Union Bank of India, Mundakayam Branch v. The District Collector, Kottayam; Village Officer, Koruthodu Village Office; Rajesh P.K.

W.P.(C).No.19173 /2022 -1- ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE T.R.RAVI** **TUESDAY, THE 28TH DAY OF NOVEMBER 2023/7TH AHRAHAYANA, 1945** ## **WP(C) NO. 19173 OF 2022** ## **PETITIONER:** UNION BANK OF INDIA MUNDAKAYAM BRANCH BEN EXCLAVE, OPP. POST OFFICE, NH 220, MUNDAKAYAM, KOTTAYAM - 685 584, REP. BY ITS CHIEF MANAGER & AUTHORIZED OFFICER, NIMY PETER. BY ADVS. SRI ASP.KURUP SRI SADCHITH.P.KURUP SRI C.P.ANIL RAJ ## **RESPONDENTS:** 1 THE DISTRICT COLLECTOR OFFICE OF THE DIST. COLLECTOR, KOTTAYAM - KUMILY RD, COLLECTORATE, KOTTAYAM – 686 002. 2 THE VILLAGE OFFICER KORUTHODU VILLAGE OFFICE, ANAKKALLU THADITHODE BRIDGE, ANAKKALLU, MUNDAKAYAM - KORUTHODU RD, KUZHIMAVU, KORUTHODU - 686513. 3 RAJESH P. K. S/O.KUNJUKUNJU, PLAMKUZHIYIL, MADUKKA P. O., KORUTHODU VILLAGE, KANJIRAPPALLY TALUK, KOTTAYAM - 686 513. BY ADVS SRI JAFAR KHAN, SR.GOVT.PLEADER SRI JOSE ANTONY **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.08.2022, THE COURT ON 28.11.2023 DELIVERED THE FOLLOWING:** W.P.(C).No.19173 /2022 -2- ## **T.R. RAVI, J.** **-------------------------------------------W.P.(C)No.19173 of 2022** **-------------------------------------------Dated this the 28[th] day of November, 2023** ## **JUDGMENT** The writ petition has been filed by a Nationalised Bank. The Bank had granted a loan facility to one Roy Joseph on the security of a mortgage of a property of an extent of 4.20 Ares in Sy.No.385/1 of Koruthodu Village. On default in repayment, the petitioner proceeded with recovery measures. Proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were initiated and the property was put for sale. Ext.P4 is the sale notice dated 20.11.2021. The 3[rd] respondent was the successful bidder in the auction and the petitioner issued a certificate transferring the title of the property to the 3[rd] respondent. The sale certificate was registered in the Erumely Sub Registry as Document No.453/2022. The document as registered is produced as Ext.P5 along with the writ petition. The 3[rd] respondent approached the 2[nd] respondent for effecting mutation of the property and payment of land tax. The 2[nd] respondent refused to effect mutation on the reason that there are some attachments over the property, which had been effected after the W.P.(C).No.19173 /2022 -3- date of the mortgage. Ext.P6 is the communication issued by the 2[nd] respondent to the 3[rd] respondent. Since it is the duty of the petitioner Bank to ensure that the purchaser of the property in Bank auction for consideration, is able to enjoy the property without any impediments, and for avoiding action being taken by the 3[rd] respondent against the Bank, the writ petition has been filed. 2. A counter affidavit has been filed by the 2[nd] respondent. It is contended that the petitioner being a third party cannot challenge Ext.P6 letter issued by the 2[nd] respondent. It is stated that the property stands in the name of Roy Joseph as per Thandaper No.6453. It is stated that on verification of the Thandaper account it is seen that there is an attachment with respect to the property as per the order in I.A.No.2474/12 in O.S.No.293/12 and I.A.No.2559/12 in O.S.No.304/12 ordered by the Sub Court, Pala. It is stated that the attachment was much prior to the sale certificate. An extract of the Thandaper account has been produced as Ext.R2(a). According to the 2[nd] respondent, even going by Ext.P4 notice, the purchaser is liable to clear all the encumbrances pertaining to the property. It is also stated that the petitioner has transferred the property to the 3[rd] respondent without disclosing the attachment W.P.(C).No.19173 /2022 -4- over the property. Another contention taken is that in Ext.P5 it is stated that no valid encumbrances exist in respect of the property. According to the 2[nd] respondent there is a requirement under Rule 9(9) and 9(10) of the Security Interest (Enforcement) Rules 2002 that the authorised officer mentions whether the purchaser has purchased their secured asset free from any encumbrance known to the secured creditor or not. 3. Heard Sri.Sadchith P. Kurup, on behalf of the petitioner and Sri.Jaffar Khan, Senior Government Pleader on behalf of respondents 1 and 2 and Sri Jose Antony for the 3[rd] respondent. 4. The counsel for the petitioner relied on the decisions in **Jayan Kuttichakku V. Common Man Chitties and Loans (P) Ltd.** reported in **(2007 KHC 3413)** and **Francis @ Porinju v. Navodaya Kuries and Loans (P) Ltd. & Ors.** reported in **(2010 KHC 726)** to submit that the contention that the details of attachment orders have not been mentioned is without any legal basis, since the attachments projected in Ext.P6 letter do not amount to an encumbrance. Reliance is placed on **Keechery Service Co-operative Bank Ltd. V. Sajitha Nizar** reported in **(2020 (6) KLT 68)** to submit that an attachment effected after the date of the mortgage is invalid and will get effaced on the enforcement of the mortgage and the sale of the property. W.P.(C).No.19173 /2022 -5- Reliance is also placed on the decision in **Punjab National Bank V. Union of India & Ors. (2022 SCC OnLine SC 227)** to submit that where land has been mortgaged to the secured creditor, having regard to the provisions contained in Section 2(zc) to (zf) of the SARFAESI Act, 2002 read with the provisions contained in Section 13 of the SARFAESI Act 2002, the secured creditor will have a first charge on the secured assets. It is further held that Section 35 of the SARFAESI Act 2002 provides that the provisions of the SARFAESI Act shall have overriding effect on all other laws. It is also submitted that as far as priority of charge is concerned, as per Section 26(E) of the Securitisation Act and Section 31A of the Recovery of Debts and Bankruptcy Act the same has been considered in several decisions of this Court and the law is well settled. I do not think it is necessary to go into the said aspects in this writ petition. 5. The Senior Government Pleader submitted that going by Section 26B of the SARFAESI Act, any person having any claim against any borrower who has obtained an order of attachment of property from any Court or other authority empowered to issue attachment order, he may file such particulars with the Central Registry in such form and manner on payment of such fee as may be prescribed. Referring to Section W.P.(C).No.19173 /2022 -6- 26C, it is submitted that the Statute recognises attachment orders also for the purpose of registration. It is further submitted that what was considered by the Hon'ble Supreme Court in **Punjab National Bank (supra)** was the effect of the provisions of the SARFAESI Act as per Section 11E of the Central Excise Act, 1944, which specifically contained an enabling provision regarding supremacy of certain legislations. Further reference is made to a Division Bench judgment of the Bombay High Court in **Medineutrina Pvt.Ltd. v. District Industries Centre [2021 KHC 3414]** wherein it was held that there is a statutory obligation to the secured creditor as the owner of the property under Section 13(6) and (7) of the SARFAESI Act, who has a liability to transfer a clear and marketable title when it comes to an attachment which had been effected prior to the auction. It was held therein that there is a liability to pay the amounts to the attaching creditor for obtaining clear and marketable title over the property, since the sale is on 'as is where is and whatever there is basis'. Under the Kerala Land Tax Act, as long as the land remains registered under the name of the person, he is bound to pay the tax and when the land holder offers to pay basic tax due under the Act, officer entrusted with the duty to collect the same has no authority to refuse it [see W.P.(C).No.19173 /2022 -7- **Rajkumar v. Tahsildar (2020 (3) KLT 403)** ]. In the above case, the Court went on to hold that the refusal to accept the tax amounts to abdication of duty. In the case on hand, there is no dispute that the sale certificate has been registered by the Erumely Sub Registry. The right/obligation of the 3[rd] respondent as the registered owner to pay tax cannot hence be disputed. The Revenue Officers who are bound to accept the tax cannot raise objections as to existence of an attachment which has been effected after the mortgage. The loan in question had been advanced to Sri Roy Joseph as early as in August, 2008. The mortgage was created much before the attachment was effected. In a similar instance, when there was refusal on the part of the Village Officer to effect mutation with respect to a property which was purchased in auction under the SARFAESI Act, a Division Bench in **Keechery Service Co-operative Bank Ltd. (supra)** has categorically held that the attachments effected after the date of the mortgage are invalid and entries regarding the attachment needs to be effaced. In the light of the categoric pronouncements by the Hon'ble Supreme Court and the Division Bench of this Court, there is no justification for the issuance of Ext.P6. The petitioner is entitled to succeed. The writ petition is hence allowed. Ext.P6 is quashed. There will be a direction to W.P.(C).No.19173 /2022 -8- the 3[rd] respondent to effect mutation of the property covered by Ext.P5 within three weeks from the date of receipt of a copy of this judgment and accept land tax from the 3[rd] respondent, when the same is tendered. **==> picture [325 x 46] intentionally omitted <==** Sd/- **T.R. RAVI JUDGE** dsn W.P.(C).No.19173 /2022 -9- ## **APPENDIX OF WP(C) 19173/2022** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE TITLE DEED NO. 3145/2006 DATED 10/11/2006 OF SRO, ERUMELI. Exhibit P2 TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 22/08/2008. Exhibit P3 TRUE COPY OF THE DEMAND PROMISSORY NOTE DATED 30/08/2008. Exhibit P4 TRUE COPY OF THE SALE NOTICE DATED 20/11/2021 ISSUED BY THE PETITIONER. Exhibit P5 TRUE COPY OF THE SALE CERTIFICATE NO. 453/2022 OF ERUMELI SUB REGISTRY DATED 11/03/2022. Exhibit P6 TRUE COPY OF THE COMMUNICATION DATED 31/5/22 ISSUED BY THE 2ND RESPONDENT TO THE 3RD RESPONDENT. RESPONDENT EXHIBITS EXHIBIT R2(a) TRUE COPY OF THE THANDAPER ACCOUNT NO. 6453