Union Bank of India v. Sub Registrar, Kanjiirappally Sub Registry & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN TUESDAY, THE 11[TH] DAY OF JANUARY 2022 / 21ST POUSHA, 1943** ## **WP(C) NO. 25370 OF 2021** ## **PETITIONER:** UNION BANK OF INDIA, MUKKADANS BUILDING, KURISHINKAL, KANJIRAPPALLY, KOTTAYAM -686504, REPRESENTED BY ITS BRANCH MANAGER, NAMELY ANISH KUMAR S S. SRI.A.S.P.KURUP, SC SRI.C.P.ANIL RAJ SRI.SADCHITH.P.KURUP ## **RESPONDENTS:** - 1 THE SUB REGISTRAR, OFFICE OF SUB REGISTRAR, KANJIRAPPALLY SUB REGISTRY, KOTTAYAM - 686506. - 2 THE TAHSILDAR, KANJIRAPPALLY TALUK OFFICE, KANJIRAPPALLY -686555. - 3 THE VILLAGE OFFICER, KANJIRAPPALLY VILLAGE OFFICE, KANJIRAPPALLY - 686555. - 4 A S INDUSTRIES, PUNNATHARA, ETTUMANOOR P.O, KOTTAYAM - 686631, REPRESENTED BY IS MANAGING PARTNER. - 5 SYED AHAMMED, S/O P M KHANKUTTY, CHERUKARA VEEDU, KANJIRAPPALLY P.O, PIN-686507. - 6 MANOJ ALEX, S/O ALEXANDER, MANNAMPLACKAL VEEDU, VIZHIKKATHODU, KANJIRAPPALLY-686507. - 7 SHYAM VARKERY SEBSTIAN KALLOOR HOUSE, KALAKETTY P.O, KOTTAYAM-686508. - 8 GEORGE VARGHESE KALLOOR HOUSE, KALAKETTY P.O, KOTTAYAM-686508. - 9 K V SEBASTIAN, CHELIKUZHIYIL HOUSE, KOZHENCHERRY P.O, WP(C) NO. 25370 OF 2021 2 PATHANAMTHITTA, PIN-689641. SRI.SAIBY JOSE KIDANGOOR SRI.BENNY ANTONY PAREL SMT. MABLE .C .KURIAN SR.G.P SRI A.S.P.KURUP., S.C. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 25370 OF 2021 3 ## **JUDGMENT** The Union Bank of India, which is a Nationalised Bank and a body corporate constituted under the provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, have approached this Court alleging that the first respondent - Sub Registrar, is refusing to register Ext.P3 Sale Certificate issued by them in favour of respondents 7 to 9, consequent to the sale of a property, over which they had obtained an equitable mortgage from its original owners towards collateral security for a loan facility availed by them. 2. The petitioner – Bank says that when the loan facility was not honoured by the original owners of the property, they were constrained to sell it under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) and that it was purchased by respondents 7 to 9, leading to Ext.P3 Sale Certificate being issued in their favour. They say that, however, when Ext.P3 was submitted before the Sub Registrar for registration, the said Authority refused to accede to it, saying that respondents 4 to 6 have obtained attachments over it. They contend that since the attachments, as are evident WP(C) NO. 25370 OF 2021 4 from Ext.P2 Encumbrance Certificate, are all after the date on which they obtained equitable mortgage over the property, the Sub Registrar could not have denied registration of Ext.P3 for that reason and they rely on the judgment of this Court in **Secretary, Keechery Service Co-operative Bank Ltd. v. Sajitha Nizar alias Sajitha P.M.** (2020 (6) KLT 68) in substantiation. 3. I have heard Sri.Sadchith P.Kurup, learned counsel for the petitioner; Sri.Saiby Jose Kidangoor, learned counsel appearing for respondents 7 to 9 and Smt.Mable C.Kurian, learned Senior Government Pleader appearing for respondents 1 to 3. 4. Even though summons from this Court have been validly served on respondents 5 and 6, they have chosen not to be present in person or to be represented through counsel; while the one issued to the fourth respondent has been returned with the endorsement “addressee left”. 5. Sri.Sadchith P.Kurup submitted that his client had obtained equitable mortgage over the property in question as early as on 25.05.2015, while the Encumbrance Certificate shows the dates of the orders of attachments obtained by the party respondents as being 16.02.2018, 12.03.2018 and WP(C) NO. 25370 OF 2021 5 13.03.2018 respectively. He submitted that, therefore, going by Section 26E of the SARFAESI Act, his client certainly obtains first charge over it and that they were, therefore, entitled to sell the same, which they had done correctly leading to Ext.P3 sale certificate being issued. He thus reiteratingly prayed that the first respondent - Sub Registrar be directed to register Ext.P3 without any further delay. 6. Sri.Saiby Jose Kidangoor, learned counsel appearing for respondents 7 to 9, affirmed that his clients are the auction purchasers of the property, but added that, on account of the fact that more than 1½ years have now elapsed, they intent to sell it to another person. He prayed that this liberty may be reserved to his clients. 7. Smt.Mable C.Kurian, learned Senior Government Pleader appearing for respondents 1 to 3, submitted that the first respondent has been incapacitated from registering Ext.P3 only because he noticed several attachments over the property in question ordered by a competent Civil Court. She, however, added that if this Court is inclined to direct the first respondent to register Ext.P3, he will abide by the same, subject to all other requirements in law being satisfied. 8. When I evaluate the afore submissions, it is without WP(C) NO. 25370 OF 2021 6 doubt that when the Bank claims a prior equitable mortgage, all subsequent attachments will have to bow down to it. The first charge that the bank obtains over the property remains unimpeached even though the attaching creditors may have obtained orders of attachment thereafter. This has been so declared by this Court in several judgments and it does not require any restatement now. 9. As regards the request of Sri.Saiby Jose Kidangoor, his clients certainly can accept the property under Ext.P3 sale certificate and then sell it to any person of their choice, for which purpose, certainly full liberty is available to them in law. 10. As far as the purchasers are concerned, the law is now clear that they have the option of either registering Ext.P3 or having its entries entered in Book No.1 maintained by the first respondent - Sub Registrar. If they intend to sell the property immediately after taking delivery, then perhaps their best option would be to have Ext.P3 entered in Book No.1 and then obtain registration of subsequent Sale Deed, which they intend to execute in favour of a third person. 11. In the afore circumstances, I allow this writ petition and leave liberty to respondents 7 to 9 to approach the first respondent, either with a request to register Ext.P3 sale WP(C) NO. 25370 OF 2021 7 certificate or to have it entered in Book No.1; and if this is done within a period of two weeks from the date of receipt of a copy of this judgment, the said Authority will accede to either of the request and complete proceedings thereon, as expeditiously as is possible, but not later than two weeks thereafter. 12. Needless to say, subsequent to the registration of Ext.P3 or entering it in Book No.1 - as the case may be, the Sub Registrar shall efface all entries of attachments from the Encumbrance Certificate and the records, so as to enable respondents 7 to 9 to deal with the property without any impediment in future. As far as attaching creditors are concerned, they are left full liberty to invoke any other remedy that may be available to them, including by approaching the petitioner – Bank claiming any surplus from the sale consideration that may be available with them, after closure of the loan account. **Sd/- DEVAN RAMACHANDRAN** **JUDGE** **stu** WP(C) NO. 25370 OF 2021 8 ## **APPENDIX OF WP(C) 25370/2021** PETITIONER EXHIBITS Exhibit P1 COPY OF MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 25.05.2015 DRAWN BY PETITIONER BANK. Exhibit P2 COPY OF ENCUMBRANCE CERTIFICATE DATED 16.04.2019 ISSUED BY FROM KANJIRAPPALLY SUB REGISTRY. Exhibit P3 COPY OF SALE CERTIFICATE DATED 21.08.2020 ISSUED BY PETITIONER BANK. Exhibit P4 COPY OF LETTER OF REQUEST DATED 17.04.2021 GIVEN BY BANK TO THE 1ST RESPONDENT. Exhibit P5 COPY OF DECISION REPORTED IN 2014(1) KHC 249. Exhibit P6 COPY OF DECISION REPORTED IN 2020(6) KLT 68.