 683101 3 THE VILLAGE OFFICER ALUVA EAST VILLAGE OFFICE PUKKATTUPADY ROAD, EDATHALA, ALUVA, PIN - 683563 4 M/S. SMC FINANCE LTD HAVING ITS REGD. OFFICE AT BETHANY COMPLEX, THRISSUR ROAD, KUNNAMKULAM 680 503, ITS CORPORATE OFFICE AT SMC BUILDING, TOLL JUNCTION PUKKATTUPADY ROAD, EDAPPALLY COCHIN – 682024, REP. BY ITS MANAGER, 5 PRAVEEN M VASUDEV MUNDACKAPARAMBIL HOUSE KODANAD, ALATTUCHIRA PO, ERNAKULAM, PIN - 683544 BY ADVS. K.S.BHARATHAN **WP(C) NO.21639/2023** **2** ALPHIN ANTONY(K/625/2014) AADITHYAN S.MANNALI(K/631/2014) VISAKH ANTONY(K/573/2014) RANCE R.(K/1560/2021) HASNA NAZAR(K/00000302/2023) DEEPA.V., GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO.21639/2023** **3** ## **JUDGMENT** _Dated this the 19[th] day of February, 2024_ Petitioner has approached this Court seeking the following reliefs : _“A. Issue a writ of certiorari or any other appropriate writ, order of direction quashing Ext. P2 in so far as it notes the attachment entry dated 26.7.2016 consequent to the sale on the basis of Ext.P3 notice._ _B. Issue a writ of mandamus or any other appropriate writ, order or direction directing the 1st respondent to efface the attachment effected over property covered by Ext.P3 and register the sale certificate on presentation of the same on payment of requisite stamp duty._ _C. Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondents 2 & 3 to effect transfer of registry of property in the name of 5[th] respondent as and when the sale certificate is registered with the 1[st] respondent._ _D. Petitioner also prays that this Honourable Court may be pleased to dispense with the translation of the vernacular documents produced in the vernacular language._ _E. Grant such other reliefs, which are just and necessary in the facts and circumstances of the case.”_ 2. It is contended that the petitioner is a nationalised Bank and various credit facilities was availed by one Manaf.P.B. **WP(C) NO.21639/2023** **4** and since the same was defaulted, the Bank had filed O.A.No.665 of 2018 before the DRT-1, Ernakulam. In order to secure the credit facilities, the borrowers have created equitable mortgage on 12.07.2012 as is evident from Ext.P1 memorandum of deposit of title deeds evidencing mortgage of the property. Subsequent to the filing of the O.A., the Bank has also initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act, 2002) and the property was brought to sale as per Ext.P3 sale notice and sale was confirmed in the name of the fifth respondent and Ext.P4 sale confirmation letter was issued. It was found that during the subsistence of the mortgage, the fourth respondent obtained an attachment over the property in I.A.No.2979 of 2006 in Arbitration O.P.No.595 of 2016 on the file of the II Additional District Court, Ernakulam as is evident from Ext.P2 encumbrance certificate and the said attachment is dated 26.07.2016. In view of the said attachment, even if the sale certificate is presented for registration, it will not be entertained. Petitioner submits that it is settled law that any attachment pursuant to the mortgage of **WP(C) NO.21639/2023** **5** the property will not affect any proceedings initiated by the Bank under the SARFAESI Act inasmuch as the mortgage was on 12.07.2012 and attachment at the instance of the fourth respondent was on 26.07.2016. 3. 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] and the decision of a Division Bench of this Court in **Secretary, Keechery Service Cooperative Bank Ltd. v. Sajitha Nizar alias Sajitha P.M. and** **others** , [2020 (5) KHC 231] 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 attachment has to be effaced from the encumbrance register. 4. 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_ **WP(C) NO.21639/2023** **6** _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 confirmed in favour of the petitioner. 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 prejudicially 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.”_ 5. 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. 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. In the light of the aforesaid declaration of law by this Court the order of dismissal of the petition filed for lifting the attachment ordered under Ext R7 (a) viz., Ext R7 (b) by the Federal Bank would pale into insignificance. We do not find any reason to disagree with the_ **WP(C) NO.21639/2023** **7** _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”._ 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. It is evident from the documents produced in the Writ Petition that the attachment obtained by the fourth respondent is subsequent to the creation of equitable mortgage by the borrowers in favour of the petitioner. 6. This Court in **Phoenic ARC Pvt. Ltd. v. Sub Registrar, Feroke** [2023 KHC Online 9452] while considering an identical issue referring to Section 89(5) of the Registration Act, 1908 has held that since the attachment subsequent to **WP(C) NO.21639/2023** **8** creation of equitable mortgage has lost its efficacy and has to be obliterated from the records, the same can be done by the Sub Registrar by filing the certified copy of the order/judgment of this Court in Book No.1 maintained by the Sub Registrar. 7. Accordingly, there will be a direction to the first respondent to efface the attachment obtained by the fourth respondent noted in Ext.P2 encumbrance certificate from Book No.1 by filing the certified copy of this judgment in the said book and register sale certificate, if the same is otherwise in order. The second and third respondents shall thereafter effect mutation of the said property _de hors_ the aforesaid attachments, if there are no other impediments. The Writ Petition is disposed of as above. Sd/- **VIJU ABRAHAM JUDGE** csl **WP(C) NO.21639/2023** **9** ## **APPENDIX OF WP(C) 21639/2023** PETITIONER'S EXHIBITS Exhibit P1 A TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 14/7/2012EVIDENCING MORTGAGE OF THE PROPERTY Exhibit P2 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 21.6.2023 ISSUED FROM ALUVA SUB REGISTRY Exhibit P3 A TRUE COPY OF THE SALE NOTICE DATED 8.5.2023 ISSUED BY THE PETITIONER Exhibit P4 A TRUE COPY OF THE SALE CONFIRMATION LETTER DATED 14.6.2023 IN THE NAME OF THE 5TH RESPONDENT