Union Bank of India v. Noorjahan and Others (WP(C) No.17394 of 2023)

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN`** ``` TUESDAY, THE 21[ST] DAY OF NOVEMBER 2023 / 30TH KARTHIKA, 1945 ``` ``` WP(C) NO. 17394 OF 2023 ``` ## **`PETITIONER:`** ``` UNION BANK OF INDIA, ASSET RECOVERY BRANCH, 2ND FLOOR, UNION BANK BHAVAN M.G. ROAD, ERNAKULAM - 682 035, REPRESENTED 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 CHENDAMANGALAM, PARAVUR ERNAKULAM, PIN – 683 521.`** - **`2 THE TAHSILDAR PARAVUR TALUK OFFICE POLICE STATION ROAD, NORTH PARAVUR ERNAKULAM, PIN – 683 513.`** - **`3 THE VILLAGE OFFICER PUTHENVELIKKARA VILLAGE OFFICE THURUTHIPURAM EAST, ERNAKULAM, PIN – 683 594.`** - **`4 THE DEPUTY COMMISSIONER OFFICE OF THE DEPUTY COMMISSIONER WORKS CONTRACT & LUXURY TAX COMMERCIAL TAX DEPARTMENT OLD RAILWAY STATION ROAD KACHERIPADY, ERNAKULAM, PIN – 682 018.`** - **`5 THE REGIONAL TRANSPORT OFFICER RTO OFFICE, PERIYAR NAGAR ALUVA, PIN – 683 101.`** ``` WP(C).No.17394 OF 2023 ``` ``` 2 ``` ``` 6NOORJAHAN D/O. ABDUL KHADER ARAKKAL HOUSE, VEZHAPPILLY WEST VELIYATHUNADU P.O ALANGAD VIAL, ALUVA, KARUMALOOR, ERNAKULAM, PIN – 683 511. ``` ``` SRI. BIMAL K. NATH – SR. GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C).No.17394 OF 2023 ``` ``` 3 ``` ## **`JUDGMENT`** One Karthik constructions (hereinafter referred to as ‘borrower’) availed credit facilities from the petitioner, a Nationalised Bank, by creating equitable mortgage by deposit of title deeds on 04.09.2010 in respect of different extent of properties in Puthenvelikkara Village. When the borrower failed to repay the loan, SARFAESI proceedings were initiated and the properties were sold in auction. The 6[th] respondent is the auction purchaser to whom Ext.P3 sale certificate dated 24.04.2023 has been issued. 2. When the auction purchaser took steps to register the sale certificate, the 1[st] respondent, the Sub Registrar, refused to register the same stating that there are attachments over the mortgaged property pursuant to revenue recovery requisitions made by the ``` WP(C).No.17394 OF 2023 ``` ``` 4 ``` Commercial Taxes Department and the Motor Vehicle Department. Ext.P4 is the requisition dated 09.03.2017 issued by the 4[th] respondent, Deputy Commissioner, Commercial Taxes Department, for recovery of Rs.12,91,160/- towards the Kerala Value Added Tax (for short, 'the KVAT') for the assessment year 2013-2014 from the borrower. Ext.P5 is the requisition dated 07.03.2018 issued by the 5[th] respondent, the Regional Transport Officer, for recovery of Rs.10,570/- towards Motor Vehicle Tax. 3. The petitioner submits that the attachments effected pursuant to the revenue recovery requisitions are subsequent to the creation of the equitable mortgage and cannot affect the right of the petitioner to sell the property under the SARFAESI Act and the attachments are liable to be effaced from Ext.P2 encumbrance certificate issued by the 1[st] respondent. 4. A counter affidavit is filed by the 2[nd] ``` WP(C).No.17394 OF 2023 ``` ``` 5 ``` respondent, the Tahsildar, stating that pursuant to four requisition letters for recovery of amounts due to the Commercial Taxes Department including Exts.P4 and P5 requisitions from the Motor Vehicle Department, notice under Section 36 of the Kerala Revenue Recovery Act, 1968 was issued to attach the mortgaged properties. It is further stated that an amount of Rs.1,35,00,000/- and interest is due to the Government and there is no other way to recover the dues from the defaulter. It is, therefore, contended that the attachments cannot be withdrawn and registration or transfer of registry cannot be effected in respect of the defaulter’s property. 5. Heard Sri.Sadchith P.Kurup, the learned counsel for the petitioner and Sri.Bimal K.Nath, the learned Government Pleader. 6. Equitable mortgage was created by the borrower in favour of the petitioner on 04.09.2010. ``` WP(C).No.17394 OF 2023 ``` ``` 6 ``` The attachments under the Kerala Revenue Recovery Act pursuant to the requisitions made by the Commercial Taxes Department and the Motor Vehicle Department for recovery of tax under the KVAT Act and the Motor Vehicles Taxation Act are subsequent to the creation of equitable mortgage. Ext.P4 requisition dated 09.03.2017 is for recovery of VAT for the assessment year 2013-2014. Ext.P5 requisition dated 07.03.2018 is for recovery of Motor Vehicle Tax. The equitable mortgage has been created by the borrower in favour of the petitioner before the amounts have fallen due as per the provisions of the KVAT Act and the Motor Vehicles Taxation Act. A Division Bench of this Court in **Tahsildar (RR), Taluk Office, Kollam v. Nizamudeen** [2023 (1) KHC 248 : ILR 2023 (1) KER.365] has held that the statutory charge created as per the provisions of the KVAT Act, 2003, prior to any mortgage made, would remain in tact even if the ``` WP(C).No.17394 OF 2023 ``` ``` 7 ``` property is sold by the Bank, under the SARFAESI Act, till such time the encumbrances are cleared as per the provisions of the said enactments. In the present case, the charge created as per the provisions of the KVAT Act and the Motor Vehicles Taxation Act are subsequent to the creation of equitable mortgage and therefore gets effaced for the purpose of registration of the sale certificate issued pursuant to the proceedings under the SARFAESI Act and for mutation of the property. 7. Accordingly, there will be a direction to the 1[st] respondent to efface the entries regarding revenue recovery attachments in respect of the properties measuring 4.05 Ares in Survey No.323/2A/1; 2.52 Ares in Survey No.317/1/44 and 59.78 Ares in Survey No.323/2A/2/3 of Puthenvelikkara Village from Book No.1 maintained in terms of Section 51 of the Registration Act, 1908. There will be a further ``` WP(C).No.17394 OF 2023 ``` ``` 8 ``` direction to the 1[st] respondent to register Ext.P3 sale certificate as and when presented for registration, if the same is otherwise in order. On registration of Ext.P3 sale certificate, respondents 2 and 3 shall effect mutation of the properties covered by Ext.P3 in the name of the 6[th] respondent, de hors the aforesaid attachments. The writ petition is disposed of with the above directions. ## **`Sd/-`** ``` MURALI PURUSHOTHAMAN JUDGE ``` SPR ``` WP(C).No.17394 OF 2023 ``` ``` 9 ``` ## **`APPENDIX`** ## **`PETITIONER’S EXHIBITS:-`** ``` EXHIBIT P1A TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 05.09.2010 EVIDENCING MORTGAGE OF THE PROPERTY. EXHIBIT P2A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 28.04.2023 ISSUED FROM CHENDAMANGALAM SUB REGISTRY. EXHIBIT P3A TRUE COPY OF THE SALE CERTIFICATE DATED 24.04.2023 IN THE NAME OF THE 6TH RESPONDENT. EXHIBIT P4A TRUE COPY OF THE REQUISITION DATED 09.03.2017 ISSUED BY THE 4TH RESPONDENT. EXHIBIT P5A TRUE COPY OF THE REQUISITION DATED 07.03.2018 ISSUED BY THE 5TH RESPONDENT. ``` ## **`RESPONDENTS EXHIBITS: NIL.`**